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Auto Sales

By: J. F. (Jim) Straw
1998 Phlander Company.

Explanation: In these times of corporate downsizing and union strikes, many people are opting for a good Used Car, instead of buying a new one. - Other people have decided to sell their second of third cars and bank the money.

The Sellers and Buyers first contact the customary Used Car Dealers. - These operators, like yourself, are in their business to make a profit. So, they must buy at a fair wholesale price, and sell at a higher retail price in order to make their profit.

Even though this is nothing more than good business, many sellers refuse to sell their cars for what they consider to be "less than value" - Considering value, of course, at retail. On the other hand, many buyers feel that the retail prices asked by Used Car Dealers are excessive.

For these reasons, many sellers decide to sell their cars themselves, to make more money. And, many buyers decided to buy directly from an individual owner to save money.

This ready-made market is yours for the tapping. If you handle it the right way, you could make a fortune and render a much needed service in your community.


In most states, you must have a license to sell automobiles. Since getting this license can cost you a good deal of time and money, I suggest that you DO NOT sell automobiles. - That sounds like I have put you out of business before you started, but, actually, this license fact can make you rich.

If you got a Dealer's License, you would just be another Used Car Dealer. The sellers wouldn't want to deal with you, and the buyers would think you were cheating them, too. - Judging you like all other Used Car Dealers.

What Do You Sell, if you don't sell cars? - Simple! - You sell a form of Advertising space that brings the prospective buyers into contact with the individual owner/seller.

First you will need to find a vacant lot where you can display the Used Cars. These lots can usually be rented from the owner for a small amount; because they are just sitting idle, producing no income, and costing taxes.

Once you have located a lot, and made arrangements to use it, set up a sign on the street, reading; "USED CARS - For Sale By Owners" (make the sign readable from both directions).

You make your MONEY by letting owner/sellers set their cars on this lot. You charge them a fee of $20 per month for each car they leave on display. (This price is much lower than what it would cost to run a classified ad in the Newspaper for one month.)

To get your first Used Cars to display on your lot pick up a copy of your local Newspaper and phone the people who are advertising their cars for sale. Explain your service to them and ask them to meet you at the lot - sign them up. (See details further on.)

In order to get more and more cars for display, run a Classified Ad, something like this: "SELLING YOUR CAR? Sell it faster on display. Phone: ....."

Have the people who call in response to the ad bring their car and meet you at the lot. When they arrive at the lot, tell them something like this:

"In order to sell your car, you need to advertise it For Sale. Newspaper Advertising is fine, but people can't see your car in the Ad. Here on the lot, they can look at it, think about it, and call you if they are at all interested. Using Newspaper ads, you have to show your car to a lot of people who really aren't interested. It costs you money for the ad and then more money to show it to people who respond. Here on the lot, the people see the car. They only call you if they are really interested ... PLUS ...We run ads constantly to bring prospective buyers to the lot to look at the cars on display."

If the owner/seller wants to leave his car on display, get him to sign an Advertising Agreement and pay one month, in advance. Your advertising agreement can read something like this:

"I, the undersigned, hereby authorize ... (your name) ... to display my car (For Sale) on his lot, located at ... (lot address).

For this service, I agree to pay $xx ($20 to $50 depending upon the economy in your community), in advance, per month for display space. I understand that ... (your name) ... will not endeavor to sell my car for me, but will advertise the lot and its location in order to bring prospective buyers to see my car and others on display.

"If the prospective buyer wishes to test drive or inspect my car further, it will be my responsibility to make such arrangements with the respective buyer. I will pay NO sales commission or fees beyond my display space rental.

"I further understand that ... (your name) ... assumes no liability for loss , damage, or injury incurred by having my car on display on his lot."

Date: Signature

NOTE: Be sure to include seller's Name, Address and Telephone Number on the Agreement.

After the owner has signed the Agreement (two copies) and paid the first month's rent, put a sign in the window of the car, showing: Price, Owner's Name, Telephone Number, and Times to call. (Get a set of bright-colored Magic Markers.)

In order to bring prospective buyers to see the cars on display, run a classified ad, something like this:

"USED CARS For Sale By Owners. See them on display at ... (lot address)..."

Once you get a few cars on the lot, you will have people stopping to look at the cars all the time. Put up a sign at the back of the lot, telling the people to: LOOK AROUND - Call the owners to test-drive the cars you like. - Buy direct from the owner. - NO Sales Agents or Commissions to pay. - Phone ... (your phone number) ... if you want to display your car For Sale on this lot.

It won't be too long before your lot will be full of cars and people looking at them. - After just a short time, it will become the place to go looking for a good Used Car, in your area.

Fifty (50) Cars, at only $20 per month, will bring-in $1,000 per month. Your costs of Advertising and lot rent will probably be around $250 per month, so you can make an easy 75% profit: with NO WORK!


1) After you get going, it would be a good idea to have the telephone company put four or five pay-phones on the side of your lot: so the buyers can call the sellers, then and there. - You'll also be able to pick-up a few bucks from the telephone company each month, for the calls they make from your pay phones.

2) In order to get your lot, you might offer the property owner a percentage of your gross instead of a monthly rental, until the lot proves profitable.

NOTE: A friend of mine rents unused space on the parking lots at shopping centers; on the weekends. He uses bright colored flags and tape - with signs on each corner - to mark his space. Charges the sellers $10 for the weekend. Advertises "CARS For Sale By Owners - Saturday & Sunday only - 9 a.m. to 9 p.m. - (name & location of the shopping center)". He even has a Finance Company agent on hand to offer 'financing' for the cars - for which he gets a 'commission' on each car they finance.

3) ADDITIONAL REVENUE: You can offer the seller/owner a clean-up service for his car. Charge him or her about half the going rate in your area (check with the "car detailers" in your area) to wax & shine the car, vacuum it out, and generally clean it up for display. - Hire high-school kids to do the actual work for 50% - or- let the Boy Scouts, or some other group, do it as a fund raising project.

4) You can reduce your Advertising cost by setting up a contract with the Newspapers to run both of your classified ads every day for a set number per month.

5) In the beginning, you can let Used Car Dealers set some of their cars on your lot - if they pay your price - using their name and home phone number (not their business number) in the window of the car.

6) WARNING - DO NOT, repeat DO NOT, get involved in the sales of the cars. If you do, you might have to get a Dealer's License.

7) DO NOT have an office on the lot. Let your signs tell the prospective buyers what to do. Also, notify the Police so they can drive through your lot at night.

8) Keeping with my philosophy of not doing anything that you can get someone else to do for you: Get someone to answer the phone calls, get the Agreements signed, etc. - pay them 25% of what they take in. You'll still make a bundle.

9) After you get your first lot operating, why not set up similar lots in all the surrounding towns. - An easy way to compound your earnings.

NOTE: Shortly after this report was originally published, one man used a rather unique twist and is making bundles of MONEY every weekend. - Instead of renting a lot, and displaying cars there, this fellow uses down-town covered parking garages (the ones with 4, 5, or 6 floors) on Sundays;when they aren't being used. He charges each owner/seller a small fee to park his car in the garage on Sunday, then advertises the For Sale by Owner showing of cars on TV and in the Newspapers. Then, he charges buyers$1 to get into the parking garage to look around. And, you might want to add a Finance Company agent; like my friend did on the shopping center parking lots. - This might be just the extra angle you need to make this operation pay-off like a broken slot machine for you.

Article by J. F. (Jim) Straw

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