Yet another becoming a part time dealer thread.....
Discussion
Frimley111R said:
It was nerve wracking the first time but after that it was a doddle tbh. You may find a warranty claim for something big but in practice I never did. You will know if a car is fine or not from your own experience. If I bought a bad car I'd fix it, take it on the chin, and move on. I was only selling cars up to £5k so worst case scenario I'd just buy it back but this never happened.
I'd choose the same route again if recommending it. Keep start up costs as low as possible. I never had a website as AT was fine for me.
Hey FrimleyI'd choose the same route again if recommending it. Keep start up costs as low as possible. I never had a website as AT was fine for me.
thanks for your input and it sounds a good plan to keep costs as low as possible. I see your point about taking it on the chin I just have visions of 10 people lining up at my front door asking for their car to be repaired/replaced. I guess though if I sell 10 cars and make £10k and have to spend £2k sorting out a few problems pre or post sale then it's no huge deal. Did you start as a sole trader or limited company? What about trade plates, did you bother to start with? I am guessing a tradex policy would cover demoing/transporting and everything required, will have to give them a bell. I like the sound of giving it a go on say 10 cars as a sole trader to try it out.
legendtrader said:
Hey Frimley
thanks for your input and it sounds a good plan to keep costs as low as possible. I see your point about taking it on the chin I just have visions of 10 people lining up at my front door asking for their car to be repaired/replaced. I guess though if I sell 10 cars and make £10k and have to spend £2k sorting out a few problems pre or post sale then it's no huge deal. Did you start as a sole trader or limited company? What about trade plates, did you bother to start with? I am guessing a tradex policy would cover demoing/transporting and everything required, will have to give them a bell. I like the sound of giving it a go on say 10 cars as a sole trader to try it out.
I was a soletrader when starting out. I didn't bother with trade plates and few other home dealers seemed to either. As said, in practice, unless you are selling high end cars you just won't get such warranty claims, or its unlikely anyway. I had 1 in a year and just paid for it and that was that. You'll need a bank account too but that's about it. Its very easy to trial so keep costs low and just buy and sell one or two and see if its for you.thanks for your input and it sounds a good plan to keep costs as low as possible. I see your point about taking it on the chin I just have visions of 10 people lining up at my front door asking for their car to be repaired/replaced. I guess though if I sell 10 cars and make £10k and have to spend £2k sorting out a few problems pre or post sale then it's no huge deal. Did you start as a sole trader or limited company? What about trade plates, did you bother to start with? I am guessing a tradex policy would cover demoing/transporting and everything required, will have to give them a bell. I like the sound of giving it a go on say 10 cars as a sole trader to try it out.
legendtrader said:
...lets say they are advertising it for 5k and I think I can sell it for 5.5k. So I contact them all and work out which ones will soften their price and look to buy from then around 4.3k cash
If they can't sell the car for £5000, why do you think you'll turn it round for £5500 ?Some people get rid of cars cheap. You can make money from it but it is hard work and you have to travel all over the country. I know as I have done it. Auctions are far easier.
I wouldn't bother with warranty. Most buyers will be price driven and bodywork being near no scratches dents etc is far more important to them than service history. Madness I know.
Whack a fresh 12 month mot and polish the cars up.
Sell your first few as a private seller. If it goes well, look to offer warranty etc etc after that.
You need to dip your toe in. A lot of people fancy a go at selling cars, not many stick it out.
If you scale it up it takes up a hell of a lot of time.
I wouldn't bother with warranty. Most buyers will be price driven and bodywork being near no scratches dents etc is far more important to them than service history. Madness I know.
Whack a fresh 12 month mot and polish the cars up.
Sell your first few as a private seller. If it goes well, look to offer warranty etc etc after that.
You need to dip your toe in. A lot of people fancy a go at selling cars, not many stick it out.
If you scale it up it takes up a hell of a lot of time.
mcflurry said:
If they can't sell the car for £5000, why do you think you'll turn it round for £5500 ?
a good point. they probably would be able to sell their car for 5k if they were prepared to wait but most people are inpatient. They may have poorly presented the car and advert, they may need the cash. When I buy the car I valet it and present it with a good advert.legendtrader said:
The Moose said:
I'd be very surprised if you were going to make £30k-£40k and stay under the VAT threshold.
Thanks to you and another poster for pointing this out. Clearly VAT is on turnover not profit, sorry I was being thick. You are spot on it is likely I would have to register for VAT, that's fine though the accountant can handle that.Roo said:
Don't forget that as of 1st October VED is cancelled when a car is sold.
Without trade plates you're going to be snookered.
Which is why most small time traders have a small car transporter. No idea on the insurance for one of these. I imagine they are quite juicy on fuel when loaded up. The small time traders I know are literally travelling the length and breadth of the uk sourcing stock. And if you can't find stock you can't make dough .......,,Without trade plates you're going to be snookered.
legendtrader said:
Bluequay said:
If you don't have actual business premises then I think you would have a better chance if you had prospective purchasers come to your house. By meeting people elsewhere it gives the impression that you don't have enough faith in your product for people to know where you live. It makes the venture look dodgy.
ok thanks for the input. I would have no problem with buyers coming to my house however I live in a small cul de sac and I wouldn't want to upset the neighbours. maybe they wouldnt be bothered if it was only a viewing every other day and I was discreet. thing to think about.Edited by legendtrader on Monday 23 June 11:20
If you do meet them at home, be prepared for callers at all times of the day and night, particularly once you get a troublesome car.
Also, as i put earlier today on the other thread, once people break circa £5,000 for a car purchase they expect full dealer facilities - primarily finance and at very least a forecourt. The amount of people with that amount of cash is very limited.
Also, be prepared for heavy bank fees to lodge that sort of cash. And i mean heavy.
legendtrader said:
Frimley111R said:
When I started all I did was get insurance and then off I went to an auction. I traded from home and that was fine. No need to get carried away with financing and full warranties. I just told customers to call me if there were any problems and they trusted me to do so. I used local garages for work too. The main requirement was transporting cars, for example, you drive to an auction and buy a car, how do you get it back?
Auctions are hard work as there are so many people trying to buy so many cars for next to nothing and driving the prices up. Its easy to sell a car but far far harder to find good ones cheaply.
Hi. That was a bold move! I could just get tradex insurance and trade from home cut out all the costs. transport for me wouldnt be much of an issue as I live in Cambridge I would just get the train the auctions tup north or into enfield, if i buy a car I would drive it back. I am not sure about selling without using a warranty. Lets say I buy and sell 3 cars and make 3 x 1k then I get a call and one of the cars has a problem that costs £2k to fix, that's a wipe out of profit right away. At least if I have a warranty I spend say £150 a throw on the buyer knows what they are covered for when they buy. My other question to everyone is what happens about car problem post sale that are not covered by the warranty. Lets say I provide a car to a buyer with a platinum warrant from warranty direct. see http://www.dealerwarrantydirect.co.uk/pdfs/WTY.pdfAuctions are hard work as there are so many people trying to buy so many cars for next to nothing and driving the prices up. Its easy to sell a car but far far harder to find good ones cheaply.
it seems to me quote a few expensive things can go wrong with a car that wont be covered by a decent warrant such as this.
Customers have quite significant rights under the SOGA - and they know it, that cant be palmed off with a cheap warranty.
markcoznottz said:
Which is why most small time traders have a small car transporter. No idea on the insurance for one of these. I imagine they are quite juicy on fuel when loaded up. The small time traders I know are literally travelling the length and breadth of the uk sourcing stock. And if you can't find stock you can't make dough .......,,
yes I am beginning to think that trade plates are a must unless you have a car transporter. even if you have a car transporter you need trade plates for demonstration drives.daemon said:
Generally warranties like this arent worth the paper they're written on. They have entire call centres dedicated to telling you why your claim isnt valid, so after the claim has been declined the customer will be on to YOU - firstly wanting to know why you supplied a worthless warranty and wanting to know what YOU are going to do about their faulty car.
Customers have quite significant rights under the SOGA - and they know it, that cant be palmed off with a cheap warranty.
yes I agree with you on the warranty front, I was given one when I bought a Merc a few years back and it was impossible to claim. They dont make money by paying out! The rights under the SOGA are significant, I can well imagine selling a 10 year old car to a buyer who comes back in 4 months time asking for the gearbox to be replaced... hmmmmmm....Customers have quite significant rights under the SOGA - and they know it, that cant be palmed off with a cheap warranty.
daemon said:
I dont think you're going to get too many people who will be happy effectively to meet you at the side of the road in an industrial estate and part with £12-14,000 of their hard earned.
If you do meet them at home, be prepared for callers at all times of the day and night, particularly once you get a troublesome car.
Also, as i put earlier today on the other thread, once people break circa £5,000 for a car purchase they expect full dealer facilities - primarily finance and at very least a forecourt. The amount of people with that amount of cash is very limited.
Also, be prepared for heavy bank fees to lodge that sort of cash. And i mean heavy.
The callers at all times of day and night does concern me. I am looking at offering quality cars and not looking to rip anyone off, I do want to offer a genuine service. The question is will it be profitable taking into account money I will have to pay out to sort out faults etc.If you do meet them at home, be prepared for callers at all times of the day and night, particularly once you get a troublesome car.
Also, as i put earlier today on the other thread, once people break circa £5,000 for a car purchase they expect full dealer facilities - primarily finance and at very least a forecourt. The amount of people with that amount of cash is very limited.
Also, be prepared for heavy bank fees to lodge that sort of cash. And i mean heavy.
Bank fees - yeah I have run into this before with business accounts. They normally want 1% to deposit and withdraw cash. So if you withdraw 5k then deposit 5k back in cash you would get billed £100 total - which is a joke. I would probably do what I suspect most sole traders do and keep a cash float to avoid repeatedly depositing and withdrawing money incurring fees from the business account. I dont think HMRC would have any issue with this as long as a record of all cash transactions is kept and made.
Out of interest, why have you chosen cars? You don't seem very well set-up to trade big, heavy, expensive cars, and from a standing start, there are some significant barriers to you doing well.
It sounds like fun and games, but it isn't really. It's bloody tough, and if you're trading 3 Series and C Classes, most of your customers think you're a
before they've even met you, yet many of them will be dheads too.
In terms of turning your life into a meetattathon, only hot hatches or Vauxhalls would be worse.
Why not buy and sell something you can stick in the post?
It sounds like fun and games, but it isn't really. It's bloody tough, and if you're trading 3 Series and C Classes, most of your customers think you're a
before they've even met you, yet many of them will be dheads too.In terms of turning your life into a meetat
tathon, only hot hatches or Vauxhalls would be worse.Why not buy and sell something you can stick in the post?
Edited by SpeckledJim on Monday 23 June 21:06
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