Buying & Selling cars.

[Seal1917]

Afternoon,

I am currently looking at a new ‘potential’ career move in the new year. I have been thinking about ‘flipping’ / buying & selling cars but I want to do it legitimately. I have been doing research for a while now but all the old topics and debates are from 2011/2012 which I am guessing are outdated?

I just wanted to know if any of you currently do this or previously have done it?
Things to watch out for?
Ideas & tips?
Just anything that would help a young guy trying to start up a business / venture.

Many thanks
James

[Coilspring]

Seal1917 said:

Afternoon,

I am currently looking at a new ‘potential’ career move in the new year. I have been thinking about ‘flipping’ / buying & selling cars but I want to do it legitimately. I have been doing research for a while now but all the old topics and debates are from 2011/2012 which I am guessing are outdated?

I just wanted to know if any of you currently do this or previously have done it?
Things to watch out for?
Ideas & tips?
Just anything that would help a young guy trying to start up a business / venture.

Many thanks
James

Don't do it. I now will not sell any car at any price for a living. I always bought and sold cars as money earner when repairs were quiet. It is cheaper, and better for my health, to be quiet and sit back, rather than sell cars.

Many many posts on here, and elsewhere. People want, and expect, perfection, at any and every price level. And will take you to extremes to chase that perfection.

Very little profit margins.

Not worth the time or investment.

Ask yourself how many more (or fewer) car sales sites there are in your area, and why?

If you have contacts in the trade local to you, ask them. If you don't have any contacts then you really are pushing uphill.

The only profitable way to sell is from your driveway as a private person, not a motor trader. And that is NOT the way to do it, nor should it be.

[MOBB]

Has to be the most disappointing "expectation vs reality" thing out there

Just think of the people you will no doubt encounter.

Sorry for being negative :-(

[Nickp82]

To be honest, the previous two posts aren’t too far wide of the mark. The comment about people expecting perfection no matter the price of the car is particularly accurate
Having said that, there should be plenty of opportunities of getting some reward out of it both financially and mentally. For me, the process of spotting a car and buying it for the right price then selling it for a solid profit is hugely rewarding, the buzz can last for days!
Just go in prepared, some cars will cause issues and cost you money, you will answer endless emails asking you to give your best price, you will make loads of appointments with people who then never show up.

If you want to get rich, forget it. If you want to make a reasonable living being involved with something you love, go for it.

Personally, I think it is good to have a niche/specialism , that way you can pounce on the cheaper cars without having to look up book values etc and if you know you can sell something you may even be prepared to pay ‘over book’ to buy it. Plus when you encounter customer issues it is handy to have an understanding of common issues so you can deal with it in the right way.

Buying cars can be tough, bread and butter stuff will usually make prices that cause you to wonder how any decent margin can be taken from it. I think some people think it is easy; go down the auction, buy a truck load of cars, whack a healthy margin on and away you go but this is not the case if you want to earn some money.

[Seal1917]

Thank you for your advice, I’m not looking to swap from working my full time job anytime soon, more dip my toes and see how it goes really?

I am very mechanically minded and feel I understand the market to an extent. I won’t be pumping loads of money in to it from the get go. Just buy 1 sell 1 and gauge if it will make sense to do more often.

I’m not looking to become a millionaire etc just looking to earn a bit on the side and then maybe something may come of it? I know the big concern is the turnover and potentially loosing money on a car if you can’t shift it. I just am looking to break away from the regular 9 to 5 job that your average man doesn’t enjoy & Pursue something that I am keen on learning and enjoy doing.

[Seal1917]

Nickp82 said:

To be honest, the previous two posts aren’t too far wide of the mark. The comment about people expecting perfection no matter the price of the car is particularly accurate
Having said that, there should be plenty of opportunities of getting some reward out of it both financially and mentally. For me, the process of spotting a car and buying it for the right price then selling it for a solid profit is hugely rewarding, the buzz can last for days!
Just go in prepared, some cars will cause issues and cost you money, you will answer endless emails asking you to give your best price, you will make loads of appointments with people who then never show up.

If you want to get rich, forget it. If you want to make a reasonable living being involved with something you love, go for it.

Personally, I think it is good to have a niche/specialism , that way you can pounce on the cheaper cars without having to look up book values etc and if you know you can sell something you may even be prepared to pay ‘over book’ to buy it. Plus when you encounter customer issues it is handy to have an understanding of common issues so you can deal with it in the right way.

Buying cars can be tough, bread and butter stuff will usually make prices that cause you to wonder how any decent margin can be taken from it. I think some people think it is easy; go down the auction, buy a truck load of cars, whack a healthy margin on and away you go but this is not the case if you want to earn some money.

[stevemcs]

Seal1917 said:

Thank you for your advice, I’m not looking to swap from working my full time job anytime soon, more dip my toes and see how it goes really?

I am very mechanically minded and feel I understand the market to an extent. I won’t be pumping loads of money in to it from the get go. Just buy 1 sell 1 and gauge if it will make sense to do more often.

I’m not looking to become a millionaire etc just looking to earn a bit on the side and then maybe something may come of it? I know the big concern is the turnover and potentially loosing money on a car if you can’t shift it. I just am looking to break away from the regular 9 to 5 job that your average man doesn’t enjoy & Pursue something that I am keen on learning and enjoy doing.

Mechanically minded won’t help when the £1500 golf Tdi you have sold that’s 200 miles away has got a funny noise and they know their rights and you should hire them a car because they have sick grandparents that they need to ferry around and that you should not have sold them the death trap and that you should come and collect it as they have only owned it 5 months and covered 10,000 miles in that time and could you bank transfer the money as they have already put a deposit on a car they like ......

[Seal1917]

stevemcs said:

Mechanically minded won’t help when the £1500 golf Tdi you have sold that’s 200 miles away has got a funny noise and they know their rights and you should hire them a car because they have sick grandparents that they need to ferry around and that you should not have sold them the death trap and that you should come and collect it as they have only owned it 5 months and covered 10,000 miles in that time and could you bank transfer the money as they have already put a deposit on a car they like ......

Well I see your point but I suppose it’s in your best intrest not to by a dodgy golf in the first place? You’ve made up a very hypothetical situation and although it can happen, that hasn’t really answered any of my questions. Like I said I’m trying to do research at the minute and that wasn’t really helpful

[loskie]

I think it is entirely helpful AND realistic.
Sounds like you just want the answers you want to hear so why ask?

Sell 10 cars in the year make £300 per car, £3k is it really worth it?
Insurance, indemnity, advertising, refunds and repairs you will make a loss in a short time. No ability to sell finance.

You would be better off getting a part time job.

I take it you are still at school.

Edited by loskie on Wednesday 23 October 20:18

[Roboticarm]

As above really, mate of mine worked for various 2nd hand dealers then main dealers as a salesman and was pretty good at it. Decided to buy and sell a few auction cars, did will on the first, second took a while to sell, 3rd had a gearbox fault and was sold at a massive loss.

He said if he ever tried again he'd focus on a particular model with a good owners club and really learn the cars, that way you can really know what you our buying and find an audience willing to pay a premium.

[stevemcs]

Seal1917 said:

Well I see your point but I suppose it’s in your best intrest not to by a dodgy golf in the first place? You’ve made up a very hypothetical situation and although it can happen, that hasn’t really answered any of my questions. Like I said I’m trying to do research at the minute and that wasn’t really helpful

In fairness i spent 2 years with so called prestige cars before moving onto the service and seeing the bottom end of the market although we did get some very ropey px's.

You can expect people wanting to call or email at all times and wanting a reply in 5 minutes, you should also expect to give up your weekends and if pushing for full time your holidays. Yes there is tax and insurance (vat on any profits - so buy a car for £1000, sell for £2000 however it costs £800 in prep giving you a paper profit of £200, however the VAT man takes just over £160 in vat on the profit )

You will have people booking appointments and not turning up. Yes you can fix and repair the cars but big shiny wheels sell cars, you will get texts wanting to swap a mint car ay bruv thats really a shed ..... Flipping cars for a profit and treating customers fairly is not easy. You are better off getting a weekend job with a small trader and seeing how you feel about the trade.

Its hard work, stock - good quality stock is hard to come by. If you think its easy then sadly you are very mistaken. Only people that have worked in the trade will truly understand how difficult customers can be.

• Owners clubs and forums can sometimes be the hardest to sell to, they go through everything and then low ball

Edited by stevemcs on Wednesday 23 October 21:07

[Coilspring]

Seal1917 said:

Well I see your point but I suppose it’s in your best intrest not to by a dodgy golf in the first place? You’ve made up a very hypothetical situation and although it can happen, that hasn’t really answered any of my questions. Like I said I’m trying to do research at the minute and that wasn’t really helpful

You are free to do as you wish.

But why ask questions if you don't want the answers ?

Best place to ask is the traders around you, if you don't know any, then you are seriously under prepared. Maybe you just want to sell a car every 2/3 months. Unless you deal with some very exclusive stuff you won't make a living like that.

[cbmotorsport]

If you want to do it successfully and profitably, you will need to turn over enough stock to absorb the losses you'll inevitably make on some cars. The consumer is protected if you're a dealer, and with the best will in the word you will get bitten. You'll need a reasonable float to get going for some stock, and somewhere to keep them. You'll also need a friendly mechanic who can give you favourable rates to sort out issues.

You'll need to allow test drives, so you'll need a comprehensive trade insurance policy.

Edited by cbmotorsport on Thursday 24th October 10:53

[joestifff]

Have you got a premises you can do the work on the cars and run the business from? Neighbours and council may not be happy for you to do it from your house.

Have you thought about the additional tax you will pay, and possibly VAT.

Just go into it with your eyes open.

[anonymous-user]

No No No don't do it
£500 car and 2 year guarantee.There's too many people who expect too much for a small outlay.