Calculate car-flipping ROI correctly using total cost, not purchase price. Includes the formula, a worked UK example and sensitivity checks.
Written and reviewed by FlipTrack Editorial Team
First calculate total cost. Then subtract total cost from sale income to find net profit. Finally divide net profit by total cost and multiply by 100.
Worked illustrative example
| Step | Calculation | Result |
|---|---|---|
| Total cost | £4,250 purchase + £600 preparation + £245 other costs | £5,095 |
| Net profit | £6,150 sale - £5,095 total cost | £1,055 |
| ROI | £1,055 ÷ £5,095 × 100 | 20.7% |
| Sale margin | £1,055 ÷ £6,150 × 100 | 17.2% |
ROI measures profit against money invested. Sale margin measures profit against sale revenue. Both are useful, but they answer different questions. Label them clearly so two deals are compared on the same basis.
Dividing profit by purchase price overstates the return whenever preparation or selling costs exist. Include auction fees, collection, checks, MOT work, parts, labour, valeting, advertising, insurance allocation and post-sale costs when attributable.
Sensitivity using the same starting scenario
| Scenario | Net profit | ROI |
|---|---|---|
| Starting assumptions | £1,055 | 20.7% |
| £250 additional cost | £805 | 15.1% |
| £500 lower sale price | £555 | 10.9% |
| Both changes | £305 | 5.7% |
A projected ROI is not a promise. Test a realistic cost overrun and sale-price reduction together. If the downside leaves too little return for the risk, reduce the buying price or reject the deal.
ROI alone does not describe scale or speed. Review net profit, ROI, days held, profit per day and cash tied up together.
What is the formula for car-flipping ROI?
Subtract total cost from sale income to find net profit. Divide net profit by total cost and multiply by 100.
Should ROI use purchase price or total cost?
Use total cost. Purchase price alone excludes preparation and selling expenditure and overstates the return.
Is ROI the same as profit margin?
No. ROI divides profit by total cost, while sale margin divides profit by sale revenue.
What is a good ROI for flipping a car?
There is no universal target. It depends on uncertainty, days held, capital committed, post-sale obligations and sale-price evidence.
Run your purchase price, costs and expected sale value through the free FlipTrack calculator, then track the actual result vehicle by vehicle.
Start free - no card required →Share this article
Related articles
How to Track Profit When Flipping Cars in the UK (The Complete Method)
9 min read · Profit Tracking
How to Calculate Break-Even Price When Flipping Cars in the UK
6 min read · Profit Tracking
UK Car Dealer Margin Calculator: Gross Margin, Net Profit and ROI
7 min read · Profit Tracking
How Long Should You Hold a Car Before Selling? Days Held and Profit
6 min read · Profit Tips