Flipping a Toyota RAV4 - Wise Investment or Fraught with Risk?

Hey fellow OzBargainers,

I'm hoping to tap into the collective wisdom here to discuss a potential "investment" opportunity that has landed in my lap.
I decided to ask here because I believe our collective objective to being on this great website is to find a great deal, and that we can also sometimes be financially risk averse.

Background

In March 2022 I ordered a Toyota Rav4 via Novated Lease at work. We were told there was a lead time of ~6 months.
It was a Hybrid 2WD Blue XSE with tinted windows, weather shields and rugged floor mats.

Following the second rate hike in June-2022, we cancelled the car order, and took many actions to extend our financial runway given that the yield curves were suggesting that rates were going to go up to 3-4% in a really short amount of time. (Was worried there was going to be a recession)

Well, low and behold, 15 months later, we're called by the dealership, our car arrived. Apparently it wasn't cancelled and as such, our car was available to re-purchase with basically instant delivery. The option is ours, we were told that there is a massive wait list of 18-24 months and that this car would be gone in a heartbeat if we didn't want it.

Since the original order, the car has been upgraded to the 2023 model, which has a bigger infotainment screen + USB C ports everywhere now. This also means that the car price went up, so we were offered to either go novated lease for ~$48k or buy it outright for $52k.

Opportunity

Based on a search in the Sydney area, I'm obvserving that 2023 Rav4 XSE are quite rare.
Infact, even the 2020-2022 vintage of Rav4 hold their prices surprisingly well.

And nearly all listings of 2023 Rav4 XSE on carsales are referring to made-to-order lead times.

There is one, however listed ready to drive off the lot for damn near $70,000!

Now, we're a frugal lot, and while we do need a car, it is definitely not a car with a $52,000 rrp price tag.

That said, I'm entertaining the idea of reselling it. Take a hit on the insurance cost as well as any associated costs to sell the car.
But seeing that the premiums on cars that are available for instant pickup is very tempting.

The potential for a $10k-$18k profit is very attractive. It would mean that we could buy a new family car with the proceeds.

Concerns

I'm weary of the risks though, how does one even receive $60-70k from a private buyer?
What if i crash or scratch the car before sale?
What if I cant find a buyer and we end up in a recession?
I guess the risk-free rate would be what a dealer would give me for the car, which would basically be near the RRP anyway considering the lag in deliveries.

Love to hear everyones thoughts.

Poll Options

  • 313
    Do it
  • 43
    Dont do it

Comments

  • +3

    How is this different to ticket scalpers?
    .

    • +7

      I think you can draw parallels to ticket scalping, no doubt. I can also say this is my car, manufactured to my specs, which I ordered 15 months ago.

      Someone whose on the market to buy a car now is due to wait 18 months anyway, as per Toyota's allocation policy, right?

      This could also be framed as the natural markets functioning to create a premium for instant gratification.

      • +2

        Who's, abbr. Who is. Just saying.

        • 😅 thanks, thats the second time i've been told this today. hopefully I won't forget again!

        • +3

          Don't forget to mention "lo and behold" and "wary".

          • @gesco: Oh god, how embarrassing. 😅

            Thanks for pointing that out

    • -8

      Ticket scalpers have integrity.

    • +41
      • It’s a car not a concert
      • OP pre ordered sometime ago not with the intent of doing this and not knowing what the market for resale would be at the time
      • ticket scalpers buy as large a quantity as they can to control supply, in this instance OP has no control over supply
      • OP was genuinely intending to buy the car at the time, professional ticket scalpers have no intent of attending the event with the excess tickets they purchase

      So quite a few differences

  • +22

    List it for $70k before you buy it then arbitrage to your buyer. Pocket the difference $18k and get a cheaper car… and a steak dinner for me.

    • +1

      I did a sneaky and tried to, can't list cars without VIN or rego based on my short adventure into exploring carsales/gumtree.

      • +25

        then ask the dealer for the vin
        Also, you should flip it. Its your car and people who do not want to wait will happily pay a premium to get it now

        • +3

          who do not want to wait will happily pay a premium to get it now

          They might pay a premium. IMO the ship for flipping for big profits has sailed. You might sell it for a little more, but not as much as mid covid.

        • +1

          Some states won't reveal the entirety of the VIN when doing a rego check e.g. NSW

          • @kerfuffle: The VIN should be in the contract before signing though?

            • +3

              @ATangk: That’s if your car has actually been made. If OP has a new contract and not the one he originally signed when making the order, then he’d have a VIN.

              Source: signed three contracts for my Toyota as I changed the order twice; third one had the VIN as the car was already made and on the way

      • How about Facebook? It's miles better than gumtree anyway. Though I agree that Carsales is probably the best option for a car like this

    • -6

      Pocket the difference $18k

      Don't forget to keep some for CGT come tax time.

      • +1

        https://community.ato.gov.au/s/question/a0J9s0000001CUe/p000…

        A car is generally exempt from any capital gains tax and in turn is not counted as assessable income. We define a car under this exemption as being designed to carry a load of less than one tonne and fewer than nine passengers. You can read more about excluded assess on our page on capital gains tax.

        • +5

          The key word here is generally, and it is all about intent. Your intent is to buy and sell the car for profit, this is different to realising a gain on a private good. Under the tax legislation this would be considered income, and you would be liable for tax. The likelihood of being audited for not including it would be low, but it is present, particularly as all registered vehicle purchases and sales are provided to the ATO

          • +1

            @RMBC: ATO went after people fleet buy car under fake company to make profits

            • @nikey2k27: That doesn't surprise me given the information available to the ATO for vehicle purchases/sales. Setting up a car dealer to get around luxury car tax is another well known vehicle purchasing rort

      • +7

        Oh don't worry, dear government wont miss out, they will scam stamp duty twice, once from the OP and then again from the person who buys the car a week later.

        • +1

          Stamp/transfer duty is charged by the state govt, so the feds still miss out

          • +6

            @larndis: My heart breaks.

          • @larndis: Isn't the customs duty and GST federally collected? - although they usually disseminate much of GST to the states

        • +1

          Government always gets their bit.

      • Imagine being this stupid lmao

    • Do you mind explaining it? Didn't understand the 'arbitrage' part.

  • +11

    Do it. The market is saying 60k for a used XSE with tens of thousands of kms.
    Yours is brand new is definitely valued at 70k will definitely sell for 65k

    Free money. Why not

    • Too tempting, you're saying exactly what i'm thinking, I was trying to think of reasons not to, like the risk that I might not be able to find a buyer.

      • +8

        Worst worst case is if you get back what you paid for it and based on the market. There’s no way that’s happening. Profit $$ guaranteed
        In the thousands

      • -1

        your car is blue people killing for colour one you get with less time a white ones .

    • Why not 75K and negotiate from there?

  • +1

    just do it.

  • Does anyone know if it's hard to sell a Rav4 in the current economy? 😄

    • +5

      clearly there is a 18-24 month wait on them. so they are in high demand, you're basically guaranteed a profit in the thousands of dollars. There are people that want a car now and do not want to wait up to 2 years for one

    • Nope, got family members working in a major jap car company and the official news in the industry is that there is still chip shortages.

  • Try it.
    If you cant sell it for more, sell it for what you bought it for.

  • +18

    Do people legitimately pay $70k for a RAV4?

    • +1

      I wish I knew, I haven't been able to find any kind of website that shows recent car sales.

    • +6

      Highly unlikely,I would rather wait. You would have to have more money than sense to fork out 70k for a RAV4.

    • +7

      Good question. A lot of people forget the ads that remain on carsales are the vehicles that haven't sold.

    • +4

      No. There is a big difference between what people are listing cars at vs. what they are actually selling for.

  • +1

    So do you have $52k cash?

  • -3

    If you buy the car, can't you just sell it back to the dealership? I think they'll pay you the money to at least 60-65k.

    • +2

      Why would they, unless they could sell it themselves for 70k? Surely they couldn’t get away with that themselves?

      • +3

        Because as a dealer from a major auto manufacturer they are obliged to sell for the rrp if they want to keep the badge on the top of the building.

        • +1

          That’s what I thought too

  • +3

    Just buy it, drive it, and resell in a few months time.

  • +11

    You may come out on top or you may not

    This isn't risk free

    • Based on Carsales atm I’d wager it is

      • Scenario: takes the car and gets into a crash on the way home

        It's not" risk free"

        • +4

          while you're at it add lightning, hail, dog's peeing on it, vandals, aliens…

  • +5

    In this market your unlikely to lose money on it.

    You might not flip it for 18k but you will likely come out with more dollery doos then you started with.
    (Just don’t forget to factor all purchasing your fees etc in to your sale price)

  • +1

    I’m more than happy to buy it on your behalf 👍

  • +9

    Not a bad strategy to make a quick coin. However, the market is definitely showing signs of cooling down now, especially with consumers feeling the pain of consistent interest rate hikes. You may need to wait 3-6 months before the right buyer comes along who is willing to pay 10-15k extra on it.

  • +1

    Buy it but tell the dealer you do not want the car registered. Then sell it. Win win for both parties, less capital outlay for you, and no stamp duty for rego transfer for the buyer.

    • This

    • How will the new buyer test drive the car if it's not registered?

      • I've never test driven a brand new car?

      • +18

        why would you let a buyer test drive a brand new car, if they ask for a test drive. they are a time waster and they will put kms on the car. If they want to see what a Rav 4 feels like, they can organise a test drive with a Toyota dealer

        • Thats a great point, thanks. I've never dealt with this problem before.

    • How will you get it home to sell it?

      • It’s called an unregistered vehicle permit or can just get it towed

  • +1

    I am sitting in my armchair covered in bubblewrap saying DO IT !!!
    There are suckers out there paying $6k for 17 year old Kia Rios, there will be plenty of suckers to pay a premium for your car.

    Negotitate a deal with the Dealer to resell your car to minimise your risks?

  • If you don’t want it I’ll meet you at the dealer and buy it for $52k this weekend! I have been wanting for buy this exact model and colour but the wait times are ridiculous so I soldier on with my 11 year old blue Corolla!

    • Post in Classifieds

    • I think Toyota is already doing well by their customers by taking preorders. It's companies that refuse to hold orders that create scalping

  • +2

    Why don't you go ahead as per initial idea. If times get tougher, recession like you fear, then there will still be people wanting to buy your car. Go ahead and get this car, it's exactly what you want. You can always list it for a high price in the mean time, but heck, get it man!

  • I'm doing it later in the year also when an order comes in, the market is hot…go for it.

  • +2

    Either you or the dealer makes $18k

  • What if i crash or scratch the car before sale?

    You have a bent or scratched car and claim insurance.

    Glad to help.

    • Most scratches and minor damage isn't worth the excess claim and the increase in premiums etc that you'll suffer, hence why most people don't bother. If he's selling a "brand new rav4" that has scratches on it, that $18k profit becomes less quite quickly.

  • I have been thinking of doing similar but for upgrading my 2021 Rav4 Cruiser Hybrid 2WD.

    I was thinking of placing an order for a new RAV4 Hybrid and then trade in my old one when the new one arrives 1 year later.
    There should be no loss or minimal loss on my original cost as there is huge demand for Rav4 hybrids and I have travelled very less kms.

    The risk is that if I end up getting an all new model in 2025, my old model will drop severely in price. So far the upgrades have been minimal like cooling seats,upgraded headlights,upgraded infotainment system and digital mirror etc.

  • Do it man! seems like a low risk high reward play

  • Have you signed up for the Facebook Rav4 group?

    You can read comments from different people who have done that, read through the forum to make an informed decision.

    Good luck!

    • hey thanks for sharing, i'll take a look tonight!

      do you have a sense of how peoples experiences are going?

      • +2

        Rav4 hybrid is currently in very high demand and has a long wait. As a seller, you have the upper hand; you can easily make 10k plus for a ready-available car.

        You can post your car specs on the Rav4 Facebook forum and ask interested people to message you the price they are willing to pay directly. Also, if you have time, you can go to the Toyota dealers, not the one you bought from but other car re-seller and gauge how much they are willing to buy from you directly. This would give you a realistic idea of your car's current value.

        Delay the car delivery a week - 10 days until you find the right buyer according to your terms and conditions.

  • High demand car, could easily make some $ks and even with the low ballers and tire kickers when selling private that take up your time prob still worth it.
    I had a 2020 hybrid Camry sport and sold it in 2022 for $7k more than I paid. I probably spent that profit on the premium on used cars at the time to replace it but yeah lot of people wasted my time with low offers and inspecting, accusing me of trying to rip them off, etc. But it wasn’t the most expensive listed at the time!

  • Yeah it's probably a pretty safe bet to flip. People have lost their minds over the RAV4 so there will be demand for the car. I dont think you'll make $18K though. Some of the advertised prices are not realistic in anyway. You could probably make $5k fairly safely.

  • I haven't looked at the figures but I know you won't get more than what a buyer can buy it new. The fact that there's no stock doesn't mean much, they'll just buy a GM or something that is available.

    If you can make profit from that, then go ahead. Lots of people have.

    • A GM or something? Haha haha. You haven't seen the RAV4 hybrid cultists around?

  • +2

    Had the same opportunity last year when my GX RAV4 hybrid arrived in early November.

    At the time, I could have on sold for about $4K profit, but I chickenned out and just cancelled the order and the dealer kept it. He was surprised and said I was mad.

    Main reason was, I just wasn't prepared to deal with low ballers, tyre kickers and all the other risks and BS that came with it.

    Also there is a cost of time, transfer duty, insurance etc which adds up. It didn't seem worth it.

    At the time I had better means to make $4K without any risk and took only half a day. Just refinance my house for the cash back. Done that twice already in the past 6 months.

    • Why not both? 🤷🏻‍♂️

      • +2

        I think the biggest stumbling block was putting $40K out on the line. The return vs the risks and hassle just didn't tip the balance.

        I didn't want to do all that and end up selling it just to get even, because that was a real possibility.

        It was November. I also figured the end of the year was the worse time to try to flog a new car despite what the carsales site had these for. Who knows what they sold for though. Anyone can ask for anything, doesn't mean they are settling for that.

  • +6

    It’s not risk free. Interest rate rises are starting to bite. Covid car price silliness is subsiding. Just because cars are advertised at $10k over RRP doesn’t mean they’ll sell for that, for all you know those advertising at those prices are accepting gains of $1-2k because they can’t sell them quick enough.

  • +2

    Just dont make the mistake of thinking what they are listed for is what people are willing to pay. Many over price and cant sell. Make sure you look for sold prices or ask a dealer other than one you are buying from what you can get

  • Do it. It's easy cash.

  • +1

    If you've got the cash lying around or the finance is unsecured then do it. I'd do it. Complicates the sale if you're using secured finance.
    The risk seems very low.
    In terms of accepting money from the buyer… ugh. I sold my Corolla for $32k (IIRC) just with a bank cheque. He gave me the bank cheque, I gave him the car keys, he drove away. I don't know, I feel like I get a vibe from people. I was definitely sweating waiting for it to clear though.

    • Bank cheque is like cash

      • Until it's claimed as lost before you deposit it. It is not risk free

      • Counterfeit bank cheques are not worth anything.

  • A guy I know has a RAV4 on the way and said he's thinking about doing the exact same thing as you. I think it's doable, so if you don't need it and want to make a profit, go ahead.

    I'm weary of the risks though, how does one even receive $60-70k from a private buyer?

    Bank transfer? I bought my car second hand and transferred the guy the cash and then he gave me the keys, but that was several years ago, and I feel like scams have increased a lot since then.

    What if I cant find a buyer and we end up in a recession?

    It was reported a couple of days ago that we're in a consumer recession. If you want to flip it you'd better do it sooner rather than later. If it's in high demand then a recession probably won't be too much of an issue for a while.

  • you only pay insurance for the period that you own the car .. so pretty minimal.

  • Iv brought a couple new Toyotas over the last 3 years, Since covid hit when we take delivery of any of them now we have to sign an agreement that we won't sell them within the first 12 months. Not sure if Toyota Australia would even chase you about it tho.

    • wow really, whats the consequences of breaking this?

    • Are you on a Silver/Gold/Plat fleet discount? Only people on those are the ones I've heard of getting told to sign an agreement (well, it's part of enrolment into the program)

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