Car Flipping Business: How To Price Your Car For Sale

The Winning Price Strategy

The ultimate success of the car flipping business is the profitable sale of the vehicle. Until the car is sold there’s no flipping that has happened. Until the vehicle is sold at a profit the flipping is not a success.

The success of and extent of the success depends on several factors including among others a well thought out pricing strategy. A vehicle that’s priced well will be snapped out very fast; all things being equal.

First Impression Factors

In our last blog post, I mentioned the critical importance of pictures/images in giving a product (in this case your car) a viewing chance. At the top of critical considerations in getting to a buying decision is the price. To fully appreciate the importance of a price in buying decisions you have to try and understand the psychology of an average buyer.

Generally, when buyers come to the market they usually have an established framework of what they are looking for regards:

  • Quality (Function and Durability)
  • The general outlook (appearance)
  • The value (price and function)
  • Their budget
  • The estimated time it should take to get the product

As they browse through a number of a hoard of options (as is usually the case with most of these car sales platforms like AutoTrader) they only give attention to those products that fit in their filter and dismiss everything else. It, therefore, becomes critical to every flipper to anticipate a lot of things about their target market including the price point.

The price of your car has to reconcile with your would-be customers’ sense of value and their budget. It is an important variable in the overall marketing language mix. If the price is missing or perceived to be somewhat distorted the whole message you may be trying to communicate is just lost.

Critical Factors to Consider

What are those factors to consider to arrive at the price decision? The following are some of those fundamental factors in getting to a price decision for your car:

  • The Book Value
  • The Market Price
  • The Target market
  • The Cost of Buying The Vehicle
  • The Restoration/Improvement costs
  • The State of the Vehicle

Let’s explore these further:

The Book Value

Every vehicle has a book value largely based on the brand; model and year of manufacture. All dealerships will ideally have a pricing guide booklet. It’s an important instrument for all car sales and marketing individuals of note. In the medium, to the long term, you should have this vital instrument.

The book value of any vehicle is the primary and foundational pricing guideline before taking into consideration other important factors. This price also helps you as a flipper regards what price you should pay for the vehicle.

Your profitability will significantly be determined by the price you pay against the book value. Ideally, you want the price to be significantly discounted against the book value.

All things being equal you are in money from day one of your possession of the vehicle. By all means, avoid paying below or just close to the book value unless you are with a special vintage or collectors’ car. This leads me to another pricing category; the market price.

The Market Price

When vehicles come into the market they are generally received differently depending on several factors we can talk about. The market’s reception will in many ways be influenced by some of the following:

  • The performance of the vehicle
  •  Durability
  • Cost of maintenance and availability or accessibility to spare parts
  • The general aesthetics of the car
  • The scarcity of that particular vehicle

There are many more considerations that will influence the market price of any given car. These factors will either drive the price up or down depending on the performance (real or perceived) of the car on each factor. Notice my use of ‘real or perceived’ because at times the said performance is just sentimental with no objective measure and can be easily spread in the market and ultimately influence buyers’ perception about that given vehicle. Whether perceived or real it is difficult to sway deeply embedded beliefs hence you just have to factor it in whether you feel like doing so or not.

If you price your car far above the market price you may struggle to get the attention of any buyers. The market price is in essence the estimated mean average of the aggregate price points of the same car in the market. It’s therefore critical that you factor it in your pricing strategy. If you don’t you will risk holding on to your vehicle for a very long time. As mentioned earlier on when talking about the psychology of buyers; they generally are not blinded to pricing dynamics.

The Target Market

There’s absolutely no way I can overemphasize the power of knowing your target market. Different market segments think and perceive issues differently including purchasing decisions. You could target just a specific part of society or try and do a mixed approach pricing strategy. There’s no one superior approach over the other per se but it helps to streamline and seek to understand your particular section of potential buyers.

Earlier on I briefly explained what and how a market price is determined. The keywords in that explanation are; aggregate and mean average. Therefore within that aggregate, it’s important to try and identify and target buyers within a certain price range. So you could choose to price your vehicle at a certain price point below or above the market price as long as you know how to reach out to those buyers.

Let me give you a typical example of what I mean. There are certain makes and models of cars that are sought after by people involved in the transportation industry. Many; if not most those buyers are willing to pay a premium for their choice of vehicles; even far above the market price. Theirs is an end game calculation. They probably know very well they have the potential to recoup the cost within a short space of time.

When you have therefore chosen such a group as your target market it doesn’t help to price below market. Doing so would be tantamount to leaving a lot of money on the counter. This is usually a very thin segment of the market though, hence you must know them well to help in the development of a tailor made pricing strategy.

What’s interesting though is that even within this specific and unique market segment, there’s a mean average price. If you want to sell fast within the group your price point mustn’t be far off from that mean average.

The Cost of Buying The Vehicle

We earlier on touched on the importance of your purchase price in determining the selling price of your car. The main goal in most cases of going into the car flipping business is to make a profit; hence the price you pay for any vehicle should ideally allow you or give room for you to inturn sell at a price that gives profit.

As a general rule, it is vital to first check the book value and market price before you. As mentioned earlier again you strongly discouraged from buying vehicles priced near or above their book value for flipping purposes. Unless you are buying some vintage or special vehicle it just doesn’t make sense to buy anything above book value.

The Restoration and Improvement Costs

This may sound like an obvious consideration on the face of it. Believe you me many have significantly eroded their profit margins by not paying requisite attention to this seemingly obvious factor. The focus on some car flippers is more getting vehicle ready at the expense of focusing on the big picture: the business.

As a car flipper, the business mindset should always be on the fore at all times. Most people who go into the car flipping business are extremely passionate about cars; which by itself great attribute if one is to go into this business and do well in it. That passion however can significantly overtake and overrun many other critical considerations in the business including the close attention to costs.

It is a fact that remodeling and repairs are unavoidable when dealing with used cars. Yet it is also true that if these are done without due care to their effect on the bottom line this process becomes futile.

This post may probably not allow me to delve deeper into some of the important instruments to employ to monitor and factor the cost of remodeling and repairs well in your pricing strategy. If you are unable to do it by yourself I suggest you sought the services of cost analysis professionals to construct a comprehensive pricing strategy model which includes the cost of remodeling and repairs.

The car flipping business is an entrepreneurs’ domain, not a hobby. It’s, therefore, going to be much easier to develop a model you are going to use to help you come up with profitable price points for marketing your car.

The pricing strategy should start from the time of sourcing as and buying the vehicle for resale as I mentioned earlier. Unfortunately, several people are still unable to give the requisite attention to this rather foundational part of the car flipping business. How to price your car should be a conscious proactive process; it can not be left to chance.

The State of the Vehicle

When all has been done and factored into the pricing process the final thing that will add to the price guide elements of your flip is the outlook and impression of the car. While this can be an emotional exercise it has a good element of objectivity. It is about juxtaposing the two pictures the before and the after. The difference between the two states of the vehicle should help guide you to the final price point of the vehicle.

As I have stated before, all these factors matter in helping one to get to the final selling price. Over time and with experience in the business it should be easy to give weightings to each consideration. There’ll be some that weigh more than others.

From the onset, though it will be important to as stated before; to construct a pricing strategy model or subcontract the costing professionals to it together for your business. You can always tweak the model as you go. Such a pricing strategy model will help in factoring out emotions and subjectivity out of your vehicle pricing culture.

The Common Pricing Mistakes

Having discussed all the above critical considerations on how to price your car it’s also important that we briefly explore some of the most common pricing mistakes when marketing your vehicle in the car flipping business. I’m not going to try and cover all but will zero in on just three of them.

Here are the three:

  • Sentimental Pricing
  •  Profiteering
  • Underpricing

Sentimental Pricing

This indeed is one of the top pricing mistakes in the marketing and sales fraternity. Used car pricing suffers a great deal from this phenomenon on many fronts. Sentimental pricing happens when the pricing is done without any objective instruments to come to a particular price point. It is when we choose to price a product or service based on our emotions rather than using measurable attributes. Difference
Sentimental pricing has a lot to do with:

  • The lived experience with a particular product;
  • What you may have heard from others
  • General love(appeal) of the vehicle in question and
  • Your subjective view of value that you may have added to the vehicle

There are many drawbacks we can talk about in sentimental pricing but the two that stand out to me are:

  • The Prolonged Turnarounds for each flip and
  • High possibilities leaving a lot of money on the table(especially where the seller is emotionally detached from that particular vehicle).

While it helps to infuse an element experiential selling which naturally tends to drop emotional anecdotes from time to time it is an attribute that can equally be damaging to the whole selling process if not handled well.


The love and attachment to as outlined earlier can make one overvalue their vehicles and inevitably try and sell at insanely high prices. At other times this drive for too high prices is not at all related to the emotional valuation of a particular vehicle but rather a realization of an opportunity to make the most usually out of a desperate situation.

Successful and long-lasting entrepreneurship is not just about the most possible profit margin but rather about establishing a strong supportive buyers’ network for whatever you could be selling. It is that community or network of buyers that eventually bring the profit you are going after.

A price is by itself an instrument of communicating several attributes of the product for sale and other several factors including among others how you value those you sell to. Some prices are screaming ‘take it or leave it’ some are saying so many statements. Be sure the price is communicating the right message to your community of buyers.

Make the price communicate ‘trust’ to produce multiple repeat customers and sales representatives to many other potential buyers. Your community of buyers should never feel you are taking them for granted in any way. Rather price your vehicles well that you indirectly forge a prolonged partnership with your business.

How to price your car for sale should, therefore, be a sustained process rather than a myopic and blinkered view of just that particular vehicle. Treating your business like a going concern by pricing your vehicle right will ensure you have buyers lined up for flips you are yet to do.

In your pricing strategy, you need not aim for a once-off kill but a long sustained entrepreneurial journey.


While a profiteering price strategy is a self-defeating business approach underpricing is as equally bad. It is a perfect recipe for business failure.

As stated earlier that your price is a communication instrument about the product for sale; the seller and the perceived value of the potential customers. Underpricing generally communicates several things including, the desperation of the seller; potential sinister source of the vehicle (most likely stolen), or that there’s something fundamental that’s not well with the mechanics or function of the vehicle.

Even when you’ve gotten the car for a song do not be lured into trying to sell it for a price way below the market value. In the process of trying to give a good deal to your potential buyers, you may instead be unawares of the labeling with all sorts of names that will repel buyers for a long time. It’s just not worth it at all; if you are in the business for the long haul it doesn’t help to price wrongly.


In the last post, I promised that I would cover the pricing strategy and the various platforms for marketing each flipping niche. Unfortunately due to the extent of my pricing strategy coverage, it wasn’t possible to include marketing platforms for each niche. In the next post, I will, therefore, go back to explore that subject in greater detail. I do hope though that you gained considerable insights into how to price your car for sale in your car flipping business. The subject is quite vast that I couldn’t by any stretch of the imagination have managed to exhaust it.

Please be kind to leave comments down here if there are many things you probably identify within one or the other in the article or any other pricing considerations for that matter. If this is your first encounter with our blog I suggest you go back to the first post on the series of my posts on the car flipping business in order to have a clear flow of the subject to this end.

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