This transcript was generated from the episode audio and may contain minor errors.
I don't know if you have noticed or paid attention in the news, but the used car market continues to amaze. If you have been in the market for a car, especially a used car, you may have found that it's quite difficult these days. So lots of interesting issues with supply and demand, supply chain, so-called labor shortage, etc. It's just really contributed to used cars being very expensive. So I was actually going to announce today that I am shutting down the podcast to open a car lot in my backyard, but then I realized a few problems. Number one,
I don't have a backyard. Number two, I don't have a car. Number three, I don't actually know anything about cars. I really don't like to drive. And number four, I don't like to talk on the phone, which you probably have to do a good amount if you are a car dealer. So considering all
that data, I realize I should probably stick to podcasting and writing books. Still, I do try to pay attention. And like you, I've seen these stories about new cars holding their value long after they leave the lot, which never used to happen. It used to be like you drive the car off a lot and you lose 30% of the value or more and used cars selling for major premiums all because of a nationwide shortage. So today's caller wants to know how can he profit from this market? That's
the question. We're going to talk about it here. I'm going to say a quick thank you to our sponsor and then we'll dive in. Hi Chris, this is Trent and I've been following the show for a while. Thanks for all the help. The economy is wild these days. If you've tried to buy a used car
recently, or if you know anyone who has, you probably know that prices are higher than ever. I think it's because of rental cars being sold off or something to do with supply chains. Whatever it is, used cars are the new iPhones. I've heard that in some cases, dealers are buying back cars for more than they sold them for last year. A long time ago, I bought and sold a couple of cars a year, not really a big business, but just something to make extra money. Now I'm thinking I
wish I had stocked up on vehicles before the pandemic instead of buying toilet paper. But since it seems that this market will continue for a while, what's a good way to profit from it? All right, Trent, thanks for the question. I think the key point there is what Trent said about how a while ago he bought and sold a couple of cars a year, not a big business, but something to make extra money. Well, maybe it wasn't a big business, but it obviously gave him some experience with buying and selling cars for resale. You definitely learned a lot through
that process, I'm sure. Because he has that experience, I think this might indeed be a good time to capitalize on that and to look around and say, where can I buy a car and resell it? Is it the same method as before? Is it something different? But for everybody else, for somebody else who's out there and like, oh, I've never done this before, I'd like to get into it. Well,
I would say the market might continue for a while. This price disparity, this shortage, which contributes to higher prices, it might continue for a while. But personally, I think it's better to observe and consider what you can learn that will apply to the next big thing or to any market. As mentioned, I'm not an expert in cars, but I do know something about markets. So I would say pay attention to how supply and demand affects prices, pay attention to how hype creates hype. Sometimes prices go up just because people want something and they
want something just because they see other people who want something. So it can be an interesting circle where the perceived value becomes the value. I mean, ultimately all value is perceived. But I think what I'm saying is that the story around a particular shortage generates higher prices on its own. And then if you do want to sell cars specifically, I would look at Reddit and auction sites, just be aware that the price is high for a reason. Dealers are struggling to keep inventory,
rental cars are scarce. There are still supply chain problems. So all of those things drive up the price and not just for consumers, but also for sellers. Right dealers are having to pay more at auction for vehicles. So it's not as though everyone in the market is making a ton of money, because a lot of their prices are high as well. You just got to keep that in mind. You know,
it's not like you can buy a car for the same price you used to be able to buy it for and now sell it for a much higher one. Your acquisition cost is going to be high too. Keep that in mind. But as for Trent, I don't mean to discourage you in any way. Since you have some experience buying and selling cars, definitely do some more research and see if this might be a good time for you to return to that. And of course, let us know how it goes. Listeners, let me know how we can
help you as well. sidehustleschool.com/questions. The podcast is here every single day, seven days a week. Thank you for tuning in. My name is Chris Guillebeau. This is Side Hustle School.
From the Onward Project.
