Why do SOR dealers keep going bust?
Discussion
Why do SOR dealers keep going bust.
I sell used cars, have some stock funding, have some of my own money try to keep a ratio that ensures I stay afloat and can pay the bills etc.
Bought the premises and have a nice chunk sat there.
If I solely sold on SOR which is essentially interest free stocking I don't know how I could get it so wrong.
Where does it repeatedly go wrong?
I understand no mentioning of names in this thread.
I sell used cars, have some stock funding, have some of my own money try to keep a ratio that ensures I stay afloat and can pay the bills etc.
Bought the premises and have a nice chunk sat there.
If I solely sold on SOR which is essentially interest free stocking I don't know how I could get it so wrong.
Where does it repeatedly go wrong?
I understand no mentioning of names in this thread.
If you own your premises, even with a mortgage, you're halfway there. If you own it outright you essentially have no premises costs. There's a cash and carry where they pay about £1m a year in rent and have been there 50+ years. I asked why they had never bought the place and they shrugged their shoulders. I can understand with shareholder/capitalist ventures where they milk and drain property for all it's worth.
But going back to SOR, they get in a cashflow pinch and the easiest thing to do is to "borrow" your customers money, and they end up in a slippery slope of robbing Peter to pay Paul.
But going back to SOR, they get in a cashflow pinch and the easiest thing to do is to "borrow" your customers money, and they end up in a slippery slope of robbing Peter to pay Paul.
vikingaero said:
But going back to SOR, they get in a cashflow pinch and the easiest thing to do is to "borrow" your customers money, and they end up in a slippery slope of robbing Peter to pay Paul.
I suspect this is the answer, the dealer gets silly and starts using money they should be sending back to their SOR customer as their own for other purposes then the next car they sell money goes to the previous sale they didn't pay out and it spirals. It doesn’t make a lot of sense to me. Surely, there’s less effort and cost involved in sourcing suitable stock when using SOR, and no interest to pay as would be the case with a stocking loan. Perhaps there’s less margin, I don’t know, or is there less regulation/control and therefore more temptation to gamble a little with other peoples money?
Jamescrs said:
vikingaero said:
But going back to SOR, they get in a cashflow pinch and the easiest thing to do is to "borrow" your customers money, and they end up in a slippery slope of robbing Peter to pay Paul.
I suspect this is the answer, the dealer gets silly and starts using money they should be sending back to their SOR customer as their own for other purposes then the next car they sell money goes to the previous sale they didn't pay out and it spirals. Cost of running the business including all the marketing simply exceeds their commission on sales if either customer not realistic about selling price and / or commission not sufficient when a sale is made.
As a customer that has sold 2 cars via SOR from Main Dealers with whom a lengthy relationship and 1 car from someone with an Indy business that I have known as friend for more years than I care to remember the right choosing of any SOR entity is paramount.
As a customer that has sold 2 cars via SOR from Main Dealers with whom a lengthy relationship and 1 car from someone with an Indy business that I have known as friend for more years than I care to remember the right choosing of any SOR entity is paramount.
JimmyConwayNW said:
Why do SOR dealers keep going bust.
I sell used cars, have some stock funding, have some of my own money try to keep a ratio that ensures I stay afloat and can pay the bills etc.
Bought the premises and have a nice chunk sat there.
If I solely sold on SOR which is essentially interest free stocking I don't know how I could get it so wrong.
Where does it repeatedly go wrong?
I understand no mentioning of names in this thread.
I had one call about my car for sale. First off they wanted £600 to inspect my car before it went on their website etc then they wanted 10% of sale when sold! Needless to say it was FRO.I sell used cars, have some stock funding, have some of my own money try to keep a ratio that ensures I stay afloat and can pay the bills etc.
Bought the premises and have a nice chunk sat there.
If I solely sold on SOR which is essentially interest free stocking I don't know how I could get it so wrong.
Where does it repeatedly go wrong?
I understand no mentioning of names in this thread.
TX.
vikingaero said:
If you own your premises, even with a mortgage, you're halfway there. If you own it outright you essentially have no premises costs. There's a cash and carry where they pay about £1m a year in rent and have been there 50+ years. I asked why they had never bought the place and they shrugged their shoulders. I can understand with shareholder/capitalist ventures where they milk and drain property for all it's worth.
But going back to SOR, they get in a cashflow pinch and the easiest thing to do is to "borrow" your customers money, and they end up in a slippery slope of robbing Peter to pay Paul.
Tax ruse? Less profits, less Corp Tax.But going back to SOR, they get in a cashflow pinch and the easiest thing to do is to "borrow" your customers money, and they end up in a slippery slope of robbing Peter to pay Paul.
TX.
JimmyConwayNW said:
Why do SOR dealers keep going bust.
I sell used cars, have some stock funding, have some of my own money try to keep a ratio that ensures I stay afloat and can pay the bills etc.
Bought the premises and have a nice chunk sat there.
If I solely sold on SOR which is essentially interest free stocking I don't know how I could get it so wrong.
Where does it repeatedly go wrong?
I understand no mentioning of names in this thread.
Does the SOR seller ( if competent) have to warrant / guarantee the car as one of his own or does that responsibility revert to the owner if the car sells; presumably this would make quite a difference with an obscure or exotic car, as opposed to the £5000 hatchback already mentioned above.I sell used cars, have some stock funding, have some of my own money try to keep a ratio that ensures I stay afloat and can pay the bills etc.
Bought the premises and have a nice chunk sat there.
If I solely sold on SOR which is essentially interest free stocking I don't know how I could get it so wrong.
Where does it repeatedly go wrong?
I understand no mentioning of names in this thread.
Lester H said:
Does the SOR seller ( if competent) have to warrant / guarantee the car as one of his own or does that responsibility revert to the owner if the car sells; presumably this would make quite a difference with an obscure or exotic car, as opposed to the £5000 hatchback already mentioned above.
That might depend on the type of car being sold. SOR usually tends to be on much higher valued cars than £5k.
To refer back to my post above with the Indy dealer - I had the car from new and was virtually a unicorn in terms of ownership and spec and type and indeed very limited mileage.
Every item of paperwork over 9 years of ownership added to this.
There was no guarantee offered or indeed asked for by the buyer.
Terminator X said:
JimmyConwayNW said:
Why do SOR dealers keep going bust.
I sell used cars, have some stock funding, have some of my own money try to keep a ratio that ensures I stay afloat and can pay the bills etc.
Bought the premises and have a nice chunk sat there.
If I solely sold on SOR which is essentially interest free stocking I don't know how I could get it so wrong.
Where does it repeatedly go wrong?
I understand no mentioning of names in this thread.
I had one call about my car for sale. First off they wanted £600 to inspect my car before it went on their website etc then they wanted 10% of sale when sold! Needless to say it was FRO.I sell used cars, have some stock funding, have some of my own money try to keep a ratio that ensures I stay afloat and can pay the bills etc.
Bought the premises and have a nice chunk sat there.
If I solely sold on SOR which is essentially interest free stocking I don't know how I could get it so wrong.
Where does it repeatedly go wrong?
I understand no mentioning of names in this thread.
TX.
Auction fees would be much more than that
Lester H said:
Does the SOR seller ( if competent) have to warrant / guarantee the car as one of his own or does that responsibility revert to the owner if the car sells; presumably this would make quite a difference with an obscure or exotic car, as opposed to the £5000 hatchback already mentioned above.
Yes, legally they have to warrant/guarantee (as per CRA2015) and that obligation is of the dealer (not the true (previous) owner).alscar said:
That might depend on the type of car being sold.
It is not dependent on the type of car (or indeed, the type of product at all).paul_c123 said:
It is not dependent on the type of car (or indeed, the type of product at all).
I stand corrected although not a cast iron warranty as such. A quick look at the CRA adds this.
• You can seek compensation or a refund after six months of purchasing the vehicle, but it’ll be up to you to prove the fault was there at the time of delivery.
alscar said:
paul_c123 said:
It is not dependent on the type of car (or indeed, the type of product at all).
I stand corrected although not a cast iron warranty as such. A quick look at the CRA adds this.
You can seek compensation or a refund after six months of purchasing the vehicle, but it ll be up to you to prove the fault was there at the time of delivery.
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