Can You Flip Classic Cars For A Profit? (2024)

FAQs

Can You Flip Classic Cars For A Profit? ›

Flipping classic cars is a great way to make big money. But since the profit isn't always guaranteed, it would be better to consider classic car flipping as a side business and not a full-time job.

A lot of people have made good money buying and selling classic cars over the past few decades. A common way to make money can actually take years to accomplish.

The answer to these questions is, Yes Car flipping is legal, and yes and the process has become much more straightforward and profitable with regular local auctions and the introduction of car auction websites. An average car flipper can profit around $1200 per car (ridester), which is quite alluring!

If you plan to restore the car and then sell it, the process might be a good investment. Restored classic cars can easily sell for tens of thousands of dollars, depending on the make and model. If you want to keep the car for yourself, though, you won't recoup the money you spent to restore it.

The primary reason to consider renting out your classic car is to earn a little money on the side. This is ideal for anyone who needs to tighten their budget or retirees living on a fixed income. The nicer and more valuable your car, the more you can charge renters.

The key to car flipping success is finding and buying undervalued cars at a low cost and selling them high. That means searching Craigslist, Facebook Marketplace, eBay Motors, newspaper classified ads, and auctions to find a good deal. Keep your purchasing budget low and also budget for any repairs the car needs.

Depending on the value and your tax bracket, if you have owned the car for more than a year, you'll need to pay either 0%, 15%, or 20%. Calculating your profit isn't as simple as subtracting your purchase price from the sales price.

Vehicles that are tall and narrow are more susceptible to a rollover due to a higher center of gravity, which puts vehicles such as SUVs, pickup trucks, and vans at greater risk of a rollover crash.

Does selling classic car count as income? ›

Collector cars and other collectibles are considered tangible personal property. So when they're sold for a profit, capital gains tax is owed by the seller. Tax at the federal level is 28 percent, while state tax varies depending on the residency of the seller.

Classic cars require regular maintenance and the occasional repair to remain pristine, from oil changes to tune-ups. On average, classic car owners can expect to spend around $1,000 to $4,000 annually on maintenance and repairs, depending on the vehicle's age, condition, and how often they drive it.

If you estimate it will take 1,000 man-hours to complete the job, and you have 20 hours a week to work on it, the job will take you 50 weeks to complete. That's almost an entire year. If you have someone willing to put in the same amount of time, that cuts it down to six months.

Classic cars can be a risky investment. Even if you purchase a model that significantly increases in value after you buy it, you may still put more money into it with repairs and maintenance costs. Additionally, collector trends are unpredictable, so you can't bank on a specific model dramatically increasing in value.

Unfortunately for a car flipper, there is always the possibility that the buyer could take legal action against them. The list of possibilities is endless, so flipping a new car can be a risky business if they are not prepared.

Vehicles that are tall and narrow are more susceptible to a rollover due to a higher center of gravity, which puts vehicles such as SUVs, pickup trucks, and vans at greater risk of a rollover crash.

One of the most effective ways to increase a classic car's resale value is by participating in car shows. You can stay local or travel regionally but the bragging rights of a winner go far in the monetary value of a classic car. Winning also indicates that your beauty has been well-maintained and properly cared for.