I want to be a car dealer........

Honest John Back Room » Motoring discussion
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Sat 23 Aug 2003 09:18
I want to be a car dealer........ - lordwoody
I've bought my last 3 cars at Manheims auctions in Colchester, the last one a week ago, and each time I've got a bargain, usually saving about £1000 on the retail price. I love the buzz of the auction ( I'm also a long-term attendee of antique auction) and have always enjoyed buying and selling. I was amazed last week at the low prices some cars, especially Corsas and Astras. were fetching . I reckon if I bought 10 cars a year I'd make about 10K turnover. Thats a day per car in terms of auction attendence and preping the car for sale. There may be days when I can't buy a suitable car so lets add on another 5 days for extra auction attendence. Lets also say I may buy the odd one that needs fixing in some way, so I add £1k for expenses and another 1K for adverts and unforeseen costs. This means for 15 days work and possible outlay of 2K I make about £8000.
This seems quite a tidy profit doing something I enjoy doing- a sort of working hobby. There has to be a catch, would someone like to point it out for me?
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Sat 23 Aug 2003 09:46
I want to be a car dealer........ - volvoman
HM's Inspector of Taxes possibly ? ;-)
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Sat 23 Aug 2003 12:39
I want to be a car dealer........ - spencertheartist
HJ will tell you not to bother. Unless you transfer the V5 to your own name (adding another owner), insure the car, and other stuff I cant remember, you are breaking the law if you are not carrying traders insurance, which is v pricey and can be difficult to get. The rules regulationss and red tape (and legal responsibilities) are now overwhelming for all but the most committed traders. You could ignore the law but unless you are, again, a committed rogue it will blow up in yer face!
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Sat 23 Aug 2003 14:27
I want to be a car dealer........ - flatfour
I spoke to the Inland Revenue about this subject and they said that if you only traded 4 cars a year they were not interested, if you traded more it would be treated as a business. In my case its having the time, I know several people who are constantly selling the car they drive then buying another at the auction, they Japanese as they get far less problems.
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Sat 23 Aug 2003 18:56
I want to be a car dealer........ - king arthur
Trade insurance isn't hard to get at all, and not that pricey. You can get policies that allow you to trade without premises, enable you to drive any car you're likely to come across for motor trade purposes, and allow you to give test drives as long as you are in the car. Mine cost me about £650 for TPO (that does mean if one of my cars gets nicked or catches fire, I'm a bit screwed).

It might sound like money for old rope, the motor trade, but it's nowhere near as easy as it looks and you shouldn't actually expect to make much in the first six months to a year. At certain times of the year, cars are very cheap in the auctions, other times you can hardly buy anything for less than you'd retail it for.
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Sat 23 Aug 2003 20:04
I want to be a car dealer........ - Vansboy
Lordwoody, THANKS!!

So THATS how it's done!!

New I'd been going wrong somewhere!!

VB
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Sat 23 Aug 2003 21:02
I want to be a car dealer........ - lordwoody
Brilliant eh? And another thing I'd do would be polite and courteous to my customers. Before I bought my car at the auction last week I phoned round a few dealers about cars they had advertised and they all sounded off-hand and in a couple of instances, to put it mildly, a bit thick. I see a great future stretching out ahead!
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Sat 23 Aug 2003 21:25
I want to be a car dealer........ - Billy Whizz
All that easy dough would come in handy for paying for all those speeding fines...

double ;-)
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Sat 23 Aug 2003 23:32
I want to be a car dealer........ - Aprilia
Some years ago my father used to sell cars from off our garage forecourt. Its not as easy as you might think - certainly not easy money.
The law these days is heavily weighted in favour of the consumer. We used to get some really difficult customers who basically expected to get a new car for the price of a s'hand one.
The lower end of the market has collapsed due to low interest rates and high repair costs, so you have to sell relatively expensive cars (i.e. £5k+) to make any money. Under the latest consumer laws the car's reliability is basically your problem for the first six months after sale.
I wouldn't want to get back into it, but there's loads try it for a while and then go bust. There's quite a few books and guides etc. on starting up in the motor trade, ask at the local library.
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Sat 23 Aug 2003 23:59
I want to be a car dealer........ - Gregory P
I think for a small trader it is very difficult to sell cars and make a profit. If you ever look at even big dealerships, they sell relatively few cars relative to their size and it seems that only some cars are desirable whilst others sit on the forecourt for many months at a time.

When looking at advertisements in the local papers or Autotrader there are always repeat adverts each week, and some are re-advertised many times over before sale. To sell cars I think one needs a very good knowledge of the car market and what cars are the most desirable. Taking just this into account makes car sales very difficult indeed.

What needs to be done is a lot of research. If you want to test how well certain cars sell, it might be worth asking other traders or making a proto-type ad in the paper and seeing what kind of response it gets. When I was younger, I tried my hand at computer auctions and always put in proto-type adverts in the local paper with low prices. I found I got a very good response and eventually made a good profit. I was very entrepreneurial and tried my hand at a lot of things. I was only 14 years old though and I was the wealthiest in the class!
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Sun 24 Aug 2003 19:34
I want to be a car dealer........ - Steve G
I think you might struggle selling cars like Astra's/Corsa's.
People go to car supermarkets and such like to buy these sort of cars. Can you offer finance, part exchange, warranties and a stock of at least 10 cars ?
Valuing part ex's is a minefield in itself. Anything from the 80's, early 90's is scrap money but your customers wont think so !
Even if you sell your cars cheaper than other dealers your customers will still be knocking on your door as soon as a airbag light comes on or gearbox becomes noisy. Modern cars are expensive to fix and the law is firmly in the customers favour these days.
I admire your enterprising spirit but car dealing is not a easy living these days, i've tried it moderately successfully but now I work for a large car supermarket - cant beat them,join them ;-)
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Sun 24 Aug 2003 21:02
I want to be a car dealer........ - lordwoody
The reason I chose Corsas in particular was that thet were very cheap at the auction, thus allowing me to sell them on fairly cheaply, my reasoning being that the cheaper the car the easier it is to sell and that such a middle of the road small car would appeal to the greatest number of average buyers. Ideally I would prefer to deal in one make, I was thinking of Saabs as I drive one, have owned a few and like them. I feel it would be easier to sell something I like and am interested in, but the market is more limited.
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Mon 25 Aug 2003 00:12
I want to be a car dealer........ - v0n
Surely a sole trader selling cars can actually specify limited warranty terms and conditions in sale contract, right?
If it's legal for auction houses to sell you a bag of rattling parts on four wheels without any reponsability there must be a simple way out for sole trader too. You could offer extended warranty from companies like Warranty Direct (usualy about £300 per year) as an extra paid option to newer models, but if you're selling ex fleet 6 or 7 year old car technicaly I'd say you don't even have to tell these people you do that for living - 1 owner and fleet, here's fresh MOT and service check sheet, voila.
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Sun 24 Aug 2003 22:15
I want to be a car dealer........ - looking4car
>>>This means for 15 days work and possible outlay of 2K
>>> I make about £8000.


Apart from all the legal stuff mentioned above I think you're missing a practical point.

It may be 15 days spent buying, but have you ever tried selling a car in a day ? I think you'll find that you spend more time selling than buying.
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Sun 24 Aug 2003 23:24
I want to be a car dealer........ - lordwoody
I agree it may take calender time to sell, but once the ads are placed , apart from any time meeting customers there's little or no work involved. I've just sold my Punto HGT, it took a day on Autotrader website. Previous experience has been similar. If a car is priced right it sells, simple as that! (He said, optomistically!)
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Sun 24 Aug 2003 23:59
I want to be a car dealer........ - Hugo {P}
It's hard enough selling a car privately.

I've sold a few myself in the West Country, one took me 7 months to shift! Mind you it was a Fiat Regata.

On a few occasions I have been very lucky. My sister's ZX, one enquiry only and they gave me (us) exactly what we wanted. Also, my Aunt's old Metro, I got an offer a fair bit lower than the asking, but after taking everything into account, I decided to take it. Glad I did because I got no other phone calls!

You know the market's dire when dealers are selling a car identical to yours for less money than you're asking for yours!

Also, I think we'll see more dealers posing as private advertisers to try to get around the legislation. Whilst the new 6 month rule is good for cars for a few grand. There is no incentive for dealers to offer cheap trade ins for £250 to the general public any more, which I think is bad.

IMO there ought to be a cut off point where the new law applies. IE if you by a car for up to £1000, it should be "sold as seen excepting items relating to roadwortheyness (return within 7 days for dealer rectification)" as a min. If the dealer wishes to warranty it, then fine. Between £1001 to £2000 it should be Roadworthy and free of major failures for first 3 months or 3k miles (whichever is sooner)... etc. I think the 6 month rule should only apply to cars over say £2k or so. Even so, this should not be limited miles (say 6K).

In addition, dealers should be able to sell cars with stated defects, for example, if 5th gear does not work, then the dealer should be allowed to sell the vehicle with this fault stated. It is then up to the buyer as to whether he needs 5th gear or not, or he may decide to take it on and change the box.

I think it is up to the consumer to protect their purchases by making sure the dealer provides a warranty with the car that covers mechanical defects and that the cam belt is changed and/or the car is fully serviced before taking delivery.

This teared legislation will ensure that the general public can still buy cheaper cars with confidence, and we are not at the mercy of main dealers peddling new or 5 yr old cars at inflated prices.

Those of you who are familiar with product liability legislation will know that for most household appliances, the manufacturer can be held liable for a non safe failure of a product up to 10 years old. Motor vehicles are specifically excluded from this law, but we're still kicking the dealer for selling a 10 year old car that may fail within the first 6 months of ownership - why?

H
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Mon 25 Aug 2003 18:22
I want to be a car dealer........ - T Lucas
I am a car dealer,i want to be something else.
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Mon 25 Aug 2003 21:39
I want to be a car dealer........ - Vansboy
My thoughts EXACTLY!

But now, 6 months on from sellng our yard & 'downsizing',I've counted all the money & now it's doing my head in!!I've even taken to DiY on the house-some people even enjoy going to B&Q at the weekends!!

Give me back the tyre kickers,moaning traders at the auction, the 000's miles & £$£$ spent, wasting diesel going to the sales, every day, even the complaints from unhappy customers, let me sort out thir complaints....

So what else should Mr Lucas & myself be doing, to find our true life path??

VB
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Tue 26 Aug 2003 13:36
I want to be a car dealer........ - T Lucas
Vansboy,enjoy the money,enjoy the free time,and if you ever need to be reminded,think about the VAT man,the lying,thieving punters,the junk p/xs,the morons that want to vandalise/steal your stock,the punters that know more about your business than you do or the thrill of driving a 10 grand car from the auction and the oil light comes on,or one of your drivers cooks an engine up on delivery,surely you would not want to get back into that.
On the upside,you can have some laughs,when its good you can earn reasonably,but i would not want my son to get into it.
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Tue 26 Aug 2003 20:13
I want to be a car dealer........ - Vansboy
So, there you are then, LordWoody, best listen to your Mum & get a proper job!! Thats 2 of us who didn't!

VB
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Wed 27 Aug 2003 11:43
I want to be a car dealer........ - lordwoody
OK, so perhaps it's not quite as easy as I thought! Might try selling the Saab in 6 months though and see if I can make a profit and buy a better one next time, sell that in 6months etc etc
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Wed 27 Aug 2003 11:50
I want to be a car dealer........ - Altea Ego
Didnt some bloke make a fortune selling a book about buying and selling cars for profit?
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