Anyone own a Car Dealership
Discussion
Do you have any first hand experience with contract hire? I understand the concept but didn't really know the best way to get into it. I think you have hit the nail on the head with having a site that would offer everything i.e. valeting/MOT's etc. But the start up costs do scare me a bit.
I might have a look at Contract Hire as a sideline to my main job? Depends on how much time it would take up. The only problem I would have is the conflict of interests with my current employers. I guess at some point I am going to just have to bite the bullet and start working for myself.
Mat
I might have a look at Contract Hire as a sideline to my main job? Depends on how much time it would take up. The only problem I would have is the conflict of interests with my current employers. I guess at some point I am going to just have to bite the bullet and start working for myself.
Mat
Hi,if you like what your doing and think you could better yourself,why not do some trading.Buy non franchise cars from dealers such as the ones you have worked at before,underwrite for them and trade the cars on.If you can buy the cars,because the dealerships we use,are now switching to auction sites,making it much harder to buy the cars.Weigh up the pros and cons first,but good luck.
Just read the thread, so heres my tuppence..........most people who I know in the trade who own sites are selling them for development and selling some cars from home, having no pressure and not having to staff and cover the overheads. The internet has become a double edged sword for the smallish trader, yes your cars get a wider audiance than ever before, BUT the margins are very very tight in comparison to what they were even 5 years ago. Customers seem very price led, and are willing to buy off the trader who works from home,as they know they have the same rights from buying from a high street garage.
Couple of examples........friend of mine has just come off his pitch after 14 years, too much hassle for the return in his eyes. He had overheads of circa £5K per month for a 30 car pitch.
Another friend has a nice 50 car pitch and showroom which he owns(no mortgage), busy workshop with quite a few staff.......he needs to sell 1 car a day to stand still (paying himself nothing), he is struggling, and is ready to pack up.
However, its not all doom and gloom...........there is still a good living to be had, source of cars is key, the auctions are too expensive for clean retail stock, too many traders chasing too few nice cars, if you can buy from main agents as we do, you have a head start. As with any business its the overheads which kill it..........before you know it you need to earn £2K a week to get nothing.
If I was starting again I would specialise is something, be it BMW, Merc Porsche or whatever.
Funding......The banks have taken some serious hits with the motortrade recently, and they are looking at the sector very closely, one of the big groups will in my opinion go out of business in the next 12 months due to trading conditions, so the banks are not as willing as they were.......stocking plans are a pain in the arse, as you have to pay for stock audits every month or so, fax your stock position etc etc.......easier to go down the route of remortgage of house.
If you need any more info feel free to pm me. Good Luck
I don't have experience in the trade but my nephew did this last year. I think the problems he has had has been getting things on a business footing and finding suitable premises at the right price. He had a similar background to you with sales and sales mangaer experience at Toyota and Vauxhall.
I think he had hoped to go down the route of getting the finance companies to buy nearly new cars for him to sell but looking at his stock I presume that hasn't come off as he is buying and selling at the £2k to £8k end . He didn't have a vast amount of equity but did have to use an inheritanmce to get going and I think it weas closer to £100K than £10K.
He had problems getting premises with the right planning permission and to get them at the right price and has taken a rural industrial unit where he cannot advertise with signs etc (so no passing custom) and has a clause in his lease saying that customers have to be by appointmnet. This hasn't bothered him too much because he went for a niche market and sells via the net so buyers come by appointmnet and he doesn't have to staff his storage unit all the time which gives him the time to get to the auctions. He had to buy a transporter trailer. However, these are all things he ended up having to consider after the event as he hadn't realised how expensive commercial rents/rates can be. He has also been broken into many times despite the alarm system and had his transporter stolen Oh the joy and strss of self employment hey?
He also didn't have much of a clue about how VAT was dealt with or about the corporation tax rates/arrangements. He didn't even realise what expenses could be set to the business and hadn't claimed any businsess mileage/fuel for 2 years when I spoke to him.
See an accountant before you sign anything!
I think he had hoped to go down the route of getting the finance companies to buy nearly new cars for him to sell but looking at his stock I presume that hasn't come off as he is buying and selling at the £2k to £8k end . He didn't have a vast amount of equity but did have to use an inheritanmce to get going and I think it weas closer to £100K than £10K.
He had problems getting premises with the right planning permission and to get them at the right price and has taken a rural industrial unit where he cannot advertise with signs etc (so no passing custom) and has a clause in his lease saying that customers have to be by appointmnet. This hasn't bothered him too much because he went for a niche market and sells via the net so buyers come by appointmnet and he doesn't have to staff his storage unit all the time which gives him the time to get to the auctions. He had to buy a transporter trailer. However, these are all things he ended up having to consider after the event as he hadn't realised how expensive commercial rents/rates can be. He has also been broken into many times despite the alarm system and had his transporter stolen Oh the joy and strss of self employment hey?
He also didn't have much of a clue about how VAT was dealt with or about the corporation tax rates/arrangements. He didn't even realise what expenses could be set to the business and hadn't claimed any businsess mileage/fuel for 2 years when I spoke to him.
See an accountant before you sign anything!
Tearz said:
escargot said:
matc said:
So in this case my start up costs would be lower?
Slightly O/T escargot how is Group20 going? I did enquire about a franchise a while ago but didn't gt any urther with it. Am I right in thinking you took one of these franchises?
Thanks
Mat
Slightly O/T escargot how is Group20 going? I did enquire about a franchise a while ago but didn't gt any urther with it. Am I right in thinking you took one of these franchises?
Thanks
Mat
I'm a director for Group20 now too so if you wanted to have a chat with me about it, feel free.
matc said:
Do you have any first hand experience with contract hire? I understand the concept but didn't really know the best way to get into it. I think you have hit the nail on the head with having a site that would offer everything i.e. valeting/MOT's etc. But the start up costs do scare me a bit.
I might have a look at Contract Hire as a sideline to my main job? Depends on how much time it would take up. The only problem I would have is the conflict of interests with my current employers. I guess at some point I am going to just have to bite the bullet and start working for myself.
Mat
Mat,I might have a look at Contract Hire as a sideline to my main job? Depends on how much time it would take up. The only problem I would have is the conflict of interests with my current employers. I guess at some point I am going to just have to bite the bullet and start working for myself.
Mat
Yes, I set up a contract hire & leasing brokerage for the dealer I used to work at.
Hi, just seen the post. I made a similar transition in December last year. My background was IT sales and marketing but I got bored of being tied to a desk and fancied working for myself.
I work from home and sell between 5 and 10 cars a month. Working from home I make appointments as and when I want for people to view cars. I dont have to sit and wait for people to walk in off the street. I sell to the public and also trade cars to the main dealers I buy from. I started with a fraction of the £100k mentioned above but am managing to make a fair enough living for my first years trading and grow the business. If you start with a smaller amount of cash you will be more picky about the cars you buy. I think if I had started off with more money I could have got in to trouble buying stuff for the sake of it.
Before I made the leap I spent a good few hours with an accountant going through all the tax, trading and proceduaral issues that a small business will face. I also sought feedback from people on this forum (many thanks).
I also made sure that warranty companies, finance houses etc would be happy to work with me as a trader working from home. Some will some wont but I saw these as two vital components for my business. Licenses for various things must also be sought which can take up to 2 months.
I often wonder If I would have more success with a forecourt, but at the moment the rental cost would be too much to make it worthwhile. Ebay, Autotrader, Exchange and Mart and even this very site have all proved worthwhile and I supplement them with my own (basic) website.
My advice is go for it. Yes the margins are getting smaller, and yes the timewasters and the chap that takes 2 weeks to decide if he wants the car will frustrate the hell out of you, but the plus side of being your own boss far outweighs all of that.
Cheers
I work from home and sell between 5 and 10 cars a month. Working from home I make appointments as and when I want for people to view cars. I dont have to sit and wait for people to walk in off the street. I sell to the public and also trade cars to the main dealers I buy from. I started with a fraction of the £100k mentioned above but am managing to make a fair enough living for my first years trading and grow the business. If you start with a smaller amount of cash you will be more picky about the cars you buy. I think if I had started off with more money I could have got in to trouble buying stuff for the sake of it.
Before I made the leap I spent a good few hours with an accountant going through all the tax, trading and proceduaral issues that a small business will face. I also sought feedback from people on this forum (many thanks).
I also made sure that warranty companies, finance houses etc would be happy to work with me as a trader working from home. Some will some wont but I saw these as two vital components for my business. Licenses for various things must also be sought which can take up to 2 months.
I often wonder If I would have more success with a forecourt, but at the moment the rental cost would be too much to make it worthwhile. Ebay, Autotrader, Exchange and Mart and even this very site have all proved worthwhile and I supplement them with my own (basic) website.
My advice is go for it. Yes the margins are getting smaller, and yes the timewasters and the chap that takes 2 weeks to decide if he wants the car will frustrate the hell out of you, but the plus side of being your own boss far outweighs all of that.
Cheers
Off the top of my head...
As has been said, specialize in one marque or type of car.
Make sure that you have a network of other traders in place to underwrite the crap that comes in in p/x, or you'll find that your website is full of shitters very quickly.
Arrange a deal with a friendly local garage to do a PDI/service/MOT at agreed rates when you get the car, rather than rushing to do it once you've sold it.
That is all for now.
As has been said, specialize in one marque or type of car.
Make sure that you have a network of other traders in place to underwrite the crap that comes in in p/x, or you'll find that your website is full of shitters very quickly.
Arrange a deal with a friendly local garage to do a PDI/service/MOT at agreed rates when you get the car, rather than rushing to do it once you've sold it.
That is all for now.
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