Part time motor trader
Discussion
The biggest problem with auctions is the lack of ability to thoroughly check the vehicle. Yes, there are ways to lessen your risk but ultimately you have a very limited opportunity, certainly compared to your customer who can spend as much time as they like testing, driving, inspecting and so on. What's more having bought the car your customer is still protected as they drive around looking for faults or problems which they can come back to you with.
So on that basis you would think cars at auction would be cheap given the risk, but you are in a race to the bottom. Whoever is the most foolish / prepared to feck off customers with any problems gets the car and believe me there are some very early examples on the Darwin evolutionary scale out there. There are also lots of people who don't share your desire to earn an upstanding reputation and sleep comfortably at night.
It's very easy to kid yourself that auctions offer great opportunity solely on the basis of volume. The fact that you never get to negotiate directly with the vendor is frustrating. If I was buying from you and found genuine fault you would be inclined to reflect the repair cost by way of a reduction in asking price. At auction no one gives a sheet, they just wait for the next bloke who gets carried away and misses the problem.
Buying privately brings with it it's own challenges but there are motivated sellers who see the bigger picture and might not have your skills in terms if maximising potential. You can also thoroughly check the car out to minimise risk, providing you know what you're looking at. It isn't foolproof and your customer still has the upper hand in terms of protection but you're in a far stronger position than buying from auction.
The long and short of it is there are much easier ways to make money and it's hard work. A lifestyle rather than a job.
Henry
So on that basis you would think cars at auction would be cheap given the risk, but you are in a race to the bottom. Whoever is the most foolish / prepared to feck off customers with any problems gets the car and believe me there are some very early examples on the Darwin evolutionary scale out there. There are also lots of people who don't share your desire to earn an upstanding reputation and sleep comfortably at night.
It's very easy to kid yourself that auctions offer great opportunity solely on the basis of volume. The fact that you never get to negotiate directly with the vendor is frustrating. If I was buying from you and found genuine fault you would be inclined to reflect the repair cost by way of a reduction in asking price. At auction no one gives a sheet, they just wait for the next bloke who gets carried away and misses the problem.
Buying privately brings with it it's own challenges but there are motivated sellers who see the bigger picture and might not have your skills in terms if maximising potential. You can also thoroughly check the car out to minimise risk, providing you know what you're looking at. It isn't foolproof and your customer still has the upper hand in terms of protection but you're in a far stronger position than buying from auction.
The long and short of it is there are much easier ways to make money and it's hard work. A lifestyle rather than a job.
Henry
Edited by Henry-F on Saturday 2nd May 11:13
Just a thought, but if you need to ask someone else how to do it on an internet forum, it probably isnt a viable business option for you. At least get some experience in the field you're looking to get into, working for someone else and you just might not get eaten alive in the process.
Just following up on this ...
I wanted to know the legality of trading cars in the UK. I wanted to know the procedure needed in place to ensure i legally trade (documents paper work, registering vehicles, trade insurance, etc etc)
May i add I'm also looking to trade maybe 3 or 4 cars a month from my currant business premises which is a lockup/unit on a local industrial estate
Thanks in advanced for any help that can be provided
I wanted to know the legality of trading cars in the UK. I wanted to know the procedure needed in place to ensure i legally trade (documents paper work, registering vehicles, trade insurance, etc etc)
May i add I'm also looking to trade maybe 3 or 4 cars a month from my currant business premises which is a lockup/unit on a local industrial estate
Thanks in advanced for any help that can be provided
Nmk123 said:
Just following up on this ...
I wanted to know the legality of trading cars in the UK. I wanted to know the procedure needed in place to ensure i legally trade (documents paper work, registering vehicles, trade insurance, etc etc)
May i add I'm also looking to trade maybe 3 or 4 cars a month from my currant business premises which is a lockup/unit on a local industrial estate
Thanks in advanced for any help that can be provided
From your currant business premises will you be raisin any eyebrows or do you get on well with the other businesses ?I wanted to know the legality of trading cars in the UK. I wanted to know the procedure needed in place to ensure i legally trade (documents paper work, registering vehicles, trade insurance, etc etc)
May i add I'm also looking to trade maybe 3 or 4 cars a month from my currant business premises which is a lockup/unit on a local industrial estate
Thanks in advanced for any help that can be provided
Yes i can trade from my currant premesis and i wish to stock cars with a value of up to 12k. Mainly the A3, 1 series & golf range with the likes of insignias, passats, c class & 3 series. The clientele in the area have quite high disposible incomes and the industrial estate where im based employ many young (18-30) aged people
I have done some homework this side of the business...its the legality od trading i dont know. As i say v5, insurance bla bla...read above ^^^
I have done some homework this side of the business...its the legality od trading i dont know. As i say v5, insurance bla bla...read above ^^^
Nmk123 said:
No i wanted to know about trade insurance. So many options...whats the difference on the policies ? Which would you recommend ?
The reason I asked is many people in your position of taking out a "Road Risks" Policy which is basically designed for people trading from home.These policies have an exclusion in them that someone in your position needs to avoid, namely if you have a business premises they exclude damage/theft/fire etc for parked vehicles within a certain radius of your trade premises. The typical exclusion radius is 400m but can go up to 1km.
Obviously the above is not suitable for you but a lot of people in your position either take out this type of policy by mistake or are miss advised to take one of these by an inexperienced broker.
You need to take out a Motor Trade Combined Policy which is designed for traders with premises, these have the options to cover the items a trader with premises will need eg cover for stock of vehicles, cash, liabilities, wrongful conversion etc etc.
The Insurers in the market for Road Risk policies tend to be at the really cheap and un cheerful end of the market, the Insurers for traders with premises tend to be at the good end of the market.
Ideally you need a policy with an Insurer such as Aviva or Allianz or even Arista.
You'll find the decent policies are more expensive especially initially while you establishing yourself and proving yourself low risk to an Insurer. In addition they tend to insist on particular security and H&S measures which can seem expensive / a pain. But they tend to be imposed for a reason as the Insurers know these massively reduce the risks of a claim.
The better policies tend to provide much wider cover than the cheaper policies.
I'd recommend you visit a decent local broker (Personally I'd avoid Swintons) or as fellow traders for recommendations, you can then build up a good relationship with your broker. They will normally do you favours and can often refer business your way.
Find a broker who explains what you're covered for & what you're not covered for as many brokers do not fully understand motortrade. If they're taking the time to explain the cover and answer your questions they're likely to know what they're talking about. It's good for you in the long run for you to understand what cover you're taking out
Alternatively InsuanceJon on this site is good on commercial insurance, I'm sure he'll be along to help.
One thing I strongly recommend you do is buy a good key safe as Insurers are likely to insist on this as thieves target traders so they can steal the keys for the cars. A good system of protecting your car keys can save you a fortune.
I'd also recommend you be very cautious over taking card payments over the phone in full payment, there's a fairly widespread con where people ring traders with various excuses as to why they can't attend in person to buy the car but will pay in full by card over the phone. Their "friend" then collects the car and a month or so later the card company reclaim the full amount from you as the card was stolen.
The way to avoid this problem is to always insist on the payment in person using chip & pin which is very very unlikely to ever be reclaimed. By all means accept deposits over the phone with balance by card (Chip & pin) or cash as deposit amounts you can afford to lose
Wow that was some great advice and explained very very well. Following your advice i would be inclined to find a local broker who i can meet and discuss my policy with to ensure my cover fully covers me and my business premises.
Do you recommend any direction with getting finance brokers on board ? I believe Santander have a specialist unit that assist with finance for the motor trade and provide business mentor etc while also opening a business account with themselves.
Also when trading the cars, see my questions below
1. How do i fill out the V5 if the car is from a previous owner ? Do i fill out the traders section send that off and ask the previous owner to sign the bottom of the V5 so that the new owner signs the bottom of the V5 and then send the remaining to DVLA when i make the sale ?
2. I believe when i have a car in traders possession i have to ring my insurance to have the car listed on MID. I also have to list my trade plates on MID as well ?
3. I believe cars must be sold with 3 months warranty. Do you recommend any warranty companies to handle this ?
How do you trade a car legally in the UK ? What is the step by step requirements. I can buy and sell easily not a problem its the legality in between im struggling with
Many thanks
Nic V.
Do you recommend any direction with getting finance brokers on board ? I believe Santander have a specialist unit that assist with finance for the motor trade and provide business mentor etc while also opening a business account with themselves.
Also when trading the cars, see my questions below
1. How do i fill out the V5 if the car is from a previous owner ? Do i fill out the traders section send that off and ask the previous owner to sign the bottom of the V5 so that the new owner signs the bottom of the V5 and then send the remaining to DVLA when i make the sale ?
2. I believe when i have a car in traders possession i have to ring my insurance to have the car listed on MID. I also have to list my trade plates on MID as well ?
3. I believe cars must be sold with 3 months warranty. Do you recommend any warranty companies to handle this ?
How do you trade a car legally in the UK ? What is the step by step requirements. I can buy and sell easily not a problem its the legality in between im struggling with
Many thanks
Nic V.
Most of those questions are not by field.
There are plenty of traders on PH so hopefully some will come along and answer them for you
I know Black Horse and Close are big in this field.
This leaflet from the MID explains about your obligations on updating vehicles http://www.mib.org.uk/NR/rdonlyres/E5BCBA75-D5CE-4...
Insurance for motortraders is not cheap, instalments are available but you need to budget for a fairly significant amount to cover the cost to be covered properly.
I'd suggest you do a bit of networking with local traders, they'll be able to give you some information on the local market and you should be able to make contacts for trading cars between you that are not the type of vehicles you would normally trade.
There are plenty of traders on PH so hopefully some will come along and answer them for you
I know Black Horse and Close are big in this field.
This leaflet from the MID explains about your obligations on updating vehicles http://www.mib.org.uk/NR/rdonlyres/E5BCBA75-D5CE-4...
Insurance for motortraders is not cheap, instalments are available but you need to budget for a fairly significant amount to cover the cost to be covered properly.
I'd suggest you do a bit of networking with local traders, they'll be able to give you some information on the local market and you should be able to make contacts for trading cars between you that are not the type of vehicles you would normally trade.
I think you need to stop here and re evaluate what you are doing. You are looking at entering a market thats extremely hard to make money in and there are a LOT of very professional operators doing what you want to do who are more established etc. Auctions are usually a route to paying £250 less than retail so you need to try to find other ways to get stock. You can get car from buying private thats actually a good way to get decent stock. The other bit of advice I would give is to pick a speciality (not Lotus or I'll have to come and kill you 
). If you pick Golf TDIs just sell golf TDIs for example. You'll soon learn when you have a good one, how to fix them easily and people will be reassured if you know your chosen subject.
As a small operator being more focused on your selection of cars will pay dividends.
). If you pick Golf TDIs just sell golf TDIs for example. You'll soon learn when you have a good one, how to fix them easily and people will be reassured if you know your chosen subject. As a small operator being more focused on your selection of cars will pay dividends.
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