We own two pawnshops and flipping defaulted items or purchased items is what we do. Never got into cars but came across this deal and took a stab.

2013 BMW S28i Hoping to flip it around tax refund season. Fun car to drive in the meantime. Anyone hit up auctions and flip cars on the side? Have a few questions.

It's a tough business. There's usually a reason a car is at an auction. Especially now when dealers are desperate for good inventory. Fees are high. Tax time car business isn't as fun with so many note lots doing super low down payments.

I'd recommend just cruising facebook marketplace. I've found a few deals that were worth paying the taxes on, getting a title and still making a little money.

a07nathanb said:

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It's a tough business. There's usually a reason a car is at an auction. Especially now when dealers are desperate for good inventory. Fees are high. Tax time car business isn't as fun with so many note lots doing super low down payments.

I'd recommend just cruising facebook marketplace. I've found a few deals that were worth paying the taxes on, getting a title and still making a little money.

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Thanks for the reply. Do you have to pay sales tax on a resale if you have a sales tax cert or do you need a special vehicle sales tax cert? Eating 6.25% would definitely change my feelings on it.

Well I didn't want to get a dealers license but it may be worth it to avoid that 6.25%. Gonna have to look at some numbers to see how this plays out for only 1-3 cars a year and some fun.


Sale for resale. A sale for resale is not taxable. A sale for resale is a sale of a motor vehicle to a purchaser who is a dealer who holds a general distinguishing number issued under Article 6686, Revised Statutes, as amended, and the Transportation Code, Chapter 503; and
(1) holds the motor vehicle exclusively for resale; or
(2) operates the motor vehicle with metal dealer plates in accordance with Article 6686, Revised Statutes, as amended, and the Transportation Code, Chapter 503

Less than 5 cars a year saves you from getting an actual dealers license. Lots of rules and requirements around the retail license that makes what you want to do difficult.

You can get a wholesale license to give you access to auction but speaking from experience (I.e. it's my job) the auction is really the last place I want to buy cars.

Honestly, for the hassle and extremely low volume, you are much better off building a relationship with a buyer, used car manager, or independent lot owner that you can call on the rare occasion that you look at swapping a car for a buy bid and back up from there.

ETA Avoiding the tax will require the wholesaler license.

My email is my profile if you get cars I am happy to bid them for you. I buy corporate for a very large public dealership group.

Yesterday said:

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Well I didn't want to get a dealers license but it may be worth it to avoid that 6.25%. Gonna have to look at some numbers to see how this plays out for only 1-3 cars a year and some fun.


Sale for resale. A sale for resale is not taxable. A sale for resale is a sale of a motor vehicle to a purchaser who is a dealer who holds a general distinguishing number issued under Article 6686, Revised Statutes, as amended, and the Transportation Code, Chapter 503; and
(1) holds the motor vehicle exclusively for resale; or
(2) operates the motor vehicle with metal dealer plates in accordance with Article 6686, Revised Statutes, as amended, and the Transportation Code, Chapter 503

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If I were you, I would marry your car flipping idea with your pawnshops. As you know, the money is in the financing. You've already got the perfect clientele for it that know and trust you. Paying their car payment to you (the pawnshop) once a month gets them into the shop an extra time per month where other deals and purchases is bound to happen.

Mookie said:

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Less than 5 cars a year saves you from getting an actual dealers license. Lots of rules and requirements around the retail license that makes what you want to do difficult.

You can get a wholesale license to give you access to auction but speaking from experience (I.e. it's my job) the auction is really the last place I want to buy cars.

Honestly, for the hassle and extremely low volume, you are much better off building a relationship with a buyer, used car manager, or independent lot owner that you can call on the rare occasion that you look at swapping a car for a buy bid and back up from there.

ETA Avoiding the tax will require the wholesaler license.

My email is my profile if you get cars I am happy to bid them for you. I buy corporate for a very large public dealership group.

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Thanks for the info. Saving your email.

What's bad about the auction? Too much leg work? Low margins? Crap cars? All of the above?

Low margins and too much leg work. Youre flipping script on sourcing. You don't have the insights into the retail market that your dealer counterparts do without investing heavy time and effort, so you're going in blind and buying with your "gut". You'll lose more often than not.

I like the idea above about creating your own note lot on the side, which would involve a dealer license for sure. But if you have steady stream of pawn cars then you may have something.

Every dealer will tell you they can sell more cars if they have them. The auction is the least profitable place to acquire them. I will buy every consumer car I can get my hands on right now.

Friend of mine flipped his Jeep 3-4 times before it stopped on its roof. I suppose flipping one on its side would be less exciting.

I don't flip cars but in another life I would be WatchJRGo (youtuber)