Manheim Auction prices and simulcast
Discussion
Andyjc86 said:
How much discount are you expecting to get?
Say they have the car advertised at £10k, it will only be worth slightly more then £10k down south surely?
Have you actually spoken to dealers about the discounts they'll give you?
not much discount. if you look at a niche typically what you see is a couple of dealers in midlands/north/scotland will price at £10k and the cheapest within 60 miles of London will be around £10600-900. If you can squeeze the dealers down to £9500-9700 it then leaves room to make a small profit per car. You would be cheapest within 60 miles of London selling at £10500. Of course the margins are tight and if you had to pay for premises, wages, business rates and other overheads it would not be viable. My way the costs are very low and I can put aside profit ready for any customer returns. My background is sales and I have bought and sold quite a few cars.Say they have the car advertised at £10k, it will only be worth slightly more then £10k down south surely?
Have you actually spoken to dealers about the discounts they'll give you?
Edited by legendtrader on Friday 2nd September 10:30
legendtrader said:
TVR1 said:
So youre going to give the impression of a 12 months warranty? Topping up the manufacturers and adding a measly 1000 miles extra? Who is underwriting that warranty, you? Good luck with that. 3 months warranty top up for even us 'big 3 prestige' is around £300 depending on model. whatchagonna do month 10 when the mechatronic unit goes and you face a 2k bill?
No. I will clearly explain how much manafacturers warranty is left on the car. I will offer a self funded warranty on top using http://www.warrantyadmin.co.uk/. This will likely be a 3 months / 1000 miles term. I might stretch it out to 6 months / 2000 miles. In the scenario you mention above the customer would be referred to the manafacturer as it would be outside of my 3 months warranty. If the customer reports a fault to me in the first 3 months I will ask them to return the car (or get it recovered using the recovery on the warranty admin product). I will then get the issue fixed immediately if its a small <£200 job. If it's a larger job I will go to the manafacturer with the issue. For your warranty to have any value, it HAS to cover the initial period after the manufacturer's warranty has expired. I'm not sure how you would manage any mileage limit on that, but I would also suggest that any concept of 3 months or 1000 miles is also of very little value.
For some people, 1000 miles is less than a week.
Sorry if this sounds a bit harsh, but I am just trying to be constructive.
Frankthered said:
Speaking as a potential punter, I don't get why you are planning to run your warranty in parallel with the manufacturer's. It adds no value IMHO. If I have a problem and a (correctly transferred) manufacturer's warranty, I go to a dealer and get it sorted. I'm only going to come to you if there is an issue with the validity of the manufacturer's warranty or a transfer issue.
For your warranty to have any value, it HAS to cover the initial period after the manufacturer's warranty has expired. I'm not sure how you would manage any mileage limit on that, but I would also suggest that any concept of 3 months or 1000 miles is also of very little value.
For some people, 1000 miles is less than a week.
Sorry if this sounds a bit harsh, but I am just trying to be constructive.
The ideal behind it is to try and give the customer additional re-assurance. Yes they are covered by the manafacturers warranty but my additional 3 month guarantee would hopefully mean they can come back to me in that period with any problems and I will sort it. In addition the Drivecover Pro product from warrantyadmin.co.uk gives 3 months Gen Assist recovery for £20+VAT. So the customer would have a way of getting the vehicle back to me, extra re-assurance. I have been in touch with lawgistics and I think this is the best solution I can find for a part time car dealer.For your warranty to have any value, it HAS to cover the initial period after the manufacturer's warranty has expired. I'm not sure how you would manage any mileage limit on that, but I would also suggest that any concept of 3 months or 1000 miles is also of very little value.
For some people, 1000 miles is less than a week.
Sorry if this sounds a bit harsh, but I am just trying to be constructive.
What would you suggest I provide in my situation?
I am aware that there will be large franchised dealers who have a edge over me 60 miles from London, there price will be £1000 more than mine though.
sfella said:
I also fail to see any value in an additional warranty when a car has manufacturers warranty. It just seems pointless
ok so say a customer buys a car from me. 2 month later they get an oil pressure warning light, they pull over, read the manual and it says 'do not drive the car in any circumstances'. What are they going to do? With my 3 month guarantee they simply call the number and get recovered back to me.I asked the other guy the same but he didnt respond or hasnt yet. What would you offer as a dealer in this instance? nothing?
I can't see the appeal of going in to a niche market, by its very nature it has a very limited appeal, you could be sat on an aging piece of stock waiting for the elbow patched tyre kicker to show any interest.
You'll also struggle to pump out 10 grand cars off your driveway, at this price point most people like security dealers provide.
An edit to ask, what will you do with px's? Valuations ect? You don't seem to have much of an idea how retail car sales work and you can easily get your ass handed to you on a dodgy px.
You'll also struggle to pump out 10 grand cars off your driveway, at this price point most people like security dealers provide.
An edit to ask, what will you do with px's? Valuations ect? You don't seem to have much of an idea how retail car sales work and you can easily get your ass handed to you on a dodgy px.
OP, I don't work in the car trade, but I do work for myself. You've changed your business model very quickly on this one, and people in the trade posting here are being, shall I say, a little less optimistic I feel on your chances of creating this niche business. It would be kind of worrying if I was in your shoes
I'm also a little confused on the whole "delivery down South plus two warranties plus recovery" set-up, and in my wholly unqualified view I cannot see how the figures will work. That's leaving aside what cut HMRC will want of any of your profits, cost for an accountant, liability insurance, the inevitable issues with some of these cars that warranty companies won't want to know about, the headache that will be dealing with the general punter (and potentially their legal advisors), scammers, etc, etc.
Also, I think you need to consider the opportunity cost involved in all of this. Can you honestly see yourself doing better out of it than what you currently spend your time at? Or is this just a side-line venture? I love messing about with cars, but I'd have no interest if it got in the way of either my livelihood or too much of my spare time
I don't want to sound all Dragon's Den to you, plus please do a lot of (cheap) research into this before investing any real funds. I could be very wrong on this, and I genuinely hope I am, but good luck either way
I'm also a little confused on the whole "delivery down South plus two warranties plus recovery" set-up, and in my wholly unqualified view I cannot see how the figures will work. That's leaving aside what cut HMRC will want of any of your profits, cost for an accountant, liability insurance, the inevitable issues with some of these cars that warranty companies won't want to know about, the headache that will be dealing with the general punter (and potentially their legal advisors), scammers, etc, etc.
Also, I think you need to consider the opportunity cost involved in all of this. Can you honestly see yourself doing better out of it than what you currently spend your time at? Or is this just a side-line venture? I love messing about with cars, but I'd have no interest if it got in the way of either my livelihood or too much of my spare time
I don't want to sound all Dragon's Den to you, plus please do a lot of (cheap) research into this before investing any real funds. I could be very wrong on this, and I genuinely hope I am, but good luck either way
legendtrader said:
The ideal behind it is to try and give the customer additional re-assurance. Yes they are covered by the manafacturers warranty but my additional 3 month guarantee would hopefully mean they can come back to me in that period with any problems and I will sort it. In addition the Drivecover Pro product from warrantyadmin.co.uk gives 3 months Gen Assist recovery for £20+VAT. So the customer would have a way of getting the vehicle back to me, extra re-assurance. I have been in touch with lawgistics and I think this is the best solution I can find for a part time car dealer.
What would you suggest I provide in my situation?
I am aware that there will be large franchised dealers who have a edge over me 60 miles from London, there price will be £1000 more than mine though.
OK, from my perspective, I would be buying a car with (let's say) 9 months manufacturer's warranty and this usually comes with recovery as well. I appreciate you want to appear trustworthy and give reassurance that you haven't just sold me a lemon and will have disappeared off the face of the earth if I do have a problem. But if I do have a problem with the car, I have a warranty and recovery from the manufacturer, so I don't need anything from you. Thanks all the same.What would you suggest I provide in my situation?
I am aware that there will be large franchised dealers who have a edge over me 60 miles from London, there price will be £1000 more than mine though.
If that is the best that you can come up with, I would suggest you don't offer anything to be honest.
As I and others have intimated, 1000 miles is pretty pointless in warranty terms and really gives very little additional reassurance to anybody.
If you feel the need to offer something, the only thing that really makes sense to me is to give people an additional warranty to take it up to a full 12 months and, I would suggest, 12000 miles from purchase. If that's too expensive for you, then I would seriously suggest that you offer nothing. Make sure the warranty and recovery transfer paperwork are in order and leave it at that.
What you are proposing now adds no value for your customers and is only going to cost you money.
ah guys getting a lot of negative vibes. this is a part time things for me, like 1 day a week plus demonstrations. the only way I can see if this will work is to try, I am going to try it on a couple of cars. not from my driveway, I have a mailbox address set up at a business park 2 miles from my house.
plenty of people are chiming in but ask yourself this. If someone was making some ok money trading part time do you think they are going to post here and tell me to go ahead and how they do it? That just isn't going to happen. Like most things a minority of people succeed at things and others say 'its not possible' or 'it cant be done'.
If I buy a prepared car from a dealer up north for £9000 and sell it for £10000 my costs are minimal. £100 transport (£50 train, £50 fuel), £25 advert, £2.5 HPI check, £20 driveway plys. No VAT margin scheme on first 8 cars as sole trader. My monthly costs are £50pm trade insurance, £10pm website/email, £10pm phone, £20pm warrantyadmin sub. £30pm business mailbox, £165pa trade plates. £600pa accountant when I go limited.
If I do a couple of cars a month its some nice extra cash.
plenty of people are chiming in but ask yourself this. If someone was making some ok money trading part time do you think they are going to post here and tell me to go ahead and how they do it? That just isn't going to happen. Like most things a minority of people succeed at things and others say 'its not possible' or 'it cant be done'.
If I buy a prepared car from a dealer up north for £9000 and sell it for £10000 my costs are minimal. £100 transport (£50 train, £50 fuel), £25 advert, £2.5 HPI check, £20 driveway plys. No VAT margin scheme on first 8 cars as sole trader. My monthly costs are £50pm trade insurance, £10pm website/email, £10pm phone, £20pm warrantyadmin sub. £30pm business mailbox, £165pa trade plates. £600pa accountant when I go limited.
If I do a couple of cars a month its some nice extra cash.
Edited by legendtrader on Friday 2nd September 14:10
Edited by legendtrader on Friday 2nd September 14:11
legendtrader said:
sfella said:
I also fail to see any value in an additional warranty when a car has manufacturers warranty. It just seems pointless
ok so say a customer buys a car from me. 2 month later they get an oil pressure warning light, they pull over, read the manual and it says 'do not drive the car in any circumstances'. What are they going to do? With my 3 month guarantee they simply call the number and get recovered back to me.I asked the other guy the same but he didnt respond or hasnt yet. What would you offer as a dealer in this instance? nothing?
What will they do if the oil light comes on? Call the manufacturer's recovery number and get the car taken to a dealership.
Once the car is recovered to (presumably) your driveway, what are you going to do?? There's a reasonable chance that you won't be able to fix it, so you would have to get it transported to the dealership.
I wish you every success with your venture, I just don't think your warranty has any value, so you should probably not offer anything.
legendtrader said:
ah guys getting a lot of negative vibes. this is a part time things for me, like 1 day a week plus demonstrations. the only way I can see if this will work is to try, I am going to try it on a couple of cars. not from my driveway, I have a mailbox address set up at a business park 2 miles from my house.
plenty of people are chiming in but ask yourself this. If someone was making some ok money trading part time do you think they are going to post here and tell me to go ahead and how they do it? That just isn't going to happen. Like most things a minority of people succeed at things and others say 'its not possible' or 'it cant be done'.
If I buy a prepared car from a dealer up north for £9000 and sell it for £10000 my costs are minimal. £100 transport (£50 train, £50 fuel), £25 advert, £2.5 HPI check, £20 driveway plys. No VAT margin scheme on first 8 cars as sole trader. My monthly costs are £50pm trade insurance, £10pm website/email, £10pm phone, £20pm warrantyadmin sub. £30pm business mailbox, £165pa trade plates. £600pa accountant when I go limited.
If I do a couple of cars a month its some nice extra cash.
Not trying to be negative or hide a secret just realistic. I looked into this and tried buying and selling from auctions and reality is there simply is little margin unless you have contacts who can put you onto bargain cars.plenty of people are chiming in but ask yourself this. If someone was making some ok money trading part time do you think they are going to post here and tell me to go ahead and how they do it? That just isn't going to happen. Like most things a minority of people succeed at things and others say 'its not possible' or 'it cant be done'.
If I buy a prepared car from a dealer up north for £9000 and sell it for £10000 my costs are minimal. £100 transport (£50 train, £50 fuel), £25 advert, £2.5 HPI check, £20 driveway plys. No VAT margin scheme on first 8 cars as sole trader. My monthly costs are £50pm trade insurance, £10pm website/email, £10pm phone, £20pm warrantyadmin sub. £30pm business mailbox, £165pa trade plates. £600pa accountant when I go limited.
If I do a couple of cars a month its some nice extra cash.
Edited by legendtrader on Friday 2nd September 14:10
Edited by legendtrader on Friday 2nd September 14:11
Stop and think for a minute how petty and lacking in self responsibility people are these days. Your biggest cost will be rectifying "faults" that customers will find post purchase.
"Hey my car has a blown light bulb you miss sold it I want to pay for a new light bulb plus have the car professionally valeted to as factory condition and you also have to come round my house and mow the lawn with a pair of scissors and a ruler this weekend".
If there was a high enough margin then this sort of thing would not be an issue it would simply be a business cost but thats the problem it becomes a major pain in the ass as a small trader as you dont have the support network to help make these issues "cheap" to resolve.
Frankthered said:
To cover less than 1000 miles in 2 months would mean (by extrapolation) that the new owner is covering less than 6000 miles a year. Not unheard of, but not that common.
What will they do if the oil light comes on? Call the manufacturer's recovery number and get the car taken to a dealership.
Once the car is recovered to (presumably) your driveway, what are you going to do?? There's a reasonable chance that you won't be able to fix it, so you would have to get it transported to the dealership.
I wish you every success with your venture, I just don't think your warranty has any value, so you should probably not offer anything.
ok yeah i take your advice onboard. I have been researching what other dealers do. There are a few online only dealers (which seems to be a good model saying you are online upfront). Just transfer the manafacturers warranty over to the customer.What will they do if the oil light comes on? Call the manufacturer's recovery number and get the car taken to a dealership.
Once the car is recovered to (presumably) your driveway, what are you going to do?? There's a reasonable chance that you won't be able to fix it, so you would have to get it transported to the dealership.
I wish you every success with your venture, I just don't think your warranty has any value, so you should probably not offer anything.
Examples of dealer following a similar model:
http://www.silverdalecc.com/
frankenstein12 said:
Not trying to be negative or hide a secret just realistic. I looked into this and tried buying and selling from auctions and reality is there simply is little margin unless you have contacts who can put you onto bargain cars.
Stop and think for a minute how petty and lacking in self responsibility people are these days. Your biggest cost will be rectifying "faults" that customers will find post purchase.
"Hey my car has a blown light bulb you miss sold it I want to pay for a new light bulb plus have the car professionally valeted to as factory condition and you also have to come round my house and mow the lawn with a pair of scissors and a ruler this weekend".
If there was a high enough margin then this sort of thing would not be an issue it would simply be a business cost but thats the problem it becomes a major pain in the ass as a small trader as you dont have the support network to help make these issues "cheap" to resolve.
I am not planning to buy from auctions anymore only fully prepped cars from other dealers. I have 2 mechanics that I know and trust within 1 mile of my house. Stop and think for a minute how petty and lacking in self responsibility people are these days. Your biggest cost will be rectifying "faults" that customers will find post purchase.
"Hey my car has a blown light bulb you miss sold it I want to pay for a new light bulb plus have the car professionally valeted to as factory condition and you also have to come round my house and mow the lawn with a pair of scissors and a ruler this weekend".
If there was a high enough margin then this sort of thing would not be an issue it would simply be a business cost but thats the problem it becomes a major pain in the ass as a small trader as you dont have the support network to help make these issues "cheap" to resolve.
legendtrader said:
I am not planning to buy from auctions anymore only fully prepped cars from other dealers. I have 2 mechanics that I know and trust within 1 mile of my house.
to maximize your costs, I would avoid buying from another dealer ( who is selling on for profit in the first place ). why not buy direct privately ? cheaper to buy, meet the owners, see the surroundings etc. plus you are not paying over the odds that you would be from another dealer ( who has bought privately ).seems a strange way to buy, IMO.
good luck either way.
ps - I wouldn't buy from Scotland. travelled there many times to buy / look at cars and ALL have been rotten underneath. they like the salt on the roads better than the batter on the Mars bars
OP not being negative but slow down and think.
Reading your thread you have changed your whole business plan in the space of two days.. I am not in the trade but you have some very sound advice from what seem like very experienced people who are, re read it and take a step back, there will be still be cars to trade in a few months time. Also as a customer why would I buy from you (not being personal) rather than an established garage or dealership unless you were selling the same vehicle significantly cheaper?
Reading your thread you have changed your whole business plan in the space of two days.. I am not in the trade but you have some very sound advice from what seem like very experienced people who are, re read it and take a step back, there will be still be cars to trade in a few months time. Also as a customer why would I buy from you (not being personal) rather than an established garage or dealership unless you were selling the same vehicle significantly cheaper?
I didn't want my comments to just be taken as negative and telling you not to do something. However it is concerning that you seem happy to plough 20k into something it's very apparent you know little about. As I have said before I did this job full time and have considered doing it on a small scale from home but I would in no way attempt what you want to do. Your latest plan is as far as I can see is to buy prime main dealer stock, drive it 150 miles and try to make a margin.....this brings me back to my origional point that you are then in direct competition with said main dealer with much better facilities to provide peace of mind and compete at a lesser margin. For example finance, most people buy a car on finance,main dealers will sell the finance and make a commission. Some are happy to sell the car for no margin and just take the commission. This then relies on the customer not defaulting or settling early as the commission is then clawed back from the dealer. To sell finance you would need a consumer credit license,unsure how easy a part time driveway trader can get one of these or costs involved now. If you take a car in px older than your 3 year ideal how will you deal with warranty then?
If you need an insurance based policy ie your not liable for the cost of repairs you also need to join the fsa....good luck on that,it's a right pain in the backside.
When I first said cars at the bottom of depreciation curve that was in no way reference to sub 3 year old main dealer mundane cars. I meant find a make, be it mercedes, bmw, land Rover (preferably something you have a an interest in as it will make it more engaging) and look at that makes back catalogue. For example land rover defenders aren't going to drop like a stone or older discovery. I'm not saying they are ideal as not the most reliable and getting all exited you could deal in late range rover sports isn't going to work either every man and his dog is pimping those things.
A long post I know but it seems pretty poorly planned what you are wanting to embark on with quite a chunk of money and it is a lot more time consuming than you think. One last point,if this is one day a week Job do you have a full time job where you can take as many calls as often as you like to deal with customers? There is no way people will constantly leave messages and await a convenient time for you to call back.
If you need an insurance based policy ie your not liable for the cost of repairs you also need to join the fsa....good luck on that,it's a right pain in the backside.
When I first said cars at the bottom of depreciation curve that was in no way reference to sub 3 year old main dealer mundane cars. I meant find a make, be it mercedes, bmw, land Rover (preferably something you have a an interest in as it will make it more engaging) and look at that makes back catalogue. For example land rover defenders aren't going to drop like a stone or older discovery. I'm not saying they are ideal as not the most reliable and getting all exited you could deal in late range rover sports isn't going to work either every man and his dog is pimping those things.
A long post I know but it seems pretty poorly planned what you are wanting to embark on with quite a chunk of money and it is a lot more time consuming than you think. One last point,if this is one day a week Job do you have a full time job where you can take as many calls as often as you like to deal with customers? There is no way people will constantly leave messages and await a convenient time for you to call back.
Edited by sfella on Friday 2nd September 16:00
legendtrader said:
ah guys getting a lot of negative vibes. this is a part time things for me, like 1 day a week plus demonstrations. the only way I can see if this will work is to try, I am going to try it on a couple of cars. not from my driveway, I have a mailbox address set up at a business park 2 miles from my house.
plenty of people are chiming in but ask yourself this. If someone was making some ok money trading part time do you think they are going to post here and tell me to go ahead and how they do it? That just isn't going to happen. Like most things a minority of people succeed at things and others say 'its not possible' or 'it cant be done'.
If I buy a prepared car from a dealer up north for £9000 and sell it for £10000 my costs are minimal. £100 transport (£50 train, £50 fuel), £25 advert, £2.5 HPI check, £20 driveway plys. No VAT margin scheme on first 8 cars as sole trader. My monthly costs are £50pm trade insurance, £10pm website/email, £10pm phone, £20pm warrantyadmin sub. £30pm business mailbox, £165pa trade plates. £600pa accountant when I go limited.
If I do a couple of cars a month its some nice extra cash.
You have to sell it though, until you do, all your capital is tied up in the asset which for whatever reason, could take a few weeks to sell. Also, that day you are on the train, collecting the car and brining it back is effectively your "one day a week working" so you also need to be available for viewings at the customers convenience so your working week becomes haphazard. You'll need to drop everything to secure the bargain car up north and bring it back south the day the listing appears, can you do that?plenty of people are chiming in but ask yourself this. If someone was making some ok money trading part time do you think they are going to post here and tell me to go ahead and how they do it? That just isn't going to happen. Like most things a minority of people succeed at things and others say 'its not possible' or 'it cant be done'.
If I buy a prepared car from a dealer up north for £9000 and sell it for £10000 my costs are minimal. £100 transport (£50 train, £50 fuel), £25 advert, £2.5 HPI check, £20 driveway plys. No VAT margin scheme on first 8 cars as sole trader. My monthly costs are £50pm trade insurance, £10pm website/email, £10pm phone, £20pm warrantyadmin sub. £30pm business mailbox, £165pa trade plates. £600pa accountant when I go limited.
If I do a couple of cars a month its some nice extra cash.
Edited by legendtrader on Friday 2nd September 14:10
Edited by legendtrader on Friday 2nd September 14:11
It's an interesting thread and I hope it works but there are lots of issues. Can you believe I looked at something very similar with "niche" bicycles but couldn't get the maths to work!
legendtrader said:
ah guys getting a lot of negative vibes. this is a part time things for me, like 1 day a week plus demonstrations. the only way I can see if this will work is to try, I am going to try it on a couple of cars. not from my driveway, I have a mailbox address set up at a business park 2 miles from my house.
plenty of people are chiming in but ask yourself this. If someone was making some ok money trading part time do you think they are going to post here and tell me to go ahead and how they do it? That just isn't going to happen. Like most things a minority of people succeed at things and others say 'its not possible' or 'it cant be done'.
I didnt realise it was like that, every time my uncle/dad have bought cars from main dealers they've located cars for sale up north and the dealer has had them brought down for them. Seems fairly common round here at least.plenty of people are chiming in but ask yourself this. If someone was making some ok money trading part time do you think they are going to post here and tell me to go ahead and how they do it? That just isn't going to happen. Like most things a minority of people succeed at things and others say 'its not possible' or 'it cant be done'.
It will be interesting to see, particularly if you can get a decent amount of customers who are paying cash for £10000+ cars. Keep us updated on how you get on, and while I'm not sure how it'll pan out, I wish you luck, you sound fairly determined.
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