Buying a car to re-sell...insurance issues?

[Shuvi McTupya]

Possibly a dumb question but...

I just visited a car auction just to have a look, and ended up buying an old beater thinking I could just give it a good wash and turn a little profit maybe.

So..I call my insurance company up and tell them my cunning plan and they declined the opportunity to offer me insurance for said beater!

I figured (stupidly perhaps) that I could take out a policy and then pay whatever the administration fee is to cancel early when I sold the car but obviously it is more complex than that!

Please don't tell my I am going to require some hellishly expensive traders policy or something just to do this? The car is currently at the auction house and I don't fancy driving it with no insurance. I only really need to tax it and get it back to the house where it will be off the road until I sell it!

Is my best option just to get it trailered back and not bother insuring it and taxing it? I could just sorn it. I wasn't even going to register it to me if I didn't need to.

Edited by Shuvi McTupya on Thursday 3rd August 21:19

[MixFi]

I have never been asked by any insurer whether or not I intend to cancel or sell a car after taking out the policy, why did you tell them if they did not ask you? They cannot void your policy over what they do not ask, but they can decline to insure you.

[Shuvi McTupya]

I told them because they are my current insurer and I don't want to lie to them and have my other policy cancelled.

I didn't think they would have an issue with it as I won't even be driving the thing so it's money for nothing!

[Huntsman]

Shuvi McTupya said:

Possibly a dumb question but...

I just visited a car auction just to have a look, and ended up buying an old beater thinking I could just give it a good wash and turn a little profit maybe.

So..I call my insurance company up and tell them my cunning plan and they declined the opportunity to offer me insurance for said beater!

I figured (stupidly perhaps) that I could take out a policy and then pay whatever the administration fee is to cancel early when I sold the car but obviously it is more complex than that!

Please don't tell my I am going to require some hellishly expensive traders policy or something just to do this? The car is currently at the auction house and I don't fancy driving it with no insurance. I only really need to tax it and get it back to the house where it will be off the road until I sell it!

Is my best option just to get it trailered back and not bother insuring it and taxing it? I could just sorn it. I wasn't even going to register it to me if I didn't need to.

Edited by Shuvi McTupya on Thursday 3rd August 21:19

One day insurance is how I've done similar.

[Shuvi McTupya]

One day insurance eh? I will have a google. Thanks

[mrtwisty]

Shuvi McTupya said:

...it's money for nothing!

Isn't that their business model?

(I, of course, jest. I miss Loon, I really do!)

[anonymous-user]

cancel your current insurance and get a new policy, as i guess you have now changed your mind and now going to keep it a few weeks, or just get 1 day insurance. Just be aware the car will still show up as sorn unless you tax it.

i have to admit though not a fan of bedroom traders. keep it a few months at the least.

[cuprabob]

What's preventing you from taking out a new policy and then cancelling it within the 14 day cooling off period?

[Shuvi McTupya]

Ok, the story just took an amusing turn!

I called a local recovery guy to ask how much he would charge to bring the car from the auction house to my house and he said :

"What car is it"

"An old fiesta semi automatic"

"What, the blue one? I dropped that off there earlier today, it has ignition problems and sometimes won't start!"

Small world eh??

His suggestion is that I leave it there and let them run it back through the auction

I paid £300 for a VERY tidy 2004 fiesta with 38000 miles on and an interior that looks like no one has ever sat in it...maybe I won't lose too much

[Toaster Pilot]

Chuck it back into the auctions and forget trying to be a driveway trader unless you are willing to pay for insurance, trade plates and fulfil the legal obligations of your customers.

[Shuvi McTupya]

Toaster Pilot said:

Chuck it back into the auctions and forget trying to be a driveway trader unless you are willing to pay for insurance, trade plates and fulfil the legal obligations of your customers.

Er, ok..

I have bought every car I have ever owned privately, it doesn't make any difference to me if they bought it from an auction to sell on.

I know for a fact that the car I drive at the moment was bought by the PO from an auction and then sold to me at a fair market price, he just got a good deal.

Since when did it become a crime to buy and sell stuff for a profit??

I had no intention of ripping anyone off.

Edited by Shuvi McTupya on Friday 4th August 00:23

[98elise]

Shuvi McTupya said:

Toaster Pilot said:

Chuck it back into the auctions and forget trying to be a driveway trader unless you are willing to pay for insurance, trade plates and fulfil the legal obligations of your customers.

Er, ok..

I have bought every car I have ever owned privately, it doesn't make any difference to me if they bought it from an auction to sell on.

I know for a fact that the car I drive at the moment was bought by the PO from an auction and then sold to me at a fair market price, he just got a good deal.

Since when did it become a crime to buy and sell stuff for a profit??

I had no intention of ripping anyone off.

Edited by Shuvi McTupya on Friday 4th August 00:23

If they bought it to sell it on for a profit, then they are a trader (as you would be). Its not a crime, it's a business with certain rules and obligations.

If you sell it for a profit, and the buyer comes back complaining about the ignition problems are you going to fix it?

[Vibes]

Next week.....2 threads will appear:

"bought a 2004 fiesta from a trader, now it wont start"

and

"sold a car privately, now threatened with court action"

[daemon]

Shuvi McTupya said:

Toaster Pilot said:

Chuck it back into the auctions and forget trying to be a driveway trader unless you are willing to pay for insurance, trade plates and fulfil the legal obligations of your customers.

Er, ok..

I have bought every car I have ever owned privately, it doesn't make any difference to me if they bought it from an auction to sell on.

I know for a fact that the car I drive at the moment was bought by the PO from an auction and then sold to me at a fair market price, he just got a good deal.

Since when did it become a crime to buy and sell stuff for a profit??

I had no intention of ripping anyone off.

Edited by Shuvi McTupya on Friday 4th August 00:23

Well, as you're finding already, reselling a car for profit isnt just a matter of rocking up to an auction, bidding on the first heap that looks like value, driving it home, washing it and sticking it on gumtree the following morning and making £££s.

Probably bid up by the trader who dumped it through the auction too, and only there because of the known fault.

You've got burnt already and you havent even got the car home yet

Whilst it may not be a "crime" per se, if you are selling a car for profit you have legal obligations with respect to

=> HMRC (tax implications of being a trader)
=> Road Traffic Act - the car needs to be TAXED, insured, roadworthy and registered to your name (either trader or otherwise)
=> The Consumer Rights Act 2015 (the car must be as described, and you are effectively warranting the car against faults. If a significant fault occurs within 28 days the buyer can legally demand a refund. If its after 28 days you would have to prove the fault wasnt there at the time of purchase.

And presumably if you've "no plans to rip anyone off" you've budgeted for standing over the car and taking irate calls from the buyer for say 6 months?

Once you've complied with all of the above, the little hope you have of a bit of profit remaining will be very quickly eaten up when the phone rings in a months time because some engine management light has popped on and the handbook says "return to dealer".....

Anyways, good luck, but please dont play the "Since when was it a crime to buy and sell stuff for profit?" card again. Far far too many low life driveway traders out there avoiding ALL their responsibilities then bleating on about being "private sellers"

Edited by daemon on Friday 4th August 08:11

[Philemon]

Your biggest issue is going to be when you renew or take a new policy. One of the key questions is whether you have ever been refused insurance, or had a policy cancelled?

It will be on record.

[Shuvi McTupya]

Philemon said:

Your biggest issue is going to be when you renew or take a new policy. One of the key questions is whether you have ever been refused insurance, or had a policy cancelled?

It will be on record.

I did wonder about that, but surely they can't do that when you call an insurance company to ask if they will insure you to do a certain thing and they say no!

Mind you, the insurance companies are bigger thieves than your average driveway car dealer, so maybe.

[Shuvi McTupya]

I take all your points on board and there are obviously pitfalls!

There must be a line somewhere though, surely plenty of people change cars regularly, and sometimes at a profit. At what point are you a dealer ?

I might just enjoy driving different cars for a while and sorting them out and then get bored and sell them!

I know that is not the case here but surely some people do that and it must be legal ?

[daemon]

Shuvi McTupya said:

Philemon said:

Your biggest issue is going to be when you renew or take a new policy. One of the key questions is whether you have ever been refused insurance, or had a policy cancelled?

It will be on record.

I did wonder about that, but surely they can't do that when you call an insurance company to ask if they will insure you to do a certain thing and they say no!

Mind you, the insurance companies are bigger thieves than your average driveway car dealer, so maybe.

At least with car insurance companies they're regulated, they are declaring themselves businesses so you know where you stand and you have choice as to which company you use - "private traders" usually fly beneath the radar paying no tax, not abiding by the RTA, and not honouring any responsiblities under the Consumer Rights Act.

[Shuvi McTupya]

Understood.

But how much comeback do people really expect when they buy a 13 yr old snotter for £500?

It's always going to be a risk!

[QuickQuack]

Shuvi McTupya said:

I take all your points on board and there are obviously pitfalls!

There must be a line somewhere though, surely plenty of people change cars regularly, and sometimes at a profit. At what point are you a dealer ?

I might just enjoy driving different cars for a while and sorting them out and then get bored and sell them!

I know that is not the case here but surely some people do that and it must be legal ?

At the point where you buy a car with the main intention of selling it for a profit with or without doing it up, which is precisely why you bought the car. It doesn't matter whether the price is £300 or £3000, or whether you do it once a month or once a day. If your intention is to make a profit, you're trading. It most definitely is NOT illegal to trade; it just means that you have to comply with the laws which are there to protect consumers and also regulate business financial transactions so that appropriate taxes are paid.