How I Built My $3 Million Business Buying Cars At Auctions

I enjoy going to the auction. It's shopping. I mean, it's retail therapy for me. I never know what I'm going to come home with. And that's half the thrill, half the fun. I get to go car shopping for a profession. My great grandfather came here from Italy almost 100 years ago and owned gas stations. I would say gasoline and motor oil is in our blood. So welcome to a dealer auction. To get into a dealer auction, you need a dealer's license. It's very exclusive. It's very private. My name is Craig. I own a car dealership named Flying Wheels. We buy and sell cars and ship them nationwide based off videos I create for social media. You are watching flipping $400 into a Ferrari. I get 30 seconds to 3 minutes to look at each one and hope I pick the right one. And these are cars that I'm going to have to then fix and clean and then resell to the public with my name on them. So it's really, there's a lot of pressure and every once in a while you make a mistake. I go to a dealer auction every single week because I don't want to miss out on anything. A large source of almost all car dealers' inventory is sourced from dealer auctions. It goes from repossessions to wholesale car dealers, new car trades, the bank repossessions, and I would say eight out of every ten cars I buy come from the auction. We sell every single year millions of dollars worth of cars. And that sounds like a really high number. But if you think about it, cars are in the values of thousands. It's not a brand new car and it's not an expensive car. You know that. It's new to me. It's new to you. If there are things you find after like, you know what, I just didn't expect this, you're right up the street. That's really nice to know. And I appreciate that. I have a Lincoln we're selling. Not everybody has $20 grand. Not everybody has $30 grand to buy a brand new car. They just want something better than they had before. I bought that Lincoln a month and a half ago for $900. The auction fee was $145. We then had repairs on top of that vehicle, totaling $646. I sold that vehicle for $3500 today. That gives me a net profit of $1,809. That's 106% profit on my investment. I can't get that in the stock market. I won't get that as a return from my bank. Keep in mind, I took no consideration of my cable, my internet, my phone bill, my light bill, my mortgage, my insurance cost, the cost of doing business. Everything that carries this business. I have stacks of bills this thick that we pay $40-50000 on every single month. There's a lot of money that gets spent to make that $1,800 on one car. So I got caught up in bidding. I got caught up in the whole scene. I haven't even walked around the other side. I was prepared to bid on this vehicle without even doing a full 360 degree circle. And it's just too easy to get distracted and not know what I'm buying. I have lost thousands and thousands of dollars making silly mistakes that taught me lessons that I know not to make anymore. That is gross. I think I'm going to pass on that Xterra. I'm not tied to it. When I first started, this car dealership was young. I got into this job because I wanted to do what I love. Follow my passion. Part of it was like this right here, this Mustang and the Corvette on the other side of the parking lot, these are the things that made me really, really happy. Unfortunately, this isn't what always sells. So you need to focus on what sells and not just what you want. I have economical cars for people that need commuter vehicles. I have trucks for people that need the heavy lifting, and I have SUVs for the families. I have a little bit of everything. And as much as I want to sell Mustang Cobras all the time, I wouldn't be able to stay in business. Prices vary. I mean, there are cars for 3, 4, $500 that might be ready for the junkyard all the way up to $100,000 cars. And to be quite honest with you, I've bought them on both ends. But I find right in the middle to be the sweet spot. I would love to say that I can buy every car at $2,000, invest $500, and then sell it for $5000. But every car is a case-by-case basis. We've made upwards of 5, 6, 7, $8000 in the past, which is just tremendous. But then there are cars that I've had to break even on just to get it out of here. And then, sad to say, there are some that are losers too. Here's why you need to be so careful when buying cars at auctions, because you can very easily get tricked or scammed and it could cost you thousands. My business model is slightly unconventional compared to your traditional car dealer. I like making car content and I like interacting with viewers. And I've built a rapport, like personal connections, with so many people because of social media and through the comment sections that have built a level of trust. And I can ship cars nationwide now based off of a video. Customers will see something in the background or something I'm working on, and that car is oftentimes sold before it even hits my website. I want to show people what it's really like behind the scenes of owning a car dealership, how we get our cars and showing them that we're family men. We have wives and husbands and children and we're real people and we're not out to target others and we're business owners, so we do need to make a profit. And it's a never-ending challenge because every car is different than the last. So every scenario and every person and every customer is different. I went to the auction last week, I bought seven cars, and I got them all home and all of them are winners. Today could have been a great day and we ended up empty handed. You need to know when to walk away. You need to know when to step it up. And know that not every day is going to be a good day.

Channel: CNBC

Views: 288,971

Keywords: Car, automobile, vehicle, auction, auctioneer, millions, business, entrepreneur, money, saving, investing, financing, personal finance, small business, dealership, car dealership, cars, vehicles, car auction, wholesale, sale, buy, sell, new Hampshire, maine, invest, fix, repair, businesses, small business owner, investment, car dealers, flying wheels, drive, driving, repairs, parts, supply chain, used cars, antiques, car trades, trading, success, passion, family, making money, costs, profit, return on investment

Id: icGTy1X_oic

Length: 6min 27sec (387 seconds)

Published: Thu Feb 16 2023