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Both previous replies are giving you excellent advice. Buying at auctions to make a profit is strictly for the professionals. Visit the auctions by all means to find out how much cars are going for, you'll probably be rubbing shoulders with some very shady characters ! Buy the autotrader as another way of finding out car values. E-bay too. If you're determined to try it spend only hundreds, not thousands.
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If you need to ask, you are too ignorant to make it successful.
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MADf,
Totally pointless post ,the guys asking for advice ,he may be naive ,who knows .But we all need advice and guidance when we first start any enterprise .
Have you achieved so little that you resent somebody else trying ?
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There is no such thing as a "cheap auction". You get the odd cheap day, but if there was a magical place where top quality cars were cheap it would be full of buyers and no longer cheap. If it stayed cheap all the vendors would withdraw their custom and go sell elsewhere.
The obvious places are BCA and Manheim who have by far the largest selection. Beware their fees are high - particularly to non-established non-trade buyers. There are slightly "second tier" auction houses (not that they see it that way) such as Aston Barclay who also have some major vendors but are a little kinder on fees to newcomers.
The small independents tend to have a lot of iffy private sale stuff with major faults which may be cheap but unless you are a mechanic probably not worth the bother.
Knowing and understanding car auctions can take years to fully appreciate but if you are serious you need to spend some cold boring days standing around auction halls working out what is going on. It will take time and be pretty boring but you can't do it from a computer.
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Tony g, thank you very much for your advice. I actually never thought of that approach (i.e. buying from eBay then trying to sell via auto trader) until you adviced it.
infect I eventually linked with someone who shared his experience buying from eBay then selling using auto trader.
The most encouraging thing was that he hardly knew much about cars before he started the business part time. What am I trying to express here?
He refused to let his little knowledge of the business area discourage him from trying the business out. Guess that’s how new inventions and enterprises are created.
Its great know how encouraging advice can be shared on the forum, most especially when I ask a question to build my knowledge of a subject area I do not know much about (since its the reason forums where designed). Thanks to every one for your comments.
Guess I try out the approach using eBay and autotrader but keep my risk low by sticking to the hundreds to see it goes.
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He refused to let his little knowledge of the business area discourage him from trying the business out. Guess that’s how new inventions and enterprises are created
Without wanting to sound like a wet blanket, thatt's not really true. Inventors invariably have a thorough understanding of the fundamentals behind their invention. The leap is to apply the knowledge to an area that has previously been overlooked. This is important because most 'inventions' have already been considered and been dismissed because of fundamental flaws that are evident to the well-versed but not so obvious to the uninformed.
(This is from bitter personal experience!)
A viable business should add value. Anyone can look at e-bay and buy a car directly without paying a mark-up to a middleman. The middleman must earn his keep. You can either improve the car directly to raise its value-or provide some form of insurance (ie guarantee) to the seller.
To do either requires knowledge. You have to be able to repair cars economically-and have the knowledge to avoid lemons. But to buy a random car for, say, £500 on ebay and just readvertise it on autotrader at £600 isn't viable.
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I did just that about 20 times last year ,average retained profit was about £300 !
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No offence, but how do you find enough mugs?! I can fully understand going to a trader to buy a car with some value in it because you can wave SoGA at them if it goes wrong. But buying a £500 car from a trader makes no sense at all. I suppose a fool with money are easily parted...
P.S. Tempted to have a go myself!
Edited by unthrottled on 20/02/2013 at 22:56
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Most second hand car dealers have a unwritten contract with many main agents and take there trade ins as required going to auction is a last resort for lower price cars.
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Collos.
Sorry that's wrong ,Most main dealers sell everything via auction .it cuts out fraud between dealers and sales managers ,and saves dealers time and effort .
Car transporters arrive each week and take the cars to auction where they are given a quick wash and vac .
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Collos. Sorry that's wrong ,Most main dealers sell everything via auction .it cuts out fraud between dealers and sales managers ,and saves dealers time and effort . Car transporters arrive each week and take the cars to auction where they are given a quick wash and vac .
You should do a little more homework and get to know some agents a little better.
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( You should do a little more homework and get to know some agents a little better.)
Collos,
As ever a little knowledge is a dangerous thing !
I've been in the trade for thirty years + I don't need to do any homework .
main dealers have a policy that all cars go to auction ,in addition most main dealers will dismiss any member of staff caught selling part exchange cars to used car dealers.
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Hi unthrottled ,
If there is a secret it's in the buying ,not the selling .The first thing is Dont buy cars for £500 ,I generally pay between £2000 and £4000 for cars with less than 70'000 miles .Obviously the cars are then in better condition .
The way I buy ,is to trawl through e bay private sellers who are attempting to auction cars .I find a likely car and then look at how much I could retail the car for on autotrader .I then bid sufficient to leave a gross margin of £1000 .ie buy for £2000 sell for £3000 .
You need a gross profit of £1000 ,to prep the car ,mot and service it plus give a discount or an over allowance on a part exchange when you sell it .
Adds from private sellers often stand out on e bay .The photographs are poor ,the car has a short mot and is often dirty with minor paintwork to do .
If a car doesn't reach it's reserve , I ring the seller and offer a cash purchase that day ,I buy about one in three cars that I bid on .The other benefit of e bay you get to test drive and check the car before you buy it .Thats much safer than a conventional auction .
Your comments about soga are interesting .I try to ensure my cars are in good condition when I sell them ,new mot ,faults fixed ,serviced etc .However on the rare occasions I have a problem car .The buyer rarely threatens me with soga .Most people grumble and fix it themselves or we both make a contribution .
Very few car buyers want the hassle of the small claims court or to get involved with trading standards .
It works for me.
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Ah right. That makes perfect sense! I misunderstood and thought you had bought twenty cars for banger money, and turned them straiught round and made £300 on each.
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The first thing I do when enquiring about a private car sale is ask if the seller's name is on the V5. Very often it isn't, and they give every excuse under the sun why not. Selling it for my father in law, belongs to my cousin, etc etc.
The real reason is usually that they are a small time trader masquerading as a private seller. Run a mile.
There are also some quite aggressive sellers on ebay, again masquerading as private individuals.
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Hi bs,
There's no real advantage in a dealer pretending to be selling cars as a private owner .
The advantage gained from not being responsible under soga ,is more than outweighed by risking a criminal prosecution by not declaring as a trader . It's easy to check how many cars an individual has for sale ,just search his phone number on google .
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There is merit in what Tony G says, but it doesn't seem to stop an awfully large number of people doing it..
They feel the risk is worth it to avoid the paperwork hassle, the extra keeper on the V5, insurance, permits or whatever it is you need from the DoT, premises, SOGA, the list goes on.
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(They feel the risk is worth it to avoid the paperwork hassle, the extra keeper on the V5, insurance, permits or whatever it is you need from the DoT, premises, SOGA, the list goes on.)
Hi bs,
Dealers don't register a cars to themselves ,no extra name on log book ,most small time dealers like me work from home ,so no premises cost .
I can also claim 25% of my domestic rates and 10 % of my gas and electric bills back .So it's not all bad news .
At a guess I think I save about £700 a month compared to renting premises .
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I applaud you Tony, I guess I had in mind the dishonest ones who park their bangers on the road and tell fibbingtons on the phone.
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It's hard to make a living out of "the block" these days unless you stick to unloved marques, anything with a reputation will be bidded into the stratosphere by over-entusiastic immigrants with a wedge in their pocket. If you can strike up a good relationship with the auction house you can make a living buying ghost-bidded cars midweek, leaving the car there, and then sending the same car though at the weekend when the clueless masses turn up to play trader. Auction workers often do this themselves, although low wages keep them towards to bottom end of the market.
Edited by SteveLee on 26/02/2013 at 01:30
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Hi Tony
What makes and models to recommend concentrating on?
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