Buying Advice on Stock Under 5 Grand

[DBCARS 3]

Hi Everyone 

I have currently been selling cars for around £1500 and under £2000 and its time to move on. 

 

The stock is getting harder to find now in good clean condition and the margins are getting lower and im finding every car needing repairs and the bills are taking away my profits.  

I want to start buying some better stock, slightly more expensive stuff but unsure of the market place as such, Maybe some £2495 stuff and some £2995 stuff and maybe some £3995 stuff and some £4995 stuff. 

 

So my question is really what makes and models to steer clear of and what sells good at this price point! 

 

I have in the past done well with Diesel Estate Cars, and Mainly Peugeot/Citroen stuff as I think it ages well with no rust and people tend to like them at the lower end of the Market. However moving on up  I want to stock what ever is going to sell the easiest and what is going to have the best profit margins in. 

 

Things I always try to do well are find a car with decent miles and full service history with low owners, this has worked for me in the past but I need to be more target specific with brands of car and types of car.

I have never really sold sports or performance cars, I kind of stuck with the Family kind of stuff as the customers are generally easier to deal with. 

Any pointers out there? 

For example I know some guys sell Jags, some sell VW / Audi, Some sell 4x4, I just want to be able to see a car and spot the value in it right away, for this ive mainly stuck with Diesel cars as most of the petrol stuff ive struggled with but its so diverse out there its unbelievable!

Any help / advice greatly appreciated 

 

 

 

[Arfur Dealy 823]

49 minutes ago, DBCARS said:

Hi Everyone 

I have currently been selling cars for around £1500 and under £2000 and its time to move on. 

 

The stock is getting harder to find now in good clean condition and the margins are getting lower and im finding every car needing repairs and the bills are taking away my profits.  

I want to start buying some better stock, slightly more expensive stuff but unsure of the market place as such, Maybe some £2495 stuff and some £2995 stuff and maybe some £3995 stuff and some £4995 stuff. 

 

So my question is really what makes and models to steer clear of and what sells good at this price point! 

 

I have in the past done well with Diesel Estate Cars, and Mainly Peugeot/Citroen stuff as I think it ages well with no rust and people tend to like them at the lower end of the Market. However moving on up  I want to stock what ever is going to sell the easiest and what is going to have the best profit margins in. 

 

Things I always try to do well are find a car with decent miles and full service history with low owners, this has worked for me in the past but I need to be more target specific with brands of car and types of car.

I have never really sold sports or performance cars, I kind of stuck with the Family kind of stuff as the customers are generally easier to deal with. 

Any pointers out there? 

For example I know some guys sell Jags, some sell VW / Audi, Some sell 4x4, I just want to be able to see a car and spot the value in it right away, for this ive mainly stuck with Diesel cars as most of the petrol stuff ive struggled with but its so diverse out there its unbelievable!

Any help / advice greatly appreciated 

 

 

 

This question comes up regularly. There is no answer, you have to find what suits you, find your own niche through trial and error. We can’t teach you that. 

[trade vet 702]

Focus more on what you are good at.Work harder on the buying side,it is the same for everyone.Its not just cheaper stuff that comes with big bills.Don’t believe other traders too much,the job is full of bullshitters,it always has been.

[EPV 631]

17 minutes ago, trade vet said:

Focus more on what you are good at.Work harder on the buying side,it is the same for everyone.Its not just cheaper stuff that comes with big bills.Don’t believe other traders too much,the job is full of bullshitters,it always has been.

One of the best pieces of advice I was given a year ago was to not listen to other traders. It’s excellent advice. There are far too many doom mongers out there. 

OP, buying five grand stock isn’t that much different to £500 stock. You need to prep better cosmetically but as long as you are doing the job right, selling sound cars and giving good customer service, it’s the same thing. 

Buy some stuff you like and see how you get on. Get some miley newer stuff, lower mileage older stuff, hot hatches, diesel barges and see what works. Or, more specifically, what you enjoy. 

 

[AutoJacob 34]

Your current market is where I am and I agree it is very hard, for example today there was a 2006 Nissan Note 1.6 SVE, Good Spec, 97K Mileage, Some History, Nice car a couple of dents but would of retailed for £1695 / £1795 on my pitch.. today this sold for £1050, cap clean is £910, CAP is miles out for Nissan Notes and they never make clean. 

4 Months ago I bought the same car in a respectable condition, slightly less spec for £475 hammer price and sold for £1495 No prep other than an MOT and Service.

The problem with this end of the market as I'm sure you're aware it attracts all the fly by night traders, Asian and Polish Car sales groups who are flipping cars for £50 profit and it is only getting worse.

[Rory RSC 596]

Cars at 5k just need as much work doing as cars at 2k in my experience when it comes to prepping.  

Margins are increasingly squeezed across all sectors and you have to put extra effort in to finding stock. Its tough at the moment. Very tough but you can still do well and find good profits if you are prepared to work harder and smarter.

[Mikey360 68]

I'm in the 5k bracket and everyone's right, it's tough. It's a fine balance between older low mileage stuff or newer high mileage, both have similar prep issues. Just find what sells nicely and repeat.

[Nick M.K. 574]

16 hours ago, DBCARS said:

I have in the past done well with Diesel Estate Cars

Me too but lately they are a bit of a struggle.

Their buyers are switching towards small and medium MPVs, SUVs, 4x4 of the sort that didn't exist 7-8 years ago. 

They also like to buy petrol estates now in my just-out-of-London area. Give them a year of high fuel bills (E Class Estate petrol auto, can you imagine the real life MPG!!!) and just as many reliability issues and diesel estates will make a minor resurgence.

[justina3 518]

I often tell my guys to forget value a £2500 Focus is as new to one customer as is a £15000 Focus RS to another, each needs to be prepped to the best of our ability and sold as such. 

[It's me 615]

1 hour ago, justina3 said:

I often tell my guys to forget value a £2500 Focus is as new to one customer as is a £15000 Focus RS to another, each needs to be prepped to the best of our ability and sold as such. 

I call it double minting

mint it out its tree

walk away

walk back mint it again

then you know first genuine person to see will never find better, indeed they have been looking for ages, so unless they really arent in the position to proceed ie they need their mums hand, you have a sale

[DBCARS 3]

18 hours ago, EPV said:

One of the best pieces of advice I was given a year ago was to not listen to other traders. It’s excellent advice. There are far too many doom mongers out there. 

OP, buying five grand stock isn’t that much different to £500 stock. You need to prep better cosmetically but as long as you are doing the job right, selling sound cars and giving good customer service, it’s the same thing. 

Buy some stuff you like and see how you get on. Get some miley newer stuff, lower mileage older stuff, hot hatches, diesel barges and see what works. Or, more specifically, what you enjoy. 

 

Agree with you here but I already prep to the highest standards possible even on the cheap stuff

Never had much luck with high mileage stuff, when you say miley newer stuff, what sort of mileage would you consider as miley?

15 hours ago, AutoJacob said:

Your current market is where I am and I agree it is very hard, for example today there was a 2006 Nissan Note 1.6 SVE, Good Spec, 97K Mileage, Some History, Nice car a couple of dents but would of retailed for £1695 / £1795 on my pitch.. today this sold for £1050, cap clean is £910, CAP is miles out for Nissan Notes and they never make clean. 

4 Months ago I bought the same car in a respectable condition, slightly less spec for £475 hammer price and sold for £1495 No prep other than an MOT and Service.

The problem with this end of the market as I'm sure you're aware it attracts all the fly by night traders, Asian and Polish Car sales groups who are flipping cars for £50 profit and it is only getting worse.

Thanks for your insight, this is one of the main reasons im trying to move on up a level aswell, to escape the bidding wars im currently finding myself in with a certain few other dealers who sell there stock under market value and with no prep, no warranty and they just bid bid bid and often I have to pay too much, its always the same faces and they end up taking it personally and in the end they bid on what ever im bidding on even if they don't really want it!

5 hours ago, Rory RSC said:

Cars at 5k just need as much work doing as cars at 2k in my experience when it comes to prepping.  

Margins are increasingly squeezed across all sectors and you have to put extra effort in to finding stock. Its tough at the moment. Very tough but you can still do well and find good profits if you are prepared to work harder and smarter.

Thanks, the cosmetic prep isn't a problem to me, I always prep to a very high standard, what im trying to do is escape the repair bills ive been getting of late, the cars im buying are end of life and im having to put extra money into them to bring them up to road worthy condition, I am hoping to eliminate this by buyer newer stock. 

4 hours ago, Mikey360 said:

I'm in the 5k bracket and everyone's right, it's tough. It's a fine balance between older low mileage stuff or newer high mileage, both have similar prep issues. Just find what sells nicely and repeat.

Thanks, what do you find sells better the low mileage older stuff ot the newer high mileage stuff? and what is your golden rule on maximum mileage to buy?

3 hours ago, Nick M.K. said:

Me too but lately they are a bit of a struggle.

Their buyers are switching towards small and medium MPVs, SUVs, 4x4 of the sort that didn't exist 7-8 years ago. 

They also like to buy petrol estates now in my just-out-of-London area. Give them a year of high fuel bills (E Class Estate petrol auto, can you imagine the real life MPG!!!) and just as many reliability issues and diesel estates will make a minor resurgence.

Interesting take on things, I didn't look at it this way. 

What I tend to get is alot of guys looking for an estate car to use as a van, instead of a van, some have said its more of a disguise to thieves, as they've had there vans broke into numerous times and kit stolen

[DBCARS 3]

3 hours ago, justina3 said:

I often tell my guys to forget value a £2500 Focus is as new to one customer as is a £15000 Focus RS to another, each needs to be prepped to the best of our ability and sold as such. 

Couldn't of agreed more, this is what im good at, I go to town on every car I have in stock regardless of age or condition, I do whats needed to bring it right back up to the best it can be. I spend alot of time on prep, advertising, photos, etc... 

[Mark101 536]

I spend far too much on mechanical prep (prevention is better than cure and all that).  This means I change timing belts if overdue or near due, always MOT everything now regardless how recently it was done, change all filters (not just oil), PDI, two keys, A/C, Parking sensors etc etc etc.  I therefore cannot compete (or I have to sit on stock much longer than many) with the plastic traders as I throw £200 to 500+ at every car just on mechanicals. 

Paint, I try to limit to touch-ins or at worst smart repairs because the cost (but mainly time) for bodyshop is a nightmare.

[Mikey360 68]

27 minutes ago, DBCARS said:

 

Thanks, what do you find sells better the low mileage older stuff ot the newer high mileage stuff? and what is your golden rule on maximum mileage to buy?

 

Depends which way the wind is blowing! Honestly if the cars right, its right! Example 2007 BMW 320i M sport coupe 130k in black, sold in 7 days, 2009 CRV 163K, sold in 5 days and on the flip side, 2009 Ford mondeo titanium, 103k, sold in 68 days, Honda civic type S, 70k, couldn't sell it! Had to ebay auction it off dirt cheap. 

It REALLY depends on you adverts, pricing, your area, whats going on in the country, what colour knickers your neighbour is wearing next tuesday, what the minister had for breakfast etc.

2 minutes ago, Mark101 said:

I spend far too much on mechanical prep (prevention is better than cure and all that).  This means I change timing belts if overdue or near due, always MOT everything now regardless how recently it was done, change all filters (not just oil), PDI, two keys, A/C, Parking sensors etc etc etc.  I therefore cannot compete (or I have to sit on stock much longer than many) with the plastic traders as I throw £200 to 500+ at every car just on mechanicals. 

Paint, I try to limit to touch-ins or at worst smart repairs because the cost (but mainly time) for bodyshop is a nightmare.

I agree Mark, they are second hand after all, they will have minor scuffs and bumps and I think 90% of punters would rather the car be mechanically sound than look like its just come out the showroom

[Mark101 536]

3 minutes ago, Mikey360 said:

I agree Mark, they are second hand after all, they will have minor scuffs and bumps and I think 90% of punters would rather the car be mechanically sound than look like its just come out the showroom

Sorry, I may have misled you there.  None of my cars go out with scratches or dents (unless a PX clearance).  I avoid buying cars which require more than a touch in or smart repair as opposed to bodging them through.

[Mikey360 68]

5 minutes ago, Mark101 said:

Sorry, I may have misled you there.  None of my cars go out with scratches or dents (unless a PX clearance).  I avoid buying cars which require more than a touch in or smart repair as opposed to bodging them through.

Ah sorry my bad! I tend to deal in slightly older higher mileage stuff that would require a lot of paint work to get them looking perfect. If they were as nice as your stock Mark then I would happily get the odd paint repair done here and there.

[Mark101 536]

Just now, Mikey360 said:

Ah sorry my bad! I tend to deal in slightly older higher mileage stuff that would require a lot of paint work to get them looking perfect. If they were as nice as your stock Mark then I would happily get the odd paint repair done here and there.

Just FYI - I deal mainly in the stock you are planning to move up to but I am now starting to prepare to double my stock unit value, so I can offer much newer, lower mileage stuff because I have had more than a bad run of claims leading up to Christmas despite some serious mechanical prep.  I would rather stock fewer higher value cars and that is my plan for 2019 once the sub £5k stuff moves on.

 

[grant8064 219]

If you think moving up to £4995 is going to reduce your prep costs i'd think again, not trying to be a doom monger but a £4995 Focus is still a five - eight year old car with worn out parts, no average car gets maintained properly these days. For us £200 - £400 per unit average prep costs plus the odd 1K bill is typical. Having wasted many an evening trying to compete with benefits moonlighters and local takeaway owners at sub 2K auctions I feel your pain, good luck!

[david gott 58]

19 hours ago, EPV said:

One of the best pieces of advice I was given a year ago was to not listen to other traders. It’s excellent advice. There are far too many doom mongers out there. 

OP, buying five grand stock isn’t that much different to £500 stock. You need to prep better cosmetically but as long as you are doing the job right, selling sound cars and giving good customer service, it’s the same thing. 

Buy some stuff you like and see how you get on. Get some miley newer stuff, lower mileage older stuff, hot hatches, diesel barges and see what works. Or, more specifically, what you enjoy. 

 

This is so true, don’t worry about other people and what they are doing, if you start comparing you’ll just end up changing your formula for success every month, week, day and then before you know it you’ve lost your identity. One of the problems with this job is you always think the grass is greener on the other side, but in most cases it isn’t. In this day and age you can either be a race to the bottom dealer with little prep and just running round like a headless chicken or you can somebody who sells good quality cars, prepared to the highest standard, providing a service that deserves profit, these are the customers we want not the bottom picker customer who 9 times out 10 end up being a nightmare anyway.

[David Horgan 564]

The main reason an owner of a car sells it now days by 98% is there is something that needs doing to it , New Brakes , Cam Belt , Turbo Whine , Shocks , Tyres , EGR , and the list goes on . So in my thinking any car price range will need something doing 

It wont matter what price range your in its going to be a similar story as regards expense of prep mechanically , the only benefit is the more expensive a car the cost seems to be more justified  as the parts are the same cost as a £1,999 banger and profits should be higher , 

Look around on the roads and see what customers are driving , look at the affluence in your area and where you might pull customers from . 

If they are all on 50cc mopeds or maybe Audi A6's , you might have the answer. 

All the best and a happy new year 

[Arfur Dealy 823]

A lot more people are completely  strapped up. With the ease of PCP deals “rent a car” schemes used cars aren’t so attractive. But the ones who can’t get PCP can’t afford to maintain their own cars,  it’s a vicious circle. The whole game is changing, as I always say it’s a rollercoaster.....

[metcars 397]

3 hours ago, Arfur Dealy said:

A lot more people are completely  strapped up. With the ease of PCP deals “rent a car” schemes used cars aren’t so attractive. But the ones who can’t get PCP can’t afford to maintain their own cars,  it’s a vicious circle. The whole game is changing, as I always say it’s a rollercoaster.....

This!

More than anything else, owners lack of maintenance or at least minimal maintenance is making buying really tough for me. It seems that owning a car is about how little you have to spend on it between MOT's. Of the stuff I buy, less and less are coming with any history, other than a book with a few stamps from when it was nearer to new. Nobody seems to DIY service any more, which makes buying older cars a lottery, after all if you are intending to do nothing to a car for years, not even change the oil, when you swap it in it's going to be rough!

[CCC 31]

17 hours ago, Mark101 said:

Just FYI - I deal mainly in the stock you are planning to move up to but I am now starting to prepare to double my stock unit value, so I can offer much newer, lower mileage stuff because I have had more than a bad run of claims leading up to Christmas despite some serious mechanical prep.  I would rather stock fewer higher value cars and that is my plan for 2019 once the sub £5k stuff moves on.

 

I agree with everything in this thread.

Prices on cheap stuff is too high to make a margin if you prep properly and too many cars seem to have a zero maintenance approach, plus there’s a lot more to go wrong on modern cars.

We’re liquidating our cheap stock having spent time learning the hard way and plan to move to less stock but higher price (around £9995) stuff too. With hindsight that will fit in better with the local area (similar to Nick’s) but at least our investment in over prep and helping on claims has helped establish a good reputation locally. 

Edited January 4, 2019 by CCC

[David Horgan 564]

11 hours ago, met said:

This!

More than anything else, owners lack of maintenance or at least minimal maintenance is making buying really tough for me. It seems that owning a car is about how little you have to spend on it between MOT's. Of the stuff I buy, less and less are coming with any history, other than a book with a few stamps from when it was nearer to new. Nobody seems to DIY service any more, which makes buying older cars a lottery, after all if you are intending to do nothing to a car for years, not even change the oil, when you swap it in it's going to be rough!

Agree with you there Met 

Had a guy ring us in panic , been told you guys repair cars . Er yes whats your problem ?

Cars chucked oil all over my drive . Get it down here then . He tows car down to see us . Last time it was serviced was 4 yrs ago , 3.0 litre V6 petrol S type Jag 128,000 miles . The oil filter was hanging on by a crumb of rust and that was the leak . It also had tape round it to attempt a repair 

The guy asked us if he could get his own oil from Asda , I told him to collect his car and take it to ASDA for the filter too 

4yrs and 40,000 miles on same oil , never heard it running but it must of sounded terrible 

Charged him £50 + vat  diagnosis too  

[Del Boy 76]

28 minutes ago, David Horgan said:

The guy asked us if he could get his own oil from Asda , I told him to collect his car and take it to ASDA for the filter too

Oil from Asda!!? What’s he gonna use, cooking oil?