I mentioned in a previous thread that I had been considering setting up as a home trader. I got a quote for trade insurance, and it was cheap enough for me to consider the idea more seriously. So I am planning to start early in the new year, and am in the process of finding out all the things i need to.
Is there such a thing as a definitive guide to what is required of me as a car trader? I want to do everything above board, so i need to know exactly where i stand on legal matters such as tax, warranties, etc.
I'd also be interested if anybody has done this, and how they are getting on? It will be a part time thing at the moment - i'm fortunate that i live within 10 miles of three big auction houses, and my full time job is flexible enough to allow me to get to them on sale days, but if it went well i would like to do it full time. Yet reading past threads on this subject there seems a lot of people reckoning that there is little profit to be made. So it would nice to hear people's experiences, good and bad!
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I have no wish to divert this thread, nor can I directly respond to owen's question, but the coincidence of name jogged my memory sufficiently to make me pen this.
Some time ago HJ recommended Geoffrey Owen's book "Turning back the Clock: The Life and Times of a Motor Trader". I follow what HJ says in most things and took up his recommendation. It is indeed a cracking read, even if written slightly amateurishly (no beef with that), and gives a fascinating view of the motor trade as it used to be. I have read it more than once, and bought a copy for my father in law, who has also read his more than once.
It's almost relevant, isn't it?
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Definitely relevant dipstick, i'm after as much information as i can get my hands on!
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There will of course be planning issues to think about re your house and the local authority, neighbours, access, congestion, Council Tax, possibly H&S rules about parking more than a certain number of vehicles not privately owned, etc.
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Probably one you have already thought of, but find a local mechanic or two that are a) reliable and b) inexpensive. You will need to turn stock over at a reasonable rate to make a living from it and you can't afford stuff to be coming back or spend too much time in prep.
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ND - there is a small garage about 50 yards from my house, which will be very convenient if he's good - not used him yet though.
Cliff - Haven't yet approached planning - since initially i'm only planning to have a maximum of 2 or 3 cars at any one time (which will all fit on my driveway), i'm reluctant to alert the red tape which is the local council. I will of course talk to my neighbours about it, all of whom i get on well with, and i wouldn't want to jeapardise that.
I'm putting together a checklist of stuff to sort out:
1) Insurance - got one quote which was good, just need to phone around to see if i can get it cheaper
2) Trade plates - need to make enquiries with local licensing office
3) Need to speak to local auction houses to find out details of buyer premium, trade status required, etc at each one
4) Need to speak to accountant to sort out financial issues that'll need to be dealt with (income tax, VAT, etc)
5) Need to decide whether i need Glass's guide, CAP, both or neither
6) Need to speak to neighbours!
7) Need to find out about legal requirements of me as a motor trader, i think trading standards are the people to speak to
8) Need to find out about warranties, i.e. how they work, what they cost
9) Need to find out my legal obligations with registering vehicles (DVLA)
10) Need to find out whether local garage is any good, and if so approach him about sorting out MOT's, servicing etc at good (i.e. trade) prices
Sorry if i'm waffling on a bit here, just trying to air my thoughts those on here who have done/are doing this at the moment, to check i've not missed anything vital - any more help is very gratefully appreciated!
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Dont know if your trader insurance covers it but you might need business insurance for your house as well - i.e if someone falls over your doorstep going into the house finalise a deal you will need liability insurance for that.
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Owen, as you might remember from a recent thread I'm also evaluating a career change.
It sounds like you have a fair bit of the business and admin stuff covered in your "to do" list. One thing I would spend some time investigating is what sort of market you want to try and be in i.e newish or older cars, what type of car, etc. I'd also try and aim for more than 2 or 3 cars if possible - I'd imagine turnover is everything for a small trader!
I've spent quite a bit of time at the auctions recently. I've noticed that there is fair amount of rubbish out there! By "rubbish" I certainly dont mean old wrecks, I mean newish cars that are in vile colours, bad spec, 3 drs instead of 5 etc. Although these cars can be bargains are they really the kind of thing I want to have my money tied up in? No! Remember also that this country is very "brand aware" For example would you really want to buy a Seat Leon or a Skoda Octavia when you could have had a VW Golf? (Just an example folks, I know these are all decent enough cars but the Seat and the Skoda just dont have the same identity in peoples perceptions as VW...yet!)
In summary your cars will need to stand out from the crowd...buy wisely!
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Thanks for the reply smartdealer - I'm aiming at buying around the 5k mark, i'm hoping that cars around this sort of price should be relatively problem free. I'm planning to go for mid to top spec, simple popular cars, such as Fiesta, Focus, Golf, etc. Also planning to go to a good few auctions before i start, to get a feel for what things are going for.
As for numbers, i wouldn't like to have more than 2 or 3 for a few months - it depends, if all goes well then i'll buy as many as can fit on my drive!
Have you started buying yet?
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Sounds like our plans are very similar!
Yes, I bought an ex-fleet low mileage 4 yr old Golf a couple of weeks ago at Blackbushe - very pleased with it's condition too! I'm hoping to try out at least one other auction though. I like Blackbushe and it's fairly convenient but on some days the bids go a bit silly in my opinion!
At the moment I'm very much "testing the water" but if it goes OK then I hope to pursue this more closeley in the new year. Realistically I'd need to move to a house with a bigger drive so it will all take some time. Good luck with your venture!
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>ex-fleet low mileage 4 yr old
Theres a rare bird if ever I saw one.
Happy clocking Phil I
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Well, 40k (warranted by the way and with FSH) is lowish mileage for a 4 yr old fleet vehicle. Remember that many people still receive company cars as perks, not because they have to travel the length of the country as part of their job.
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You might want to let the revenue know you are self-employed by ringing their excellent help line 08459 154515 and asking for their free box of goodies "cutting through the red tape". There is a penalty for late registration of £100 I believe.
I became self-employed earlier this year and obtained a CD of some free accounting software called Pegasus Capital from
www.pegasus.co.uk/capitalfoc/
NB this is not specific motor-trade stuff but might help you keep track of sales, purchases, invoices and stock.
Good luck with the enterprise.
Hawkeye
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Stranger in a strange land
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