Manheim Auction prices and simulcast
Discussion
legendtrader said:
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.
Feel free to try using the new plan you want to embark on but it sounds like your best bet will be to buy cars either in deepest darkest wales or just south of the border to scotland and then ship them back to central UK london area with a mark up for "Location".
It may work out it may not.
MDMA . said:
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
Why not buy privately? There just isnt the stock for <2 year old cars privately for obvious reasons. Show me a <2 year old car from Scotland that is rusted underneath, I dont believe a car can rust in 2 years.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
Gav147 said:
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..
What are you bleating on about. I haven't changed my whole business plan, I have just looked at different sources to buy from. Gav147 said:
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?
You nailed it there. My vehicle will be the cheapest in that niche within 60 miles of London. Thats the only edge I have over them in terms of attracting buyers. I have other edges over them like extremely low overheads.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.
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The whole point is I am not 'ploughing' 20k in. My first few cars will be around the £8k mark. Worst case scenario for me would be I buy at £8k and then I get stuck with a car I have to move on at a small loss. Or even god forbid a freak customer demo accident where I am not fully comp covered. My plan is to stick £10k into the business account and trade the balance up without withdrawing any profits. Luckily I am in the position where I dont need to take income out of this new part time venture. Worse case scenario I can afford to take the £10k loss and try something else.
[quote=sfella]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.
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Unfortunately I know all about ccl licenses as my main business is financial services. I am not going to offer finance. These days it is so simple for the customer to go onto gocompare or moneysupermarket and find the best deal for them. I will go through this with them in the initial contact and put it on my website.
[quote=sfella]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.
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I am not going to take part ex in any circumstance and I will explain this to customer on first contact and on my website.
[quote=sfella]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.
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I totally agree with you. Luckily i am self employed in my main business so i can be flexible with my time.
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The whole point is I am not 'ploughing' 20k in. My first few cars will be around the £8k mark. Worst case scenario for me would be I buy at £8k and then I get stuck with a car I have to move on at a small loss. Or even god forbid a freak customer demo accident where I am not fully comp covered. My plan is to stick £10k into the business account and trade the balance up without withdrawing any profits. Luckily I am in the position where I dont need to take income out of this new part time venture. Worse case scenario I can afford to take the £10k loss and try something else.
[quote=sfella]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.
[/quote]
Unfortunately I know all about ccl licenses as my main business is financial services. I am not going to offer finance. These days it is so simple for the customer to go onto gocompare or moneysupermarket and find the best deal for them. I will go through this with them in the initial contact and put it on my website.
[quote=sfella]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.
[/quote]
I am not going to take part ex in any circumstance and I will explain this to customer on first contact and on my website.
[quote=sfella]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.
[/quote]
I totally agree with you. Luckily i am self employed in my main business so i can be flexible with my time.
pablo said:
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.
Yes it could and I may have to lower the price to move it on. This is fine, I am not banking on making money from this to pay my bills, it's all extra on top of main earnings/savings.pablo said:
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?
Yes I can. I am self employed in my main business.pablo said:
It's an interesting thread and I hope it works but there are lots of issues.
I guess if there werent any issues to solve the opportunity may not exist.with regards to some of the prices I have a friend that buys from manheims, and he pays about £50 for a delivery, he buys about 5 cars at a time. He said that the big boys pay £12 per car for delivery though so clearly you can get that number brought down.
The earlier post about finance is spot on. One of his friends in the trade wont bother selling to anyone not wanting finance, he gets £500 from the finance company and breaks even on the cars, though he does do big volumes. My mate said because of things like that they sometimes pay more for a car at the auction then he had it written down that he was going to sell the same car for.
The other thing is that the buyers from the supermarkets will be there, sometimes just to boost up the prices that other dealers pay for the cars, so that they aren't undercut on their existing stock. One conversation I heard them have when we were at a bmw auction was:
"oh you're buying 3 series today?"
"nah, I got over 100 3 series in stock at the moment, I just want to make sure no one else is getting them cheap"
The final consideration I would give is, he was dealing in things like nissans and hondas, and has switched to more upmarket cars, because the sort of people he was having around for the cheap stuff were just not the sort of people you wanted being at your house, moreover for some of them it would be like a family day out and they would spend hours bargaining and arguing over the smallest detail.
Either way, good luck sounds like a tough business, but go into it with your eyes open!
The earlier post about finance is spot on. One of his friends in the trade wont bother selling to anyone not wanting finance, he gets £500 from the finance company and breaks even on the cars, though he does do big volumes. My mate said because of things like that they sometimes pay more for a car at the auction then he had it written down that he was going to sell the same car for.
The other thing is that the buyers from the supermarkets will be there, sometimes just to boost up the prices that other dealers pay for the cars, so that they aren't undercut on their existing stock. One conversation I heard them have when we were at a bmw auction was:
"oh you're buying 3 series today?"
"nah, I got over 100 3 series in stock at the moment, I just want to make sure no one else is getting them cheap"
The final consideration I would give is, he was dealing in things like nissans and hondas, and has switched to more upmarket cars, because the sort of people he was having around for the cheap stuff were just not the sort of people you wanted being at your house, moreover for some of them it would be like a family day out and they would spend hours bargaining and arguing over the smallest detail.
Either way, good luck sounds like a tough business, but go into it with your eyes open!
HotJambalaya said:
with regards to some of the prices I have a friend that buys from manheims, and he pays about £50 for a delivery, he buys about 5 cars at a time. He said that the big boys pay £12 per car for delivery though so clearly you can get that number brought down.
The earlier post about finance is spot on. One of his friends in the trade wont bother selling to anyone not wanting finance, he gets £500 from the finance company and breaks even on the cars, though he does do big volumes. My mate said because of things like that they sometimes pay more for a car at the auction then he had it written down that he was going to sell the same car for.
The other thing is that the buyers from the supermarkets will be there, sometimes just to boost up the prices that other dealers pay for the cars, so that they aren't undercut on their existing stock. One conversation I heard them have when we were at a bmw auction was:
"oh you're buying 3 series today?"
"nah, I got over 100 3 series in stock at the moment, I just want to make sure no one else is getting them cheap"
The final consideration I would give is, he was dealing in things like nissans and hondas, and has switched to more upmarket cars, because the sort of people he was having around for the cheap stuff were just not the sort of people you wanted being at your house, moreover for some of them it would be like a family day out and they would spend hours bargaining and arguing over the smallest detail.
Either way, good luck sounds like a tough business, but go into it with your eyes open!
that's great info. It wouldnt surprise me if the dealers were making £500 on a decent size finance deal (that's the owners of the dealer not the employees). My main business is finance related, I know a lot of secured loan brokers will be paid around 4% of the loan amount as a commission/fee. These are secured loans against the punters property sat behind the main mortgage. People typically take these loans out for debt consolidation or other large purchases like home extensions but equally they can be used for large luxury purchases like motorhomes or high end cars. That said there is nothing to stop someone taking a smaller second charge loan. Anyways if a punter takes a £20k loan, from what I have seen the broker would get paid around £800 commision on that.The earlier post about finance is spot on. One of his friends in the trade wont bother selling to anyone not wanting finance, he gets £500 from the finance company and breaks even on the cars, though he does do big volumes. My mate said because of things like that they sometimes pay more for a car at the auction then he had it written down that he was going to sell the same car for.
The other thing is that the buyers from the supermarkets will be there, sometimes just to boost up the prices that other dealers pay for the cars, so that they aren't undercut on their existing stock. One conversation I heard them have when we were at a bmw auction was:
"oh you're buying 3 series today?"
"nah, I got over 100 3 series in stock at the moment, I just want to make sure no one else is getting them cheap"
The final consideration I would give is, he was dealing in things like nissans and hondas, and has switched to more upmarket cars, because the sort of people he was having around for the cheap stuff were just not the sort of people you wanted being at your house, moreover for some of them it would be like a family day out and they would spend hours bargaining and arguing over the smallest detail.
Either way, good luck sounds like a tough business, but go into it with your eyes open!
I am sure asset finance on cars is very similar dealers/brokers will be up to the same tricks like adding chunky fees into the loan. I can see how the dealers will try and make the purchase conditional on taking the finance although this is going to violate some rule. They are going to make it very easy for the punter to buy with finance, also i guess the majority of punters dont have £20k cash saving to buy a car with.
What you are saying about bottom feeder punters and them treating it like a family day out does concern me. I can only imagine working in a large car supermarket and you see a bottom feeder family rock up and you just know they are going to be there for 4 hours and probably not buy or cause furthe problems.
Good post Jambalaya
legendtrader said:
What you are saying about bottom feeder punters and them treating it like a family day out does concern me. I can only imagine working in a large car supermarket and you see a bottom feeder family rock up and you just know they are going to be there for 4 hours and probably not buy or cause furthe problems.
Good post Jambalaya
cheers and good luck, its my friend trades that from his home, which is why he didnt' want them all coming around. He said he'd have the children sitting and playing, eating sandwiches in his garden, while parents/aunts/uncles were pestering away for hours. Or sometimes minicab drivers etc all from hard bargaining countries etc etc He noted that since he's moved to more upmarket cars the people he meets are so much nicer, with the bonus that he sends little follow up emails to check its all running well, and gets a lot of word of mouth business and then they come back to him when they want to move to something new.Good post Jambalaya
legendtrader said:
HotJambalaya said:
with regards to some of the prices I have a friend that buys from manheims, and he pays about £50 for a delivery, he buys about 5 cars at a time. He said that the big boys pay £12 per car for delivery though so clearly you can get that number brought down.
The earlier post about finance is spot on. One of his friends in the trade wont bother selling to anyone not wanting finance, he gets £500 from the finance company and breaks even on the cars, though he does do big volumes. My mate said because of things like that they sometimes pay more for a car at the auction then he had it written down that he was going to sell the same car for.
The other thing is that the buyers from the supermarkets will be there, sometimes just to boost up the prices that other dealers pay for the cars, so that they aren't undercut on their existing stock. One conversation I heard them have when we were at a bmw auction was:
"oh you're buying 3 series today?"
"nah, I got over 100 3 series in stock at the moment, I just want to make sure no one else is getting them cheap"
The final consideration I would give is, he was dealing in things like nissans and hondas, and has switched to more upmarket cars, because the sort of people he was having around for the cheap stuff were just not the sort of people you wanted being at your house, moreover for some of them it would be like a family day out and they would spend hours bargaining and arguing over the smallest detail.
Either way, good luck sounds like a tough business, but go into it with your eyes open!
that's great info. It wouldnt surprise me if the dealers were making £500 on a decent size finance deal (that's the owners of the dealer not the employees). My main business is finance related, I know a lot of secured loan brokers will be paid around 4% of the loan amount as a commission/fee. These are secured loans against the punters property sat behind the main mortgage. People typically take these loans out for debt consolidation or other large purchases like home extensions but equally they can be used for large luxury purchases like motorhomes or high end cars. That said there is nothing to stop someone taking a smaller second charge loan. Anyways if a punter takes a £20k loan, from what I have seen the broker would get paid around £800 commision on that.The earlier post about finance is spot on. One of his friends in the trade wont bother selling to anyone not wanting finance, he gets £500 from the finance company and breaks even on the cars, though he does do big volumes. My mate said because of things like that they sometimes pay more for a car at the auction then he had it written down that he was going to sell the same car for.
The other thing is that the buyers from the supermarkets will be there, sometimes just to boost up the prices that other dealers pay for the cars, so that they aren't undercut on their existing stock. One conversation I heard them have when we were at a bmw auction was:
"oh you're buying 3 series today?"
"nah, I got over 100 3 series in stock at the moment, I just want to make sure no one else is getting them cheap"
The final consideration I would give is, he was dealing in things like nissans and hondas, and has switched to more upmarket cars, because the sort of people he was having around for the cheap stuff were just not the sort of people you wanted being at your house, moreover for some of them it would be like a family day out and they would spend hours bargaining and arguing over the smallest detail.
Either way, good luck sounds like a tough business, but go into it with your eyes open!
I am sure asset finance on cars is very similar dealers/brokers will be up to the same tricks like adding chunky fees into the loan. I can see how the dealers will try and make the purchase conditional on taking the finance although this is going to violate some rule. They are going to make it very easy for the punter to buy with finance, also i guess the majority of punters dont have £20k cash saving to buy a car with.
What you are saying about bottom feeder punters and them treating it like a family day out does concern me. I can only imagine working in a large car supermarket and you see a bottom feeder family rock up and you just know they are going to be there for 4 hours and probably not buy or cause furthe problems.
Good post Jambalaya
getting back to your earlier idea, cars that require no prep and are desireable do (at present) 1200 to 3k into CAP, your audi s lines and BMW m-sports etc, I just watched a nice 2008 R32 do 3200 into CAP clean, that's what you're up against, the establised dealers can still make money, as they are just that, establised
andymc said:
Because what you're looking to do makes no sense, why should the up north dealer knock money off his car? what's to stop the London based buyer just hopping on the train to get the best deal, what's to stop them getting the car delivered? the DSR protect them in event of any issues
ok so in your opinion there is no way to make money as an online car dealer working part time. Its just not possible.
How quickly do you think you'll sell the cars OP, and where will you be advertising them?
My mates a home trader, he keeps about 12 cars in stock. He only advertises on auto trader which costs about £10 per week per car (+vat).
His first and only experience of buying a car in warranty was a 2013 golf that he bought in mid 2014, Good condition, priced correctly etc etc he eventually sold it in early 2016 for around £500 less then he paid for it, after advertising it for all that time and servicing it. Lost well over a grand on it. By the time it was gone it was out of warranty anyway!
He now mainly buys 4-8 year old cars, with a mix or Mercedes, BMW, Range Rover and then cheap cars like Little hatchbacks.
My mates a home trader, he keeps about 12 cars in stock. He only advertises on auto trader which costs about £10 per week per car (+vat).
His first and only experience of buying a car in warranty was a 2013 golf that he bought in mid 2014, Good condition, priced correctly etc etc he eventually sold it in early 2016 for around £500 less then he paid for it, after advertising it for all that time and servicing it. Lost well over a grand on it. By the time it was gone it was out of warranty anyway!
He now mainly buys 4-8 year old cars, with a mix or Mercedes, BMW, Range Rover and then cheap cars like Little hatchbacks.
Your idea is a shocker.
Just hunt our private sale bargains .
Buying cheap already prepped cars at dealers is not the one.
The best prepped cars can still go wrong and just wait until you end up with a know all customer claiming they know ther rights and have spoken to a solicitor etc etc etc
Just hunt our private sale bargains .
Buying cheap already prepped cars at dealers is not the one.
The best prepped cars can still go wrong and just wait until you end up with a know all customer claiming they know ther rights and have spoken to a solicitor etc etc etc
JimmyConwayNW said:
Your idea is a shocker.
Just hunt our private sale bargains .
Buying cheap already prepped cars at dealers is not the one.
The best prepped cars can still go wrong and just wait until you end up with a know all customer claiming they know ther rights and have spoken to a solicitor etc etc etc
I hear you. If I was going to hunt out private sale bargains around 4-6 years old how would you suggest i do that? I see a lot of private sellers asking similar money to dealers on autotrader. Is it case of calling them up and asking them if they will take a more realistic price before viewing? Just hunt our private sale bargains .
Buying cheap already prepped cars at dealers is not the one.
The best prepped cars can still go wrong and just wait until you end up with a know all customer claiming they know ther rights and have spoken to a solicitor etc etc etc
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