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In what has set up to be a wild year, I have purchased not 1, but 2 new cars and sold one for a $5,000 profit and the other one for a hefty $4,500 return.
This after all fees, taxes, registration… everything!
In neither case did I intentionally buy the car to eventually sell it in short order. However, after keeping close tabs on the value of my vehicle after purchase I was able to take advantage of wild market fluctuations at exactly the right time.
In this article, I will cover how I was able to sell my new vehicles for a net positive return despite inflation. It’s less a methodology that can be repeated and more a toolkit that may come in useful if you find yourself in the right situation.
Selling a 2020 Toyota Tundra for a $5,000 Profit
So, what happened? Back in May of 2020 I needed a new truck to haul an RV. At the time, the pandemic had emptied dealership lots and I swooped in and purchased the last truck on the local Toyota’s lot. There wasn’t much room for negotiation given the hot market environment.
I walked out of the dealership with a brand new 2020 Platinum Tundra for $49,000 after Taxes and Title.
Fast forward 1 year. I had recently sold my RV and was looking to sell my Tundra outright. I turned to Kelly Blue Book’s Instant Cash Offer to get an idea of what my Tundra was worth. I figured it was somewhere in the mid-40’s.
Turns out the instant offer was at $54,000! I jumped on the offer. I submitted my information and waited to be contacted by a local dealership with an offer. After a few minutes I had received calls from 5 dealerships.
I sold the vehicle that day.
Selling a 2021 Toyota Rav4 Hybrid for a $4,500 Profit
In March of 2021, my wife and I decided to purchase a 2021 Toyota Rav4 Hybrid. We don’t like the standard dealership back and forth so we chose a Toyota dealership that advertised a ‘no haggle,’ price. $38,000 later (including Tag and Title) we were out the door with our new car.
The vehicle met all of our expectations… and we loved it.
Periodically, I would check the value of the Rav4 on various sites. I wasn’t really interested in selling but more curious of what the depreciation was.
In November of 2021, after checking KBB I decided to see what an online used car company would offer for it. I went to Carvana’s website and entered in the VIN. Wham! They made an offer after a few minutes for $42,500!
Although I wasn’t in the market to sell, this was an offer I couldn’t refuse. I called my wife and told her we had sold the Rav4… she was confused, maybe even a bit angry. But when I told her we were about to clear a $4,500 profit for the 2nd time in 2021 she was all on board.
I drove the Rav4 to the Carvana pick-up point in town and it was out of our hands in about 10 minutes. After a quick mechanical check, we had money in hand and left.
Keep Resale in Mind During Purchase
Prior to selling a vehicle you first have to buy one. Buying a vehicle with its future sale in mind is usually not a priority… but that is exactly what you should do to set the stage further down the line.
In my case, the Tundra and Rav4 had the highest resale values for their class. Here is a the 2021 Kelley Blue Book Best Resale Award Winners. The best overall brand was Toyota. Now, this does not necessarily mean you need to buy a Toyota, but you should certainly consider a top three brand for whatever model year and class of vehicle that you are shopping for.
Buying a vehicle that is recognized to hold its value will ultimately make the price of ownership lower. You will hopefully be able to sell the vehicle with less depreciation than others in its class.
In my case, I bought the best model in each class. It paid off handsomely.
Take Care of Your Vehicle
If you have ever shopped around for used cars you know that most are not well taken care of. Many people lease their cars. Since they don’t own it they treat it horribly and once it makes it way back to the dealership 3 years later it’s in utter disarray.
In my experience, dealerships also don’t spend a lot of time cleaning or fixing up once-leased vehicles. They are generally dirty and full of potentially easy repairs. If you want to stand out, make sure your vehicle doesn’t have any glaring problems.
Make sure any small scratches are buffed out. Vacuum the carpet and wipe down any plastic.
It’s not necessary to detail the vehicle. But if you can piece together a full box of French Fries then you need to put in some effort. You are trying to make a positive initial impression on the person who will assess your vehicle for safety.
Make a good first impression… that’s it.
Don’t Modify your Vehicle with Upgrades
When you go to sell your vehicle with an online service or at a dealership, they do not care about the upgrades you have made. Whatever changes you have been made won’t be reflected in the data they have to price the vehicle.
Dealerships and online buyers don’t have the ability to account for the value provided by custom work done. Whatever changes you make might actually hurt the value.
There is one exception, however, and that is a tonneau cover for a truck. This type of upgrade is visible on the outside and can often be accounted for in readily available resale data.
To give an example of this consider my Tundra that I made money on. I had an additional OEM part added to the truck bed known as a bed separator.
It cost me $500 and was made by Toyota. When I brought my truck in to sell it I had forgot to bring the separator. They made me an offer and I signed on the dotted line.
Realizing my mistake, I offered to throw in the separator for FREE… they didn’t want it. They wouldn’t have been able to increase the resale value based on the additional piece of equipment. In fact, they seemed incensed that they’d have to wait around for me to bring it in.
So, if you are thinking about upgrading those rims… don’t. Upgraded shocks, suspension or a tractor trailer style air horn… think again. Keep your vehicle as close to factory default as possible to ensure you aren’t wasting money on upgrades that won’t hold their value.
Get Quotes for your Vehicle Regularly
Finding the exact right moment to capitalize on selling your car can be difficult if you don’t have an idea of what its worth. Keeping tabs on quotes and residual value at least monthly is a great way to make sure you can take advantage of market pricing volatility.
By checking monthly at KBB and Carvana, I took advantage on two occasions of an abnormally high value for my vehicles. Apparently, those vehicles were in demand. There would have been no way for me to know this without querying a service that has this type of information.
Don’t be Afraid to Act on a Good Deal
Hopefully, if you have been checking the value of your car regularly, you will come into the good fortune where a value is offered that either makes you money above what you paid for it or offers a value that makes you consider selling it.
If this happens you must be able to act quickly.
Generally, quotes are only good for a few days. Market pricing can change quickly. If you decide what is offered is fair and something you are interested in then you need to follow through. Get your vehicle clean. Make sure you have alternate transportation for the in between period. Finally, close the deal.
Rinse and Repeat
If you happen to sell a vehicle at a great price you will likely need another one sooner rather than later. After you get your next vehicle its not crazy to assume you also may be able to sell it for more than you paid for it.
Make sure you pick a brand and model that has a high resale value.
It’s not guaranteed but it’s a good idea to once again keep tabs on the market and pull the trigger when it makes send.
I got lucky. I was able to buy 2 new vehicles, drive them around for almost a year and sell them for considerably more than what I paid for them. This is not common, however, if you follow the tips above you also might be able to come out ahead.
If you are interested in selling your car online, I also put together several tips on how to do this in an article named, “Tips on How to Sell your Car Online.”
I hope you enjoyed this article. If you have been able to sell your vehicle for more than what you paid for it initially during these weird times write it down below in the comments!