Start Your Own Business Selling Classic Cars
Selling Classic Cars
For 20 years my husband and I sold classic cars, both in the States and in the UK. It is a business which can be exciting, infuriating, profitable and risky.
Don't think you have to be a classic car enthusiast to sell them, you don't. In fact, it's best if you aren't. It's likely the person buying the car has been reading books and compiling information about his dream car and knows virtually everything there is to know about it. You don't have to compete with that, you are just a salesman.
I have seen numerous people who love classic cars and think they can sell them. They make critical errors which cost them a lot of money. I'd like to share with you a few things we learned in our years of doing this business.
Our First Classic Jaguar
Although my husband had been selling modern cars, this Jaguar was our first classic. When we advertised it, the phone didn't stop ringing. That was a Eureka moment for us and it set the course of our lives for the future.
We had a wide assortment of classic cars over the years. Basically, those that my husband saw value in, we bought. Did we make money on all of them? Almost all. They all sold one way or another. Although we had a few American classic cars, the majority were European classics, some of which we shipped back to the UK.
While waiting for them to sell I drove some. These were ones which had enough space for kids and shopping and also weren't likely to leave me stranded somewhere. When I was in California I drove a classic Cadillac Eldorado convertible, it was white with red upholstery and I always thought it should have had a set of cow horns on the front. It was reminiscent of something you'd expect to see in Texas. VW convertibles were also my favorite in California and I rarely had the top up, as it was the perfect climate for them.
When we returned to the UK, more often than not I was driving cars we had in stock. These included a Riley Elf, VW Beetles, a Bristol, an Aston Martin DBS, a Volvo Amazon, a Morris Minor, and various Mercedes and Jaguars. My husband used to joke he had a hard time getting me out of the Aston Martin when it came time to sell it. I will admit, I loved that car. Although if I had to have a classic car for everyday use, it would have to be a classic VW Beetle convertible. I was making the mistake of getting too attached to a car, and as any car dealer worth his salt will tell you, that isn't a good thing. The idea is to buy and sell, and do it again and again.
If the car was either a restoration project or extremely valuable, such as the Lamborghini pictured, we wouldn't drive it at all.
These photos were scanned from old negatives I had stored in a box, hence the low quality of them.
Advertising Your Classic Car
Love it or hate it, you'll need advertising. Times have changed since we started and now you have the potential to advertise on the internet on sites like eBay or to build your own site. Advertising is going to be your biggest ongoing expense, with the exception of purchasing your cars. Sometimes it works and sometimes it doesn't; that's the hard truth. It always amazed me that at the drop of a hat, everyone would lose interest in buying classic cars. As in any business, there are downturns, but we were advertising internationally so when one market dried up, another opened. If the dollar dropped against other currencies, it made our cars look reasonably priced to a European.
Depending on the car, you can advertise locally which is cheaper. Let's say you have a classic VW; those could be advertised locally, as they aren't that rare unless it is an early model, and your profit margin may not justify advertising it internationally.
If you have something a bit more special, then you should be targeting an international audience. Magazines such as Classic Car, Hemmings, and Classic and Sportscar are your best bets, especially if your car is European.
Advertising is the biggest headache and cost you will have. When you decide to advertise and you have no calls, it is an awful feeling. You feel as though you have wasted your money. Each month your car isn't selling, it's costing you money in advertising and is deteriorating.
If you're serious about starting a classic car business, then not only will you be advertising your cars, you should consider running ads saying you buy classic cars. Some of the people who call you will be ready to sell and others may only want a valuation of their car. There is money to be made from giving someone a valuation. The price you would pay is not the price of the valuation.
Keeping abreast of the changing prices and trends in classics is not only smart, it's crucial. We used three magazine sources: Classic Cars, Classic and Sportscar and Hemmings. Advertising in these reached a global targeted audience who were ready to buy.
Don't Renovate, Just Sell
I am sure you've read about someone who bought a car, renovated it and sold it for a staggering amount of money; we've all read a similar tale. What you don't read is how much they spent on it doing the renovation. Trust me, I have been there and seen it. Unless you can do the work yourself, and that includes not just the engine, but also the bodywork and painting, you are going to be spending a lot of money. Hiring professional people to do the work is expensive. Hiring a friend who thinks he's a professional will work out even more expensive when you have to redo his work.
We have had cars restored from the ground up, and it isn't worth doing. In those stories when people tell you how much they sold the car for, most don't tell you what it cost them to have the work done. Not only is it difficult to find a qualified person, but also the correct parts. I liken it to people who gamble: they tell you how much they win, but they don't tell you about their losses.
Premises or Working From Home
If you are only going to be selling a few cars per year, you may be able to do this from your home. This, of course, will depend on where you live, who your neighbors are and how discreet you are.
No one wants a bunch of people parking outside their home and coming to look at cars. Plus in some neighborhoods, there are often regulations about the number of cars you can have at your home. If you have a garage, the classic car is best kept in there as they are more likely to deteriorate than a modern car.
If you decide to rent or buy a unit to sell cars from, your costs immediately increase. Expect additional costs including:
- Rent or mortgage payment
- Phones/ internet
Buying Your First Classic
If starting a classic car business is something you wish to do, you will already have an idea about different models and will have been looking at prices. The time to start is now. You don't have to be an expert, you just have to buy the car for a good price. Start doing some research as to the price of cars in the magazines listed above.
As with any car, you should make sure the person has all the documentation in place. Check that the VIN number matches that on the document. If they have had work done and kept the receipts, so much the better. Depending on the condition of the car, you may be able to drive it away, you may not. Start now to build a relationship with a towing company. When we were doing this we had one towing man who was fantastic. He would not only pick up cars and bring them to our house, he also would take them to the docks where they would be put in a container and shipped back to the UK. On one occasion, he traveled halfway across the country to pick up a car for us.
Once when he received a frantic call from me, he dropped everything he was doing to come and help us. We had a 1929 Rolls Royce Sedanca de Ville which rolled out of the driveway and into a 4-lane road. We lived on quite a busy road, and the thought that someone might hit it was nerve-racking.
I am including an image of the model so you can see the size, however, ours was a restoration project and didn't run. The sheer size of it and the slight incline back to the garage made it impossible to move it without a tow truck.The car had come to rest in the center of the road and most people just slowed to ogle at such an unusual car and the two people standing in the road directing traffic around it.
Don't Spend Anything on the Classic Car
You may think I'm being pedantic about this, but let me tell you, with a classic car, there will always be something else which needs fixing.
Let me give you an example. My husband allowed our son to buy a car with the money he'd save. He bought a classic Mini, it was a great car but it needed a new battery. When someone came to look at the car, we gave the car a jump start but told the man, it would need a new battery. My son was excited, he knew if he paid for a battery, the man would buy it. My husband discouraged this thinking and guess what, the man bought it without it being replaced knowing full well he would need to purchase a new one. If you think this is being unnecessarily tight, it isn't; it's business.
Who Buys Classic Cars?
People who buy classic cars are different than ordinary car buyers. Sometimes they have been searching for a long time to find a car they have always dreamed of owning. We had one gentleman arrive after reading a review about our car in one of the classic car magazines. As soon as he arrived we knew it was sold. He asked if he could telephone his wife and he was almost in tears when speaking to her. He had finally found the car he had wanted for years.
A few more things to mention: if a man arrives alone you are more likely to make a sale than if he is accompanied by his wife. If they arrive in a Volvo, you have virtually no chance of selling to them. This may sound like a far-fetched statement, but in my experience, it's true.
We advertised in international magazines, and when someone flew over to the States from Europe, just to see a car, we knew there was an excellent chance of making that sale. This happened on numerous occasions as most Europeans wanted to buy a car from somewhere dry, such as California. Rust on classic cars is a big problem throughout many parts of Europe; this is why many choose to buy from the dry hot states.
Congratulations, You've Made a Sale
You've just sold your first classic car, what do you do? You have a few ways to go here, but reinvesting the money in another car is the best thing if this is to be a long-term occupation. Pat yourself on the back and move on to the next deal. If you're doing this as a business, you need to treat it as a business. While you are waiting for a sale to happen, you should be lining up your next deal.
You should always have enough capital on hand. If someone is desperate to sell, they may take a lower price, but they won't wait for you to get enough cash together. You need to keep your finances liquid.
Questions & Answers
I own a 1969 Cutlass Supreme. What would be a good starting price for it?
Your best bet is to look at others that are the same model, year and condition. Places such as Auto Trader and eBay are good places to start.
If you are serious about starting a business, then be prepared to sell for less than you think it's worth. I have seen so many people think they have a business because they have a car (or cars) but never sell anything because they are overvalued.Helpful 1
(c) 2017 Mary Wickison