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Setting up as a used car trader - bottom of the ladder!

MWCLS

MB Enthusiast
Joined
Sep 1, 2012
Messages
1,680
Location
Chelmsford
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S320 CDI Perlite Gray Metallic 2005
Evening all, I currently work full time as a estate agent running two very busy offices in Essex.

I have always had a passion for cars and after a brief stint at a main dealer the early part off this year id like to get involved in selling used cars.

So looking at run around type cars. I have a few connections from my stint at the main dealer.

Sourcing cars would be the dealers PX through my connection so the seller would get a better price and my connection would get a thank you and I'd then look to clean the car up ready for resale.

Few things need to do before I make any hasty decisions.

Selling used cars circa £1-2k I know if I setup as a trader i have to give a warranty engine and gearbox which may be problematic when your looking at cars at this price point.

Trade insurance and plates ( are trade plates necessary as a start up? )

My target market well could be any one who wants a winter car for train stn duty to your first time driver.

Hpi potential purchases i would have to do if the dealer isn't taken them px is there a company that can say Hpi 20 cars no time limits for a fixed fee?

It's just a small idea that popped into my head today. Not all cars are going to be banger money going through a main dealer as potential px im going to have to think of other sourcing avenues.

Has anyone tried this on here before as a side line and is willing to share the initial setup costs?

I have storage facility ( my current drive will hold 6 or 7 small hatchbacks plus I have a detached garage )

I'd want to start small and build on that if it was a money maker rather than volume and small yields.
I am looking at buying anything except Merc, bmw, Audi etc to sell on as although they can be sourced cheaply, they are not cheap to fix.

I have a friend who has a MOT garage in East London he is very busy with his own work so I would use him for mot and work and possible repairs, I can't use him to inspect cars before buying. So it's a bit of Russian roulette.

Am I deluded thinking this could be a viable and with hard work make this something worth while?

Any comments , opinions or have tried that before welcome!

Thanks

Michael
 
How many cars would you expect to shift in a typical week? What would be the clear profit on each? Would that be enough to pay overheads and yourself?

How much profit can there be in cars sold at £1k - £2k?
 
How many cars would you expect to shift in a typical week? What would be the clear profit on each? Would that be enough to pay overheads and yourself?

How much profit can there be in cars sold at £1k - £2k?
'Evening all, I currently work full time as a estate agent running two very busy offices in Essex. '

And will you earn more than you do now?
 
I'd have thought at the start you could do both things concurrently, selling the cars at low volume to get a feel for if it's viable. Might make your weekends busy but otherwise it really is a gamble.
 
Thanks for the reply. Everything in life is a gamble I guess.

Working in estate agency for the last 18 years pretty much back to back is taking it's toll I don't want to have to answer to directors anymore in a crap market.

Prior to that I worked for a bank from aged 16. Sort of regret leaving as I would be in a position to retire In the next 10 years.. water under the bridge.

I do have another income revenue no where near what i earn working 6 days a week but as it's said you get one life and I'm open to taking risk as you just never know and that would drive me insane the not knowing if I hadnt taken the chance!

Thanks


Michael
 
Markjay, I guess what I'm trying to say is I'm fed up being a estate agent!

I have developed a hatred for property!

I'm looking at work life balance- being my own boss doing something i enjoy would be A1.

Of course we all need to earn money ... Well most people do. For me it's a balance.

I've met and know far to many people who money is their god they have far too much and are still pissed off!
 
How many cars would you expect to shift in a typical week? What would be the clear profit on each? Would that be enough to pay overheads and yourself?

How much profit can there be in cars sold at £1k - £2k?

That's why I'm asking on here given the market price of vehicles I'd be looking to start off with I'm not expecting to double my profits! I don't have ed China tucked away in the garage lol
 
If you have the urge to work for yourself why not set up as an estate agent?
 
If you have the urge to work for yourself why not set up as an estate agent?

I have lost interest in property.. not to mention if I did my contact with my current employer would allow them to take me to the cleaners if I migrate any of their landlords - I do both sales and lettings. Lettings is the only thing keeping money coming in and a steady rate currently - not to mention the impending tenant fee ban.
 
Evening all, I currently work full time as a estate agent running two very busy offices in Essex.

I have always had a passion for cars and after a brief stint at a main dealer the early part off this year id like to get involved in selling used cars.

If you have a passion for cars, you wont do once you deal in them!

So looking at run around type cars. I have a few connections from my stint at the main dealer.

Thats great but you will need other sources. They wont supply that many in your price range.

Selling used cars circa £1-2k I know if I setup as a trader i have to give a warranty engine and gearbox which may be problematic when your looking at cars at this price point.

Now this is where it gets complicated regarding the law.
In this price bracket, it will be very very difficult to keep a good repuation. Cars under £2K will be problematic just by the fact that these are naturally going to be cars nearing the end of their useful life.
This price bracket is the one that causes me the most headaches as the customers who buy these cars generally expect the cars to be perfect as its a lot of money for them, but in reality these are the cars that are scraping through their MOT's.
Think students, first time buyers, struggling young families etc.
They will be the ones to shout the loudest too. I promise you.

To hold on to any repuation you will want to ensure all cars are prepped to beyond MOT standard. MOT is a very basic check in reality and most issues you will come across will not be MOT items.

A decent inspection and service will help to ensure the cars are going out ok and have a good chance of no immediate issues.

In terms of the law, you are ultimately responsible for the car for 6 months. It has to be proven that any fault was likely there at time of sale but this doesnt stop customer shouting and screaming the consumer rights act.
It is very very difficult to explain to a customer that faults and problems are part and parcel of owning a used car.
A decent warranty may help you and the customer, but remember, most are junk. We have our warranties in house as we have workshops etc.

Unfortunately the law is abused and even professionals such as citizens advice, trading standards and lawyers dish out incorrect advice on a regular basis. Its not as cut and dry as it should be.

Trade insurance and plates ( are trade plates necessary as a start up? )

This is easy. Just apply with DVLA once you get set up. They will need proof that you are a trader such as company number, trade insurance etc.
This is so that you can move cars around without having to tax them. Remember a trade plate does not replace an MOT! Common misconception.

Hpi potential purchases i would have to do if the dealer isn't taken them px is there a company that can say Hpi 20 cars no time limits for a fixed fee?

Just join up with HPI or experian. They charge per check. Its cheap.

It's just a small idea that popped into my head today. Not all cars are going to be banger money going through a main dealer as potential px im going to have to think of other sourcing avenues.

Its a good business when things are going well. The stress comes from unrealistic customer expectations and also cars going wrong. Both of which you can never change, only manage.

Has anyone tried this on here before as a side line and is willing to share the initial setup costs?

Yep I started Mercland as a side line in 2006, was supposed to go back to my investment bank job 6 months later... They are still waiting.

Setup costs arent massive. Premises, Insurance and Advertising are the main ones. Dont underesimate Auto Trader costs!


I have a friend who has a MOT garage in East London he is very busy with his own work so I would use him for mot and work and possible repairs, I can't use him to inspect cars before buying. So it's a bit of Russian roulette.

Thats the business. You take an informed risk and then make the cars right before they go out.

Am I deluded thinking this could be a viable and with hard work make this something worth while?

No lots of people do it... But it can be a very stressful and demanding line of work.
 
When we were looking for first cars for the kids i figured that i would have been spoiled for choice but it turned out to be a nightmare due to lack of availability ,for weeks most nights and weekends were spent viewing cars for the impatient children.

Any decent ones were snapped up straight away by people doing what you are contemplating so by the time were were able to get to them they were sold.

Our Clio came from a trader who told us that he bought them from the auction and cleaned/fixed them up before moving them on with around £200 profit on a £1400 vehicle and we still have it five years on,

The 107 was advertised locally with an add in its window and was a decent deal but it was one of those , right time / right place scenarios.

All it takes on low value / low profit deals is one to go pear-shaped and you are running at a loss.

Kenny
 
Give it a go as a side line and see how it goes. I wouldn’t be quitting a steady income. See how it goes over six to twelve months, by then you’ll know what you’re doing to a certain extent and will be able to make a more informed decision. Merland did it so why can’t you ! You never know, within 6-12 mins the those £1-2k cars might turn into £10-20k cars giving you a better profit. Just be mindful as Jay said, lower priced cars will inherently be more prone to issues which will result in a bad reputation, thus means words travel fast...


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Thanks Jay, very informative, I know from running two estate agent offices that aren't mine that's stress - never mind playing with your own money and the expectations of your 2k car buyer!

Having two sons I wouldn't skimp on safety of a vehicle i was selling, as you rightly say some people's expectations at the price point are very unrealistic this is were I had my doubts. Transferable skills selling or letting property or cars bring with them issues.

That's why I steer away from landlords who want me to manage their properties but aren't willing to do the very basics bar a gas safe cert and a epc! To much headache.

As kenny said to cut my teeth as it were I have to be pro active seeking out genuine cars and beating private buyers to them but there is the risk of paying market price and I'm left with a Ford focus with no money in it which I'm been bid down on!

Thanks again for the insight, I'm going to give this all serious consideration.

There are lots of down sides as well as up.

I don't really won't to be appearing on rogue traders at anytime.

I think for me start slow selling well inspected cars - there still are alot of people at that price point that will pay that bit more for dealer come back, so I have to make sure what I am selling is 'fit for purpose' 6 months is along time on a 12,13 or 14 year old car without a whif of a come back!

I'll give anything ago, one thing I can see now is until I'm climbing the ranks to newer cars, headaches and margins will be very small!

I do have a connections with other general motor services such as inspections, servicing and maintenance at mates rates.

I believe most MOT's aren't worth the paper they are written on.. you have given me some real food for thought...
 
Give it a go as a side line and see how it goes. I wouldn’t be quitting a steady income. See how it goes over six to twelve months, by then you’ll know what you’re doing to a certain extent and will be able to make a more informed decision. Merland did it so why can’t you ! You never know, within 6-12 mins the those £1-2k cars might turn into £10-20k cars giving you a better profit. Just be mindful as Jay said, lower priced cars will inherently be more prone to issues which will result in a bad reputation, thus means words travel fast...


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I totally hear you Jamie, maybe that is my best option- I've always been one to roll up my sleeves and dive in - maybe caution is required here on my part.

Don't want to burn all my bridges...
 
Its a good sideline.. I was selling cars since I was a teenager.. and it was always a good supplemental income for me.
 
Its a good sideline.. I was selling cars since I was a teenager.. and it was always a good supplemental income for me.

I bet it was 20 odd years ago. As you pointed out the CCA 2015 has put pay to alot and pretty much hammered businesses hence the diligence needed today.

I wondered I didn't see many 1 or 2k cars on Mercland.. now I know !!
 
I bet it was 20 odd years ago. As you pointed out the CCA 2015 has put pay to alot and pretty much hammered businesses hence the diligence needed today.

I wondered I didn't see many 1 or 2k cars on Mercland.. now I know !!

We are much more careful with the part exchanges we take in now. They can quickly become more headache than they are worth.
I also dont touch Range Rovers now. Every one we have ever sold has left me in tears financially!
 
Very self explanatory...
 

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