Virginians keeping up with new market: Car flipping acquired niche after COVID-19 pandemic
House flipping is a type of real estate in which an investor purchases a property with the intent to improve it and resell it for a profit.
But, have you heard of car flipping?
According to a survey by GuntherKia.com, a new breed of “flipper” is on the market. Individuals are buying cars, specifically electric vehicles, with the purpose of reselling them for a profit.
The survey revealed that more than 1.2 million car flippers are in Virginia. However, half of survey respondents believe car manufacturers should ban car flipping.
GuntherKia.com said that cars lose more than 1/5 of their value in the first year of road use. But, since the beginning of COVID-19, used car prices have increased by more than half, 53 percent actually. Apparently, electric vehicle flippers are finding buyers willing to pay thousands of dollars more than retail price.
One car flipper had a 2022 Hummer EV1 for sale on Facebook for $220,000, but the vehicle retailed for only $105,000. The used car market gained value with supply chain shortages in lithium batteries and microchips. New car production was put on hold for months in 2021.
GuntherKia.com’s survey of 3,012 would-be car flippers revealed that the average person is happy to flip a car and expect a profit of 41 percent of its original value. The percentage of car flippers is highest in Wyoming and Vermont with 33 percent of respondents saying they dabbled in the market or would be interested. In Massachusetts, however, only 3 percent were car flippers or interested in car flipping.
“The car flipping business is definitely a contentious topic – especially with used car prices having begun to soar during the pandemic due to a lack of brand-new vehicles available on the market,” Joseph Gunther IV of GuntherKia.com said in a press release. “There are plenty of risks involved in purchasing a car that has been ‘flipped.’ These kinds of deals are usually done privately and without the authoritative qualities of a dealership, therefore, it’s important to do extensive research prior to investing in any kind of used car — especially one that is being sold for a significantly higher cost than retail value.”
Twenty-one percent of respondents said they would most likely purchase an SUV, 18 percent said a sedan, 16 percent a sports car, 16 percent a pickup truck, 11 percent said a station wagon, 7 percent said a hatchback, 6 percent a coupe and 5 percent would buy and flip a minivan.
While 44 percent said they think car manufacturers should ban the car flipping market, 68 percent said they have no moral disagreement about the new market.