American Gold Mine Part 1: 1999 Corvette Z51
There are a few things you should be aware of straight off the bat if you intent to part out cars for a profit.
1.) Buy as low as you can.
The less money you obtain the original asset for, the higher your profit margin is going to be. This is of course vastly dependent on your ability to negotiate, notice things that are wrong/ broken, and knowing your own abilities and the rough order of magnitude on what parts might cost to repair, if you do want to repair them before you flip or sell the part/ amolifier/ vehicle/ house. For a vehicle, your ability to see what is wrong or can't be salvaged at a cursory (or sight unseen) glance can be the difference between losing your ass and making a killing when parting out a car or flipping it.
2.) Specifically for cars, you will never make money on things that are not heavily optioned/ superior than the base car.
No one wants to put regular Honda Civic brakes on their old busted one. What people do want, and what they will buy, is Civic Si brakes - even if they're exactly the same as the brakes on the regular car. People seem to assume that every component of a vehicle has been improved when considering a heavily optioned car/ performance version over a regular version. This is rarely, if ever completely true. There are many components that may be better or more performance oriented on a superior trim car, but by and large there are many components that are not.
When deciding on what car you would like to flip, choose the top of the options at the bottom of market price. Your ability to sell parts more quickly, and sell them for more money, will be a huge benefit and motivating factor in continuing your side hustle.
Allow me to give you an example. I recently bought a 1999 Chevrolet Corvette from an online auction. Cost Breakdown is below:
I won the bid for $4,300, a little higher than I originally intended to go, honestly, but I guess we are all victim to the adrenaline rush and excitement of a second-by-second bid war. After taxes and fees, I was in for more than a full $1,000 over my initial bid win. I was expecting this to an extent, although not to this degree. Oh well. I bid on the car because I was confident I would be able to make money on it.
My motivating factor for that confidence was several things that coalesced. Firstly, the car only has 27,000 miles on it. Insanely low, even for a Corvette (which aren't driven as regularly as your typical vehicle), and the engine and transmission present in this car. The General Motors LS1 is one of the most highly sought after engines for aftermarket replacements for hot rods, both old and new, from the 1930's all the way in to the early 2000s.
People look to the LS1 to make excellent power, and keep fuel consumption in the 21st century. Similarly, the Borg Warner T56 is a monster of a 6 speed transmission, used in the same way by enthusiasts both restoring old muscle or repairing an existing performance car.
The LS1 engine, in rebuilt or good running condition fetches about $3,500 on eBay. Perhaps more considering the mileage is so low.
The T56 transmission, in rebuilt or good running condition, fetches about $1,500 on eBay. The online auction market can be high or low depending on the items you're trying to sell, but I considered those ranges to be really close to what I would be able to obtain for mine locally. Someone from the state or nearby would probably be willing to drive to my location and pay roundabout those numbers to avoid the hassle of crating, loading, unloading, and negligent freight drivers and forklift operaters destroying your expensive engine on its transit across the country.
Those two items alone put our revenue at $5,000, and we haven't even looked at the car yet! We just know it runs and drives, and has low miles. It doesn't take a genius to know that it wouldn't hard to make $575 on what's left of the car, then whatever you sell beyond that is just gravy.
To end the suspense, here is the car the day I bought it an rolled it into my driveway:
I know. It's wrecked. It wouldn't have been for sale at a salvage auction if it wasn't!
In part 2 I'll break down some of the components of the car and show you exactly why this turned out to be a gold mine. I'll give you a hint: aftermarket.