A Crazy Quest?

[Will]

Anything is possible with enough time and motivation.

As a newish driver years back I used to buy and sell several cars and motorbikes. I reckon there's more money to be made % wise at the lower end of the market. Ie a few hundred £££s on a £1-2k car rather than the bigger more ex-benz-ive stuff.

Can you add value to the cars you are buying though? Or are you trying to buy them for less than their true value and sell for more?

I remember when I was 17 or 18 at College IIRC. Start of summer holidays had no money and no car, by buying and selling a few vehicles I'd cleared around £2k and then went on to buy a 4.5 year old Ford Scorpio when they were newish cars (96/97 car in 2001)

Sold that later and ended up with an old Mercedes 190 and ££££ cash. Loved it and went and bought a 5 year old C-class for around £5k after a bit more saving and working.

So it's definitely possible. But in 8 months - doing one vehicle at a time - 'ambitious'

Good luck

 

[lordklp]

Little update on this guys, driving down the road, saw a little Rover 25 for sale, 54 plate, 37,000 miles from new, £800 asking price...out of interest gave the number a call. Went to see the car, ended up buying it for £220, no tax or MOT. Took it straight to the test centre, £262 later, 12 months MOT and 6 Months Tax. Sold it the same day for £650, so a small but honorable profit of £168. So, I'm using the £168 towards the goal, but putting the £482 back in the bank, as no 'new' money will be added to the pot. Also, got someone coming to view to the C180 tomorrow asking price £4200. (Which would represent a profit.....)

Ultimatley, i want to end up with this C63, for the price i paid for the C180.....(which i'll reveal after it sells....)

 

[Deleted member 37751]

Your two biggest problems as I see it are;

1. In effect you are becoming a car trader so in the eyes of the law the cars you sell will have to be warranted. This alone could wipe you out.

2. If/when you get into, for example, £10-15k cars, what will you do if it goes bang while you have it and needs a couple of grand spending (or even more) on it?

I own a commercial vehicle business selling trade-to-trade and 'do up' cars (mostly AMG's) in my spare time and up to press I'm about level profit-wise, if not a little bit down and when I sell mine I do so as a private sale. The point being that once you get into the more expensive (when new) cars then your risks are ever greater.

 

[lordklp]

Hi SPX,

I'm a qualified lawyer and did some research into this as it's not my field.The law seems to imply that if your acting as a car dealer, which for the purposes of what im doing I will be, then i'll have to warrant each car i sell for a period of time, and that period of time is calculated based on the age, mileage, price and condition of the car being sold. Typically no more than 3 months, but, could be much less, for a £500 bangor with 100,000 miles on the clock, as a little as a few days.

Even then, its only major mechanical flaws that should have been obvious, or detectable at the point of sale, and even then (within the timescale implied by the age, mileage, price and condition) if i could prove that i didn't know of the fault, i wouldn't be liable.

After the timescale a buyer, can still try and claim for the cost of the repair, but the burden of proof would rest with the buyer to show i knew the fault was there, and typically a new MOT is seen as enough to demonstrate i didn't.

It also negates a trader's liability if the buyer brings their mate 'dave' the mechanic along for a viewing, this demonstrates that the car was inspected and accepted at the point of sale, no further evidence would be required by the trader to prove he had no knowledge of any fault.

Only other point worth noting is that the notion of a 'trade sale' is technically non existent. I've spoken to a few local main dealers who said they will call me with anything non franchise they get, that they can't retail, and i could buy it on a trade basis, meaning that as soon as i drive it any problems are mine (in much the same way as sold as seen works in a private sale).

However, as the dealer is a professional trader, then simply stating or even writing on an invoice 'trade sale' or 'sold as seen' does NOT negate my consumer rights. At best the agreement is a gentlemans one - 'Your getting the car cheap, so, if you have problems, we are both agreeing that i'm not responsible to fix them'.

It's very difficult to argue that you can ever contract out of legislation.

That said, i'm not out to rip anyone off, if something went wrong with a car after I'd sold it regardless of value and cost, i'd put it right. I've also considered whether, on the more expensive cars it would be worth offering a third party warranty, although from what i can tell, these don't often cover people in the way they'd expect and ultimately if the warranty company don't pay out, the dealer could still face a claim based on the points i've made above, so the only person who ever wins is the third party warranty company!

 

[martyz]

I would be very surprised if a main franchised dealer would do business with you,as trade disposals normally go to auction or are sold to established traders that take all (rough with smooth).

 

[John Jones Jr]

Hi SPX,

I'm a qualified lawyer and did some research into this as it's not my field.The law seems to imply that if your acting as a car dealer, which for the purposes of what im doing I will be, then i'll have to warrant each car i sell for a period of time, and that period of time is calculated based on the age, mileage, price and condition of the car being sold. Typically no more than 3 months, but, could be much less, for a £500 bangor with 100,000 miles on the clock, as a little as a few days.

Even then, its only major mechanical flaws that should have been obvious, or detectable at the point of sale, and even then (within the timescale implied by the age, mileage, price and condition) if i could prove that i didn't know of the fault, i wouldn't be liable.

After the timescale a buyer, can still try and claim for the cost of the repair, but the burden of proof would rest with the buyer to show i knew the fault was there, and typically a new MOT is seen as enough to demonstrate i didn't.

It also negates a trader's liability if the buyer brings their mate 'dave' the mechanic along for a viewing, this demonstrates that the car was inspected and accepted at the point of sale, no further evidence would be required by the trader to prove he had no knowledge of any fault.

Only other point worth noting is that the notion of a 'trade sale' is technically non existent. I've spoken to a few local main dealers who said they will call me with anything non franchise they get, that they can't retail, and i could buy it on a trade basis, meaning that as soon as i drive it any problems are mine (in much the same way as sold as seen works in a private sale).

However, as the dealer is a professional trader, then simply stating or even writing on an invoice 'trade sale' or 'sold as seen' does NOT negate my consumer rights. At best the agreement is a gentlemans one - 'Your getting the car cheap, so, if you have problems, we are both agreeing that i'm not responsible to fix them'.

It's very difficult to argue that you can ever contract out of legislation.

That said, i'm not out to rip anyone off, if something went wrong with a car after I'd sold it regardless of value and cost, i'd put it right. I've also considered whether, on the more expensive cars it would be worth offering a third party warranty, although from what i can tell, these don't often cover people in the way they'd expect and ultimately if the warranty company don't pay out, the dealer could still face a claim based on the points i've made above, so the only person who ever wins is the third party warranty company!

Don't concern yourself too much about the above, says the non lawyer to the lawyer!

If you want to be totally within the law (which is very understandable) why not just register the cars in your name as a private individual, my advise is not to become a 'Trader', unless you intend to do it properly. The only down side I can see is, it may/will slow possible sales due getting back the relevant paperwork in your name etc and you may end up having your insurance company asking questions about the frequent change in cars, mind a broker may be better for your particular insurance needs.

Just my pennies worth.

 

[dhard]

Hi All,

I am about to embark on a crazy quest....I've always, as a hobby bought and sold cars, just so I could drive as many different makes / models as possible, without having to really spend anymore than my initial investment in a £600 Nissan Micra around 11 years ago. I'm 29 now, (nearly 30), and since then i've had 53 Cars, however....until last week never a Mercedes.

Now though all that has changed, I brought a Mercedes C180 Kompressor Coupe, 6 Speed Manual, 55,000 Miles, on an 05 Plate, and, I'm impressed, in fact, blown away.

So much so that after a few beers in the pub, and some ramblings from me about what i thought could be achieved if you bought carefully, i've set myself a challenge that is this - To trade up from my C180 to 2010 C63 AMG, without adding a penny into the pot.

I'm going to try an achieve this by 31st August Next Year, so 8 months.....

Possible....or....crazy dream?

If after 11 years and 53 cars you are driving a 05 c180 coupe value £4-6k and you want to get to a 10reg c63 value £23-25k it's going to take you a lot longer than a year . So to answer your question crazy ..

 

[Deleted member 37751]

Only other point worth noting is that the notion of a 'trade sale' is technically non existent. I've spoken to a few local main dealers who said they will call me with anything non franchise they get, that they can't retail, and i could buy it on a trade basis, meaning that as soon as i drive it any problems are mine (in much the same way as sold as seen works in a private sale).

However, as the dealer is a professional trader, then simply stating or even writing on an invoice 'trade sale' or 'sold as seen' does NOT negate my consumer rights. At best the agreement is a gentlemans one - 'Your getting the car cheap, so, if you have problems, we are both agreeing that i'm not responsible to fix them'.

It's very difficult to argue that you can ever contract out of legislation.

Every franchised dealer I know will send their part-exchanges to auction, I got wind of a W211 E55K at my local Mercedes dealer that had been taken in part exchange and they asked retail money for it as a 'trade sale' and they requested a VAT invoice before they'd even consider an offer.

If *if* you do somehow get these dealer part exchanges, they don't like to let you pick and choose which ones you want, they will generally say you've got to take at least a couple of cars, not just one. And this, barring a catastrophe, will be a 'sold as seen' sale, if you start complaining they might (if they want to) take the car back and give you your money then close the door on you.

B]That said, i'm not out to rip anyone off, if something went wrong with a car after I'd sold it regardless of value and cost, i'd put it right.[/B] I've also considered whether, on the more expensive cars it would be worth offering a third party warranty, although from what i can tell, these don't often cover people in the way they'd expect and ultimately if the warranty company don't pay out, the dealer could still face a claim based on the points i've made above, so the only person who ever wins is the third party warranty company!

I don't think for one minute that you'll try and rip anyone off, you seem a decent bloke for starters, but becoming a car trader as a bit of a hobby tends to not yield the results your average punter believes.

I'm all for enterprise, and wouldn't want to discourage anyone from trying anything, but with vehicles it's sadly just not a case of 'buying and selling' there are quite a few strings attached.

Have you got a traders insurance policy?

 

[Spinal]

I'm a qualified lawyer

Well that's put me off

 

[Deleted member 37751]

If you want to be totally within the law (which is very understandable) why not just register the cars in your name as a private individual, my advise is not to become a 'Trader', unless you intend to do it properly. The only down side I can see is, it may/will slow possible sales due getting back the relevant paperwork in your name etc and you may end up having your insurance company asking questions about the frequent change in cars, mind a broker may be better for your particular insurance needs.

I'm 99% certain that what you're advising would be fraud, registering a car in your name means nothing other than you are the registered keeper.

Also, there's a finite number of cars you can register as a private indiviual in a year before the DVLA get a bit nosey, I'm sure.

Also, don't forget that the OP should have a car traders insurance policy and should really apply for trade plates, not to mention declaring the extra income to the taxman; whichever way you look at it, he's selling cars for profit...

 

[Deleted member 37751]

I'm going to try an achieve this by 31st August Next Year, so 8 months.....

Let's say a C63 will be £20k in eight months and your current car is worth £4k, you're going to have to flip £2,000 a month in pure profit and you can do this in your spare time?

Good luck.

 

[John Jones Jr]

I'm 99% certain that what you're advising would be fraud, registering a car in your name means nothing other than you are the registered keeper.

Also, there's a finite number of cars you can register as a private indiviual in a year before the DVLA get a bit nosey, I'm sure.

Also, don't forget that the OP should have a car traders insurance policy and should really apply for trade plates, not to mention declaring the extra income to the taxman; whichever way you look at it, he's selling cars for profit...

Thus, I advised the OP not to become a 'Trader' - no need for trade insurance, trade plates or tax returns. And nothing wrong with selling anything for a profit and really who's to say he actually made a profit.

I don't see any fraud either, private purchase & private sale. Op's income comes from a different source which is non related. And so, what if the DVLA got nosy, what's the Op doing..nothing but changing his car often which is not illegal.

Whatever he decides, I'm routing for him as it an honorable quest even if I think he's set the bar too high.

So, positive vibes here!

 

[st13phil]

FWIW, HMRC (who get told about change of vehicle keeper details by DVLA) always used to view 6 car changes in 12 months as prima facie evidence of trading vehicles. It would then be up to the individual to convince them they were not trading.

 

[Stratman]

If HMRC believe the OP is a trader, then indeed all profits will be taxable but all costs will be tax deductible. Buying a car to sell on will be counted as a cost, and as each car is bought with the proceeds of the previous sale there is no profit to tax.

 

[Deleted member 37751]

Thus, I advised the OP not to become a 'Trader' - no need for trade insurance, trade plates or tax returns. And nothing wrong with selling anything for a profit and really who's to say he actually made a profit.

I don't doubt for one minute that a solicitor won't go about this the 'correct' way, either way, good luck to him.

Buying a car to sell on will be counted as a cost, and as each car is bought with the proceeds of the previous sale there is no profit to tax.

So you're saying that profit doesn't count if it's tied up in stock?!

 

[Stratman]

Introduce capital of £1000.
Buy car for £1000, sell it for £1500.
Buy car for £1500, sell it for £2000
Buy car for £2000, sell it for £2500
Buy car for £2500, sell it for £3000
Buy car for £3000 and keep it.

What is the profit and what are the costs?

 

[st13phil]

So you're saying that profit doesn't count if it's tied up in stock?!

Lots of people don't realise that.

The other very real issue is that once HMRC have decided your a trader, all the rest of the regulations kick in, regarding advertising, warranties, etc. and that could be retrospective too.

 

[Deleted member 37751]

Introduce capital of £1000.
Buy car for £1000, sell it for £1500.
Buy car for £1500, sell it for £2000
Buy car for £2000, sell it for £2500
Buy car for £2500, sell it for £3000
Buy car for £3000 and keep it.

What is the profit and what are the costs?

I'm not too sure if you're being serious or taking the piss?

Let me get this straight, as long as you have all your profit in your stock, you don't pay tax?

In your example, there is £2k worth of profit.

 

[Stratman]

I agree there's £2000 of profit, I'm being serious in asking what are the tax deductible costs in the example?

 

[Deleted member 37751]

I'm being serious in asking what are the tax deductible costs in the example?

Depends how much you earn in the year, I believe the allowance is circa £10k before you get taxed, an amount that I'm sure a qualified solicitor will easily surpass.