Setting up a forecourt

[Nvp cars 0]

Hi I have just secured a forecourt which can fit 30 cars I'm new to the business ,just after general advise how to offer finance warrenty stock sourcing anything would be usefull, any advice on most popular cars to go for?

Edited October 5, 2017 by Nvp cars
Additonal

[BCC 9]

What sort of cars are you selling? and what value cars?

[Nvp cars 0]

Hi thanks for replying was thinking of corsa fiesta focus vow golf fiat 500 basically anything that's popular 2007 on ward models

[It's me 615]

52 minutes ago, Nvp cars said:

Hi I have just secured a forecourt which can fit 30 cars I'm new to the business ,just after general advise how to offer finance warrenty stock sourcing anything would be usefull

HI WELCOME

i would suggest your first priority is security before you place a single car on the pitch

[Nvp cars 0]

It has metal fencing all around and high entrance gates thanks for your reply

[GreenGiant 287]

Have you looked here?

http://cardealermagazine.co.uk/forum/forum/8-frequently-asked-questions/

 

[trade vet 704]

Hi NVP

Would you be able to confirm if this is a petrol station forcourt.Has it been used for car sales previously .Is it a main road location etc.Every pitch is different as to what sells better,I have had quite a few so I should be able to provide information which may help together with the other guys on here.

 

[Max Branning 149]

Why on earth are you diving into a 30 car forecourt with no experience?

Recipe for disaster if you ask me, sorry to sound harsh but whats wrong with getting a bit of experience and then expanding rather than diving in at the deep end in a climate that is not exactly great at the moment?

[Earunder 69]

30 cars on your first stint... Brave if you ask me especially if you don't know anything about the industry or don't have any experience in running a car site but if that's your decision I wish you all the best. IMO start with a smaller site, 6-10max and see how you go, grow from your own experience and resources and you can't fall fail providing you move along with the times and stay on your game.

Here's some advice to hopefully help out a little.

1st off you should sort out your trade insurance.

Then figure out what you want to do with warranties etc.  Take the responsibility yourself or outsource warranties to other companies.  Personally I prefer to do the warranties in house, setting aside a set amount out of every car to cover any costs for a warranty job.  I have a separate account for warranty funds.  On average you can pay a warranty company between 110 - 170 per car for around 12 months warranty, just look into the cover as their products are associated with your company so your customers will review you for their product also.  Don't cheap out on the warranty cover basically.

Are you self funded or going for business/stocking loans?  I personally don't do stocking loans and have been and am lucky enough not to need one, but 1 huge mistake I've seen many dealers make is not making sure you have enough in each vehicle to satisfy your outgoings.  Sounds simple, but the business/stocking loans can get the better of you if mis-managed and I wouldn't recommend one for someone new to the motor industry.  If your starting up in this way the risks are way greater than you think and my advice is to rethink this through.  It's a tough industry, with a dog eat dog mentality and not just used cars, but from the big main agents also.  Don't be kidding yourself that you'll start up and start selling a third of your stock off the bat.  Be very careful, we've held off on opening another site towards the end of this year due to the market change.  I'm not going to say what's changed as our market research gives us the head start against many of our competitors but many dealers have noticed a shift in their sales / balances.  

What products or services are you offering your customers?  Are you MoT cars?  Servicing Cars?  Valeting / Repairing Cars?
Are these things you are doing in house or are you outsourcing? 
A good valeter costs from 300 per week (21,000+ p/a). 
A good mechanic costs from 500 per week (£32,500+ p/a).  You can probably outsource a local garage to do an MoT and service for £100, so a good place to start with little regular overheads, so you only pay when you sell.

Advertising... Now here comes the dilemma.  CarGuru's, Motors, Ebay, GumTree, AA Cars all have the same average costs.  I believe in my area, South East, Motors is superb value for money with CarGurus a close 2nd.  AutoTrader has become implausible for us now as it costs us to advertise there.  Our monthly bill was just under 10k p/ for half our stock of 80 cars on 'Premium'.  Over a 2 month period we sold 6 from AT, so the decision was made to cut out AutoTrader.  Don't be fooled by their sale pitches, and not AutoTrader alone, I mean all of the advertising mediums.  You do need to do/try everything, not all at once, but you should try all advertising possibilities for at least 3 months.  I know some dealers, not many now, but a few that rely totally on Motors nowadays.  Go back a year or 2 the same dealers where adamant AutoTrader was their sole advertising platform and nothing could beat it.  Now these dealers are over 30k better off selling the same amount of stock.  Just don't be afraid to cut off something that isn't working.  Track your leads and completions profusely.  When you get 5 minutes, look and track your stats, stats and stats.

Finance...  You'll need to apply to get an FCA licence to be able to offer finance packages with your vehicles.  You should only do that really when you have enough stock.  As you're new to the industry and want to be able to offer finance, then you should really look and download the FCA guide. 

LAW...  You should also learn about Consumer Rights and Sales of Goods Acts from 1982 onwards to familiarize yourself with the cans and cants, that way you will not be in a pickle if someone challenges your knowledge of selling what is supposedly faulty etc.  You can use companies such as Lawgistics who I've heard are very good, but why pay someone else and add an additional expense for something you can and quite frankly should learn.  Nowadays, its simple, everything is online and free.

 

Hope this helps

[Rory RSC 596]

17 minutes ago, Earunder said:

30 cars on your first stint... Brave if you ask me especially if you don't know anything about the industry or don't have any experience in running a car site but if that's your decision I wish you all the best. IMO start with a smaller site, 6-10max and see how you go, grow from your own experience and resources and you can't fall fail providing you move along with the times and stay on your game.

Here's some advice to hopefully help out a little.

1st off you should sort out your trade insurance.

Then figure out what you want to do with warranties etc.  Take the responsibility yourself or outsource warranties to other companies.  Personally I prefer to do the warranties in house, setting aside a set amount out of every car to cover any costs for a warranty job.  I have a separate account for warranty funds.  On average you can pay a warranty company between 110 - 170 per car for around 12 months warranty, just look into the cover as their products are associated with your company so your customers will review you for their product also.  Don't cheap out on the warranty cover basically.

Are you self funded or going for business/stocking loans?  I personally don't do stocking loans and have been and am lucky enough not to need one, but 1 huge mistake I've seen many dealers make is not making sure you have enough in each vehicle to satisfy your outgoings.  Sounds simple, but the business/stocking loans can get the better of you if mis-managed and I wouldn't recommend one for someone new to the motor industry.  If your starting up in this way the risks are way greater than you think and my advice is to rethink this through.  It's a tough industry, with a dog eat dog mentality and not just used cars, but from the big main agents also.  Don't be kidding yourself that you'll start up and start selling a third of your stock off the bat.  Be very careful, we've held off on opening another site towards the end of this year due to the market change.  I'm not going to say what's changed as our market research gives us the head start against many of our competitors but many dealers have noticed a shift in their sales / balances.  

What products or services are you offering your customers?  Are you MoT cars?  Servicing Cars?  Valeting / Repairing Cars?
Are these things you are doing in house or are you outsourcing? 
A good valeter costs from 300 per week (21,000+ p/a). 
A good mechanic costs from 500 per week (£32,500+ p/a).  You can probably outsource a local garage to do an MoT and service for £100, so a good place to start with little regular overheads, so you only pay when you sell.

Advertising... Now here comes the dilemma.  CarGuru's, Motors, Ebay, GumTree, AA Cars all have the same average costs.  I believe in my area, South East, Motors is superb value for money with CarGurus a close 2nd.  AutoTrader has become implausible for us now as it costs us to advertise there.  Our monthly bill was just under 10k p/ for half our stock of 80 cars on 'Premium'.  Over a 2 month period we sold 6 from AT, so the decision was made to cut out AutoTrader.  Don't be fooled by their sale pitches, and not AutoTrader alone, I mean all of the advertising mediums.  You do need to do/try everything, not all at once, but you should try all advertising possibilities for at least 3 months.  I know some dealers, not many now, but a few that rely totally on Motors nowadays.  Go back a year or 2 the same dealers where adamant AutoTrader was their sole advertising platform and nothing could beat it.  Now these dealers are over 30k better off selling the same amount of stock.  Just don't be afraid to cut off something that isn't working.  Track your leads and completions profusely.  When you get 5 minutes, look and track your stats, stats and stats.

Finance...  You'll need to apply to get an FCA licence to be able to offer finance packages with your vehicles.  You should only do that really when you have enough stock.  As you're new to the industry and want to be able to offer finance, then you should really look and download the FCA guide. 

LAW...  You should also learn about Consumer Rights and Sales of Goods Acts from 1982 onwards to familiarize yourself with the cans and cants, that way you will not be in a pickle if someone challenges your knowledge of selling what is supposedly faulty etc.  You can use companies such as Lawgistics who I've heard are very good, but why pay someone else and add an additional expense for something you can and quite frankly should learn.  Nowadays, its simple, everything is online and free.

 

Hope this helps

Great post from this chap. 

[lastyboy 23]

I admire your balls for attempting to open a 30 car pitch with no prior experience.

It can be done but it is difficult. I personally think the hardest part will be valuing the part exchanges etc. I think you will come a cropper if you just look in glass or cap and say oh it must trade at this. Some cars are over book, some are considerably under.

I personally would go and sell cars for someone for a minimum of 12 months to learn the ropes. Not a main dealer where you are a glorified meeter and greeter but at a place where you can learn the true values of second hand stock.

Good luck though

[justina3 518]

Finding 30 cars to fill the site at the right money / condition / spec is going to be hard enough, good stock for a while now has brought a top premium and squeezed margins very tight.

good luck your going to need it.

[trade vet 704]

Come on NVP,if you do exist we need some more information please or you will just get negative comments.

[grant8064 219]

Great post @Earunder - wish it had been there when I started out.

Best of luck with it NVP.

I only started three years ago with a 35 car forecourt and had only got my driving license two months before taking on the lease so don't be perturbed...it can be done and sometimes diving in at the deep end is the best way.

It's a steep learning curve but this forum has some great guys on it who are really helpful.

My only advice is do everything right...the second you take a shortcut or think you can get away with something it'll bite you in the arse. Put yourself in the punters shoes when dealing, keep a very very close eye on outgoings and bottom line and cancel all your nights out because it's a grind sometimes. 

 

 

[Arfur Dealy 823]

39 minutes ago, grant8064 said:

Great post @Earunder - wish it had been there when I started out.

Best of luck with it NVP.

I only started three years ago with a 35 car forecourt and had only got my driving license two months before taking on the lease so don't be perturbed...it can be done and sometimes diving in at the deep end is the best way.

It's a steep learning curve but this forum has some great guys on it who are really helpful.

My only advice is do everything right...the second you take a shortcut or think you can get away with something it'll bite you in the arse. Put yourself in the punters shoes when dealing, keep a very very close eye on outgoings and bottom line and cancel all your nights out because it's a grind sometimes. 

 

 

Grant, very very wise words

[Nvp cars 0]

8 hours ago, trade vet said:

Hi NVP

Would you be able to confirm if this is a petrol station forcourt.Has it been used for car sales previously .Is it a main road location etc.Every pitch is different as to what sells better,I have had quite a few so I should be able to provide information which may help together with the other guys on here.

 

Hi thank you so much for making time and effort it's 10000 sft on a industrial estate so online is going to be my main stream of advertising 

2 hours ago, tradex said:

If Carlsberg did 'free car trading advice'...

great post, thousands of quids worth there, all fa free, the OP owes that man a large drink

 

Edited October 4, 2017 by Nvp cars

[Arfur Dealy 823]

NVP, are you backing yourself ? do you have any experience in the Trade ? Who's backing you, parents friends.... No one decides with no experience to rent a 30 pitch site....

[Nvp cars 0]

38 minutes ago, Arfur Dealy said:

Grant, very very wise words

Thank you so much for taking time out my rent and rates is 450 a week in border line east London Essex which not to sad considering the size of the land but thanks for the sound advice nice to hear a motivational story.

7 hours ago, Earunder said:

30 cars on your first stint... Brave if you ask me especially if you don't know anything about the industry or don't have any experience in running a car site but if that's your decision I wish you all the best. IMO start with a smaller site, 6-10max and see how you go, grow from your own experience and resources and you can't fall fail providing you move along with the times and stay on your game.

Here's some advice to hopefully help out a little.

1st off you should sort out your trade insurance.

Then figure out what you want to do with warranties etc.  Take the responsibility yourself or outsource warranties to other companies.  Personally I prefer to do the warranties in house, setting aside a set amount out of every car to cover any costs for a warranty job.  I have a separate account for warranty funds.  On average you can pay a warranty company between 110 - 170 per car for around 12 months warranty, just look into the cover as their products are associated with your company so your customers will review you for their product also.  Don't cheap out on the warranty cover basically.

Are you self funded or going for business/stocking loans?  I personally don't do stocking loans and have been and am lucky enough not to need one, but 1 huge mistake I've seen many dealers make is not making sure you have enough in each vehicle to satisfy your outgoings.  Sounds simple, but the business/stocking loans can get the better of you if mis-managed and I wouldn't recommend one for someone new to the motor industry.  If your starting up in this way the risks are way greater than you think and my advice is to rethink this through.  It's a tough industry, with a dog eat dog mentality and not just used cars, but from the big main agents also.  Don't be kidding yourself that you'll start up and start selling a third of your stock off the bat.  Be very careful, we've held off on opening another site towards the end of this year due to the market change.  I'm not going to say what's changed as our market research gives us the head start against many of our competitors but many dealers have noticed a shift in their sales / balances.  

What products or services are you offering your customers?  Are you MoT cars?  Servicing Cars?  Valeting / Repairing Cars?
Are these things you are doing in house or are you outsourcing? 
A good valeter costs from 300 per week (21,000+ p/a). 
A good mechanic costs from 500 per week (£32,500+ p/a).  You can probably outsource a local garage to do an MoT and service for £100, so a good place to start with little regular overheads, so you only pay when you sell.

Advertising... Now here comes the dilemma.  CarGuru's, Motors, Ebay, GumTree, AA Cars all have the same average costs.  I believe in my area, South East, Motors is superb value for money with CarGurus a close 2nd.  AutoTrader has become implausible for us now as it costs us to advertise there.  Our monthly bill was just under 10k p/ for half our stock of 80 cars on 'Premium'.  Over a 2 month period we sold 6 from AT, so the decision was made to cut out AutoTrader.  Don't be fooled by their sale pitches, and not AutoTrader alone, I mean all of the advertising mediums.  You do need to do/try everything, not all at once, but you should try all advertising possibilities for at least 3 months.  I know some dealers, not many now, but a few that rely totally on Motors nowadays.  Go back a year or 2 the same dealers where adamant AutoTrader was their sole advertising platform and nothing could beat it.  Now these dealers are over 30k better off selling the same amount of stock.  Just don't be afraid to cut off something that isn't working.  Track your leads and completions profusely.  When you get 5 minutes, look and track your stats, stats and stats.

Finance...  You'll need to apply to get an FCA licence to be able to offer finance packages with your vehicles.  You should only do that really when you have enough stock.  As you're new to the industry and want to be able to offer finance, then you should really look and download the FCA guide. 

LAW...  You should also learn about Consumer Rights and Sales of Goods Acts from 1982 onwards to familiarize yourself with the cans and cants, that way you will not be in a pickle if someone challenges your knowledge of selling what is supposedly faulty etc.  You can use companies such as Lawgistics who I've heard are very good, but why pay someone else and add an additional expense for something you can and quite frankly should learn.  Nowadays, its simple, everything is online and free.

 

Hope this helps

Wow amazing guy Hi thank you so much for making time and effort it's 10000 sft on a industrial estate so online is going to be my main stream of advertising , I owe u a beer or a keg at least my rent is only 300 per week so not that bad rates 140 per week this is great info just what I was looking for can not thank you enough for reaching out hopefully I could help some this much one day too kind.

7 hours ago, Earunder said:

30 cars on your first stint... Brave if you ask me especially if you don't know anything about the industry or don't have any experience in running a car site but if that's your decision I wish you all the best. IMO start with a smaller site, 6-10max and see how you go, grow from your own experience and resources and you can't fall fail providing you move along with the times and stay on your game.

Here's some advice to hopefully help out a little.

1st off you should sort out your trade insurance.

Then figure out what you want to do with warranties etc.  Take the responsibility yourself or outsource warranties to other companies.  Personally I prefer to do the warranties in house, setting aside a set amount out of every car to cover any costs for a warranty job.  I have a separate account for warranty funds.  On average you can pay a warranty company between 110 - 170 per car for around 12 months warranty, just look into the cover as their products are associated with your company so your customers will review you for their product also.  Don't cheap out on the warranty cover basically.

Are you self funded or going for business/stocking loans?  I personally don't do stocking loans and have been and am lucky enough not to need one, but 1 huge mistake I've seen many dealers make is not making sure you have enough in each vehicle to satisfy your outgoings.  Sounds simple, but the business/stocking loans can get the better of you if mis-managed and I wouldn't recommend one for someone new to the motor industry.  If your starting up in this way the risks are way greater than you think and my advice is to rethink this through.  It's a tough industry, with a dog eat dog mentality and not just used cars, but from the big main agents also.  Don't be kidding yourself that you'll start up and start selling a third of your stock off the bat.  Be very careful, we've held off on opening another site towards the end of this year due to the market change.  I'm not going to say what's changed as our market research gives us the head start against many of our competitors but many dealers have noticed a shift in their sales / balances.  

What products or services are you offering your customers?  Are you MoT cars?  Servicing Cars?  Valeting / Repairing Cars?
Are these things you are doing in house or are you outsourcing? 
A good valeter costs from 300 per week (21,000+ p/a). 
A good mechanic costs from 500 per week (£32,500+ p/a).  You can probably outsource a local garage to do an MoT and service for £100, so a good place to start with little regular overheads, so you only pay when you sell.

Advertising... Now here comes the dilemma.  CarGuru's, Motors, Ebay, GumTree, AA Cars all have the same average costs.  I believe in my area, South East, Motors is superb value for money with CarGurus a close 2nd.  AutoTrader has become implausible for us now as it costs us to advertise there.  Our monthly bill was just under 10k p/ for half our stock of 80 cars on 'Premium'.  Over a 2 month period we sold 6 from AT, so the decision was made to cut out AutoTrader.  Don't be fooled by their sale pitches, and not AutoTrader alone, I mean all of the advertising mediums.  You do need to do/try everything, not all at once, but you should try all advertising possibilities for at least 3 months.  I know some dealers, not many now, but a few that rely totally on Motors nowadays.  Go back a year or 2 the same dealers where adamant AutoTrader was their sole advertising platform and nothing could beat it.  Now these dealers are over 30k better off selling the same amount of stock.  Just don't be afraid to cut off something that isn't working.  Track your leads and completions profusely.  When you get 5 minutes, look and track your stats, stats and stats.

Finance...  You'll need to apply to get an FCA licence to be able to offer finance packages with your vehicles.  You should only do that really when you have enough stock.  As you're new to the industry and want to be able to offer finance, then you should really look and download the FCA guide. 

LAW...  You should also learn about Consumer Rights and Sales of Goods Acts from 1982 onwards to familiarize yourself with the cans and cants, that way you will not be in a pickle if someone challenges your knowledge of selling what is supposedly faulty etc.  You can use companies such as Lawgistics who I've heard are very good, but why pay someone else and add an additional expense for something you can and quite frankly should learn.  Nowadays, its simple, everything is online and free.

 

Hope this helps

Wow amazing guy Hi thank you so much for making time and effort it's 10000 sft on a industrial estate so online is going to be my main stream of advertising , I owe u a beer or a keg at least my rent is only 300 per week so not that bad rates 140 per week this is great info just what I was looking for can not thank you enough for reaching out hopefully I could help some this much one day too kind.

14 minutes ago, Arfur Dealy said:

NVP, are you backing yourself ? do you have any experience in the Trade ? Who's backing you, parents friends.... No one decides with no experience to rent a 30 pitch site....

I have 100k to play with plus my father can support me with finance no loans needed always had passion for cars sold 5/6 cars a year ever year for last ten years 

[Nvp cars 0]

17 minutes ago, Arfur Dealy said:

NVP, are you backing yourself ? do you have any experience in the Trade ? Who's backing you, parents friends.... No one decides with no experience to rent a 30 pitch site....

I have 100k to play with plus my father can support me with finance no loans needed always had passion for cars sold 5/6 cars a year ever year for last ten years 

[Stephen 21]

Big balls I'd say good luck in new and it's one of the hardest industries I've ever tried to make a living at

impressed you've got 10000sq ft I can't find anywhere around here that will allow car storage and even if landlord will council won't 

listen to everyone on here they know what they are talking about been massive help to me

 

[trade vet 704]

OK NVP- you have a 10k sq ft compound ( that's probably a 40 car pitch) on a trading estate in Essex and you are self funded with no experience. The site has never traded Cars previously 

1).  You need a creditable and experienced car dealer as a partner or manager to teach you or you will be slaughtered.

2)    Your annual wage bill alone  for at least 3 staff will be north of £70k ( before you earn a penny)

3).    Add in all the other stuff,like advertising,will probably get you up to £150k ( before you earn a penny)

4).     In the first 6 months you will lose money because it will take you that long to establish what you can sell successfully.

5)      Don't think there is any cash you can earn and not declare,those days are long gone,its mostly plastic cards now.

You will have  to work long hours,cope with set backs in your first years trading and be prepared to  drive long distances to get the right stock.Also with a compound all your stock has to be clean and on sale every day by 10am.

I am not trying to put you off,if you do things right and stick to the script ( especially what Earunder said) ,you can do it.

Good luck

[Nvp cars 0]

10 hours ago, Stephen said:

Big balls I'd say good luck in new and it's one of the hardest industries I've ever tried to make a living at

impressed you've got 10000sq ft I can't find anywhere around here that will allow car storage and even if landlord will council won't 

listen to everyone on here they know what they are talking about been massive help to me

 

Thanks Stephen appreciate the advice .

9 hours ago, trade vet said:

OK NVP- you have a 10k sq ft compound ( that's probably a 40 car pitch) on a trading estate in Essex and you are self funded with no experience. The site has never traded Cars previously 

1).  You need a creditable and experienced car dealer as a partner or manager to teach you or you will be slaughtered.

2)    Your annual wage bill alone  for at least 3 staff will be north of £70k ( before you earn a penny)

3).    Add in all the other stuff,like advertising,will probably get you up to £150k ( before you earn a penny)

4).     In the first 6 months you will lose money because it will take you that long to establish what you can sell successfully.

5)      Don't think there is any cash you can earn and not declare,those days are long gone,its mostly plastic cards now.

You will have  to work long hours,cope with set backs in your first years trading and be prepared to  drive long distances to get the right stock.Also with a compound all your stock has to be clean and on sale every day by 10am.

I am not trying to put you off,if you do things right and stick to the script ( especially what Earunder said) ,you can do it.

Good luck

Thank @trade vet that's great help thanks for taking time out to reply some really helpful people on this forum.

[Earunder 69]

@Nvp cars No problem at all.

It's a very precarious situation at the moment, not just in used car sales, but in the business world in general.  Most customers don't appreciate that they are buying from a business and that the margin in used cars (on average) is not thousands but hundreds.  Of course you get the odd one or 2 that make a pretty penny but these `bonus` (what I like to call them) cars are few and far between nowadays.

If you're completely committed to doing this you'll need to be strong minded and have A LOT of financial backing.  If you've got 100k to start with, never `play` with money or you're destined to fail, then you should spend 50-55k on stock, probably 12-15 cars.  The rest you'll need as cover for your costs over the next 6 months.  You ALWAYS should count on rainy days.  In this industry those days are months so you should prepare for them as they can average as high as 4 months out of a yearly period.

Don't get attached to the cars.  Having a smaller stock can mean you can get attached to a car for one way or another, which results in you not letting it go for a £200 discount.  In some circumstances like you've just got it in, fair enough, but if you've had it a month, sell it.

Don't under value your cars.  A/T love to put this incentive to dealers.  Move it in 20 days blah blah...  Ok that's great, make £400-600... Now try and replace it, that takes you longer than selling the cars in the first place unless you over pay on everything.  

As others have mentioned, it's a very unpredictable market at the moment.  If a friend of mine had £100k of his money, with a site available to him like you have, would I recommend him to get into this industry without prior knowledge and just being a car nut?  Nope.  It's a very easy way to lose £100k and that £100k will not provide you with enough financial support to start and run a 30-35 car site properly.

You should take a course on HP and PCP finance.  There are a few out there ranging from £600 a day - £5,000 for a 5 day certificated course.  My finance advisers are sent on these with Santander and I also ensure they pass a SAF test every year to ensure their knowledge of the finance aspect in the used car market is kept up-to date.  I've recommended all the dealers I know to do the SAF test as it's a great way to ensure you know what you need to know and refresh your brain on things that have changed or you've forgotten.  One of the biggest things in business is to know what you offer and know it inside out, it just so happens in this industry, there is A LOT to know.

What many people don't understand is the overheads for any business but for a car dealer, it's astronomical.  As mentioned previously we were paying A/T nearly £10k per month for only 80 cars,  1 bill per month for only advertising was just shy of £10k.   Just don't forget your overheads...

Regular Monthly Payments:
Wages -
You WILL need a sales manager with at least 10 years of experience at a decent sized used car showroom to help you.  You'll need to pay £500 + bonuses per week for a decent one with knowledge of the industry and not one of the sales staff from a car supermarket as they are not really trained at all.  At the end of the day a salesman can sell anything but the sale manager can direct the company in the right direction so a good one is a MUST.  I can never stress the importance good staff play in help making a company successful.

Pension Scheme
Health Insurance Scheme (You can do without this, but I do advise it for later)
Business Site Insurance
Liability Insurance Cover
Business Trade Insurance (You may be able to tie in within the same company)
Business Rent
Business Rates
Business Bills (electricity, gas, 
Site Bills
Repair Works
MoT Works
Car Servicing
Car Preparation Costs
Advertising Costs
Valeting Equipment
Sundries
Website Hosting
Warranty Cover (in house or outsourced, it still costs)
Stock Database and Invoicing Monthly Payment

One Off Start-up Costs (12-15 cars, with £100k Budget)
Stock 
Branding
First Promo Advertising 
Website Setup
Stock Database and Invoicing Setup
Car Site Branding 
FCA Licence Fee 
Solicitors Fee to setup and Limit a New Company 
Trade Plates

I may have missed something from this list, but there are a lot of overheads.  Anyway, think it through hugely, as I've said, it's a quickfire way to lose A LOT of money.  Do pro's and cons and think it through over a few months and months.  Do a Risks and Challenges Assessment for everything.  

On a side note, if you're really into cars, a good sales manager at a large franchised main dealer can get around £72,800 per year if they show good enthusiasm, hit their targets and motivate their sales team to hit their targets.  I've known someone as young as 27 to be a Sales Manager on this kind of pay.

As I've said and highlighted above:

"If a friend of mine had £100k of his money, with a site available to him like you have, would I recommend him to get into this industry without prior knowledge and just being a car nut?  Nope.  It's a very easy way to lose £100k and that £100k will not provide you with enough financial support to start and run a 30-35 car site properly."

All the best with what you decide, just really do think it through.

[trade vet 704]

26 minutes ago, Earunder said:

@Nvp cars No problem at all.

It's a very precarious situation at the moment, not just in used car sales, but in the business world in general.  Most customers don't appreciate that they are buying from a business and that the margin in used cars (on average) is not thousands but hundreds.  Of course you get the odd one or 2 that make a pretty penny but these `bonus` (what I like to call them) cars are few and far between nowadays.

If you're completely committed to doing this you'll need to be strong minded and have A LOT of financial backing.  If you've got 100k to start with, never `play` with money or you're destined to fail, then you should spend 50-55k on stock, probably 12-15 cars.  The rest you'll need as cover for your costs over the next 6 months.  You ALWAYS should count on rainy days.  In this industry those days are months so you should prepare for them as they can average as high as 4 months out of a yearly period.

Don't get attached to the cars.  Having a smaller stock can mean you can get attached to a car for one way or another, which results in you not letting it go for a £200 discount.  In some circumstances like you've just got it in, fair enough, but if you've had it a month, sell it.

Don't under value your cars.  A/T love to put this incentive to dealers.  Move it in 20 days blah blah...  Ok that's great, make £400-600... Now try and replace it, that takes you longer than selling the cars in the first place unless you over pay on everything.  

As others have mentioned, it's a very unpredictable market at the moment.  If a friend of mine had £100k of his money, with a site available to him like you have, would I recommend him to get into this industry without prior knowledge and just being a car nut?  Nope.  It's a very easy way to lose £100k and that £100k will not provide you with enough financial support to start and run a 30-35 car site properly.

You should take a course on HP and PCP finance.  There are a few out there ranging from £600 a day - £5,000 for a 5 day certificated course.  My finance advisers are sent on these with Santander and I also ensure they pass a SAF test every year to ensure their knowledge of the finance aspect in the used car market is kept up-to date.  I've recommended all the dealers I know to do the SAF test as it's a great way to ensure you know what you need to know and refresh your brain on things that have changed or you've forgotten.  One of the biggest things in business is to know what you offer and know it inside out, it just so happens in this industry, there is A LOT to know.

What many people don't understand is the overheads for any business but for a car dealer, it's astronomical.  As mentioned previously we were paying A/T nearly £10k per month for only 80 cars,  1 bill per month for only advertising was just shy of £10k.   Just don't forget your overheads...

Regular Monthly Payments:
Wages -
You WILL need a sales manager with at least 10 years of experience at a decent sized used car showroom to help you.  You'll need to pay £500 + bonuses per week for a decent one with knowledge of the industry and not one of the sales staff from a car supermarket as they are not really trained at all.  At the end of the day a salesman can sell anything but the sale manager can direct the company in the right direction so a good one is a MUST.  I can never stress the importance good staff play in help making a company successful.

Pension Scheme
Health Insurance Scheme (You can do without this, but I do advise it for later)
Business Site Insurance
Liability Insurance Cover
Business Trade Insurance (You may be able to tie in within the same company)
Business Rent
Business Rates
Business Bills (electricity, gas, 
Site Bills
Repair Works
MoT Works
Car Servicing
Car Preparation Costs
Advertising Costs
Valeting Equipment
Sundries
Website Hosting
Warranty Cover (in house or outsourced, it still costs)
Stock Database and Invoicing Monthly Payment

One Off Start-up Costs (12-15 cars, with £100k Budget)
Stock 
Branding
First Promo Advertising 
Website Setup
Stock Database and Invoicing Setup
Car Site Branding 
FCA Licence Fee 
Solicitors Fee to setup and Limit a New Company 
Trade Plates

I may have missed something from this list, but there are a lot of overheads.  Anyway, think it through hugely, as I've said, it's a quickfire way to lose A LOT of money.  Do pro's and cons and think it through over a few months and months.  Do a Risks and Challenges Assessment for everything.  

On a side note, if you're really into cars, a good sales manager at a large franchised main dealer can get around £72,800 per year if they show good enthusiasm, hit their targets and motivate their sales team to hit their targets.  I've known someone as young as 27 to be a Sales Manager on this kind of pay.

As I've said and highlighted above:

"If a friend of mine had £100k of his money, with a site available to him like you have, would I recommend him to get into this industry without prior knowledge and just being a car nut?  Nope.  It's a very easy way to lose £100k and that £100k will not provide you with enough financial support to start and run a 30-35 car site properly."

All the best with what you decide, just really do think it through.

Great stuff !,but did you forget bookeeping and accountancy fees.I recall the first time I divided the annual cost of sales by the number of sales and the penny dropped !

[Earunder 69]

Just now, trade vet said:

Great stuff !,but did you forget bookeeping and accountancy fees.I recall the first time I divided the annual cost of sales by the number of sales and the penny dropped !

Very True