How to make money parting out cars


how to make money parting out cars

I started parting out cars the summer before I moved out of the house to complete my last two years in college. It was honestly by a complete mistake that I got into parting out cars. I began working on our family’s cars when I was sixteen, and when I was nineteen I felt like it was time to make some money from this enjoyable hobby I had developed.

I wanted to get into flipping BMWs because I had performed many types of repairs on these cars over the years. My first flip car was going to be a 1996 BMW 328i. It only had 120k on the dash but the owner said it had an overheating problem and the car honestly looked like sh@@. I ended up buying the vehicle for $500 and had it towed to my buddy’s garage.

Well, the next day me and my buddies realized that the car was not just “overheating”. I suspected it might have a blown head gasket when I bought the thing, but I figured the profit margin would be great even with the added time and expense of a head gasket replacement.

Then I discovered that the car had a title problem. North Carolina is very specific about who can sign the title when you are selling a car. The guy I bought it from had bought it from another guy who was listed as the owner, but his wife had signed the sale. A quick call to the DMV confirmed that this was insufficient to have a “clean title”.

At that point I thought about my options. I did some research on used BMW parts and discovered that I could make plenty of money from a car with only 120k miles if I took it apart. So that’s what I did, and two years later I had racked up a list of more than two dozen cars that I had parted out!

I do want to mention that parting out cars can make a nice side income but it is not for everyone! I have another article on things to consider if your thinking of parting out a car.

If your still reading I’m going to assume that you are still interested in taking the plunge and you want to hear tips and tricks on finding good parts cars, and information about how to run a parts business.

Picking Your First Parts Car

Picking your first parts car will depend on a few important factors.

Your Experience

What type of cars have you worked on in the past? Are you a mechanic or a home DIYer? What’s your toolbox looking like?

When I parted out my first car almost all of my previous experience was working on BMWs, more specifically E36 and E46s. Since I already had plenty of experience working with these cars and this was my first time buying & selling/parting out a car it made since for me to go with a car that I knew. If your not a mechanic I would strongly suggest that you stick with a vehicle model that you have worked on before and that you are comfortable with.

I’m not saying that you can not learn how to pull-a-part another car. Quite the contrary, if you are willing to put the effort in you can make almost any type of parts car a success story. However, in the interest of saving time and money for your first parts car I suggest that you stick to what you already know.

What about if your a mechanic? In my experience mechanics can usually be placed into two categories. 1) Mechanics that’s daily job entails oil changes, brake changes and other simple repairs. 2) Mechanics that either work in specialty repair shops (BMW, Mazda, Mercedes, Honda, imports, etc) or they work for generalist shops, but these shops shy away from many import brands. What I’m saying is most (not all!) mechanics have vehicles that they specialize in and my advice to DIYers applies to most mechanics as well.

Another consideration is your tool box. If your the home DIYer it’s likely that many of the tools you have bought over the years are specific to the cars that you have owned. A socket is a socket and a ratchet is a ratchet, but I have plenty of tools that I have bought overtime that are specific to BMWs. If you decide to buy a vehicle that you have not worked on before do not be surprised when you have to drop money on tools that are specific to the car you have purchased.

Your Location

Convertibles are the name of the game in Florida, and are extremely popular in many other fair-weather states. Trucks are ridiculously popular and over-priced in my home state of North Carolina. This may not be as big of a consideration if your close to a big city, because you will have a large market of many types of cars. However if you are located in a more rural area it will be more important for local sales to pick a vehicle that is popular in your geographic area.

Why is it important to be aware of your local area car preferences? When I part out cars I do a ton of business on Craigslist. When you get a parts car you want to maximize the number of sources you have to sell parts. Although choosing a car that is unpopular in your immediate area wont hurt you on the internet, it will severely limit your ability to sell parts locally.

Your Space

Here is another reason to choose your car carefully and I can speak based on an experience to this issue. After a couple BMW part outs I decided to expand my horizons a little bit and try out another manufacturer. I settled on Mercedes Benz because I had worked on quite a few of them previously and I knew that used parts went for a high dollar. I can say now that it was a big mistake.

Why? Well the Benz parts did sell for considerably more than the same parts I pulled off of BMWs. But the parts moved out of my garage at a significantly slower rate. What this meant was months later I still had 50-100 parts in my garage clogging up space for additional cars. The sad part was I never sold a lot of those parts. I ended up junking many of them. Yes, I still made profit but I decided I was never going to part out a Mercedes Benz again.

So why were the parts not moving nearly as quickly? Well I almost exclusively parted out BMW 3 Series models. It is BMW’s most popular model, and the older model E36 and E46 generations are extremely popular DIY vehicles.

What about Mercedes? The vehicle I parted out was an E-Class which sells significantly fewer cars than the 3 Series year-to-year. In addition, E-Class owners are less likely to be DIYers, which reduces the number of people wanting used parts for these cars.

Comparing the Price of the Car to the Parts

So what makes for a good parts car? You don’t want to get into the game of where your profit margins are too slim and you need to start pulling every little part just to make your purchase worth it.

A good rule of thumb is to do some research on the car your interested in buying and identify what the used major parts are selling for. If the engine, transmission and differential are more valuable than the price of the car than it will make a good parts car.

I play around with this rule a bit because I often buy parts cars that have either a bad engine or a bad transmission. In that case I will check for other additional major parts that are easy to pull and that are quick sellers. These parts include: bumpers, fenders, leather seats, hood, and doors. All of these parts are extremely easy to pull and are often among my first sellers on Craigslist.

Parting Out the Car

Make an Excel Spread Sheet

Every time I part out a car, I make an excel spreadsheet of parts I want to pull and there used value. I come up with my list by checking the value of them through eBay completed listings and then testing them on the car to confirm that they are in good working order.

Once I get through that list I am done and I sell the car to the junkyard. Pulling parts before you sell them works fine as long as you don’t go crazy pulling parts that are likely going to sit in your garage for six months.

List in lots of places

I usually list individual parts on Ebay, and I list the car as a whole on Craigslist and Facebook Marketplace. In the listing description for Facebook and Craigslist I will list the major parts on the vehicle and the prices for them.

A happy customer is a potential repeat customer

Make sure that the part you are selling to customers is a working part. If you want to build a business out of this the more happy customers you have now, the more repeat customers you will have later!

A bonus tip is to check back up with your customers later on. Wait two weeks or so and then email to confirm that they are happy with the purchase. If there is a serious issue you can offer a return or refund. Every good business is built on a solid foundation of excellent customer service.

Running a Business Tips

Branding

Have you ever bought a used part off of Ebay? It’s easy to differentiate the pros from the guys just parting out their old junker or just getting started. Why? Well besides the fact that the pros will usually have hundreds or even thousands of good reviews they will often send some marketing material along with your used part. It might have some sort of branding with a logo and include an email address or a website name.

After you part out your first car you may very well decide that you really like parting out cars. If you do, business cards are cheap and a professional email is free. Create a logo, get it stamped on a business card with your name and an email address and send it out with your used parts that you sell online. A business card is also something that you can give to locals that you sell to in person.

Website

If you are really wanting to run a business, eventually you may want to start a website. They are incredibly easy to create through WordPress and they have a number of advantages. You can build a community, create an email list and branch out with other sources of revenue besides parting out cars.

Conclusion

Hope you enjoyed this article and it helps you along the way with a successful part-out and even a business! At the very least you will have learned a valuable experience from the process of parting out a car!

Stephen Metellus

I am a BMW enthusiast and owner of abetterbmw.com! I have been repairing, flipping, and parting out BMWs for nearly ten years. I love these vehicles and I hope you will find my articles and YouTube channel helpful for whatever BMW project you have in store!

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