Going full time are my costings correct?

[Toomanyclouds 1]

Hi Guys,

Looks a great forum hopefully you can help me with a few questions about going full time as a motor trader.

Been trading part time from home now for about 3 years and traded typically 2-3 cars a month. I`m  finding that good cars at BCA (gold card)are fetching about £100/£150 above CAP clean which for a part timer like me is killing the bottom line so i`m considering going full time with a pitch may to hopefully increase my sales.

I`m looking for a pitch in the West Midlands area that will suit around 10 cars. I`m looking to sell cars in the £2000/ £4000 price range. Need  another 6 cars at the moment so i`m working on a £25000 cash injection to fund the business during start up. Here are the costs as i see them can you see if they look about right and let me know if there is anything i have missed thanks.  My biggest fears are the pitch lease/rent and car depreciation. With a  10 car pitch would you expect passing by/footfall sales to cover the cost of rent alone  over  year one or is that being a bit optimistic? I`m looking to increase sales to around 10-12 per month as well

Thanks in advance for your time.

Pitch - Rent/Rates £250 per week

Loan £20000 over 10 years £100 pw

Advertising £80 pw

Insurances £40 pw

Misc - fuel, telephones, electric, stationary,  £50 p/w

So i make it around £520 at least p/w or £52 per car p/w to cover costs does this sound about right?

 

Once again thanks

 

 

 

Edited March 28, 2017 by Toomanyclouds

[MrC 142]

Any reason to have a pitch? Trade from home, I'm lucky as I can have 5-6 cars here and only 1 direct neighbour. I also have some (outdoor) storage within walking distance another 7-8 cars  £60 per month

If your price is right people have no problems buying from your house, in the last 12+ years I have had zero problems. I have sold bangers up to a £15k VW camper. 

 

 

 

 

[Toomanyclouds 1]

Hi MrC,

Thanks for posting.

I was hoping that having a pitch would increase my sales by looking a bit more professional. Only have room for four cars at home was hoping the extra 6 cars would pay for the increased overheads and possible get me up to BCA  Black. Glad to see you are doing well working from home and thanks to responding to this topic.

 

Thanks

[RH Trading 80]

Throw away the CAP guide as find its way too much of a distraction, know how much you can sell each car for before you bid then decide how much you want to pay.  I started much the same way many years ago and now have a service centre as well as sales. My advice when moving to a premises is people are more likely to bring a car back to you if there is the slightest of problems. when selling from home people knew that's all I did and didn't expect the earth, with a professional premises they expect a hell of a lot more, better prep and you soon learn to up your aftercare levels. My advice is to to have a contingency, put something aside for the profit from each car because you'll need it sooner or later, invest in security, cameras etc, I found employing people at the beginning a real nightmare so don't be tempted to take anyone on unless you really need to, keep it within your means until you're confident in growth. have a stock plan of how long each car is going to cost you, how quickly do you sell your cars on average? whats this against the depreciation cost. and then of course there's the dreaded tax, keep records for everything and invest in a good accountant at least twice a year (year end was always a nightmare) - in some ways I'd prefer to be working on my own from home again, no people management worries, pensions, etc etc but good luck, always great to see new blood coming in

[Toomanyclouds 1]

Thanks RH much appreciated. How long it takes me to sell a car is a difficult one. Sometimes they go the same day i post the ads others can take as long as 4 weeks On average i would say 2-3 weeks. Just got a 05  petrol zafira from auction 65K fair cond, out the door was £430 needs some prep work , Mot  and central locking sorted. Hoping to get £900 for this with in 2 weeks.

Thanks again

[MrC 142]

How long it takes you to sell a car is anyones guess these days. For example i sold an 07 Cooper just in December within a week of having it. A few weeks later i spotted the exact same car at bca. Naturally i bought it..... I sold it last weekend, you do the maths.

I have a low mileage 09 Twingo i have also had since Jan. Not had a single call on it.

 

 

 

[metcars 397]

On 07/04/2017 at 10:59 AM, Toomanyclouds said:

............... central locking sorted. ................

It's always the bloody wiring in the door shuts on those Zafira's. I had one last year that needed soldering in 'every' door and the hatch. Speakers wires too, which made the radio go weird

[Toomanyclouds 1]

On 4/15/2017 at 10:02 PM, metcars said:

It's always the bloody wiring in the door shuts on those Zafira's. I had one last year that needed soldering in 'every' door and the hatch. Speakers wires too, which made the radio go weird

It was n`t to bad in the end just needed to solder the contacts on the remote fob. Sorted now at no extra cost