Confessions of a used-car dealer: The six myths about my job

It's a glamorous life. You're surrounded by colorful flags, with personalities like walking cartoons, and everything you buy turns into a pot of gold for you (and a rolling disaster for your customer three months down the road.)

Not quite.

The truth is that most used-car dealers are always one missed step away from failure. On every deal, between buying a car at a wholesale auction that's worth the flip, and successfully selling it to someone who has the resources to pay for it, there is an awful lot in the middle that can and will trip you up. People lie. Repairs can be shoddy or misdiagnosed. The floorplan company that gives you all that money to put cars on your lot has to get paid, always, and the wholesale auctions are pretty much the most cut-throat free market you can ever imagine.

You compete against everyone, hundreds of large and small operators, and everyone competes against you. Often times your competitors will have financial resources that compare to yours in the same way NATO stacks up against the army of Luxembourg.

There is a lot of myth about the easy money in this business where nearly everything you deal with is downright expensive and imperfect. Let's start with the one thing people always seem to believe when it comes to the so-called affordable dealer auctions.

Car Auctions Are Cheap! : Yes, there are cheap cars at the dealer auctions. They are at the "inop" sale, where cars that don't run are usually worth more dead than alive. The cars that actually run? Well, the popular cars that look good typically go for all the money in the world. And the less popular vehicles typically have a spread in the hundreds instead of the thousands — if you find a good one. Get a bad one and you just got stuck with a four-figure loss.