Starting a car dealership -Sorry! I know this is asked a lot
Discussion
I've been looking into my future after uni and after a horrid placement year at an engineering company in Oxford I think I've been put off mechanical engineering for life.
I'm trying to do as much research and planning in regards to starting a car sales business in the future (3-4 years from now), cars are a passion/hobby of mine and I can't think of a better job to have personally. I'm aware of the long hours, the ups and downs, having to accept losses etc. I'm just not so sure on the legal aspect of things regarding the running of such a business which is where I'd like to ask for some help.
1 - What are your legal obligations as a proper dealer to the customer
2 - Apart from registering as a business, do you need to have a license in order to sell cars to the public as a dealer
3- Are there any constraints on properties, i.e I'd like to rent out a light industrial unit with a roller garage door to trade from, am I allowed to trade from such a property or does the property have to be approved to trade from.
4 - Getting rid of cheap P/X's. If a p/x comes in let's say sub £1k and I just want it rid, how do I sell it/get rid of it without having to offer a warranty on it as a dealer.
5 - What should a warranty cover and where do you draw the line with a customer taking the piss. I.e if a car is sold to someone and they come back 3 months later with an engine management light, is that my responsibility as a dealer or the customers responsibility as the owner of the car.
I'd appreciate any insight into any of the above points!
I'm trying to do as much research and planning in regards to starting a car sales business in the future (3-4 years from now), cars are a passion/hobby of mine and I can't think of a better job to have personally. I'm aware of the long hours, the ups and downs, having to accept losses etc. I'm just not so sure on the legal aspect of things regarding the running of such a business which is where I'd like to ask for some help.
1 - What are your legal obligations as a proper dealer to the customer
2 - Apart from registering as a business, do you need to have a license in order to sell cars to the public as a dealer
3- Are there any constraints on properties, i.e I'd like to rent out a light industrial unit with a roller garage door to trade from, am I allowed to trade from such a property or does the property have to be approved to trade from.
4 - Getting rid of cheap P/X's. If a p/x comes in let's say sub £1k and I just want it rid, how do I sell it/get rid of it without having to offer a warranty on it as a dealer.
5 - What should a warranty cover and where do you draw the line with a customer taking the piss. I.e if a car is sold to someone and they come back 3 months later with an engine management light, is that my responsibility as a dealer or the customers responsibility as the owner of the car.
I'd appreciate any insight into any of the above points!
OP do you like working each and every weekend? Working every bank holiday apart from Xmas and Easter Sunday?
Do you like trying to stop punters part x you Cars which are ruined and trying to cover it up.
Do you like punters coming in with crazy low ball offers?
Do you like people test driving cars showing your asset no respect or consideration
Do you like that punters browsing have no ability to afford the cars you sell.
Do you like trying to stop punters part x you Cars which are ruined and trying to cover it up.
Do you like punters coming in with crazy low ball offers?
Do you like people test driving cars showing your asset no respect or consideration
Do you like that punters browsing have no ability to afford the cars you sell.
spikeyhead said:
Spend a year working for someone else in the trade and learn as much as you can
Already on it, going in to work for a main dealer soon to learn the ropes. Just not sure if they'll be able to teach me much about warranties etc as most used cars are still under manufacturer warranty or have a 1 year dealer supported warranty when sold. Welshbeef said:
OP do you like working each and every weekend? Working every bank holiday apart from Xmas and Easter Sunday?
Do you like trying to stop punters part x you Cars which are ruined and trying to cover it up.
Do you like punters coming in with crazy low ball offers?
Do you like people test driving cars showing your asset no respect or consideration
Do you like that punters browsing have no ability to afford the cars you sell.
I've had to work each weekend every weekend since starting uni to afford to live! No change for me there and I'm not expecting to build a business by working Monday - Friday, 9-5. I know there's effort and work involved but I'm willing to put that in if there's a chance I can make a living off it. Do you like trying to stop punters part x you Cars which are ruined and trying to cover it up.
Do you like punters coming in with crazy low ball offers?
Do you like people test driving cars showing your asset no respect or consideration
Do you like that punters browsing have no ability to afford the cars you sell.
I'd be stupid to expect any car be it p/x or bought in to be problem free. I'm sure a test drive, inspection and fault code reader will weed out most hidden problems. Not expecting that this will be 100% effective but it's decent risk mitigation.
In regards to test drives and time wasters, I haven't experienced it yet but time wasters are a given really. I'm sure a good chat with a customer will allow me to find out whether they're looking to buy or waste time. I'm not planning to have an open pitch so no walk in time wasters at the very least.
Ayahuasca said:
I think most businesses that sell to the public are open weekends / holidays.
What about a main dealership for a good brand? How easy is it to set up (say) a BMW dealership?
Well first of all there has be what Car Makers call an Open Point, eg an area with no coverage, pretty rare unless a new to the market brand.What about a main dealership for a good brand? How easy is it to set up (say) a BMW dealership?
Proven track record in the trade.
Lots of money or Access to it.
Buying a current business is the most common way
As for getting a premium brand, pretty much forget it, just about every Dealer Group wants to sell Premium Brands so the waiting list is long. Put simply you'd need to be the chosen one.
With a closed pitch aren't you basically a trader rather than a dealer as closed pitch surely means no retail type premises and operating out of an industrial unit.
If your selling high end premium used cars then I can understand how a closed pitch would work but for selling normal cars unless heavily discounted vs "retail" operations you'll surely frighten away most buyers who will think your a trader and likely to
them over.
What level of car are you thinking of selling as for a say 1k or 2k car that is 10 years old the customer should have less warranty exceptions than a say 10k to 30k car that's 3yrs to 5 yrs old. legally you do not have to give a warranty but the car has to fit for purpose. You'll need to read up on the Consumer Rights Act to understand what your legal obligations are and what the customers rights are.
If your selling high end premium used cars then I can understand how a closed pitch would work but for selling normal cars unless heavily discounted vs "retail" operations you'll surely frighten away most buyers who will think your a trader and likely to
them over.What level of car are you thinking of selling as for a say 1k or 2k car that is 10 years old the customer should have less warranty exceptions than a say 10k to 30k car that's 3yrs to 5 yrs old. legally you do not have to give a warranty but the car has to fit for purpose. You'll need to read up on the Consumer Rights Act to understand what your legal obligations are and what the customers rights are.
Ayahuasca said:
What about a main dealership for a good brand? How easy is it to set up (say) a BMW dealership?
A franchised dealer is not that hard to setup if you a numerous millions in the bank, proven track record running a premium dealership and the manufacture wants a further dealer in a given area... Yadizzle1 said:
I've had to work each weekend every weekend since starting uni to afford to live! No change for me there and I'm not expecting to build a business by working Monday - Friday, 9-5. I know there's effort and work involved but I'm willing to put that in if there's a chance I can make a living off it.
I'd be stupid to expect any car be it p/x or bought in to be problem free. I'm sure a test drive, inspection and fault code reader will weed out most hidden problems. Not expecting that this will be 100% effective but it's decent risk mitigation.
In regards to test drives and time wasters, I haven't experienced it yet but time wasters are a given really. I'm sure a good chat with a customer will allow me to find out whether they're looking to buy or waste time. I'm not planning to have an open pitch so no walk in time wasters at the very least.
Now in the real world where you have kids and birthday parties and swimming/ballet /horse riding clubs you don’t want to be working the weekend otherwise you’ll never really see hem will you just evenings.... that especially as it’s mothers day today really loads up 1 person in the partnership doesn’t it. I'd be stupid to expect any car be it p/x or bought in to be problem free. I'm sure a test drive, inspection and fault code reader will weed out most hidden problems. Not expecting that this will be 100% effective but it's decent risk mitigation.
In regards to test drives and time wasters, I haven't experienced it yet but time wasters are a given really. I'm sure a good chat with a customer will allow me to find out whether they're looking to buy or waste time. I'm not planning to have an open pitch so no walk in time wasters at the very least.
Welshbeef said:
OP do you like working each and every weekend? Working every bank holiday apart from Xmas and Easter Sunday?
Do you like trying to stop punters part x you Cars which are ruined and trying to cover it up.
Do you like punters coming in with crazy low ball offers?
Do you like people test driving cars showing your asset no respect or consideration
Do you like that punters browsing have no ability to afford the cars you sell.
Having traded cars for a couple of years f/t, in my experience:Do you like trying to stop punters part x you Cars which are ruined and trying to cover it up.
Do you like punters coming in with crazy low ball offers?
Do you like people test driving cars showing your asset no respect or consideration
Do you like that punters browsing have no ability to afford the cars you sell.
Working weekends, holidays etc is a PITA yes but then your time is more flexible in the week, you can't have it both ways
You soon get sharp enough to spot obvious issues
They didn't do that very often but it's some people's techniques, it's just negotiating, that's all
All drove carefully with me next top them
Part of the job on customers who can't buy, no big deal really.
I doubt anybody could open a car sales pitch and learn as they go along.
The only way I would get into this is to start working for an established dealership or indy, and learn as much as possible from people who have been doing it years.
After you know the answers to your questions, then you can maybe find a nice opportunity that won't step on anyone elses toes, and you wont take a rinsing on.
Failing that, get into fleet sales and go for volume.
The only way I would get into this is to start working for an established dealership or indy, and learn as much as possible from people who have been doing it years.
After you know the answers to your questions, then you can maybe find a nice opportunity that won't step on anyone elses toes, and you wont take a rinsing on.
Failing that, get into fleet sales and go for volume.
S11Steve said:
I doubt anybody could open a car sales pitch and learn as they go along.
The only way I would get into this is to start working for an established dealership or indy, and learn as much as possible from people who have been doing it years.
After you know the answers to your questions, then you can maybe find a nice opportunity that won't step on anyone elses toes, and you wont take a rinsing on.
Failing that, get into fleet sales and go for volume.
I knew nothing when I started never done a days work in a dealership in my life.The only way I would get into this is to start working for an established dealership or indy, and learn as much as possible from people who have been doing it years.
After you know the answers to your questions, then you can maybe find a nice opportunity that won't step on anyone elses toes, and you wont take a rinsing on.
Failing that, get into fleet sales and go for volume.
OP, experienced people are suggesting that you either don't do it, or get a job at somebody elses's dealership to gain experience and then decide.
I would add that if you look at the impact that technology has had on the retail process during the last 20 years, and project that forwards during your 40 year career term, continuing your engineering might be a more fruitful existence, and you can always buy your own cars and enjoy them, rather than attempt to sell cars in an increasingly regulated sector with decreasing margins.
As a slight aside, it seems there is a shortage of people in the car trade who can think analytically, interpret electrical diagnostics, and physically replace electromechanical components. Dealers would rather replace a working module than assess which sensor isn't working properly. In some circumstances, customers don't want to pay for uncertain diagnostic work, but particularly with higher-end cars where the cost of parts exceeds the cost of diagnostic analysis, there is a growing market for someone with those skills. If there is sufficient overlap with your skill set, this is something I would consider.
I would add that if you look at the impact that technology has had on the retail process during the last 20 years, and project that forwards during your 40 year career term, continuing your engineering might be a more fruitful existence, and you can always buy your own cars and enjoy them, rather than attempt to sell cars in an increasingly regulated sector with decreasing margins.
As a slight aside, it seems there is a shortage of people in the car trade who can think analytically, interpret electrical diagnostics, and physically replace electromechanical components. Dealers would rather replace a working module than assess which sensor isn't working properly. In some circumstances, customers don't want to pay for uncertain diagnostic work, but particularly with higher-end cars where the cost of parts exceeds the cost of diagnostic analysis, there is a growing market for someone with those skills. If there is sufficient overlap with your skill set, this is something I would consider.
Legal obligations - go and have a good read of the Consumer Rights Act 2015 and the Sale of Goods Act 1979 that it supersedes in most places. Many websites out there giving advice to buyers of fked cars from dodgy traders too - forewarned is forearmed etc. You’ll also need trade insurance and trade plates to be legal and taken seriously at auction houses etc. Not cheap especially if you have premises.
Property - if you are carrying out your own repairs to motor vehicles that needs a specific planning category I believe but retailing them doesn’t necessarily. Nosy neighbours and fussy landlords will stand in your way more than planning.
Warranty - you don’t need to offer any warranty. Not one single day. Read the consumer legislation though - that doesn’t mean you can tell people to FRO and actually leaves you wide open to hassle. Many dealers supply a third party warranty to limit (not absolve) their liability. In your example given - it would be very difficult to prove the car wasn’t faulty at the point of sale so you’re on the hook.
Part exchanges - auction, scrap or sell to other ACTUAL TRADERS. “Trade sale m8 no warranty” has no legal status, you cannot remove a retail customer’s rights in this way. You just can’t. Selling cheap stters to the feckless is a MASSIVE waste of time.
You’ll buy lemons, you’ll have cars come back, you’ll have time wasters. You’ll have crackers that fly out the door making you a killing.
Would I do it again? Not on your life.
ked cars from dodgy traders too - forewarned is forearmed etc. You’ll also need trade insurance and trade plates to be legal and taken seriously at auction houses etc. Not cheap especially if you have premises. Property - if you are carrying out your own repairs to motor vehicles that needs a specific planning category I believe but retailing them doesn’t necessarily. Nosy neighbours and fussy landlords will stand in your way more than planning.
Warranty - you don’t need to offer any warranty. Not one single day. Read the consumer legislation though - that doesn’t mean you can tell people to FRO and actually leaves you wide open to hassle. Many dealers supply a third party warranty to limit (not absolve) their liability. In your example given - it would be very difficult to prove the car wasn’t faulty at the point of sale so you’re on the hook.
Part exchanges - auction, scrap or sell to other ACTUAL TRADERS. “Trade sale m8 no warranty” has no legal status, you cannot remove a retail customer’s rights in this way. You just can’t. Selling cheap s
tters to the feckless is a MASSIVE waste of time. You’ll buy lemons, you’ll have cars come back, you’ll have time wasters. You’ll have crackers that fly out the door making you a killing.
Would I do it again? Not on your life.
Edited by Toaster Pilot on Tuesday 13th March 06:06
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