flipping tip

After you’ve looked inside and out, pop the hood. According to Jones, the engine compartment’s general appearance is a key tell. “Cars with dirtier engine compartments tend to need more work,” he says. In other words, dirty engine compartments don’t bode well for your margins. At a private party sale, you’ll have plenty of time to check the car’s vitals. (Let the seller know you plan to do this beforehand. If they get antsy on the day of, that’s a potential red flag.) At an auction, you’ll be much more rushed and face much more competition. Still, you’ll want to check as much as possible of the following for any used car warning signs:

• Engine Oil: Check oil levels and color. Ideally, the level would be within the acceptable range and the color would be relatively light, but neither is a deal-breaker – it’s quick and cheap to change the oil once you’ve taken possession of the car. Leakage is a bigger, costlier issue.
• Radiator: The radiator’s water supply should maintain a normal temperature with no air bubbles or leakage. If the car overheats after a few minutes of operation or leaks water while running, it’s going to need repairs – the question is what kind, and how much they’ll cost. If you’re not a car expert, think carefully before you buy.
• Belts: With the engine turned off, carefully inspect the belts. Visible signs of wear, such as fraying or thinning, will need to be addressed before you sell. According to Angie’s List, you can expect to pay at least $500 to replace a timing belt – a substantial hit to your profit margin.
• Radiator Hose: Repeat this procedure for the radiator hose. This part isn’t quite as expensive as the timing belt, but it’s not cheap. According to RepairPal, a radiator hose replacement can cost upwards of $200.
• Transmission: Most auction lots don’t allow prospective buyers to drive cars during the inspection period. However, most private party sellers are fine with it (and if your seller isn’t, walk away). If you can take the car for a spin, pay close attention to the transmission’s performance. In an automatic transmission, a noticeable gap between shifting and engagement signals significant wear. A gap of longer than one to two seconds is worrisome – the transmission might not be long for this world.
• Brakes: Another test drive to-do: brake checks. Build up a good amount of speed, make sure the road is dry and clear, warn any passengers that you’re about to stop suddenly, and then engage the brake forcefully. You’re looking for a smooth, rapid, straight-line stop. Shaky, crooked, or worn-out brakes need replacement – not a deal-breaker, but a definite margin-eater.