Everyone knows that cars are almost always a depreciating asset. You pay $20,000 for it and drive off the lot and it is worth $18,000. A year later it’s worth $14,500, and a few years later it’s worth $3500. This is the common story for most cars. And with the American obsession to spend so much of our income on our transportation, I am convinced that cars greatly affect our financial freedom.
So with so many people losing money on their car purchases, how could you possible make money with cars?
A video that discussed whether or not you should buy a new car or a used car that I published a while back just received this comment…
“Exactly one year ago I had a $375 truck payment on a $13,500 loan and the truck was only worth about $11k. I put the truck up for sale and luckly sold it for $11,500, with the difference coming out of my pocket. I bought a 95 4runner for 2k, drove it for a couple of months and sold it for $3200. I used that money to buy another 4runner for $1,500. Again drove it a couple of months, sold it for 3,000. I did this a couple more times with various vehicles.
Yesterday I paid cash for a 2004 GMC Envoy fully loaded. It books for about 13k and I have about $3k of my money that wasnt made off of buying and selling vehicles. It can and will work. It takes many hours of searching on craigslist and such and a little bargaining with people but I now have almost $400 a month going to pay off student loans.” -Cameron
I have to say that I never really thought about doing this, but if you think about it, it is just what used car dealers do every day. With the “gotta-have-it-now” society we live in, you can bet that there are a lot of people who are willing to sell their car below the KBB value in order to sell it quickly.
So in Cameron’s case, it looks like he spent a lot of time looking for great deals (I am sure he never paid too much for a car!) and used patience to make a profit. I am going to see if I can get Cameron back to comment with a little more detail on how he did it…