Starting as a car trader - Madness or viable?
Discussion
As with probably many others here, I've pondering the idea of trading cars as a commercial venture for a few years now.
I have experience running Ecom businesses and operating in the UK business space in general, but not a local outfit.
After all costs considered, and in today's post lockdown state - what is your opinion about starting a used car dealership?
I have experience running Ecom businesses and operating in the UK business space in general, but not a local outfit.
After all costs considered, and in today's post lockdown state - what is your opinion about starting a used car dealership?
bumont said:
As with probably many others here, I've pondering the idea of trading cars as a commercial venture for a few years now.
I have experience running Ecom businesses and operating in the UK business space in general, but not a local outfit.
After all costs considered, and in today's post lockdown state - what is your opinion about starting a used car dealership?
Take a look at the accounts of some of dealerships size your intending to follow. I have experience running Ecom businesses and operating in the UK business space in general, but not a local outfit.
After all costs considered, and in today's post lockdown state - what is your opinion about starting a used car dealership?
Have you ever worked in that sphere
Do you like working all weekends etc (family ties)
Big fixed costs
People part x junk and lie to you
People defaulting on payment
Risks
Why do you want to try it? Current vocation not progressing/glass ceiling.
Welshbeef said:
Take a look at the accounts of some of dealerships size your intending to follow.
Have you ever worked in that sphere
Do you like working all weekends etc (family ties)
Big fixed costs
People part x junk and lie to you
People defaulting on payment
Risks
Why do you want to try it? Current vocation not progressing/glass ceiling.
Thanks for the reply.Have you ever worked in that sphere
Do you like working all weekends etc (family ties)
Big fixed costs
People part x junk and lie to you
People defaulting on payment
Risks
Why do you want to try it? Current vocation not progressing/glass ceiling.
I haven't worked in the role yet, so yes I'd be fresh to selling cars commercially.
I don't have an issue working weekends as I don't have family commitments yet.
The main reason for looking into this, and other local business types, is having a business that's more "hands on" so to speak compared to working as a sole operator in home/remote office working. My main ecom business suffered a big downturn in trade this year, so I'm looking at different avenues really.
I'm looking at the car trading as a fairly simple model, and on the basis that vehicles will always be bought and sold regardless of future legislation (EV etc)
My main concerns reflect what you've said above, one or two lemons causing the margins of the other vehicles to be squeezed on top of rent, VAT, traders insurance etc
Your location also matters, my parents' neighbour seems to make a decent living from selling dull run of the mill cars.
It's in semi-rural Dorset so a good 60-90 minute drive from any of the larger towns/cities in the region so gets plenty of repeat custom and people wanting to buy from someone 'local'. If he was in a city I suspect he'd have to have the cheapest stock in town to get any custom.
Also, he's been in the trade for 40-50 years so has plenty of contacts and owns the selling showroom outright.
As the OP has eCommerce experience that might be his niche as dealers traditionally seem to be very poor at email and phone contacts so you might be able to make sale purely by being the only dealer to reply to people. Although that might have changed this year due to people avoiding physical showrooms.
It's in semi-rural Dorset so a good 60-90 minute drive from any of the larger towns/cities in the region so gets plenty of repeat custom and people wanting to buy from someone 'local'. If he was in a city I suspect he'd have to have the cheapest stock in town to get any custom.
Also, he's been in the trade for 40-50 years so has plenty of contacts and owns the selling showroom outright.
As the OP has eCommerce experience that might be his niche as dealers traditionally seem to be very poor at email and phone contacts so you might be able to make sale purely by being the only dealer to reply to people. Although that might have changed this year due to people avoiding physical showrooms.
Good shout by another poster - try selling some now one at a time worst case you cannot sell and then you use it for yourself.
You also have the issue of covid test drives etc to consider and wiping down the car fully between each abs every test drive.
How much £ do you think is in each car?
How much does the 3month warranty
HPI checks
Insurance costs - you’d not expect joe public to fund your insurance to test drive it.
Beware selling certain types of car from home - as it’s an easy way for auto robbers willl use it as a shopping menu.
What sector and what budget
You also have the issue of covid test drives etc to consider and wiping down the car fully between each abs every test drive.
How much £ do you think is in each car?
How much does the 3month warranty
HPI checks
Insurance costs - you’d not expect joe public to fund your insurance to test drive it.
Beware selling certain types of car from home - as it’s an easy way for auto robbers willl use it as a shopping menu.
What sector and what budget
Might be useful: https://www.pistonheads.com/gassing/topic.asp?h=0&...
jeremyc said:
I'll suggest that a car selling business isn't much about selling cars; it's being able to buy the right stock at a price that enables the business to make a profit.
Do you have source(s) for your stock?
I don't have any specific source unfortunately, it would be private/auctions etc so in the boat as many others. I've heard auctions are expensive in recent times however.Do you have source(s) for your stock?
Welshbeef said:
Good shout by another poster - try selling some now one at a time worst case you cannot sell and then you use it for yourself.
You also have the issue of covid test drives etc to consider and wiping down the car fully between each abs every test drive.
How much £ do you think is in each car?
How much does the 3month warranty
HPI checks
Insurance costs - you’d not expect joe public to fund your insurance to test drive it.
Beware selling certain types of car from home - as it’s an easy way for auto robbers willl use it as a shopping menu.
What sector and what budget
Covid issues are a pertinent pointYou also have the issue of covid test drives etc to consider and wiping down the car fully between each abs every test drive.
How much £ do you think is in each car?
How much does the 3month warranty
HPI checks
Insurance costs - you’d not expect joe public to fund your insurance to test drive it.
Beware selling certain types of car from home - as it’s an easy way for auto robbers willl use it as a shopping menu.
What sector and what budget
If you're selling old bangers then 2---300 is fine. TBH you won't make masses more on a more expensive car and you'll have a smaller pool of buyers.
You don't have to provide a warranty, it's urban myth but worst case, if something does fail just pay to get it fixed but you'll know pretty quickly once you've bought the car if anything is wrong.
HPI checks are a few pounds only
Trade insurance wasn't expensive if you only sell lowish value cars
If starting out its best not to start with RS3, S3 Audis etc.
I'd go cheap to begin with and see how things go. My first purchase was a FIAT CInquento in silver for 1050 and sold for 1400
Try it part time first, get a trailer and offer buy online and deliver service, make sure every car is the best it can be, it sounds stupid but little things like taking the wheel trims off and paint the steel wheel, I hate seeing a shiny car for sale with rust wheels behind the trims. It take 15 mins with a rattle can. New wiper blades every car, a good valet with particular attention inside, it doesn't matter how shiny it is if inside stinks of piss and fags!
Get friendly with a local garage and get them to do a basic oil+filter and mot.
I've worked in a main dealer, now have my own garage and do abit of work for 2 traders and sell a few my self, 2or 3 a month and normally take £6-700 profit on each, I've seen the good and the bad.
The cars I have for sale might not always be the cheapest but there well prepped and presented
Rob
Oh a go see a couple of main dealers and see if you can buy any trade ins, more contacts it the trade the better!
Get friendly with a local garage and get them to do a basic oil+filter and mot.
I've worked in a main dealer, now have my own garage and do abit of work for 2 traders and sell a few my self, 2or 3 a month and normally take £6-700 profit on each, I've seen the good and the bad.
The cars I have for sale might not always be the cheapest but there well prepped and presented
Rob
Oh a go see a couple of main dealers and see if you can buy any trade ins, more contacts it the trade the better!
Edited by Robmainstgarage on Tuesday 15th December 22:13
This is worth a watch https://www.youtube.com/watch?v=atCl0ABu9LE !!
rog007 said:
Is there anything to learn from this that you need to take forward in to any new venture?
What did you get wrong (during quite possibly the best conditions for ecom)?
Long story short, the main product line went from having around 3-4 reflective competitors to having around 10,000 thanks to people starting covid related businesses. It also lead to paid ads being banned for these products and a rush to the bottom pricing wise. What did you get wrong (during quite possibly the best conditions for ecom)?
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