selling cars as a second job
Discussion
After a quick trip this morning to the auctions it occured to me there is some considerable money to be made in buying and selling secondhand cars. As I work from home in my normal job I am effectively available all day. Obviously I know I need to get insurance, setup as a companay etc etc pay for overheads and advertising pay tax etc but does anyone else do this? How hard is it to effectively do. Am i just being naive?
example cars - a 2004 Alfa 147 3.2GTA 30K on clock - sold for £7200 - cheapest I can find on Autotrader is 12k BMW 330D Saloon 50K on clock 2004 model £8K - Autotrader again £12-13k
So even after overheads etc I wuould more than happy to sell a couple a month and make a grand profit net on each.
Does anyone else do this - how easy/hard is it?
example cars - a 2004 Alfa 147 3.2GTA 30K on clock - sold for £7200 - cheapest I can find on Autotrader is 12k BMW 330D Saloon 50K on clock 2004 model £8K - Autotrader again £12-13k
So even after overheads etc I wuould more than happy to sell a couple a month and make a grand profit net on each.
Does anyone else do this - how easy/hard is it?
paul001 said:
After a quick trip this morning to the auctions it occured to me there is some considerable money to be made in buying and selling secondhand cars. As I work from home in my normal job I am effectively available all day. Obviously I know I need to get insurance, setup as a companay etc etc pay for overheads and advertising pay tax etc but does anyone else do this? How hard is it to effectively do. Am i just being naive?
example cars - a 2004 Alfa 147 3.2GTA 30K on clock - sold for £7200 - cheapest I can find on Autotrader is 12k BMW 330D Saloon 50K on clock 2004 model £8K - Autotrader again £12-13k
So even after overheads etc I wuould more than happy to sell a couple a month and make a grand profit net on each.
Does anyone else do this - how easy/hard is it?
It's good until you get one wrong or get stuck with a lemon, thats when you need capital to bail you out of said shitter.example cars - a 2004 Alfa 147 3.2GTA 30K on clock - sold for £7200 - cheapest I can find on Autotrader is 12k BMW 330D Saloon 50K on clock 2004 model £8K - Autotrader again £12-13k
So even after overheads etc I wuould more than happy to sell a couple a month and make a grand profit net on each.
Does anyone else do this - how easy/hard is it?
i have enjoyed cars and buyin/selling them as a hobby for almost 20 years....i dont buy em all for profit, i buy them to have fun...in the full knowledge that i probably wont keep em long..so they must be well bought...in my experience, the more exotic or oddball the car..the EASIER it has been to shift..particualrly now we have ebay and the like...caveat emptor..but have fun..thats the main thing..i took a long time away from it cos it started to feel like work and as a result became stressfull..and i dont do stress...
Jderh said:
Ive always considered doing this, i've read about people just buying cars, cleaning them up a bit then selling them for a mass profti, so id be interested to know hwo you'd dea lwith insurance and such like.
Getting a traders policy would be the easiest.It's not all that easy and if you sell over a certain amount you'll have to declare tax and Autotrader will make you advertise as a trader if you are advertising different cars every week, then you'll have to offer a minimum of a 3 month warranty and have them banging on your door everytime something goes wrong. loads of hassle
Jderh said:
Ive always considered doing this, i've read about people just buying cars, cleaning them up a bit then selling them for a mass profti, so id be interested to know hwo you'd dea lwith insurance and such like.
Insurance is pretty straight forward really just get motor trade insurance which is anything from £50-£200 a month depending on factors such as volume of cars/level of cover excess etc. To be honest if you get a lemon - the prices you pay at Auction you would still be able to fix the car and sell it for a full return without any profit. Cars generally advertised on Autotrader and on here were going through at 4-5K less. They also state in the auction if there is any major mechanical defects and you have a certain amount of time after buying the car to get your money back if on inspection there is something wrong. I would employ the services of my mechanic friend anyway to come with me for this bit!
Yes you are being a little niave. sorry.
The examples you have given are so unrealistic, there must be a reason. To sell cars from home you need to sell at very cheap money to attract people away from a bigger dealer. You must make sure you sell only very good cars, remember these customers know where you live.
To buy very good cars, at cheap enough money to be able to sell very cheap, and still have a profit left over is very hard indeed.
On the other hand I really enjoy it, it pays more than I could earn as a sales manager for a prestige dealer, and its not hard work.
All Im saying is dont do it without lots of motor trade experience first.
The examples you have given are so unrealistic, there must be a reason. To sell cars from home you need to sell at very cheap money to attract people away from a bigger dealer. You must make sure you sell only very good cars, remember these customers know where you live.
To buy very good cars, at cheap enough money to be able to sell very cheap, and still have a profit left over is very hard indeed.
On the other hand I really enjoy it, it pays more than I could earn as a sales manager for a prestige dealer, and its not hard work.
All Im saying is dont do it without lots of motor trade experience first.
Donut said:
Jderh said:
Ive always considered doing this, i've read about people just buying cars, cleaning them up a bit then selling them for a mass profti, so id be interested to know hwo you'd dea lwith insurance and such like.
Getting a traders policy would be the easiest.It's not all that easy and if you sell over a certain amount you'll have to declare tax and Autotrader will make you advertise as a trader if you are advertising different cars every week, then you'll have to offer a minimum of a 3 month warranty and have them banging on your door everytime something goes wrong. loads of hassle
kentmotorcompany said:
Yes you are being a little niave. sorry.
The examples you have given are so unrealistic, there must be a reason. To sell cars from home you need to sell at very cheap money to attract people away from a bigger dealer. You must make sure you sell only very good cars, remember these customers know where you live.
To buy very good cars, at cheap enough money to be able to sell very cheap, and still have a profit left over is very hard indeed.
On the other hand I really enjoy it, it pays more than I could earn as a sales manager for a prestige dealer, and its not hard work.
All Im saying is dont do it without lots of motor trade experience first.
Kent- When you say the examples are unrealistic what do you mean by that? That the cars I all saw today were lemons etc/had things wrong with them? seriously every single car they had there was sold at approx 30-40% lower than the average autotrader price for a private sale - More on dealers prices. I totally agree with what you are saying though- hence why I posted so thanks for the advice!The examples you have given are so unrealistic, there must be a reason. To sell cars from home you need to sell at very cheap money to attract people away from a bigger dealer. You must make sure you sell only very good cars, remember these customers know where you live.
To buy very good cars, at cheap enough money to be able to sell very cheap, and still have a profit left over is very hard indeed.
On the other hand I really enjoy it, it pays more than I could earn as a sales manager for a prestige dealer, and its not hard work.
All Im saying is dont do it without lots of motor trade experience first.
Riknos said:
Isn't the only reason cars end up in auctions is cos they're part ex's at wrong marque dealers. Every wondered why someone would auction a car for 7.2 when they can autotrader it for 11k? its bcos they can't as there is something wrong with it that you dont see on auction.
Nope- the majority of cars there today were repossesions and were being sold off directly by the finance companies. I cannot for a minute beleive that every car that went through - and there were about 1200 cars today had a problem. If all the cars they sold were duff then no one would ever go there and buy them!paul001 said:
Donut said:
Jderh said:
Ive always considered doing this, i've read about people just buying cars, cleaning them up a bit then selling them for a mass profti, so id be interested to know hwo you'd dea lwith insurance and such like.
Getting a traders policy would be the easiest.It's not all that easy and if you sell over a certain amount you'll have to declare tax and Autotrader will make you advertise as a trader if you are advertising different cars every week, then you'll have to offer a minimum of a 3 month warranty and have them banging on your door everytime something goes wrong. loads of hassle
It does sound like easy money but it ain't. Most traders I know that make the big dough act as go betweens. So they will buy a part ex off me and sell it to a dealer for £100-£500 more, 4 or 5 of those aday would be nice eh! plus you don't have the hassle of selling it and dealing with the public.
I did this for a while, avoid auctions like the plague though. Most cars there are there for a reason - reason being they're shite. If it isn't there for that reason then those in the know will be after it and the price will not leave you any real mark up.
Get friendly with a few main dealers and get their part exchanges. I was lucky to live near a small local Subaru garage, and a 4X4 dealership where I knew a few people anyway and getting cars off them was the best by far. They're a bit reluctant first time, but if you make it clear that you're after a trade sale and understand that this carries no sort of warranty or comeback if the car has major problems.
Main dealers make huge mark ups on selling new cars and they can turn them over very quickly, so the last thing a Vauxhall dealer wants is a 5 year old Ford sitting on their forecourt for 3 months, and their salesmen explaining what a great car it is to everyone who might want to buy a Corsa. They want it shifted quickly, they've allowed it's auction price on part exchange and most will happily sell it to a second hand dealer for the same money.
Look to pay roughly CAP trade prices and sell at £300-£500 mark up quick as possible.
Not sure if they still do it, but Experian used to offer a brilliant service for dealers that allowed you to do basically an HPI check for about £4. Can save you a lot of grief and make it easier to sell the car.
Motor trade insurance is easy enough to get, mine was about £800 a year, when I was 27-28 with full private NCB, and a recent driving ban for speeding. This covered me 3rd party fire and theft for any car upto £5,000
You can also offer warranties, which can be bought like any other insurance. I didn't really sell many of these but it's worth having the facility to do it if needs be.
A few pitfalls:
Avoid interesting/fun stuff, unless you have some very specialist knowledge they are expensive and troublesome and take ages to sell. The best things were always boring mainstream hatchbacks, diesels and estates, which will sell first week if they are priced right.
Don't try and pretend you're not selling for a profit. Most people who are reasonably switched on can spot this and it just makes you look shifty. Tell them the truth - you have a friend in a main dealer who gives you first refusal on part exchanges, and you do this to make a bit of extra money. Few enough people have any problem with this and it saves you any need to try and lie about it.
Avoid high mileage cars. I've always been a bit scornful of mileage in a way, because I've had great cars myself that have done 120K motorway miles and drive like new. But it's sales death. Anything over 80k miles will have to be seriously cheap to get people interested, and that doesn't leave you much room to make a profit.
Do the minimum but do it well. It needs a long MoT and it needs to be clean so do these right. Avoid cars that need much work doing to them though as this can very quickly become expensive and time consuming even for a professional mechanic. Particularly avoid damaged repairables as they're virtually never right, people don't like buying them and they can have problems further down the line which will come back on you.
Use Autotrader for selling. For me anyway, it was simply the best way to find buyers. Local free ads papers would get mega bargain hunters and scrap men, eBay would get people at the other end of the country, or more mega bargain hunters. A photo ad in Autotrader would shift most things first week.
Having said all of that, one of my most profitable cars ever was a Punto Turbo with lights and tinted windows. I took it in part exchange and then thought "Shit I'll never shift this" so I put it on eBay, no reserve and got a £700 profit that night. Someone drove 150 miles there and then, paid cash and collected it. I probably could have done even better, but as I said I simply wanted rid of the thing.
I never made my fortune at it but there's plenty who do. It was a nice little sideline that doesn't take up too much time and was quite fun.
Get friendly with a few main dealers and get their part exchanges. I was lucky to live near a small local Subaru garage, and a 4X4 dealership where I knew a few people anyway and getting cars off them was the best by far. They're a bit reluctant first time, but if you make it clear that you're after a trade sale and understand that this carries no sort of warranty or comeback if the car has major problems.
Main dealers make huge mark ups on selling new cars and they can turn them over very quickly, so the last thing a Vauxhall dealer wants is a 5 year old Ford sitting on their forecourt for 3 months, and their salesmen explaining what a great car it is to everyone who might want to buy a Corsa. They want it shifted quickly, they've allowed it's auction price on part exchange and most will happily sell it to a second hand dealer for the same money.
Look to pay roughly CAP trade prices and sell at £300-£500 mark up quick as possible.
Not sure if they still do it, but Experian used to offer a brilliant service for dealers that allowed you to do basically an HPI check for about £4. Can save you a lot of grief and make it easier to sell the car.
Motor trade insurance is easy enough to get, mine was about £800 a year, when I was 27-28 with full private NCB, and a recent driving ban for speeding. This covered me 3rd party fire and theft for any car upto £5,000
You can also offer warranties, which can be bought like any other insurance. I didn't really sell many of these but it's worth having the facility to do it if needs be.
A few pitfalls:
Avoid interesting/fun stuff, unless you have some very specialist knowledge they are expensive and troublesome and take ages to sell. The best things were always boring mainstream hatchbacks, diesels and estates, which will sell first week if they are priced right.
Don't try and pretend you're not selling for a profit. Most people who are reasonably switched on can spot this and it just makes you look shifty. Tell them the truth - you have a friend in a main dealer who gives you first refusal on part exchanges, and you do this to make a bit of extra money. Few enough people have any problem with this and it saves you any need to try and lie about it.
Avoid high mileage cars. I've always been a bit scornful of mileage in a way, because I've had great cars myself that have done 120K motorway miles and drive like new. But it's sales death. Anything over 80k miles will have to be seriously cheap to get people interested, and that doesn't leave you much room to make a profit.
Do the minimum but do it well. It needs a long MoT and it needs to be clean so do these right. Avoid cars that need much work doing to them though as this can very quickly become expensive and time consuming even for a professional mechanic. Particularly avoid damaged repairables as they're virtually never right, people don't like buying them and they can have problems further down the line which will come back on you.
Use Autotrader for selling. For me anyway, it was simply the best way to find buyers. Local free ads papers would get mega bargain hunters and scrap men, eBay would get people at the other end of the country, or more mega bargain hunters. A photo ad in Autotrader would shift most things first week.
Having said all of that, one of my most profitable cars ever was a Punto Turbo with lights and tinted windows. I took it in part exchange and then thought "Shit I'll never shift this" so I put it on eBay, no reserve and got a £700 profit that night. Someone drove 150 miles there and then, paid cash and collected it. I probably could have done even better, but as I said I simply wanted rid of the thing.
I never made my fortune at it but there's plenty who do. It was a nice little sideline that doesn't take up too much time and was quite fun.
Edited by AJS- on Wednesday 24th October 16:44
in my experience buy private cars in good nick from nice people..auction car turn up bargains..particualrly big old barges that trade dont want...but you will be amazed how many real bargains are out there privately in your local paper...what the other guy said is so true..if your selling from hoe, only sell GOOD cars....hell, it dont matter where you sell from, only sell good cars......the profit may be smaller but not always...and it pays dividends in the longer run.
Riknos said:
Isn't the only reason cars end up in auctions is cos they're part ex's at wrong marque dealers. Every wondered why someone would auction a car for 7.2 when they can autotrader it for 11k? its bcos they can't as there is something wrong with it that you dont see on auction.
Thats the skill...There are some bargins that go through but there are some right heaps too, experienced buyers will 9/10 spot them and let the weekend shopper after a bargin pick up the heaps.
That is not a dig at anyone here, do it and enjoy it but just don't do it with rose tinted glasses on.
I do have a friend who does it but only as a hobby and runs the one he buys as his own until he is bored then sells at a profit and buys the next one.
Donut said:
It does sound like easy money but it ain't. Most traders I know that make the big dough act as go betweens. So they will buy a part ex off me and sell it to a dealer for £100-£500 more, 4 or 5 of those aday would be nice eh! plus you don't have the hassle of selling it and dealing with the public.
These sort of deals are sweet if you can do them. I met people who would buy cars in the auctions at Edinburgh or Carlisle and sell them at the Auctions in Leeds. Usually make £300-400 a car just on the price difference between regions. Trouble is they rely on knowing exactly what when and where to buy, and unless you're pretty well connected then it's an equally good way to lose the same amount of money just as quickly.paul001 said:
kentmotorcompany said:
Yes you are being a little niave. sorry.
The examples you have given are so unrealistic, there must be a reason. To sell cars from home you need to sell at very cheap money to attract people away from a bigger dealer. You must make sure you sell only very good cars, remember these customers know where you live.
To buy very good cars, at cheap enough money to be able to sell very cheap, and still have a profit left over is very hard indeed.
On the other hand I really enjoy it, it pays more than I could earn as a sales manager for a prestige dealer, and its not hard work.
All Im saying is dont do it without lots of motor trade experience first.
Kent- When you say the examples are unrealistic what do you mean by that? That the cars I all saw today were lemons etc/had things wrong with them? seriously every single car they had there was sold at approx 30-40% lower than the average autotrader price for a private sale - More on dealers prices. I totally agree with what you are saying though- hence why I posted so thanks for the advice!The examples you have given are so unrealistic, there must be a reason. To sell cars from home you need to sell at very cheap money to attract people away from a bigger dealer. You must make sure you sell only very good cars, remember these customers know where you live.
To buy very good cars, at cheap enough money to be able to sell very cheap, and still have a profit left over is very hard indeed.
On the other hand I really enjoy it, it pays more than I could earn as a sales manager for a prestige dealer, and its not hard work.
All Im saying is dont do it without lots of motor trade experience first.
But either:
1) You was not comparing exactly like with like cars
2) There were things wrong the cars you saw at auction. I.E. Lots of paint repairs, can be hard to spot for the untrained eye, needed a service/tyres/MOT. Service history missing/incomplete, lots of owners, less desirable spec, to name just a small selection of reasons.
I dont think Ive ever met a dealer who makes 30-40% margins, I certainly dont. 10-15% is quite typical. Bear in mind Im talking about overall margins, not net profit.
If you turn over more than 50k (i think) you will need to be VAT registered and pay VAT on your overall margin before prep costs.
Also if you are not VAT registered some auctions wont let you open a trade account. As a private buyer you pay much bigger auction fees, and some auctions wont even give you the V5, they will send it off and register the car to you.
I dont mean to sound like a doom monger, but I think its fair to say everyones job seems simple until you try and do it.
You could possibly buy and sell your own car quite often and therefore make a small profit, or at the least have depreciaction free motoring. Give it a try like this first, and see how you get on.
Gassing Station | General Gassing [Archive] | Top of Page | What's New | My Stuff