Yet another becoming a part time dealer thread.....
Discussion
SpeckledJim said:
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?
I chose cars as that's where my interest is and I have some knowledge in that area. I dont really class £5k as an expensive car, to me that is £15k+. All I would be doing is buying 1 or 2 cars a month the immediate barriers seem to me to be getting trade plates. I am not overly concerned what car buyers think of me that has never really factored highly in my business decisions. 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
legendtrader said:
daemon said:
The accountant can handle it, but it will take 1/6th of your profit.
sorry I dont follow, mike accountant is quite reasonable so I dont think it will end up being 1/6th of my profit. She can do it all for £800 p/aSo once you VAT register, for every £600 gross profit, you'll have to hand £100 of that to the VAT man
Daemon I just read your post on the other thread. It has really put me off going ahead.
daemon said:
Sorry for the delay.
Basically i stuck it 2 1/2 years before it wore me down. I was shifting cars but margins were getting ever thinner, cars less reliable & less well described by the dealers i bought from and customers more demanding
I started at 07:00 in the morning and rarely got sitting down before 22:00 at night. Saturdays i did 09:00 to 14:00.
Customers want cheap diesel cars. Too often there were either problems identified during prep or the car came back with a fault, negating any profit.
I was making money at it, but not enough to draw the wage i needed, therefore i was eating into my "pot" monthly. This became very frustrating as i really had expected to be able to grow my "pot" as well as draw a reasonable wage. I saw no prospect of things improving so i drew a line on it.
Back in IT now. Have a great wage. Work a standard 7 1/2 hour day and home for 17:15 every night. I did continue selling cars part time for a year or so, but i've had my second decent pay bump inside a year, so i dont need to any more.
My observations :-
Basically i stuck it 2 1/2 years before it wore me down. I was shifting cars but margins were getting ever thinner, cars less reliable & less well described by the dealers i bought from and customers more demanding
I started at 07:00 in the morning and rarely got sitting down before 22:00 at night. Saturdays i did 09:00 to 14:00.
Customers want cheap diesel cars. Too often there were either problems identified during prep or the car came back with a fault, negating any profit.
I was making money at it, but not enough to draw the wage i needed, therefore i was eating into my "pot" monthly. This became very frustrating as i really had expected to be able to grow my "pot" as well as draw a reasonable wage. I saw no prospect of things improving so i drew a line on it.
Back in IT now. Have a great wage. Work a standard 7 1/2 hour day and home for 17:15 every night. I did continue selling cars part time for a year or so, but i've had my second decent pay bump inside a year, so i dont need to any more.
My observations :-
- Customers look for the cheapest car on gumtree, usedcarsni and autotrader in that order.
- If your car is pitched mid price range. The phone doesnt ring.
- To get the phone to ring your car has to be the cheapest or second cheapest.
- Whilst you may well want to valet, MOT and prep the car correctly, the person you are "competing" against doesnt and wont, so his costs are lower and chances are hes a fly by night merchant who'll meet them at tescos via a disposable phone.
- Even if you are the cheapest, customer still expect you to be able to take a big discount.
- Customers are lying weasels. They'll blatantly lie about their car to get the best price, but then complain bitterly when something goes wrong with the one they bought.
- Customers expect the car to be prepared to a high standard with fresh MOT, but dont want to pay for any of it - ie, they'll drive 100 miles to buy a rough one £50 cheaper
- You are competing with sellers all over northern ireland. So you cant just be cheapest locally, you have to be cheapest provence wide for the phone to ring.
- If you're operating from home, you will get threats if a customer has a problem that you wont cover. I had various veiled threats like "dont worry, we'll be round to see you soon. we know were you live", when you wouldnt cover a slipping clutch on a 12 year old car three months after purchase.
- Once you break the £5,000 barrier people tend to want finance facilities thus they will gravitate towards dealers who offer that.
Edited by daemon on Monday 23 June 13:13
Edited by daemon on Monday 23 June 13:15
legendtrader said:
SpeckledJim said:
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?
I chose cars as that's where my interest is and I have some knowledge in that area. I dont really class £5k as an expensive car, to me that is £15k+. All I would be doing is buying 1 or 2 cars a month the immediate barriers seem to me to be getting trade plates. I am not overly concerned what car buyers think of me that has never really factored highly in my business decisions. 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
Its very very hard to make money at. Yes. You can do the odd car make a few quid and feel like a hero. Making £40,000 a year at it is a lot of used cars for a one man band.
Assuming even £5K a year in overheads, and £10K a year for the VAT man, then you're looking at £55,000, which assuming you can hit 10% net profit then you need a turnover of £550,000.
And i dont think you're accountant is going to process the amount of transactions to make that fly plus all your VAT returns for £500 a year.
Plus for every one car you actually want to retail, you make investigate 50 adverts, make 20 phone calls, make 3 viewings @ say a 1/2 day a time to get one car.
Also to sell say four a month, you'll have two in prep and two sold and awaiting handover, so you really need to have eight cars on the go to sell four.
legendtrader said:
SpeckledJim said:
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?
I chose cars as that's where my interest is and I have some knowledge in that area. I dont really class £5k as an expensive car, to me that is £15k+. All I would be doing is buying 1 or 2 cars a month the immediate barriers seem to me to be getting trade plates. I am not overly concerned what car buyers think of me that has never really factored highly in my business decisions. 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
How are you going to source cars that you can add what a customer will think is value to, when you're missing all the assets, accoutrements, environments, relationships and contacts of the 'big' and 'old' boys?
SpeckledJim said:
Where to buy from and where to sell from are the two biggies.
How are you going to source cars that you can add what a customer will think is value to, when you're missing all the assets, accoutrements, environments, relationships and contacts of the 'big' and 'old' boys?
ok I get you. Basically there are easier ways to make an extra 20k to 30k in a side business.How are you going to source cars that you can add what a customer will think is value to, when you're missing all the assets, accoutrements, environments, relationships and contacts of the 'big' and 'old' boys?
legendtrader said:
SpeckledJim said:
Where to buy from and where to sell from are the two biggies.
How are you going to source cars that you can add what a customer will think is value to, when you're missing all the assets, accoutrements, environments, relationships and contacts of the 'big' and 'old' boys?
ok I get you. Basically there are easier ways to make an extra 20k to 30k in a side business.How are you going to source cars that you can add what a customer will think is value to, when you're missing all the assets, accoutrements, environments, relationships and contacts of the 'big' and 'old' boys?
daemon said:
You could buy a lottery ticket and double your chances of getting rich at it?
hahahah. I wasnt looking to get rich just make an extra £20k - £30k p/annum. I am seriously now just thinking about sourcing a car for 4k to 4.5k running it for a couple of months and then see if I can sell it for 5.5k as a private sale. I would be just testing the water not officially trading, dont worry though I wont turn into one of those to55ers who trade and pretend to be private sellers.legendtrader said:
daemon said:
You could buy a lottery ticket and double your chances of getting rich at it?
hahahah. I wasnt looking to get rich just make an extra £20k - £30k p/annum. I am seriously now just thinking about sourcing a car for 4k to 4.5k running it for a couple of months and then see if I can sell it for 5.5k as a private sale. I would be just testing the water not officially trading, dont worry though I wont turn into one of those to55ers who trade and pretend to be private sellers.Buy and sell the odd one and you'll be grand. I do ok when i do take a punt these days, though a car has to pretty much fall into my lap before i'll invest.
I really enjoyed it while doing it but it really takes over your life if you want to make that sort of money. I used to be ready to go anytime and to anywhere. I saw me buying cars at midnight in the middle of winter from some blokes house 40 miles from home, having dragged some poor sod with me as a driver. Doing viewings at 10:30 at night or driving a car to someone on the hope they buy, then getting the train home.
You get a buzz from it when it all falls into place, but its tough.
legendtrader said:
daemon said:
You could buy a lottery ticket and double your chances of getting rich at it?
hahahah. I wasnt looking to get rich just make an extra £20k - £30k p/annum. I am seriously now just thinking about sourcing a car for 4k to 4.5k running it for a couple of months and then see if I can sell it for 5.5k as a private sale. I would be just testing the water not officially trading, dont worry though I wont turn into one of those to55ers who trade and pretend to be private sellers.Firstly thanks for the heads up re: the VED changes. What a bloody nightmare. All of a sudden people will be expecting dealers to stump up 6 months tax but the purchase price at both ends will remain the same. Then there is the hassle involved in ensuring everyone drives away legally. Then there is the question of how many trade plates you will need. 1 car being delivered, 2 guys running a car to the workshop (in two vehicles) and test drives which on a busy day could be done 2 at a time.
All our cars generally come from private sellers and so are taxed. All of a sudden the trade plates sat in the corner become a fixture every time you sit in a car. As for the shambles they call DVLA keeping up with all the extra work Buddha himself only knows. You would have thought someone would have alerted dealers!!!
I've just written it Dominic Grieve our MP for what it's worth.
Anyway back on topic.
Trading from a car park - no chance. Every guide on the planet say don't buy from lay-bys and car parks.
A third party warranty doesn't replace your obligations as a dealer and don't for one minute think that £150 a car will pay £2,000 claims on them. Warranty companies want a nice big profit and there are lots of layers in the cake. Your Rep, his boss, the warranty company, the underwriter admin fees and so on. Not a huge amount left to pay for spanner time.
You will end up paying VAT and it isn't 1/6 of your profit. It's the VAT content of the gross difference between purchase and sale price. You can't make allowances for any non Vat labour or staff costs.
You end up kissing a lot of frogs before you kiss a Prince and each frog costs time & money to go and look at.
There are bargains out there but there are also lots of people looking for them, not just dealers but private bods wanting a set of wheels.
We are lucky in that we trade in a highly specialised market and we've been doing it for 25 years but it still doesn't get any easier. Reputations are very expensive to earn and even more expensive to maintain. You compete against people who won't be around in 10 months, let alone 10 years and if they choose to ignore VAT & Tax you don't stand a chance.
You said you didn't want people calling all hours of the day. Car dealing is a vocation not a job. Particularly when you're getting started you will be working at midnight on a regular basis.
Ultimately the motor trade has been very good to me but I have earnt much easier money in my life.
Henry
All our cars generally come from private sellers and so are taxed. All of a sudden the trade plates sat in the corner become a fixture every time you sit in a car. As for the shambles they call DVLA keeping up with all the extra work Buddha himself only knows. You would have thought someone would have alerted dealers!!!
I've just written it Dominic Grieve our MP for what it's worth.
Anyway back on topic.
Trading from a car park - no chance. Every guide on the planet say don't buy from lay-bys and car parks.
A third party warranty doesn't replace your obligations as a dealer and don't for one minute think that £150 a car will pay £2,000 claims on them. Warranty companies want a nice big profit and there are lots of layers in the cake. Your Rep, his boss, the warranty company, the underwriter admin fees and so on. Not a huge amount left to pay for spanner time.
You will end up paying VAT and it isn't 1/6 of your profit. It's the VAT content of the gross difference between purchase and sale price. You can't make allowances for any non Vat labour or staff costs.
You end up kissing a lot of frogs before you kiss a Prince and each frog costs time & money to go and look at.
There are bargains out there but there are also lots of people looking for them, not just dealers but private bods wanting a set of wheels.
We are lucky in that we trade in a highly specialised market and we've been doing it for 25 years but it still doesn't get any easier. Reputations are very expensive to earn and even more expensive to maintain. You compete against people who won't be around in 10 months, let alone 10 years and if they choose to ignore VAT & Tax you don't stand a chance.
You said you didn't want people calling all hours of the day. Car dealing is a vocation not a job. Particularly when you're getting started you will be working at midnight on a regular basis.
Ultimately the motor trade has been very good to me but I have earnt much easier money in my life.
Henry
Edited by Henry-F on Tuesday 24th June 00:12
legendtrader said:
daemon said:
The accountant can handle it, but it will take 1/6th of your profit.
sorry I dont follow, mike accountant is quite reasonable so I dont think it will end up being 1/6th of my profit. She can do it all for £800 p/asanguinary said:
legendtrader said:
daemon said:
The accountant can handle it, but it will take 1/6th of your profit.
sorry I dont follow, mike accountant is quite reasonable so I dont think it will end up being 1/6th of my profit. She can do it all for £800 p/aEspecially since you'll be offsetting your VAT by claiming VAT back on everything - fuel, parts, work done, advertising, etc, etc. This adds up to a lot of receipts per month to trawl through
hi,
you said you had another business. I obviously don`t know if that company is vat registered on not, but I was under the impression that hmrc lump connected businesses together for vat purposes. if that is the case you could end up having to register your existing business for vat as well, if not already registered.
can you not put a bit more time / effort etc into this company to increase your earnings ?
you said you had another business. I obviously don`t know if that company is vat registered on not, but I was under the impression that hmrc lump connected businesses together for vat purposes. if that is the case you could end up having to register your existing business for vat as well, if not already registered.
can you not put a bit more time / effort etc into this company to increase your earnings ?
YourWorship said:
hi,
you said you had another business. I obviously don`t know if that company is vat registered on not, but I was under the impression that hmrc lump connected businesses together for vat purposes. if that is the case you could end up having to register your existing business for vat as well, if not already registered.
can you not put a bit more time / effort etc into this company to increase your earnings ?
current business is VAT exempt and yeah I could put more time in there and this is exactly what I am looking at doing. lolyou said you had another business. I obviously don`t know if that company is vat registered on not, but I was under the impression that hmrc lump connected businesses together for vat purposes. if that is the case you could end up having to register your existing business for vat as well, if not already registered.
can you not put a bit more time / effort etc into this company to increase your earnings ?
I've read loads of these threads over the years and not once have I seen a car dealer encourage a newbie to start up! Lots of tales of woe, endless legislation, VAT nightmares etc but encouragement....not a chance! I don't doubt for one minute that it has it's challenges, but then so do most businesses.
Regarding sourcing cars, I've often wondered if buying at auction up north and selling down south might be viable?
Regarding sourcing cars, I've often wondered if buying at auction up north and selling down south might be viable?
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