Category - Storage Auctions 101

What Relationships Should You Build as a Resale Business?

As the old saying goes, no man is an island – and this is especially true for small business owners and independent contractors. The success of your resale business depends largely on the people you know and the contacts you build, and taking the time to cultivate those relationships may make the difference between a profitable business and a money pit. If you're serious about the auction business, here are a few people you should take the time to find:

  • Someone with a flat-bed truck or trailer. If you don't own one yourself, finding a way to rent or borrow this item can make a major difference in the ease of emptying your units. If you know someone who's willing to tow cars, furniture or other bulky items for a reasonable fee, it's well worth cultivating a relationship with that individual. The fewer trips you make while emptying a unit, the more time you'll have to deal with other aspects of the business.
  • A restoration and repair company. It might be worthwhile to learn restoration on your own, and fixing small appliances yourself can come in handy. As you start moving larger quantities of items, though, it's no longer practical to do your own restoration. Finding a company or two who can repair nice items at a reasonable rate will save you time and enhance your profits.
  • Other resalers. Sometimes you will end up with more items than you can reasonably resell on your own or simply have no interest in dealing with. Selling them to people who sell in greater bulk can often be a smart solution. Look at people who buy bulk clothing or own thrift stores; they'll often be quite willing to work with you.
  • Collectors. If you can find buyers in a specific niche, you'll have a good go-to person for unloading certain types of items that may not earn the same profits when sold in an open market. Some collectors are willing to spend a substantial sum on items that others may find essentially worthless, and the more collectors you have in your black book, the more possible buyers you'll have for any item you're trying to sell.
  • Antique dealers. Occasionally, you will come across a very nice item that is worth more than a layperson might realize. In these cases, it's always important to get a proper appraisal and speak with someone who knows about the item. By keeping in touch with a few antique dealers in different niches, you can improve your odds of profiting on these rare items. Whether you're getting an appraisal or selling the item itself, knowing someone in the industry will make a huge difference to your bottom line.
  • Scrappers. Having a good relationship with a scrap yard is smart when you deal with large quantities of appliances, electronics and other items with scrap metal. It may also be a good idea to find an independent scrapper who's willing to take whole items from you for a decent price so you don't waste time tearing them apart for scrap.

As you build your business, you're likely to develop many relationships with fellow bidders, auctioneers, storage facilities, buyers and more. Don't neglect that side of your business as these relationships can help your enterprise grow.

Shipping for eBay Sellers

Shipping Logos

eBay is a valuable resource for auction hunters and people who own resale businesses. Although you can get a lot of mileage out of Craigslist and yard sales, eBay continues to be the best way to sell specialty items to the people who want them. From rare collectibles to quirky everyday items, nearly everything can be found on eBay, and the shoppers there are ready and willing to spend money on the things that interest them.

For all its strengths, eBay does pose a few challenges to sellers. One of the most time-consuming and expensive aspects of eBay selling is shipping. If you're not careful, shipping costs can eat into your profits. Fortunately, there are a few techniques that can help save you time and money when sending out your wares.

Calculating Shipping Costs

When you start selling items on eBay, it's important to learn how to calculate your shipping costs before you send the items. This will help you budget, and it's also necessary when posting some of your auctions. If you don't have an accurate estimate of your shipping costs, you may lose money after an auction if the shipping costs more than your initial budget.

When calculating your shipping, you will need to know three things: the weight of the package, the package's dimensions and the distance the item will travel:

  • To calculate the weight, purchase a good digital scale. If you will primarily be selling lightweight items like DVDs, jewelry or nicknacks, a kitchen scale might be sufficient. If you'll be shipping larger packages, though, you should look for a scale specifically made for calculating postage. You can usually pick up a scale from another eBay seller for an affordable price.
  • Be sure you know what box you will use to ship the item before posting the auction. Measure its height, length and depth and plug those variables into the shipping calculator at or for the shipping company you plan to use. Over time, you may discover that certain box measurements are cheaper than others while holding the same amount of items. This will help you pick the best shipping materials for future sales.
  • Since you won't know who might win your item, you'll need to calculate shipping based on an estimated distance. It's always better to over-estimate for this purpose. To be safe, determine your costs based on a ZIP code furthest from you. For example, if you live in New York, choose a ZIP code in southern California.

It's also a good idea to add a small “handling” fee into your shipping costs to add some buffer room. Just be aware that charging too much for shipping can lose your bidders. It might be best to add some of your shipping costs to the base price of the item to keep the posted “shipping” cost low. You can even use this method to offer “free” shipping to your buyers.

Another good trick is to print your shipping labels at home or use a service that omits the shipping cost from the labels. This way, your buyers won't know how much the actual cost of shipping was. This can prevent you from getting poor feedback from disgruntled buyers who believe you over-charged for shipping.

Advantages and Disadvantages of the Major Shipping Companies

When shipping items, you have a choice between three primary shipping providers: USPS, UPS and Fedex. Each has its own benefits and drawbacks, and some will be better for certain items than others. In most cases, USPS will be the cheapest option, but there are special considerations for certain deliveries:


  • Will almost always be the cheapest option
  • It can be hard to get claims resolved if packages are lost or damaged


  • Is great for shipping large or bulky items
  • Has a great tracking system
  • Doesn't put the shipping price on the label, so your buyers won't know the cost
  • They sometimes charge a “gas money” fee if they're delivering to a rural location
  • Will not ship to a P.O. Box


  • Tends to be the fastest option
  • Sometimes low-balls the shipping estimate and costs more than you had anticipated

If you're shipping with UPS or Fedex, you have the choice of shipping without boxing the item. If it's oddly shaped or bulky, however, it can sometimes be cheaper to use a box as the handling fees will be lower.

Tips For Keeping Costs Low

Once you know how much your shipping will cost, you can begin finding ways to shave off expenses. There are multiple ways to do this, depending on the item you're shipping and the company you use. In most cases, the Postal Service will have the cheapest shipping. The flat-rate shipping, or “if it fits, it ships,” can be a very good deal if you choose your packaging carefully. Here are some tips:

  • If you're shipping books, DVDs, CDs, etc., use the Postal Service's “media mail” rather than flat-rate shipping or regular first class. It's cheaper than regular shipping by weight, and it usually ships quickly.
  • In addition to flat-rate boxes, which will ship for the same price regardless of weight, you may also be able to use regional rate boxes. If you know where you'll be sending the item, these can be very affordable.
  • When shipping items, use the smallest flat-rate box you can reasonably cram the item into without damaging it. If it's not too fragile, try to fit it into an envelope instead of a box. As long as the envelope will seal, you can ship it. You would be surprised at how many things you can fit tightly into one. As an added bonus, fitting items into the smallest possible package will save you on packing materials.
  • For light-weight items, the flat-rate shipping may not be the best deal. If you're sending something like jewelry or other items that weigh less than a pound, check to see if you could mail it first class for a lower rate instead.
  • Once you've weighted and measured your packages, print out the shipping labels from USPS at home. They're cheaper than the ones you get at the post office. You can even have them picked up from your house. Arrange to ship all of your items on the same day to economize pickup or delivery times.

When you ship with flat-rate shipping, the USPS will provide the boxes to you free of charge. If you're using UPS, Fed-Ex or parcel post, you will need to obtain your own packing materials. This can become expensive if you're not careful. Here are a few tips for reducing the cost of your materials:

  • Rather than using bubble wrap or packing peanuts, consider using shredded paper. When you're cleaning out storage units, you're bound to find a ton of useless paper. Invest in a paper shredder and turn those shreds into packing material. It'll be free, and it's a good use for all of that trash.
  • For fragile items and those that need bubble wrap or other more sturdy packing, stop off at a moving or storage company. They will sell bubble wrap in bulk for a lower price than what you could get at an office supply store.
  • Ask the storage facility if it has any shipping materials you can get for free or a good price. If you have a relationship with the managers from frequenting auctions, they may be willing to give you free boxes.
  • If there are any box manufacturers in your area, stop off and see if they have any misprints, overruns or other unwanted boxes. You can buy these in bulk for a very good price or even get them for free.
  • Grocery stores, liquor stores and other retailers usually have a lot of free boxes. Stop off and ask if you can pick some up. Just be sure to get boxes that can be mailed; some will have printing on them or open bottoms. If a box has things on the outside preventing it from being mail-legal, consider turning it inside out and taping it back together.
  • Avoid buying too much tape in bulk. Tape can become brittle over time, so large quantities quickly become useless. Only buy as much tape as you'll use in a month or two, and restock frequently.

On the topic of shipping materials, one thing should be clear: Don't use free boxes from the Post Office if you're not shipping with USPS. Using the free boxes offered by USPS or any other shipping company for any purpose other than shipping through that company is theft. If you get caught, you can be fined, so it's best just to avoid the temptation.

A Few Notes on International Shipping

International orders pose a unique set of challenges. In addition to the heightened cost of shipping, you also need to deal with customs and tariff fees. Additionally, some international buyers may not be the easiest clients to work with, especially if there's a language barrier to overcome. Indeed, the hassles of international shipping are enough to keep many people from dealing with overseas buyers altogether. If you do decide that it's worthwhile to allow foreign buyers, here are some tips to make things simple:

  • When shipping overseas, always use USPS rather than Fedex or UPS. The tariff fees will be lower this way. Additionally, ensure that your buyer knows he's responsible for any fees after the item has shipped.
  • Double-check to make sure it's legal to ship the item overseas. There may be customs limitations on certain types of items. For auction hunters, this isn't usually an issue since most limitations are placed on food items and other consumables, but it's something to be aware of.
  • Be sure that the description you use on the customs form is detailed and accurate. The item may be opened by the post office, and you can get in trouble; lying on a customs form is a felony. In addition to lying about the contents, some people may try to get you to mark down the value of the item or designate it as a gift to reduce the tariff they must pay; don't do this.
  • Make sure that the funds clear before you ship the item. There are some international shipping frauds, so having the money on-hand before you send the goods can help protect you.
  • There's a popular scam that's done by some unscrupulous buyers. They will win the auction, then wait for 30 days and file a “did not receive” complaint with eBay to receive a refund. If you have no way of proving the item was delivered, you may be forced into giving this refund. To protect yourself, identify a service that will track your international deliveries. Don't rely on USPS tracking alone as it's notoriously unreliable. Instead, use a system like
  • You can place limits on who can bid on your auctions. Sometimes, however, people will circumvent this. If an auction is won by someone in a location you don't ship to, refund the money right away and choose “buyer is from a country I don't ship to” on the eBay interface.
  • Some countries are easier to ship to than others. Canada, Australia and the United Kingdom tend to be easy to work with; developing nations usually have worse shipping problems. It's up to you to decide what countries are worth the risk.

Do I Need Insurance?

No matter what shipping company you use, you'll have the opportunity to insure the package. This insurance usually costs a few dollars and protects both the buyer and seller against damage incurred during shipping. For example, if items are lost or broken, you – the shipper – will be reimbursed for the cost of the item. You are then responsible for refunding the buyer. If the package arrives unharmed, you lose the cost of insurance.

While insurance is a good idea in theory, it can be unwieldy in practice. It can take a long time for claims to be resolved, and the provider may need to see proof of a damaged package before paying. If you're sending the item to a buyer, that buyer may not be willing or able to bring the damaged goods to the post office.

A better option may be to opt for third-party insurance rather than using the shipping company's own insurance. This is often cheaper and faster than more traditional types of insurance, and many of the third-party providers will insure international purchases. These companies can sometimes be hard to find. Here are some reviews to help you pick an insurer for your packages:

When you're shipping items privately, insurance isn't always worthwhile. For eBay sales, however, buying insurance is usually a good deal. It's up to you, though, to decide whether the extra expense is worth it.

Feel free to ask a question or add something to this article in the comments section below.

Identifying Valuable Metals When Sorting Scrap

Valuable Metals

Whenever you're sorting through items you find in a storage unit, you're probably accustomed to making multiple categories: items for quick resale, valuable antiques, things to sell at flea markets. If you want to maximize your profits, you should also make room for scrapping. Scrap metal keeps going up in value even as inflation robs profits in other sectors, and it's a great way to get the most from items that can't be sold as-is.

Sometimes, though, you'll get more money from selling whole items than from scrapping them. It's important to know what items to scrap and what should be sold as-is through eBay or to a collector. You'd hate to scrap something that turned out to be a priceless antique, and you'd also hate to sell something for less than its scrap value.

Here are a couple of tips for determining whether to scrap or sell something:

  • If you know that something is a valuable collector's item or antique, hold onto it until you can sell it for its true value. This takes some practice and experience. Go to a few good antiques stores or auctions to get an idea of what sort of items sell there. Spend time on eBay, talking to collectors or reading books about antiques. This will help you tell the difference between a real item and a knock-off.
  • Recognize what metals certain items tend to be made of. If you're familiar with the composition of normal household items, you'll know which ones will have the highest quantities of scrappable material. For example, speakers often have large amounts of copper and rare earth magnets, and computer chips have small amounts of gold.
  • Even when items can be scrapped, they're often worth more whole if they still work. For example, you can probably sell a working TV for more than you can scrap. The exception to this is jewelry. Old-fashioned costume jewelry made with gold, silver or other metals may be hard to sell due to outdated styles, but the metal has grown in value over the years. Once you ensure that a cheesy-looking piece of jewelry isn't a valuable antique, consider scrapping it for some quick cash.

Also be sure you know how to identify certain materials. You may not be able to tell the difference between them before you buy the storage unit, but you can test things while you sort them. A magnet is one of the most useful tools for identifying ferrous metals, which tend to be worth very little compared to softer precious metals. You can also gently scratch or file the surface of an item to see if it's solid or plated. If you deal with a lot of jewelry, an acid-testing kit might be a good investment; otherwise, finding a precious metal dealer you trust might be the best choice.

It takes some practice to sort through your merchandise, but it's well worth it. If you take the time to do your research and determine what's valuable and how to best capitalize on that value, you can increase your long-term earnings.

Should You Go To Every Storage Auction?

It's easy to get overwhelmed with auctions. If you live in a reasonably large city, you can find several auctions per week, and your entire weekend can swiftly be overtaken with auctions. While more auctions can translate into better odds at big profits, it's also important to pace yourself so you don't get in over your head.

There are a few obvious benefits to going to every auction you can. First, you'll be exposed to a greater number of units, and this can translate to greater odds of finding great deals. You'll also be able to make valuable connections with others in the industry, and this networking can help you buy and sell a greater quantity of merchandise in the future.

Nevertheless, there are also several reasons to be more selective with which auctions you attend. Driving to multiple auctions can burn a lot of gas, and you might lose money if you hit a run of particularly bad units. You also have to be prepared to clean out units and store the items; if you're doing multiple auctions in a week, you might not have the time or space to deal with all of them.

When it comes to deciding whether a certain auction is worth your time, there are a few things to consider:

  • Is the facility in a nice part of town or a place that's more shabby? Of course, this isn't always a good indication of quality, but it might be indicative of general trends.
  • Are there multiple auctions within a single area, or would you need to travel widely to go to all of them? Pick the most heavily-congested areas and avoid the others to maximize gas economy.
  • Do you have a good relationship with the facility owners? Will you get any perks from going to the auction?
  • Is the auction well-advertised, and will there be a lot of people in attendance? A popular auction may be too crowded and expensive to be worth exploring.
  • Does the facility have auctions frequently or only a few times per year? You don't want to miss a major auction, but frequent auctions may not have enough variety to be worthwhile.
  • If you have a good run, will you have the space to store your goods? If you have a poor run, can you afford to recover from the loss of time and gas money?

When assessing whether to attend an auction, your main question should be this: Can I make a greater profit doing something else with my time rather than visiting this auction? If the answer is yes, you may want to spend your time selling items or dealing with other aspects of your business rather than buying more merchandise.

With time and experience, you'll get a better feel for which storage facilities have the most lucrative auctions and what facilities to avoid. The answer of whether to attend more or fewer auctions is something every auction-hunter needs to determine for himself, but following the guidelines above can help you make a final decision.

Storage Auction Pickers – Running a Mobile Resale Business

The idea of the modern-day treasure hunter is something that's captured plenty of imaginations in recent years. From the popularity of shows like American Pickers and Storage Wars, it's clear that people love the idea of profiting from the forgotten treasures of others. For the average person, these shows paint a lifestyle that's surprisingly glamorous, even Romantic: traveling across the country, connecting with colorful locals, discovering bits of American history and turning exciting profits on every find.

Of course, reality is rarely that exciting, and while real people can and do make a living in the resale business, it's rarely as glamorous as television would have you believe. Nevertheless, for the right kind of person, it is absolutely possible to pursue this type of mobile resale business.

A person could, for example, travel interstate to purchase storage units and then resell them locally through Craigslist or local flea markets. After the prospects in one city began to run dry, the buyer could move on to another place. This type of lifestyle would certainly create its share of adventures and prevent life from getting dull; it would also make it easier in some ways to reach a wider set of buyers and find more items for resale. By casting a wide net, it becomes possible to find the most profitable goods.

Before setting out on the open road, though, there are a few things that you'll need to consider to run this type of business and lifestyle effectively:

  • Where will you stay? Travel expenses will add up quickly, and the cost of travel may exceed the profits of all but the most lucrative resale businesses. If you already have a house and bills back home, hitting the road for long stretches can be financially draining. On the other hand, if you own a motor home or trailer and live out of it full-time, your travel expenses can be quite low.
  • How will you store merchandise? Whether you're traveling in a motor home or staying in hotels, you'll need somewhere secure to keep items that have not yet sold. Will you rent out a storage unit or fill up a trailer of items? How much will you be able to buy and store?
  • Do you have ties that will prevent you from being mobile? Spouses and children may not be as easy to travel with as you'd like, and leaving them behind can cause strain on the family. Many travel-based careers are the territory of bachelors for this reason.

The resale business already has narrow profit margins and a high overhead cost, so it takes a smart buyer to make that job really work. On the other hand, a resale business is one of the few careers that can feasibly be completed from any corner of the globe. If your dream has always been to live on the open road, unfettered by an office job and boring obligations, a traveling resale business may be the perfect way to pursue your love of exploring while maintaining a potentially lucrative career. If you're successful, you could even pitch your lifestyle to the networks as the newest reality TV show to cash in on the craze.

Tax Season Brings Out the Buyers

Tax Season

One of the requirements of any resale business is having enough disposable income to cover the purchase and storage of your merchandise. When it comes to storage auctions, it’s important to have enough money in the bank to cover a few possible losses. Every unit you get won’t turn a profit, and if you invest your rent money into a unit, you may be sorely disappointed.

This need for disposable income is one thing that holds many people back from attending storage auctions, especially now that bidding prices are going up across the country as newcomers raise costs by over-bidding for units. In turn, this is one reason why storage auctions are particularly popular during and after tax season.

As people start getting their tax returns between February and April, they start to have a bit of extra money to apply toward nonessential purchases. For many people, tax season is the only time of the year when they have money that isn’t already pre-spent on necessities like food, gas and rent. For some, this money gets spent on vacations or home improvements; for others, it gets invested into a new business enterprise.

Of course, just because you have some extra money on hand to buy a unit doesn’t mean you can neglect your strategy. You still need to set a bidding limit and hold to it. You also need to be prepared to deal with uneducated newcomers showing up and raising the bids; they, too, have extra money to spend and may not be smart about spending it. Once you’ve put every bit of your knowledge into action, you can make a reasonably good return on your investment.

Spending your tax return on storage unit auctions can be a smart strategy if you know what you’re looking for. It can allow you to invest the cash into something lucrative that will turn a profit throughout the year. As long as you’ve done your research and are applying smart bidding strategies, you should be pleased with the results.

Storage facilities have discovered this trend among buyers, and many have geared their auctions toward that schedule. Some storage facilities are stockpiling their units in preparation for a massive auction after tax season rather than competing with holiday shopping and other end-of-the-year expenses. Many other facilities operate on a more structured and regular auction schedule, so you can get started early if you want.

Holiday Items: A Profit Opportunity for Patient Pickers

Christmas Decorations Storage

Holiday items are frequently found in storage units because their owners don't want them taking up space throughout the year when they're unneeded. Things like lawn decorations, Christmas lights, ornaments and artificial trees take up a lot of space, and people who go all-out for the holidays may need a lot of room to store all of these items.

While many auction-hunters avoid these items, they may be worth a second look. The problem with seasonal items is that there's a narrow window of time when they're in demand. In the month or two leading up to the holiday, people will be interested in buying these items. The rest of the year, these items will need to be stored somewhere.

If you have the space to store seasonal merchandise, though, picking these things up at a storage auction can be a good investment. Many seasonal items sell extremely well during the holidays, and you can often make an excellent profit if you're patient. Here are a few things that can fetch a high price:

  • Antique or collectible ornaments. You might want to do some research when you find ornaments as some can be quite rare, limited editions or otherwise valuable.
  • Large lawn decorations. These are extremely expensive to buy new, so people will be delighted to snatch them up at a lower price when used. Look for inflatable ones as well as metal or plastic decorations.
  • Keep an eye out for themes. If you collect ornaments and other decorations throughout the year, you should have a fair number by the time the holidays roll around. Look through your stock and see if you can find a way to combine a few things into a “bundle” to sell together. Ornaments and other small items might sell faster this way.

If you don't have the room to store holiday items or the patience to keep them all year, you might want to pass on these units. If you do have a bit of time to store these items, though, you may be able to make an excellent profit later in the year when they go into style.

How to Spot a Storage Unit That’s Been Lived In

living in storage unit

About 10% of the country's poor – or 1% of its total population – are believed to be homeless at any given time. For some, homelessness is temporary. For others, it becomes a long-term situation, and the economic downturn has caused a lot of people to lose their homes and jobs. This is the phenomenon behind the growing trend of people living in storage units.

A Salt Lake City storage facility was found to have at least five different units occupied by homeless people earlier this year. Manhattan Mini Storage in New York has been called “The Hobo Hilton” by some due to the number of people routinely found living in the units.

The allure of storage units for homeless people is understandable. They're secure and often climate-controlled, which makes them much more appealing than many other options available to homeless people. They're also substantially cheaper than renting an apartment. Unfortunately, storage units aren't designed for human occupancy, especially since there is no internal plumbing or running water. This leads to a health and sanitation risk for both the people living there and anyone else who comes into contact with these units.

For auction hunters, it's important to recognize the signs of a lived-in unit and avoid them whenever they come up for auction. You may run into sanitation concerns, and the original tenant could return and get combative with you while you try to clean out the unit. You're also less likely to find anything of value in these units. Here are a few signs to look out for:

  • The unit is set up like a small apartment, or there is a bed or sleeping bag on the ground
  • There may be an inordinate amount of trash, especially food wrappers
  • The unit has a particularly strong odor
  • You've seen any other signs that indicate the unit was used for something other than storage

Lived-in storage units sometimes contain human waste, drug paraphernalia and other unpleasantries, which is all the more reason to avoid these whenever you come across them. Also, if you notice any signs that a different unit is being inhabited while you're cleaning out a locker you've won, be sure to alert the management.

How to Get a Title for a Vehicle Purchased at a Storage Auction

Vehicle Title

Vehicles aren't necessarily common finds at storage auctions, but they are found from time to time. From cars to ATVs, boats and tractors, these vehicles pose a unique challenge to buyers. Unless you plan to simply scrap the vehicle and sell it for parts, you will need a title for it. The title is necessary when registering, insuring or re-selling the vehicle, so your hands are tied until you can resolve the matter of a missing title.

First, know that in order to buy a vehicle at auction, it must be known to be free of lien. The storage facility will check with the DMV to see whether the car is paid off. If it's still in a lien holder's interests, it cannot be auctioned off with the rest of the contents. If it is free of liens, the facility can proceed with the auction.

In Texas, there are some specific processes the storage facility needs to follow before auctioning off a vehicle. In addition to checking for lien holders, the owner must obtain a VTR-265-SSF form. This will be given to you so that you can complete transferring the vehicle to your name. Here is the material that the facility owner should provide you with so that you can give it to the DMV:

  • A copy of the tenant's lease showing that the tenant agreed to the foreclosure terms
  • The completed and signed VTR-265-SSF form
  • Verification of Texas title and registration (the facility will clear this with the DMV in advance)
  • Proof that the “Notice of Claim” letter was sent to the vehicle's owner
  • Proof of auto insurance if you plan to register the vehicle.

It's also a good idea to bring your receipt from the auction and a newspaper clipping of the auction's ad, just to be on the safe side. Although all of this can be a bit of a hassle, most of the leg-work should already be done for you by the facility owner. If you're concerned, you can check in advance that the owners are aware of this process, but most owners should be.

Also be aware that these requirements vary from one state to the next. If you're not in Texas, you'll need to check the local laws to ensure you obtain the vehicle legally and there are no concerns with obtaining a title. Also be sure to have enough money set aside to cover the costs of titling and registering the vehicle that you win at auction.

Do You Need Special Auto Insurance In The Storage Auction Business?

When you set up your resale business, you're probably prepared to apply for business permits, sales tax permits and other legal necessities. One issue you might not have considered, though, is car insurance. Depending on your situation, you may need to purchase a commercial auto policy for your work vehicle. Failure to do so could cause problems with your insurance company, and it might leave you without coverage when you need it most.

When you purchase an insurance policy, the company will ask you several questions about your habits, including how you use your car and how many miles you put on it. They do this so they can complete the underwriting process, which calculates how much risk you carry and what your coverages should cost. High-risk drivers pay more than low-risk drivers.

If the insurance company discovers that you've been dishonest about any of your habits, they may re-evaluate you through an underwriting assessment. This could lead to a substantial rate increase, exceptions to your policy or even a canceled policy. Many times, the insurance company finds out about the behavior after you file a claim, so this leads to the claim being denied a well. This makes underwriting assessments very important.

One important question that comes up during risk assessments is whether the vehicle will be used for work purposes. Vehicles that are used heavily for work – beyond simply commuting to and from a day job – need to be insured with commercial auto policies. If you're simply using your family pickup as a hobbyist for a few auctions a year, you probably won't need to worry about it. If you're going to multiple auctions per week, hauling items and running a resale business, though, you should talk to your agent about creating a commercial policy.

In general, commercial auto policies will be listed in the name of your business. They may also have higher liability limits than standard policies to protect your business assets. Fortunately, most private insurance carriers will offer commercial policies, so you may be able to insure all of your vehicles with the same insurer and take advantage of the multi-policy discount that most insurers offer.

Commercial policies sometimes cost more than standard auto insurance, but it's worth the investment to avoid having your policy dropped as soon as you file a claim.