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How to Buy and Sell Cars Online Without a Dealers License

Do you want to make money buying and selling used cars online? If YES, here is a complete guide to buying and selling cars for profit without a dealers license. A buy and sell opportunity can turn into a lucrative business provided that you do it well. This is especially true especially if you are considering the idea of how to buy and sell used cars.

As technology increases and state-of-the art cars are being produced, people will always have the need to buy new vehicles; thus also creating the need to disposed of old ones. A lot of people have been able to make a business out of selling and buying cars from their homes.

This business does not require a huge capital nor does it require that you to have a vast mechanical knowledge (even though this can be an advantage). However, if you are interested enough in cars, you will generally get a grasp of what goes wrong mechanically with cars along the way. There are plenty of books to help you learn all about this, too.

What Does It take to Start a Car Dealership Business Online or Offline?

Most people believe that massive capital is needed to become a used car dealer but I stand to tell you that you can start a used car dealership without a dime of your own. What you need most is the right knowledge, a plan, some marketing skills and most importantly, integrity. Yes, you need to be honest if you must make it big in this business.

Secondly, I want you to understand that you can buy and sell used cars regardless of the country you reside. Whether you are in united states, U.K, Canada, Singapore, Nigeria, Ghana, etc; you can buy and sell used cars. Now for those in Nigeria, you can visit the Autos section of and see the volume of cars being sold there daily.

If you are also observant, you will notice that vehicles are also pre-ordered from the U.S with the buyer’s money. This proves the fact that money is not the most important prerequisite to buy and sell used cars, integrity is. Now how do you buy and sell used cars online for a profit even if you have no money?

Is It Possible to Buy and Sell Cars Without a Dealers License?

The answer is No but there is a loophole you can exploit. In most states of USA, for you to sell a car without a dealers license, the car must:

  • be titled in your name (or Business Name)
  • be used for personal, household, family, or business purposes

For instance, if you want to get a new car and you wish to sell your old car, you can do so as long as your old car is titled in your name. All states allow you to sell your own personal vehicle without a dealer license. However, if you do not put a title into your name before selling it, you are committing the illegal act of title-jumping.

Some states may allow you to sell two or three cars within 365 days without a dealer’s license but you should make you research first to ensure that you are not contravening any laws. You will need a dealer license if your vehicle does not meet the above requirements, and you regularly wish to engage in the process of buying and flipping cars for a profit.

Be that as it may, there are some ways by which you can get around the restriction of selling a car without a business license. Sell your first three in your name. After that, ask a family member or very good friend if you can buy and sell cars in their name. They should get part of the profit. Do this only as an intermediately step, though. When you must have bought and sold six or seven cars, then you’ll have a nice little business on your hands.

Once you’ve sold six or seven cars and built up your confidence, you can then become a licensed dealer. Getting a dealer license is not too costly and the process is not complicated. It gives you independence to operate freely and legally to buy and sell as many cars as you like throughout the year.

7 Easy Steps to Make Money Buying and Selling Used Cars Online

To be successful in the car dealership business and to avoid getting into trouble with the law, you need to familiarize yourself with the specific guidelines set by the government in an effort to regulate this industry. It is important that you abide by the rules and operate legally to avoid costly consequences. With this said, the following are some of the basic things you need to take care of first.

1. Apply for a dealer’s license

The requirements for obtaining a dealer’s license can vary from one state to another. In general though, there are courses and a licensing exam you may need to take and pass. A dealer’s license is one of the crucial requirements to buy and sell used cars.

That’s because this license will enable you to legally operate your business. Though I must admit the fact that there are a lot of non-licensed deals, crooks, salesmen and middlemen in this industry; therefore, a license will help separate you from the pack.

2. Consider the business site

Another important step to buying and selling used cars is determining the business site; I mean where you will locate your business. For some people, they want the business to be as close to home as possible. But before that, you have to look for an appropriate space where you can use for displaying and selling the used cars.

It has to be big enough to house your car inventory. But if you lack the space and the capital to go it big, you can start your car business online based on customers pre-order so as to avoid stocking up inventory.

3. Determine the market’s demand

Another crucial aspect you can take towards becoming a successful car dealer is identifying and relating to the potential buyers’ demands. You just do not need to buy a functional car. You need to get used cars that your potential customers will like. That means you have to research on the type and brand of cars that are in demand. But if you are going to be importing based on customer’s request or order, then what you should bother yourself with is the sourcing of the cars.

4. Start building your inventory

After getting your dealer’s license, identifying and securing a business site and determining the demands of the market, you should be ready to proceed to the next step which is buying and building your car inventory. With your dealer’s license at hand, you should be able to purchase used cars at a wholesale price.

You can research and watch out for private auctions for automobiles where you can avail of the items at costs way below their regular market prices. This however will depend on the country you intend sourcing your cars from. If you know how to go through the bidding process properly, it can prove to be a rewarding step. So, take your time in learning the ropes.

Aside from attending private car auctions, you can also submit bids to car dealerships. This opportunity is only open to those with dealer’s license. And as with the private auctions, you have to master the process so you can take full advantage of this buying opportunity and make lots of profit reselling the cars you will manage to obtain.

5. Market your business

With your inventory taken care of, you are ready for the final step to becoming a full-fledged car dealer and this involves advertising your business.

Best Places to Buy and Sell Cars Online Fast

There are a lot of places where people who are interested in this business can buy cheap cars from such as Local car auctions, Craigslist, eBay, Newspaper classified ads, Supermarket community boards et al. You can post on online forums just like and market your cars freely or you can come up with business cards, place in classifieds or invest in flyers.

a. How to make the most out of car auctions

Car auctions are one of the best places to find cars, as they are fast and the cars can be very cheap. They also often offer repossessions or dealer trade-ins.

In car auctions, you should not just dismiss dirty looking cars as a trash. Granted, sometimes that may be the case, however, it could also have belonged to an older person who left it outside under the trees and couldn’t be bothered to clean it.

b. How to make the most from Craigslist, eBay, and Newspapers

Some great buys can be had from all of these sources. With local newspapers and supermarket boards however, you can easily contact the seller and start negotiating. Also, it’s easy once you’ve met the person face-to-face to really work out the reason for the sale. It is never advisable to buy cars on the spot unless you manage to get a good bargain.

When you see a car that you may be interested in, you can leave your number with them and then tell them that you will think about it. If you don’t hear back from them, you can call back three days later. If the car’s gone, then so be it. You should never get emotionally involved when making a buy. Your main aim here is to make money and not buy a car you like for personal use. There’s a bit of luck involved in buying a cheap car through these sources.

If you don’t like the idea of confronting and negotiating with someone, then stick with car auctions. Regardless of the avenue you choose to market and advertise your cars, just make sure you take advantage of every opportunity to get the word out and entice potential buyers. I want to restate the fact I said earlier that integrity is the most important asset you must build upon in this business.

You must also treat your customers well and ensure you deliver on your promises. Remember, that one of the most effective weapons that can make or break your car business is word of mouth. You must use it to your advantage by sticking to quality and excellent service delivery.

How Much Should you Spend on a Used Car You Bought Before Selling It?

When you are starting out in this business, you can begin with a budget of $1,000 to $1,500. Try to make a smaller profit of $500 to $1,000. This will give you lots of experience and will not be a huge risk. If it goes badly due to a mechanical issue that you didn’t pick up, as long as you’ve bought the car cheaply enough you should at least be able to get your money back. You can as well get an insurance for the car in order to limit your liability.

It might only be for a couple of weeks, so it won’t be expensive. It’s best to cover your asset. You just don’t know what’s around the corner. In order to make the most profit, you have a make the right choices from the very beginning. In order to ensure that the car you buy will yield the best profits, here are some of the things to check out before you pay for it. Failure to go through some of these parameters may result in buying a car that is more trouble than it is worth.

  • The Oil Level

If it’s low, don’t be too worried until you start the engine. When the car’s warm, get the owner or a friend of yours to operate the accelerator peddle. Go around the back of the car and monitor the exhaust while the accelerator operator stabs the accelerator from idle to full about eight times.

They should hold the accelerator about halfway (mid revs) twice or three times. What you are watching for is oily smoke. If the exhaust is blowing excessive smoke out while under power, just say thanks to the owner and walk away. This means it’s burning oil through the piston rings. It’s an old worn out engine. Don’t buy.

  • The Oil Color

The lighter color it is, the better. If it’s dark, that may just mean it hasn’t being changed in some time. That can still be fine. If the oil has some water in it, walk away and don’t buy. This means it’s got a blown head gasket and is going to cost a fortune to repair.

  • The Radiator

Take the cap off the radiator or cooling tank and get someone to rev the car in bursts. If water bubbles up with air, walk away and don’t buy. It’s got a blown head gasket. Buying a cheap car is one thing, but it’s still got to be trouble-free.

  • Water Temperature

Leave the car idling for 15 to 20 minutes. During this time, follow the water temperature gauge inside the car. If it gets to about 3/4 hot on the gauge, you don’t necessarily have to walk away this time. If the radiator isn’t bubbling with air and there isn’t water in the oil, the reason for the high temperature may be something reasonably easy to fix, like a leaky hose in the engine compartment.

Have a look under the engine. Be careful. Remember this is boiling water you’re trying to find. If you see water dripping and you can spot where it’s coming from, then this could be bargain time. You should be able to convince the owner that the engine’s about to blow, so offer him a fraction of what he wants. If you don’t see any drips under the engine, walk away. The problem is probably serious. The owner probably knows that and he’s actually trying to get the better of you.

  • Water Hoses and Engine Belts

With the engine off and cooled down, go over all the water hoses and engine belts. Have a look at their overall condition. If they all need replacing, that can be expensive and take any profit you could have made out of buying anyway.

  • Engine sound

Turn the engine on and have a listen to the motor while it’s idling. There shouldn’t be any loud ticking noises. Get someone to rev it up halfway and listen again. Make sure it was running on all cylinders while being revved.

If it was stuttering on the way up the revs, that could mean that one of the spark plugs or spark plug leads is failing. This isn’t necessarily a bad sign. If this is the case, the owner may be selling the car cheaply because he thinks the problem is worse. At this point get a mechanic to check the problem out, if you are keen on the car.

  • Is It Leaking Oil

Make sure that the car is not leaking oil. You should move the car away from here it is currently parked to check if there are fresh oil drops on the floor. If you notice a substantial amount, don’t buy it. Oil drips can be expensive to repair.

  • Check the Transmission

For a car with automatic transmission, turn the car on and put it into drive. See if there is any delay before it engages. Do the same for reverse. Shifting into reverse or drive should be totally smooth and instant.

If there is any hesitation or the car literally jumps when you shift the lever, then it’s not a great transmission. This is just a worn transmission, and depending on the hesitation time (shouldn’t be longer than say one and a half seconds) the car may still be worth buying if it’s cheap enough.

  • Test the Brakes

While on the open road, make sure you haven’t got a car riding on your tail at the time, and if the owner’s next to you, give him a warning before you brake. Check how good the brakes are by coming to a fast stop. The car should stop absolutely in a straight line, especially if it’s equipped with ABS brakes. If it comes to a stop on a big scary angle this can be remedied reasonably cheaply. It could be still worth buying.

  • Rusts

If you live in a dry state, rust shouldn’t be an issue. In a state that sees all four seasons, you’ll want to check this out carefully. Some states put salt on the road to combat snow and this helps to increase the rate of rust in cars. Have a good look underneath and around the inner guards on the car. The trunk floor can be a target, so check that and the car sills. The sills run down the sides of the car beneath the doors. If they have rust, don’t buy the car.