Unrealized Value In Flipping Project Cars

Unrealized Value In Flipping Project Cars

by Bryon Blakey

A common misunderstanding about car pricing gives speculators the upper hand in realizing real value for their money. In analyzing the true nature of car pricing, you can see where the real benefits are won and lost.

New cars are priced based on a hard cost platform that varies slightly depending on the price of steel, plastics, glass, labor and the many other components that make up an automobile. This gives the new vehicles a fairly predictable price point.

Used cars have a more variable pricing structure depending on the owners situation; a leasing or lending institution that needs to liquidate to cover a loan gone bad or a matured lease, a rental company dumping vehicles that have reached a mileage or year plateau, auto dealers covering overheads and sales commissions or an individual that is looking to replace their current vehicle. Depending on their needs, they will be selling the vehicle at or around a reasonably small price range, banks and other lending institutions at the low end of the price spectrum and dealers struggling to get top dollar. Even though there is a range of value, it is still a reasonably tight and predictable market.

Then we have project vehicles, classic cars from the early 1900s to the previously new car that gets into an accident pulling out of the new car store lot. There are a million things that can happen to a vehicle in its lifetime to make it end up a project car; fires, floods, accidents, shootouts, bad transmissions, engines blown, and even a failed customizing attempt. It could have just been a very good car that has been around forever and wound up in a field or in a barn somewhere. When it comes to putting a real hard fast value on a project vehicle it gets a little cloudy. Some owners will have a low perception of its value for whatever reason, other owners will overprice the same car or truck for different reasons. Some buyers will think that a vehicle is worth nothing while another gives it more credit.

The wonderful thing about project cars is that there is a wide range of cost perception between buyers and sellers. This volatility gives speculators great opportunities in some instances and sellers great opportunities in others. I have put this concept to work for many years myself and it has paid great dividends.

Founder of Black Meadow Financial Group and VprojectCar

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Bryon Blakey – EzineArticles Expert Author