Car dealer licence / trader plates??

[somnv]

I work from home and was thinking about dealing in cars as a bit of a sideline. i.e. buy maybe a car or two per month at auction and sell it on. Does anyone have any advice about starting something like this? Should I get an trade licence and how do I get trade plates? Also, does anyone have a rough idea how much this would cost and also how much insurance for this type of small scale trade operation would cost?

Thanks in advance!
Norm

[wellywells]

I too would be interested in any info on this, thanks

[POORCARDEALER]

Trade Plates.........DVLA will want to come and inspect your premises and your stock books/trading records, actual cost of trade plates is uner £200 a year.

[TerryTibbs]

somnv said:

I work from home and was thinking about dealing in cars as a bit of a sideline. i.e. buy maybe a car or two per month at auction and sell it on. Does anyone have any advice about starting something like this? Should I get an trade licence and how do I get trade plates? Also, does anyone have a rough idea how much this would cost and also how much insurance for this type of small scale trade operation would cost?

Thanks in advance!
Norm

you don't need a trade license as such, if you are working from home you may need planning permission to sell cars from your private reisdence, certainly if you sell cars next to a highway you will run into problems with the law. so check with your council.

insurance - tradexinsurance.co.uk for a quote - how much your trade insurance will depend on your history and location, you need 2 types of insurance - road risk insurance and stock insurance, generally road risk cover will only cover you third party, you can get comp cover but its only to trade value. stock cover will cover you for the trade value of your stock.

trade plates, depends on your local DVLA office how easy it will be, the general guideline is you need to show you are a bona fide trader.

you also want to get a subscription to CAP and Glassses.

[jamesw2000]

If you have trade insurance, why would you need trade plates?

[JeffC]

jamesw2000 said:

If you have trade insurance, why would you need trade plates?

cos trade plates are a universal tax disc nothing to do with insurance , but you will need trade insurance in your name covering any vehicle to get trade plates.

Ive sold cars from home for the last 10 years without any issues , but as suggested some local council s can take a dim view on it, If you live on a new housing estate forget it , few of my pals have tried and neighbours shopped them and council issued warnings etc.

there is a living in doing it As long as you dont expect to go to an auction buy a car advertise it and sell for a stonking profit, them days are gone, I rarely go to auctions and when I do the prices scare the life out of me, private buyers at auction buying running prices up getting carried away is crazy , Ive seen cars make retail money in sales, key is do your homework and no your market.

good luck anyway.

JC

[wellywells]

some useful comments, thanks

[somnv]

Thanks for the info guys. I shouldnt have a problem with location as I live out in the country with no neighbours. I cant see myself selling an awful lot of cars but it could be a fairly interesting way to make a few extra quid. I suppose I would need to sell a good few to make it worthwhile getting the insurances and the like.

What sort of percentage mark-up are you guys generally able to put on a car you have bought at auction when it comes to selling it as a trader?

[jamesw2000]

agreed on the auction thing, in my area cars are going through for silly money - It's the physicolgy (sp?) of the retail buyers thinking they are getting a good deal just becuase they are buying at auction. There are some bargains that go through but the are usually +30K and cars like that are harder to shift that the £2,500 - £15,000 ones. The main thing to remember is that there is a reason that everything is in the auction - the number of cars you see going back through in a couple of weeks time is amusing if you regularly. Trade buyers can spot a retail punter / novice a mile away and will often bid on stuff just to push the price up out of spite. Don't even get me started on the auction fees they charge...

[JeffC]

somnv said:

What sort of percentage mark-up are you guys generally able to put on a car you have bought at auction when it comes to selling it as a trader?

If I had to survive buying cars from the auctions local to me I would have to blow money to sell them on or price them higher to get a wage and keep them for ever . not wanting to urinate on your chips but a few other things you need to be aware of, if you are serious you need to register for vat as your turn over will quickly exceed the allowed amount ( would guess at £55k ish ? ) and obviously tax is to pay on profit . public liabilty , trade insurance. business rates , accountancy fees.

so....

you buy a car for £5,000 you sell it for £6,000. £1000 profit.takes 3 weeks to sell £300 quid a week not bad and sounds easy doesnt it BUT....


£148.94 goes straight to the vat man, 17.5% vat is paid on profit but cant be reclaimed on loss. tax has to be paid on the profit (if you have an income allready and go into the upper tax bracket 40% or standard 20% or whatever it is if not ) so £400 (or £200ish ) to the tax man your £1000 profit has reduced considerabley less any expenses incurred advertising average £80 per car any prep the car needed service / mot tax etc £200? valet £30 ? you get tax relief on your expenses but what Im saying dont go into it thinking its all rosey and easy ,few people I know have tried to copy what I do and come stuck, trade contacts are essential and building a reputation for what you buy/ sell etc

fwiw. Im a small one man band selling from home , I sell aprox 100 cars a year and turn over average £750- £1m a year(will be less this year) and my bottom line profit after everything is paid doesnt equal what some of my pals earn working in a factory with no hassle and a wage every week .

Edited by JeffC on Friday 16th November 20:35

[jamesw2000]

£750K-£1M turnover and (I'm guessing) less than 50K profit?!? Is that what you earn or what you 'earn' cough. What type of cars are you selling?

Edited by jamesw2000 on Friday 16th November 21:14

[JeffC]

jamesw2000 said:

£750K-£1M turnover and (I'm guessing) less than 50K profit?!? Is that what you earn or what you 'earn' cough. What type of cars are you selling?

Edited by jamesw2000 on Friday 16th November 21:14

when I buy anything I look to gross around a 10% return on my money , but 10% gross is a fair way from net profit (as above)

Ive worked up to a position where we own our stock and property without debt so dont need a big income and to be honest I would rather make less and have an easy life than chew on seliing twice as much with twice the hassle , the way I work it now I prob only work a few hours a week now , I used to have a garage / bodyshop/workshop and the attraction of working all hours away from the wife/kids then spending 7 days a week 51 weeks a year working around customers wore off. the way I work now the cars are at my house and Im in the house with my family , viewing is by appointment only at my convinience and if someone doesnt show up to see a car it doesnt effect me. I sell vag diesel cars.


fwiw My bodyshop was more profitable, and If I was looking at a business to make good money cars sales wouldnt be it, I started up a mobile smart repair business about 8 years ago and that did well but in the motor trade the best money spinner if you can do it is the paintless dent removal, all you need is a car and some sticks Ive seen lads doing that making £200 in an hour and up to a grand in a day with no overheads no chew and no come backs !! and when you watch them it looks a piece of p*ss !!