Part time motor trader
Discussion
Hi all!
Im lookig to start as a part time motor trader buying and selling used cars from home/currant business premesis
I have a local auction centre and BCA close to my currant business. Im comfortable with purchasing cars, evaluating cars and selling on. The bit which i require further knowledge of is the paper work and business side of it all
So im looking to continue as a sole trader and im aware of trade insurance & trade plates but how do i register stock in the business name, am i required to do further (i have read on MID i have to list the car after having it for 14 days) do i charge VAT on the cars, what paper work is required
Im sort of looking for a detailed step by step of how to do this. I know how to buy sell trade etc and im going for a meeting today at my local trading standards office to ensure i trade within the law but as i say its the rest of the subject really
I appreciate some people will come back with, dont do this if you dont know the trade blah blah but you have to learn and start somewhere and im prepared to take the risks involved
Thanks...help would be much appreciated!
Im lookig to start as a part time motor trader buying and selling used cars from home/currant business premesis
I have a local auction centre and BCA close to my currant business. Im comfortable with purchasing cars, evaluating cars and selling on. The bit which i require further knowledge of is the paper work and business side of it all
So im looking to continue as a sole trader and im aware of trade insurance & trade plates but how do i register stock in the business name, am i required to do further (i have read on MID i have to list the car after having it for 14 days) do i charge VAT on the cars, what paper work is required
Im sort of looking for a detailed step by step of how to do this. I know how to buy sell trade etc and im going for a meeting today at my local trading standards office to ensure i trade within the law but as i say its the rest of the subject really
I appreciate some people will come back with, dont do this if you dont know the trade blah blah but you have to learn and start somewhere and im prepared to take the risks involved
Thanks...help would be much appreciated!
I think this is more of a "business" query rather than an "employment" query - and would probably fare better in "The Business Forum".
There have been many, many threads started by people thinking of becoming car dealers. A search might reveal these threads and the responses received.
There have been many, many threads started by people thinking of becoming car dealers. A search might reveal these threads and the responses received.
I run my own business and my neighbour (who sells from home) tells me that VAT to pay HMRC is payable on the DIFFERENCE between purchase and sale price (on invoices), BUT the threshold is based on the cumulative sale prices (turnover).
Example
Purchase price £7,200
Sale price £8,200
Cost to prepare £250
Profit £750
Do this ten times, the turnover is £82,000 - and you must declare yourself to HMRC for VAT.
There would be a £167 element to pay HMRC on each car. If all the£500£250 you spent to prepare the car was VAT eligible, then £41 could be reclaimed. You would owe the VATman the balance (£167-£41=£126)
Your actual profit would be £750-£126 = £624 per car
If you only sold 9 cars, your turnover would be £73,800 (which is less than the VAT threshold).
Your profit per car would be £750.
As you can see, there is a big advantage if you can keep your turnover below the threshold.
As an aside, lern to spel
[EFA: £500 should have been £250]
Example
Purchase price £7,200
Sale price £8,200
Cost to prepare £250
Profit £750
Do this ten times, the turnover is £82,000 - and you must declare yourself to HMRC for VAT.
There would be a £167 element to pay HMRC on each car. If all the
Your actual profit would be £750-£126 = £624 per car
If you only sold 9 cars, your turnover would be £73,800 (which is less than the VAT threshold).
Your profit per car would be £750.
As you can see, there is a big advantage if you can keep your turnover below the threshold.
As an aside, lern to spel
[EFA: £500 should have been £250]
Edited by pingu393 on Friday 17th April 11:16
Eric Mc said:
I think this is more of a "business" query rather than an "employment" query - and would probably fare better in "The Business Forum".
There have been many, many threads started by people thinking of becoming car dealers. A search might reveal these threads and the responses received.
Thank you i did not notice that section of the forumThere have been many, many threads started by people thinking of becoming car dealers. A search might reveal these threads and the responses received.
pingu393 said:
I run my own business and my neighbour (who sells from home) tells me that VAT to pay HMRC is payable on the DIFFERENCE between purchase and sale price (on invoices), BUT the threshold is based on the cumulative sale prices (turnover).
Example
Purchase price £7,200
Sale price £8,200
Cost to prepare £250
Profit £750
Do this ten times, the turnover is £82,000 - and you must declare yourself to HMRC for VAT.
There would be a £167 element to pay HMRC on each car. If all the £500 you spent to prepare the car was VAT eligible, then £41 could be reclaimed. You would owe the VATman the balance (£167-£41=£126)
Your actual profit would be £750-£126 = £624 per car
If you only sold 9 cars, your turnover would be £73,800 (which is less than the VAT threshold).
Your profit per car would be £750.
As you can see, there is a big advantage if you can keep your turnover below the threshold.
As an aside, lern to spel
Thank you. That is great ... I totally understand that Example
Purchase price £7,200
Sale price £8,200
Cost to prepare £250
Profit £750
Do this ten times, the turnover is £82,000 - and you must declare yourself to HMRC for VAT.
There would be a £167 element to pay HMRC on each car. If all the £500 you spent to prepare the car was VAT eligible, then £41 could be reclaimed. You would owe the VATman the balance (£167-£41=£126)
Your actual profit would be £750-£126 = £624 per car
If you only sold 9 cars, your turnover would be £73,800 (which is less than the VAT threshold).
Your profit per car would be £750.
As you can see, there is a big advantage if you can keep your turnover below the threshold.
As an aside, lern to spel
Stick to one auction and get a trade account going (some auctions are easy some are not) to keep it simple on the first few buy with long mots
try and give them a good drive about to find any faults (get them fixed) get a market value and place your add
i keep it simple no paint and no servicing unless needed
keep your costs low
what type of cars (value) will you be selling ?
try and give them a good drive about to find any faults (get them fixed) get a market value and place your add
i keep it simple no paint and no servicing unless needed
keep your costs low
what type of cars (value) will you be selling ?
tooldtocruise said:
Stick to one auction and get a trade account going (some auctions are easy some are not) to keep it simple on the first few buy with long mots
try and give them a good drive about to find any faults (get them fixed) get a market value and place your add
i keep it simple no paint and no servicing unless needed
keep your costs low
what type of cars (value) will you be selling ?
The auction centre near me allows me to open a trader account. Just been to ask and if im a registered sole trader they are fine with ittry and give them a good drive about to find any faults (get them fixed) get a market value and place your add
i keep it simple no paint and no servicing unless needed
keep your costs low
what type of cars (value) will you be selling ?
But as i say my main concern is ensuring when i trade im within the law. So i spoke with trading standards yesterday and thats cleared up...its making sure when i buy sell and have possession of a car im within the law ... Making sure all paper work is correct, vehicle is registered correctly etc etc
andymc said:
private sellers till you're more comfortable
As Andy says private sellers. You can actually drive the car, let it get up to temperature haggle down on price a bit more when there if issues found. At auction it can be tricky and the fees add up. I used to buy privately and learnt a lot doing it that way but people don't like selling to traders. You will need a cover story. Some good advice, it's difficult to buy well at auction.
I've been buying and selling cars for 12 years, 5 years in my own business and I still buy the odd car from auction with faults I should have spotted and needing paintwork I should have seen!
I still pay over the top for cars I shouldn't buy!
I've been buying and selling cars for 12 years, 5 years in my own business and I still buy the odd car from auction with faults I should have spotted and needing paintwork I should have seen!
I still pay over the top for cars I shouldn't buy!
Private sales are best to get the stock. I actually do some work for BCA and have driven some right pups. For example, i had a lovely 62 plate A4 Sline with an electrical fault (all the lights were on - dashboard like a xmas tree). It sold for something like £15000 to an online bidder who wouldn't of known the faults. There are good cars too but you need to be so careful. Alot of them come from lease companies and have been well looked maintained but some are well just say "money pits".
IMO you will find it so hard to buy anything cheap privately and if you don't tell them your trade you will be waiting upto 4 weeks for the logbook
you need to be at the auction early and pick your few cars out well before the auction starts out of a hundred i can pick maybe 5 i like probably out of the 10 i chose online
they will start about 10 cars at a time this is your time to jump in and do as much testing as you can or watch someone else jump in and test it also check oil and water under the bonnet
over the last few years ive bought about 50 cars from an auction about a 100 miles from home and drove every single one home, they all made it... only one went into limp mode it was a £350 diesel Lagoona ended up selling it for £750 without spending any money on it
you need to be at the auction early and pick your few cars out well before the auction starts out of a hundred i can pick maybe 5 i like probably out of the 10 i chose online
they will start about 10 cars at a time this is your time to jump in and do as much testing as you can or watch someone else jump in and test it also check oil and water under the bonnet
over the last few years ive bought about 50 cars from an auction about a 100 miles from home and drove every single one home, they all made it... only one went into limp mode it was a £350 diesel Lagoona ended up selling it for £750 without spending any money on it
IMO you will find it so hard to buy anything cheap privately and if you don't tell them your trade you will be waiting upto 4 weeks for the logbook
you need to be at the auction early and pick your few cars out well before the auction starts out of a hundred i can pick maybe 5 i like probably out of the 10 i chose online
they will start about 10 cars at a time this is your time to jump in and do as much testing as you can or watch someone else jump in and test it also check oil and water under the bonnet
over the last few years ive bought about 50 cars from an auction about a 100 miles from home and drove every single one home, they all made it... only one went into limp mode it was a £350 diesel Lagoona ended up selling it for £750 without spending any money on it
you need to be at the auction early and pick your few cars out well before the auction starts out of a hundred i can pick maybe 5 i like probably out of the 10 i chose online
they will start about 10 cars at a time this is your time to jump in and do as much testing as you can or watch someone else jump in and test it also check oil and water under the bonnet
over the last few years ive bought about 50 cars from an auction about a 100 miles from home and drove every single one home, they all made it... only one went into limp mode it was a £350 diesel Lagoona ended up selling it for £750 without spending any money on it
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