Buying to sell on... advice?
Discussion
I am looking to buy a car to sell on for a profit with a view to using the profit to buy a better car and so on.. Mike Brewer did a feature on this many years ago if I remember correctly and it is something I've always fancied doing. My starting pot would be a maximum of £500 aiming to make around £250 on the first car and then keep going until I have a car worth say £5000.
I have dabbled with this in the past but not for a while and always thought at that scale of car it is better to go for something small, cheap and simple with as much MOT and tax on as possible. Can I go far wrong if I adapt this strategy? Also to those who have done / do this, other than ebay, gumtree, etc is there a good place to source these cars?
I have dabbled with this in the past but not for a while and always thought at that scale of car it is better to go for something small, cheap and simple with as much MOT and tax on as possible. Can I go far wrong if I adapt this strategy? Also to those who have done / do this, other than ebay, gumtree, etc is there a good place to source these cars?
Bear two things in mind:
I've done it, but only when a car I had specialist knowledge on and knew I could find a home for turned up. Doing it speculatively, while attractive in principle, looks like very hard work. If you can trailer MOT failures you'll be in much better position, I think.
ETA - research shows that "six cars per year" isn't really a defined threshold, but that any clear intention to make profit means you should be declaring it for tax purposes. Though in practice you're unlikely to draw much attention unless you're making enough money that it could be your sole income.
- Deliberately going into it for profit means you should be registered as a trader regardless of volume, with all the tax and sale of goods act implications this brings. So you'll need to keep proper records and treat it as a business, if you want to be strictly above board.
- It will be a truly massive pain in the arse selling them privately, you will get messed around constantly and while still at the low end of the market get phenomenal morons to deal with
I've done it, but only when a car I had specialist knowledge on and knew I could find a home for turned up. Doing it speculatively, while attractive in principle, looks like very hard work. If you can trailer MOT failures you'll be in much better position, I think.
ETA - research shows that "six cars per year" isn't really a defined threshold, but that any clear intention to make profit means you should be declaring it for tax purposes. Though in practice you're unlikely to draw much attention unless you're making enough money that it could be your sole income.
Edited by McSam on Sunday 3rd February 17:33
Know someone who has just done similar...
Bought a Bora 150PD with all the toys (inc heated seats etc) full VWSH and one Indie. 96k on it but camshaft buggered. Owner afraid of the bill and just wanted shot of it.
Did cams and a few odds and sods, gave it a thorough going over, new (used) interior carpet (seats out etc but easy to do) and a good clean up. One new wing due to rust (used from a breaker).
Stood him in at £1400ish.
Great car and now good for many more miles...has used it while other car off the road. Other car now fixed.
Sold yesterday for £2450.
Bought a Bora 150PD with all the toys (inc heated seats etc) full VWSH and one Indie. 96k on it but camshaft buggered. Owner afraid of the bill and just wanted shot of it.
Did cams and a few odds and sods, gave it a thorough going over, new (used) interior carpet (seats out etc but easy to do) and a good clean up. One new wing due to rust (used from a breaker).
Stood him in at £1400ish.
Great car and now good for many more miles...has used it while other car off the road. Other car now fixed.
Sold yesterday for £2450.
I dabbled a while back and tbh the hassle just wasn't worth it.
My advice is to stick with small, cheap to run cars with long mot and tax, you will sell them with ease
Also if you end up with 3k for example i would buy 2 or 3 cheaper cars than one at 3k as the cheaper stuff moves quicker
My advice is to stick with small, cheap to run cars with long mot and tax, you will sell them with ease
Also if you end up with 3k for example i would buy 2 or 3 cheaper cars than one at 3k as the cheaper stuff moves quicker
It can be done, but what I have found is the legalities are a huge pain in the arse. Every time that car needs to be collected, moved or sold it needs to be road legal. Tax insurance and MOT. A killer when your trying to turn a profit.
Back in the day, we used to pinch a month on the tax, we wouldnt worry about MOT's until it was time to sell on. And insurance was just a phonecall to quickly swap vehicles. Try this now. The insurance company will want paying just for swapping the vehicle, or recently it seems, they pretend the insurer won't cover that car making you cancel the policy and restart. A joke. The tax is flagged up straight away and police cars are now kitted out with tricks to spot cars that aren't MOT'd. And damn right too. But it does make it a tricky business to move cars to and from not stations or collect them from the previous owner. The costs add up quickly and the only way round it is a traders insurance policy.
eBay has made things even harder. Everything has a value that can easily be found and obtained. Befor ethe days of eBay an old car was often seen as a waste of space. Bargains were made from inconvenience. Now literally anyone can very quickly stick a car on eBay And let someone come and take it away. And how do you find a true bargain on eBay? There could be 100 people looking at that same car.
I remember small 2 line adds in local papers with no picture.
" Golf Gti, red, 5 months mot, good condition £450".
You'd ring up and pop round to find a nice little mk1 Gti with rare spec and KNOW you were the only person who'd come to see it. A deal could be struck. Now any form of dealing is met with " I'll just let the auction run" and why wouldn't they.
So yes, it can be done. But nowhere near like it could be in the 90's.
Back in the day, we used to pinch a month on the tax, we wouldnt worry about MOT's until it was time to sell on. And insurance was just a phonecall to quickly swap vehicles. Try this now. The insurance company will want paying just for swapping the vehicle, or recently it seems, they pretend the insurer won't cover that car making you cancel the policy and restart. A joke. The tax is flagged up straight away and police cars are now kitted out with tricks to spot cars that aren't MOT'd. And damn right too. But it does make it a tricky business to move cars to and from not stations or collect them from the previous owner. The costs add up quickly and the only way round it is a traders insurance policy.
eBay has made things even harder. Everything has a value that can easily be found and obtained. Befor ethe days of eBay an old car was often seen as a waste of space. Bargains were made from inconvenience. Now literally anyone can very quickly stick a car on eBay And let someone come and take it away. And how do you find a true bargain on eBay? There could be 100 people looking at that same car.
I remember small 2 line adds in local papers with no picture.
" Golf Gti, red, 5 months mot, good condition £450".
You'd ring up and pop round to find a nice little mk1 Gti with rare spec and KNOW you were the only person who'd come to see it. A deal could be struck. Now any form of dealing is met with " I'll just let the auction run" and why wouldn't they.
So yes, it can be done. But nowhere near like it could be in the 90's.
rufusgti said:
It can be done, but what I have found is the legalities are a huge pain in the arse. Every time that car needs to be collected, moved or sold it needs to be road legal. Tax insurance and MOT. A killer when your trying to turn a profit.
...especially when you try to get insurance for "business use" (after all, it's not social, domestic or pleasure) and they ask what type of business. As soon as you say Motor Trade it can all get very exciting. Thanks for the feedback guys. I may be able to get my hands on a set of trade plates which would eradicate the legalities, however this would only be temporary I imagine. The biggest problem I'm having is actually finding cars to sell on! We have a local auction but the last time I took a look cars were no longer going for less than they were worth and it is very difficult to spot a lemon in such a short space of time.
martin mrt said:
I dabbled a while back and tbh the hassle just wasn't worth it.
My advice is to stick with small, cheap to run cars with long mot and tax, you will sell them with ease
I trade, and do a couple of bread-and-butter cars a month (see website in profile). Although if you're going to do 'one or two' as an aside, my advice would be the contrary of sticking to small, cheap cars that sound like an easy sell. Buy niche, slightly oddball cars. For starters, you well never be able to buy a Fiesta or Clio cheap enough to make a decent profit. I can't, unless I take one in part exchange. You will be able to buy something a bit fruity like a Vauxhall Omega estate automatic for example, for peanuts, especially if it's one that needs a little cheering up and a good bath. You'd be surprised at how well something like that will sell and how profitable it can be for such a small investment. A punter could go out and buy ten Ford Fiestas in an afternoon, without travelling 20 miles away from home. You however will be the only one with that automatic estate Omega advertised for miles around, somebody will happily travel for it and to that end you should be able to command good money. It's food for thought. Don't get me wrong however; trading is never plain sailing - it's full of frustration and you can seriously leg yourself up. And it goes without saying that any mistakes made are always going to hit you in the pocket, and so will reduce your buying power for the next car. It can pay off though, with risk comes reward.My advice is to stick with small, cheap to run cars with long mot and tax, you will sell them with ease
Ozzie Osmond said:
...especially when you try to get insurance for "business use" (after all, it's not social, domestic or pleasure) and they ask what type of business. As soon as you say Motor Trade it can all get very exciting.
I had a trade policy through Peacocks and was about £400. Minimum legal cover. I explained to them that I had a full time job and was trading part time. You e mail them and they would add to the MID.the only requirment was you had to so evidence of trading at least 4 cars a year (auction receipts were okay)
Sourced cars from auctions for £600 to £2k and if I got a wrong one it would just go back through the auction and mostly get my money back.
Also used local adds in shop windows to buy.
Didnt touch anything that needed mot.
Truth is it was a lot of effort for not a lot of return.
Did get some bargins and still running a 1996 Ford Maverick 4wd that cost £300 in great condition (use it for when the weather is bad and going to the tip etc).
Also found that if something was a little odd I wouldnt pay much. Bought a 54 plate Polo for £1800 that had a small dent on the rear wheel arch, cost me £50 for the repair and sold a week later for £2800 which was still a cheap car, others had stayed away because of the dent but it was no big deal
I am in the trade but working for a Truck Manufacture so did have some contacts for bodywork etc but these would build up over time
Gents the trade is f****d.
I started off with a full time job, and buying cars on a night to put in the autotrader. This was 25 years ago, I was making £500 a car nett on cars that cost no more than £1200. No SOGA to worry about, cars were sold as seen. I used my expertise on pricing to stay ahead of the game. I built my stock up, if I needed cars I went to the auctions and bought as many as I could afford in one night.
Today home traders are happy to earn £300. Waste of time and effort if you are buying from auction.I reckon 40% of cars in auction have serious problems.
Internet has killed it.
I started off with a full time job, and buying cars on a night to put in the autotrader. This was 25 years ago, I was making £500 a car nett on cars that cost no more than £1200. No SOGA to worry about, cars were sold as seen. I used my expertise on pricing to stay ahead of the game. I built my stock up, if I needed cars I went to the auctions and bought as many as I could afford in one night.
Today home traders are happy to earn £300. Waste of time and effort if you are buying from auction.I reckon 40% of cars in auction have serious problems.
Internet has killed it.
ajb85 said:
.... buy something a bit fruity like a Vauxhall Omega estate automatic for example, for peanuts, especially if it's one that needs a little cheering up and a good bath. You'd be surprised at how well something like that will sell and how profitable it can be for such a small investment. A punter could go out and buy ten Ford Fiestas in an afternoon, without travelling 20 miles away from home. You however will be the only one with that automatic estate Omega advertised for miles around, somebody will happily travel for it and to that end you should be able to command good money....
I suspect this would be the best tactic if the aim is to combine selling at a profit with using the car as a daily driver.Buy something 'odd' and then advertise it at Top Dollar and as you are using it as transport than it doesn't matter if it takes a few months for the right punter to come along.
Similarly you could buy something modified from the "horrors in the PH classifieds" thread and then return it to standard over time and sell the aftermarket parts on ebay adding to your haul.
Ari said:
8potdave said:
Thanks for the feedback guys. I may be able to get my hands on a set of trade plates which would eradicate the legalities.
What legalities do you expect trade plates to eradicate?Insurance and tax, I work in the motor trade already for a company and am insured on any car. Please shed some light on this if I am wrong here..
I think I need a strategy here as to what market to attack. The small car one seems saturated with companies established selling £500 snotters already!
Ebay is not for buyers, it attracts masses and pushes prices up. Use it for selling, yes. On a smaller scale I did this with (dont laugh) Lawn mowers. Yes, mowers. Bought some dodgy old tired neglected things, buffed them up and sold them on, bought a slightly more expensive one, sold on and so on. Profit bought me a brand new Honda mower something id not usually be able to justify!
BFG TERRANO said:
Ebay is not for buyers, it attracts masses and pushes prices up. Use it for selling, yes. On a smaller scale I did this with (dont laugh) Lawn mowers. Yes, mowers. Bought some dodgy old tired neglected things, buffed them up and sold them on, bought a slightly more expensive one, sold on and so on. Profit bought me a brand new Honda mower something id not usually be able to justify!
I can believe it. I know of somebody - not a friend of mine - who buys and sells 'vintage' vacuum cleaners and eBay. There's a huge following for them.Back on topic; OP, believe me, there is absolutely no money in £500 snotters. All they bring in misery and complaints once the car's out the door. Also, think about the types of people you'll be dealing with when selling such cheaps cars. There's a lot of undesirables out there, these are not the type of people you want round your house!
POORCARDEALER said:
Gents the trade is f****d.
I started off with a full time job, and buying cars on a night to put in the autotrader. This was 25 years ago, I was making £500 a car nett on cars that cost no more than £1200. No SOGA to worry about, cars were sold as seen. I used my expertise on pricing to stay ahead of the game. I built my stock up, if I needed cars I went to the auctions and bought as many as I could afford in one night.
Today home traders are happy to earn £300. Waste of time and effort if you are buying from auction.I reckon 40% of cars in auction have serious problems.
Internet has killed it.
This. Exactly this.I started off with a full time job, and buying cars on a night to put in the autotrader. This was 25 years ago, I was making £500 a car nett on cars that cost no more than £1200. No SOGA to worry about, cars were sold as seen. I used my expertise on pricing to stay ahead of the game. I built my stock up, if I needed cars I went to the auctions and bought as many as I could afford in one night.
Today home traders are happy to earn £300. Waste of time and effort if you are buying from auction.I reckon 40% of cars in auction have serious problems.
Internet has killed it.
POORCARDEALER said:
Gents the trade is f****d.
I started off with a full time job, and buying cars on a night to put in the autotrader. This was 25 years ago, I was making £500 a car nett on cars that cost no more than £1200. No SOGA to worry about, cars were sold as seen. I used my expertise on pricing to stay ahead of the game. I built my stock up, if I needed cars I went to the auctions and bought as many as I could afford in one night.
Today home traders are happy to earn £300. Waste of time and effort if you are buying from auction.I reckon 40% of cars in auction have serious problems.
Internet has killed it.
I used to work for traders back int he late eighties and they were saying that then, I have spoken to them since and they said it then as well, I spoke to my dad who used to deal with them and they said it in the seventies as well, people still make money formt he motor trade, it is just that it has changed and the old guard havent kept up, the camel coat brigade with 50 grand on the hip buying at ADT have gone, all private punters and the Asian lads, the old faces are either dead, retired ior sat moaning at anyone who will listen. I started off with a full time job, and buying cars on a night to put in the autotrader. This was 25 years ago, I was making £500 a car nett on cars that cost no more than £1200. No SOGA to worry about, cars were sold as seen. I used my expertise on pricing to stay ahead of the game. I built my stock up, if I needed cars I went to the auctions and bought as many as I could afford in one night.
Today home traders are happy to earn £300. Waste of time and effort if you are buying from auction.I reckon 40% of cars in auction have serious problems.
Internet has killed it.
ajb85 said:
BFG TERRANO said:
Ebay is not for buyers, it attracts masses and pushes prices up. Use it for selling, yes. On a smaller scale I did this with (dont laugh) Lawn mowers. Yes, mowers. Bought some dodgy old tired neglected things, buffed them up and sold them on, bought a slightly more expensive one, sold on and so on. Profit bought me a brand new Honda mower something id not usually be able to justify!
I can believe it. I know of somebody - not a friend of mine - who buys and sells 'vintage' vacuum cleaners and eBay. There's a huge following for them.Back on topic; OP, believe me, there is absolutely no money in £500 snotters. All they bring in misery and complaints once the car's out the door. Also, think about the types of people you'll be dealing with when selling such cheaps cars. There's a lot of undesirables out there, these are not the type of people you want round your house!
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