First steps to becoming a car trader
Discussion
Hi guys, a little about me, I'm 31 love my cars, a fire fighter from South Yorkshire.
In the last 10 years I've had my fair share of cars, mainly performance cars, impreza's, evo's, vx220, Rs/st focus, clio 197, x5, golf gti's to name a few. I've always seemed to do well on resale.
I do long hours close together and get long hours off also so have time to start this. I'm in no doubt I can make money from doing this but autotrader now limit you to 4 cars in a 12 month period.
I'm also aware of the legal side of selling trade ie fit for perpose/road worthy etc and again shouldn't be problem as I'll only be selling good cars and have family members in the motor trade if a problem does appear.
Where I need help really is the business/money/insurance side. Not 100% sure on ltd company or sole trader and struggling to find any decent advice. Hopefully I'll be dealing in cars from 3-7k and selling 2 or so a month if it goes well.
I've also had different peoples opinions on trading from home address but no facts. I'd have no more than 2 cars for sale at one time and they will always be on my own private driveway.
Any advice would be great.
Cheers guys
In the last 10 years I've had my fair share of cars, mainly performance cars, impreza's, evo's, vx220, Rs/st focus, clio 197, x5, golf gti's to name a few. I've always seemed to do well on resale.
I do long hours close together and get long hours off also so have time to start this. I'm in no doubt I can make money from doing this but autotrader now limit you to 4 cars in a 12 month period.
I'm also aware of the legal side of selling trade ie fit for perpose/road worthy etc and again shouldn't be problem as I'll only be selling good cars and have family members in the motor trade if a problem does appear.
Where I need help really is the business/money/insurance side. Not 100% sure on ltd company or sole trader and struggling to find any decent advice. Hopefully I'll be dealing in cars from 3-7k and selling 2 or so a month if it goes well.
I've also had different peoples opinions on trading from home address but no facts. I'd have no more than 2 cars for sale at one time and they will always be on my own private driveway.
Any advice would be great.
Cheers guys
Make sure you're covered for stuff like this:
http://www.pistonheads.com/gassing/topic.asp?h=0&a...
There's plenty of traders on PH who will be able to give advice. But it's a tough business.
http://www.pistonheads.com/gassing/topic.asp?h=0&a...
There's plenty of traders on PH who will be able to give advice. But it's a tough business.
Some good advice here http://www.pistonheads.com/gassing/topic.asp?t=120...
Hi I have owned a car sales garage for 14 years and been in the trade for 22 years.
From your description of trading (£10000+ turnover per month)you will exceed the VAT threshold within twelve months which probably means you should register for VAT straight away. You will need to keep good records for tax, VAT etc and a stockbook. You need to get a good understanding of the VAT margin scheme, details of which are on the .gov site.
Obviously you will need suitable insurance, a trade account with advertisers and you will be liable for faults etc that may crop up with cars you sell. Soon you will also need trade plates when they get rid of tax discs later this year.
You should probably do a business plan too which covers the costings of accountants, insurance, VAT, advertising, valeting, repairs, etc So you know where you are before you start.
Good luck with the venture.
Steve
From your description of trading (£10000+ turnover per month)you will exceed the VAT threshold within twelve months which probably means you should register for VAT straight away. You will need to keep good records for tax, VAT etc and a stockbook. You need to get a good understanding of the VAT margin scheme, details of which are on the .gov site.
Obviously you will need suitable insurance, a trade account with advertisers and you will be liable for faults etc that may crop up with cars you sell. Soon you will also need trade plates when they get rid of tax discs later this year.
You should probably do a business plan too which covers the costings of accountants, insurance, VAT, advertising, valeting, repairs, etc So you know where you are before you start.
Good luck with the venture.
Steve
SubaruSteve said:
Hi I have owned a car sales garage for 14 years and been in the trade for 22 years.
From your description of trading (£10000+ turnover per month)you will exceed the VAT threshold within twelve months which probably means you should register for VAT straight away. You will need to keep good records for tax, VAT etc and a stockbook. You need to get a good understanding of the VAT margin scheme, details of which are on the .gov site.
Obviously you will need suitable insurance, a trade account with advertisers and you will be liable for faults etc that may crop up with cars you sell. Soon you will also need trade plates when they get rid of tax discs later this year.
You should probably do a business plan too which covers the costings of accountants, insurance, VAT, advertising, valeting, repairs, etc So you know where you are before you start.
Good luck with the venture.
Steve
From what I understood, the vat margin scheme works on gross profit, rather than basic turnover. Ie, you need to make gp up to the vat threshold in profit before you need to register, as opposed to just trading 80k's worth of nominal car value. From your description of trading (£10000+ turnover per month)you will exceed the VAT threshold within twelve months which probably means you should register for VAT straight away. You will need to keep good records for tax, VAT etc and a stockbook. You need to get a good understanding of the VAT margin scheme, details of which are on the .gov site.
Obviously you will need suitable insurance, a trade account with advertisers and you will be liable for faults etc that may crop up with cars you sell. Soon you will also need trade plates when they get rid of tax discs later this year.
You should probably do a business plan too which covers the costings of accountants, insurance, VAT, advertising, valeting, repairs, etc So you know where you are before you start.
Good luck with the venture.
Steve
isleofthorns said:
From what I understood, the vat margin scheme works on gross profit, rather than basic turnover. Ie, you need to make gp up to the vat threshold in profit before you need to register, as opposed to just trading 80k's worth of nominal car value.
You understand wrong, VAT threshold is on turnover not gross profit.There is a good PDF document on the direct gov website which gives you a really good understanding of how it works, you need to consult your accountant.
I own a garage stocking 60ish cars, a good accountant will make your life easier.
This is one of the most useful quotes I have seen about these type of threads.
It didnt all make sense at first.But gradually all came together. It does now.
This time last year I had 3 cars.
Up to 30 now.
Prior to that had dabbled like yourself in selling GTI, type R Megane sports, clio 182's.
I stick to run of the mill mondeo/passat/vectra/astra/focus/corsa/polo/golf type stuff now. Diesels are what the public want.
Best of luck with it.
It didnt all make sense at first.But gradually all came together. It does now.
This time last year I had 3 cars.
Up to 30 now.
Prior to that had dabbled like yourself in selling GTI, type R Megane sports, clio 182's.
I stick to run of the mill mondeo/passat/vectra/astra/focus/corsa/polo/golf type stuff now. Diesels are what the public want.
Best of luck with it.
100hourweek said:
I only check pistonheads every month or so and theres always a thread in here about someone starting a car dealership lol.
i have a pretty sucsessfull car sales garage in Glasgow (in my opinion atleast), i sell a minimum of 60 cars a month retail and trade around 20 units a month aswell.
I started with 3 cars 4 years ago, I now own a 6000 sq foot MOT station aswell as 2 car sales yard and have 120 cars in stock roughly at any one time.
Its not easy but there is money to be made if done properly. Id say i put around 100 hours in a week for work, I barely sleep and when i do im sure i dream about being at the auctions.
Im just looking at opening my third sales yard and always do a list of whats required so i will give you a run down of the things i couldnt live without
An understanding girlfriend
Rent of a yard
Autotrader bill £850 a week
Ebay motors bill
Glasses guide
Trade insurance
trade plates
Buisness insurance
Magazine advert
staff (i have 4 and i need them, i couldnt do it without my 2 right hand men who basicly orginise my life for me)
2 x mot stations to use
2 x paint shops to use
2 x auto electricians to use
2x repair garages to use
A diesel specialist
a good scrap yard your friendly with
Merchant services
Your own transporter
CCTV Equipment
Overflow space - as someone said for me to have 120 cars ready to retail i need another 30 getting prepper and 20 sitting in hand over zone i also have a dead zone for cars i want to forget about haha )
Credit consumers license for finance
Used car dealers license
trade acounts with bca, manheim, central, sma , inters
tty and good trade sources for cars, Its easier to sell well prices cars justnow than it is to buy them.
A good accountant.
a good selection of tools
A snap on booster pack, nothing else cuts it for me.
Your own diagnostic and battery recharging equipement
A complaints procedure
a warranty company who will actually pay out.
Friends to help you
A decent internet provider as autotrader dealer edit needs it.
A firm but fair attitude, the public with try take the piss out of you at any opertunity
thats just the basics i can think of there will be tons more, Good luck with it.
i have a pretty sucsessfull car sales garage in Glasgow (in my opinion atleast), i sell a minimum of 60 cars a month retail and trade around 20 units a month aswell.
I started with 3 cars 4 years ago, I now own a 6000 sq foot MOT station aswell as 2 car sales yard and have 120 cars in stock roughly at any one time.
Its not easy but there is money to be made if done properly. Id say i put around 100 hours in a week for work, I barely sleep and when i do im sure i dream about being at the auctions.
Im just looking at opening my third sales yard and always do a list of whats required so i will give you a run down of the things i couldnt live without
An understanding girlfriend
Rent of a yard
Autotrader bill £850 a week
Ebay motors bill
Glasses guide
Trade insurance
trade plates
Buisness insurance
Magazine advert
staff (i have 4 and i need them, i couldnt do it without my 2 right hand men who basicly orginise my life for me)
2 x mot stations to use
2 x paint shops to use
2 x auto electricians to use
2x repair garages to use
A diesel specialist
a good scrap yard your friendly with
Merchant services
Your own transporter
CCTV Equipment
Overflow space - as someone said for me to have 120 cars ready to retail i need another 30 getting prepper and 20 sitting in hand over zone i also have a dead zone for cars i want to forget about haha )
Credit consumers license for finance
Used car dealers license
trade acounts with bca, manheim, central, sma , inters
tty and good trade sources for cars, Its easier to sell well prices cars justnow than it is to buy them.A good accountant.
a good selection of tools
A snap on booster pack, nothing else cuts it for me.
Your own diagnostic and battery recharging equipement
A complaints procedure
a warranty company who will actually pay out.
Friends to help you
A decent internet provider as autotrader dealer edit needs it.
A firm but fair attitude, the public with try take the piss out of you at any opertunity
thats just the basics i can think of there will be tons more, Good luck with it.
Edited by 100hourweek on Friday 21st February 22:49
I know a lot of very experienced, excellent salesmen in the motor trade who finally have enough of the current culture at the large dealer groups finally decide that enough is enough and try to branch out by themselves.
"I mean, how hard can it be?"
Everyone single one of them has been back working for the man within a year, usually totally broke and working for a much less prestigious franchise than they were before.
It is a very difficult thing to make work and my respect who goes out to those who have succeeded. The stories my mate, who trades performance cars, comes out with are just unbelievable. To say the least that the majority of the general public are now 'demanding' is an understatement. And I have another friend who as had two heart attacks and got through three wives whilst in the business.
Seriously, unless you like people threatening to sue you on a pretty regular basis, don't bother.
Example;
Lady buys a £4000 car two years ago. Finally she gets the car serviced. Her garage can't find the locking wheel nut key and neither can she.
(edited for length, my mate was a little more discreet & courteous than this.)
'ring-ring'
"This car hasn't got a locking wheel,"
"Yes it has, its in the boot. I never supply a car without a locking wheel nut."
"Well I can't find it and neither can my mechanic. I demand you supply me with another one and put it in the post this pm,"
"I'd like to help but have another look first,"
'brrr'
'ring-ring'
"Still can't find it,"
"It will be in the car somewhere, it looks like a bright silver wheel nut,"
"I know what one is. Are you calling me an idiot?"
"No,"
"Well my son has been to Trading Standards and they say that this vehicle is not fit for purpose & if you don't supply me with a locking wheel nut immediately I will be suing you through the small claims court to get a full refund,"
"Ok but I'll need to see the car to match the locking wheel nut key,"
"I'm not driving all the way down there!" (35 miles)
"If the locking wheel nut key isn't in the car, I'll not only give you a new key but £75.00 for your fuel and time,"
"Ok I'll be over tomorrow but I shall also expect a full apology when you see there is no key. And if there is no key, I won't trust the vehicle or you any longer so I will putting the car through an RAC inspection which I will expect you to pay for and any faults they find I'll be looking to you pay for too or you can give me my money back,"
'brrrr'
She turns up, steaming, with son in tow, face bright red, ready for a punch up.
My friend lifts up the carpet and there by the spare wheel is the bright, shiny silverness that is the locking wheel nut key.....
Her son sort of shrugs his shoulders and she gets back in her car & drives off without saying another word, no apology for her behaviour, nothing.
Events like this happen to him every single week. If you want sell cars (or any large retail item.) in the UK at the moment, get used to it.
"I mean, how hard can it be?"
Everyone single one of them has been back working for the man within a year, usually totally broke and working for a much less prestigious franchise than they were before.
It is a very difficult thing to make work and my respect who goes out to those who have succeeded. The stories my mate, who trades performance cars, comes out with are just unbelievable. To say the least that the majority of the general public are now 'demanding' is an understatement. And I have another friend who as had two heart attacks and got through three wives whilst in the business.
Seriously, unless you like people threatening to sue you on a pretty regular basis, don't bother.
Example;
Lady buys a £4000 car two years ago. Finally she gets the car serviced. Her garage can't find the locking wheel nut key and neither can she.
(edited for length, my mate was a little more discreet & courteous than this.)
'ring-ring'
"This car hasn't got a locking wheel,"
"Yes it has, its in the boot. I never supply a car without a locking wheel nut."
"Well I can't find it and neither can my mechanic. I demand you supply me with another one and put it in the post this pm,"
"I'd like to help but have another look first,"
'brrr'
'ring-ring'
"Still can't find it,"
"It will be in the car somewhere, it looks like a bright silver wheel nut,"
"I know what one is. Are you calling me an idiot?"
"No,"
"Well my son has been to Trading Standards and they say that this vehicle is not fit for purpose & if you don't supply me with a locking wheel nut immediately I will be suing you through the small claims court to get a full refund,"
"Ok but I'll need to see the car to match the locking wheel nut key,"
"I'm not driving all the way down there!" (35 miles)
"If the locking wheel nut key isn't in the car, I'll not only give you a new key but £75.00 for your fuel and time,"
"Ok I'll be over tomorrow but I shall also expect a full apology when you see there is no key. And if there is no key, I won't trust the vehicle or you any longer so I will putting the car through an RAC inspection which I will expect you to pay for and any faults they find I'll be looking to you pay for too or you can give me my money back,"
'brrrr'
She turns up, steaming, with son in tow, face bright red, ready for a punch up.
My friend lifts up the carpet and there by the spare wheel is the bright, shiny silverness that is the locking wheel nut key.....
Her son sort of shrugs his shoulders and she gets back in her car & drives off without saying another word, no apology for her behaviour, nothing.
Events like this happen to him every single week. If you want sell cars (or any large retail item.) in the UK at the moment, get used to it.
All I here is bad things when I ask for advice ha ha, a couple of other firefighters I used to know who did a few cars trade never had a problem, you obviously get the odd bad story but surely not everyone out there is that bad. If you look into it you actually have more rights when you buy private than most people think. I've sold stacks of cars private and never once had any moans.
Surely if I buy a car that's 3/5 years old, low miles with full 12 month mot it's gonna be for purpose etc
Surely if I buy a car that's 3/5 years old, low miles with full 12 month mot it's gonna be for purpose etc
Donnydaz said:
All I here is bad things when I ask for advice ha ha, a couple of other firefighters I used to know who did a few cars trade never had a problem, you obviously get the odd bad story but surely not everyone out there is that bad. If you look into it you actually have more rights when you buy private than most people think. I've sold stacks of cars private and never once had any moans.
Surely if I buy a car that's 3/5 years old, low miles with full 12 month mot it's gonna be for purpose etc
In your day job people are no doubt delighted to see you, and as such you see the best in them.Surely if I buy a car that's 3/5 years old, low miles with full 12 month mot it's gonna be for purpose etc
Deal with the public in general in business and you'll see that there is a small percentage of them who are just out to grasp all they can, shaft you wherever possible, go running off to Trading Standards (who vary wildly from reasonable to wildly optimistic depending from location to location) and fire off small claims because their hopelessly unreasonable expectations haven't been met.
Never underestimate the hassle that you can get from a small minority of customers.
Donnydaz said:
All I here is bad things when I ask for advice ha ha, a couple of other firefighters I used to know who did a few cars trade never had a problem, you obviously get the odd bad story but surely not everyone out there is that bad. If you look into it you actually have more rights when you buy private than most people think. I've sold stacks of cars private and never once had any moans.
Surely if I buy a car that's 3/5 years old, low miles with full 12 month mot it's gonna be for purpose etc
How wrong you can be.Surely if I buy a car that's 3/5 years old, low miles with full 12 month mot it's gonna be for purpose etc
Who wants to buy 3/5 year old cars from you at your home address with no warranty, no credit and debit card facilities and such like.
Selling 1 car privately is vastly different from having a few outside your house and people knowing you are a trader. That is when things build up, a picture is painted and action can be taken.
We all do our best to ensure cars go out to a high standard but every now and again some cars are just completely crap and require significant work as a warranty return for an issue you would most likely not have checked for.
And as ever on these types of thread, , its worth pointing out that it's simply not legal to trade cars from a domestic residence. You will have your local council (not to mention the neighbours) wanting to know what is going on.
There is nothing worse than having to put up with somebody flogging cars from their drive or the road outside. It's one way guaranteed to annoy the people who live around you.
There is nothing worse than having to put up with somebody flogging cars from their drive or the road outside. It's one way guaranteed to annoy the people who live around you.
Eric Mc said:
And as ever on these types of thread, , its worth pointing out that it's simply not legal to trade cars from a domestic residence. You will have your local council (not to mention the neighbours) wanting to know what is going on.
There is nothing worse than having to put up with somebody flogging cars from their drive or the road outside. It's one way guaranteed to annoy the people who live around you.
I don't believe that's true, unless you can point me to a law that says it's illegal to trade cars from home.There is nothing worse than having to put up with somebody flogging cars from their drive or the road outside. It's one way guaranteed to annoy the people who live around you.
spikeyhead said:
I don't believe that's true, unless you can point me to a law that says it's illegal to trade cars from home.
It's absolutely true. You will not be able to run a car trading business from your home. If you do, your local council will have something to say to you.I've seen operations such as this shut down by our local council on a couple of occasions. believe me, it happens.
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