Passive Income Flipping Cars

If the passive income ideas you have come across so far hold no appeal for you, maybe flipping cars might be what you have been waiting for.

But, how do you make passive income flipping cars? You can make passive income flipping cars by buying cars at a low cost ($500 each for example), and reselling them at a higher cost for profit ($2,000 each). In this example, you would make $1,500 per car. Search for highly sought, recent, low cost, good condition, low mileage cars.

Regardless of your experience level, you can make good money flipping cars. I’m guessing you have come across a car deal that was just too good to pass up, even though you did not actually make the purchase or need the car. You probably imagined you could get the car and sell it. Well, that’s precisely what flipping cars is all about. Here are some beginner (and pro) tips to help you get started flipping cars.

How to Make Passive Income by Flipping Cars

Chances are that you have heard of flipping houses, but did you know you can also flip cars? First of all, it’s much cheaper. So, how about giving this idea some thought, it is not as hard as you might think, and you might actually enjoy it. Best of all, you can make pretty decent money in the process.

1. Flipping Cars [Legally]

If your State or Country requires you to get a licence to be able to flip cars, make sure to follow the specific requirements of your locality before getting started. Some States in the US allow you to purchase and resell a maximum amount of cars without a licence per year, so make sure to know the law in your State or country before getting started. You can learn more by consulting a lawyer or qualified professional in your jurisdiction.

2. Getting Car-Savvy by Consulting The Right Sites

Obviously, a big part of this business is being able to spot good deals on cars so that you can buy and resell easily for a profit. You cannot do that without having enough knowledge about cars. But you don’t have to know how to gauge the value of every car you can see on the road. At first, you can just focus on a few brands or models.

There are some very popular websites that can help you out with this. Here is a non-exhaustive list of sites you can check out to learn more about car models, their popularity, prices and auction costs:

Ensure you give attention to popular models that will sell much faster. There is little reward in getting a really good deal on an exotic truck and have it sit around for months before getting a buyer. That’s not the idea – the focus should be to get a car at a good deal and sell it off as soon as possible for a profit so that your capital is freed up, allowing you to chase down the next great car deal.

3. Knowing The Resell Value of The Car

It takes some effort, but it’s not difficult to know the actual value of the car you are interested in. Check out some of the websites listed above. If you wanted to know the price of Toyota Prius and its fair market value just by looking at it, you can browse through listings of this car model on these sites. After going through several ads, you will have a fairly good idea of what this car model should cost based on features like mileage, physical form, and year of manufacture. After a while, knowing whether the price of the Prius you are looking at is fair or not will seem like second nature.

4. Choosing a Car That’s On The Market for the Right Reasons

Many of the best deals you find will typically have a sad story behind them. Maybe creditors are knocking on someone’s door threatening an auction, or someone needs to clear a hospital bill or pay some other bill and they need the car to sell fast, which is why they offer deeply discounted prices. But some people just want to get rid of their cars because they have gotten a new one, or are simply looking for a way to dispose of it because they have no more interest in it. All in all, you can’t let the reasons behind someone’s decision to sell bother you because you are offering them a way out by taking them up on their offer.

Always try to find out why someone is selling the car at such a low price as it can reveal some red flags. The last thing you want is to get a car that has no proper documentation, or has a case against it because it was involved in some crime or another. You should also have a look at the title to ensure it is clean, as you have to avoid cars that have been in wrecks. Remember that these are the very same things your buyer will look at.

5. Have The Right Friends to Help Out (aka a Mechanic)

Sometimes, the car is selling at a good price because the owner needs quick cash for some reason or another. But at other times, the car is selling so cheaply because it is actually a piece of junk. You have to avoid getting into such deals.

That is why you should have a mechanic with you as you buy a car to confirm if everything is alright. For instance, if the car has been without oil for too long, odds are that it has a lot of damage. Other things to watch out for include engine knocks, problematic shifting, timing belt changing schedules, engine sounds, transmission fluid and so forth.

Before buying the car, visit sites that sell cars and see how a car in that condition would sell at. That should help you set a good fair price on your car. Obviously, since you knew you were getting a good deal, you should find a sale price that represents a significant profit for you after you make the sale.

6. Flip a Low Cost, High Value Car

Once you buy the car you can immediately start looking for a buyer – at a higher price, of course. But you also have the option of working on the car a little so that you can enhance its value even further.

List your car on an appropriate website. For better results, ensure that you take good quality pictures of the car. Low quality photos will be unappealing and might make it seem like you are trying to hide something about the car. You can also post it on a site like Craigslist or any other site where people are hunting for good car deals.

When the phone rings or a message is sent to you regarding your listing, you should be available to answer the phone and offer any additional information the buyer might desire. Otherwise, from there, it is all about having the relevant documents in place and meeting up with the buyer so that they can check out the car and possibly make the purchase.

7. Make Flipping Cars a Passive Income Source

Obviously, once you understand how to flip cars successfully, you can make the business passive. You can train or get someone who knows how to find good car deals and handle any minor improvements on them before listing them on sites to get buyers. All you will need is to finance the operation and give them a commission on the profits you make. But once such an operation is in place, you can sit back and relax as you make a neat profit off your car flipping business.
Pro Tip
Want to make even more money? Why not consider renting the car out? Learn more in this beginner’s guide to renting your car for passive income profit.

Pro Tips on Making the Car More Valuable

  • Have the car cleaned and detailed, both inside and outside. This will be a marginal expense in comparison to the additional cash you will get for the car during its sale.
  • You can have some parts replaced, but be careful about how much you spend and the amount of value it adds to the car’s price.
  • On the North American market, automatic transmissions are more in demand than manual cars, as not many people know how to drive with a stick shift. In general, the opposite is true in Europe, but more so out of preference than convenience.
  • Unless you are purchasing an RV or a truck, you should try to look for vehicles with mileage below 150k miles or 240k km.
  • Don’t assume what the seller is saying is true. Make sure the car isn’t stolen by checking the VIN at the National Insurance Crime Bureau or on

How Passive is Flipping Cars?

With a reliable partner who can find good deals for you and then find buyers and close the deals, this can be a pretty passive way to make some money on the side or a full income. You can go about other tasks of the day without any constant worries or concern as having someone handle this relatively easy process would free you up from most car flipping responsibilities entirely.


The business is scalable but depends completely on the number of cars and locations you have. If you have enough capital and have learned how to get good deals fast and sell off your cars quickly, you can scale your business. With a good reputation in the business, you can actually get a lot of customers and make a lot of money on a regular basis.

Startup Costs

As far as startup costs for passive online businesses go, flipping cars does not come cheap. You need enough capital to pay for the cars you buy, especially if you want to run a large scale business. But compared to flipping houses, flipping cars is many times cheaper.


If you are a complete beginner, have never bought a car before or do not know much about cars, than flipping cars will probably be more difficult at start. You have to find a good deal on a car, buy it, and then sell it at a better price. You have to know the difference between a good car deal and a bad car deal; a solid car, and a piece of junk. It may come with experience and practice.


This business does not take much time to set up. If you have the skills to determine a good deal and have the cash to pay for the car you get, you can be selling cars for a profit fairly quickly. You can buy a car within a day of finding out about it, and you might have the fortune of selling it for a higher price just as fast.


There is some notable risk in flipping cars. But these come about when you don’t know how to find good deals. For instance, if you get a car at a bloated price thinking you have a good deal on your hands, you might have to sell it off at a lower price in order to get a buyer. You might also get a car that is in terrible condition without you realizing it, which can make it more trouble than it’s worth for you.

You may also need insurance to cover other risks involved with flipping cars. If you flip cars illegally, you can also risk fines and jail time in some States. Of course, make sure to pay taxes and be truthful with your clients. Consult a lawyer to ensure you follow local regulations in your area before getting started.


Seasonality needn’t affect your car flipping business too much. People buy cars throughout the year, although there could be peak seasons in the year. But you can use these seasons to your benefit by getting better deals when the prices are low and then waiting a couple of weeks for the prices to pick up so that you can dispose of them at even higher prices.

ROI (Return on Investment)

The ROI you can get with car flipping can be pretty good. You can make thousands of dollars off this business. In fact, making thousands of dollars off a single deal is not unheard of. So, you can imagine how many such deals in a month you need to have a good income every month.

If you purchase two cars for $500 and resell them for $2000 each, that’s a $3000 profit.

Frequently Answered Questions

Is it legal to flip cars? Some States in the US allow you to purchase and resell a maximum amount of cars without a licence per year. However, sure to follow the specific requirements of your locality before getting started. You can learn more by consulting a lawyer in your area.

What are the best cars to flip? The best cars to flip are in demand, recent, low cost, good condition, low mileage cars requiring little to no repairs. Some of the best cars to flip are the most popular family-friendly and reliable brands such as Toyota, Nissan, Mazda, and Subaru.