Looking to Become a Motor Trader

[Kieran 2]

Hi guys, I'm a professional detailer, based in a unit, mainly dealing with paint correction and ceramic coatings. Recently, I've been looking into starting up as a motor trader, as I have the space and equipment (all the detailing equipment, plus tools for any minor work) to prepare, buy and sell cars basically - I've also got a great relationship with a garage who can deal with more involved work and MOTs.

Over the last year or so, I've kind of been buying and selling cars on a private level, bought a Suzuki Swift as a daily runabout on Facebook for £400 drove it for 4/5 months sold it for £650, then got an MX5 for £600 a couple weeks later sold it for £950, then back into another Suzuki Swift bought for £300 sold for £750 a few months later, now in another car which I bought for great price and if I sell it I'm looking at £600 'profit' - this didn't start of as intentional, just wanted a daily car that wasn't going to depreciate and then slowly turned into make a couple hundred here and there. 

It's something I want to start doing a more serious level, I've been to a few local car auctions with a friend. Bought and sold a few cars now since August, and we are looking to doing it together. So I'm basically here to reach out to look for some advice, or have any pointers as to where to look for solid advice.

There's a few things that I'm unsure of of.

• Motor trade insurance. We're both under 25, which I've been told is going to make getting trade insurance difficult. Would it be possible to have trade insurance in my dad's name, if we involved him in the business? So that he (my dad) would be the main policy holder, and we be additional ones - or is that going to be just as difficult as getting trade insurance ourselves? (just to confirm, not looking to front the business, my dad would be involved in the actual business)
• Responsibilities. Is there anywhere I can find information about the responsibilities you have as a trader? As I'm aware there's responsibilities you have as a trader, when it comes to fixing problems with cars if they have issues after selling them. I've had a good search online and all I can find is the consumer side of things, which doesn't answer a lot of my questions. The cars we will be starting off with are going to be in the price range of £500-3000. So 7+ years old with a fair amount of miles, and cars of this nature are obviously more likely to have problems, so it's something that is a bit concerning for us, and we want to make sure we understand the responsibilities we would have a seller.

Any advice would be appreciated. I apologise if this is not the right place to ask for advice!

 

Thanks.

 

 

Edited October 24, 2019 by Kieran

[MattR 177]

A nice intro Kieran

To be aware of; think of how much you need to make, especially if there are 2 of you. break that down into a monthly amount and then work out how many cars you need to sell based on your current selling experience and margins.

Think how much money you need to have to buy that initial stock of cars and recon money to make sure they are of a standard to sell.

You will soon become liable for VAT.

Your main responsibility to the customer is the CRA 2015. Take a look at that, and search around the forum for more info about it and warranties.

 

Good Luck

[justlooking 48]

Hi Kieran,

Great opening post, quite refreshing considering some of the recent one post wonders that have sought advice and disappered in to the night.

Someone will be along soon to recommend an insurance broker who may be able to help get you an under 25 policy, unsure on the dad-element.

Responsibilities, yes, you need to read up on/google/learn understand, the Consumer Rights Act 2015 like the back of your hand, but also take note that it differs slightly for the sale of used cars, versus, say, a TV. Probably worth calling a motortrade focused law firm like Lawgistics to have an initial free chat for 15 mins, I'd probably look at signing up to their help for 12 months, and do that, mechanically prepare the cars properly, MOT'ing, rather than say, spend money on warranties.

All the best!

[Kieran 2]

2 minutes ago, MattR said:

A nice intro Kieran

To be aware of; think of how much you need to make, especially if there are 2 of you. break that down into a monthly amount and then work out how many cars you need to sell based on your current selling experience and margins.

Think how much money you need to have to buy that initial stock of cars and recon money to make sure they are of a standard to sell.

You will soon become liable for VAT.

Your main responsibility to the customer is the CRA 2015. Take a look at that, and search around the forum for more info about it and warranties.

 

Good Luck

 

Thanks Matt! Appreciate that a lot.

[JA Trader 58]

9 minutes ago, Kieran said:

Hi guys, I'm a professional detailer, based in a unit, mainly dealing with paint correction and ceramic coatings. Recently, I've been looking into starting up as a motor trader, as I have the space and equipment (all the detailing equipment, plus tools for any minor work) to prepare, buy and sell cars basically - I've also got a great relationship with a garage who can deal with more involved work and MOTs.

Over the last year or so, I've kind of been buying and selling cars on a private level, bought a Suzuki Swift as a daily runabout on Facebook for £400 drove it for 4/5 months sold it for £650, then got an MX5 for £600 a couple weeks later sold it for £950, then back into another Suzuki Swift bought for £300 sold for £750 a few months later, now in another car which I bought for great price and if I sell it I'm looking at £600 'profit' - this didn't start of as intentional, just wanted a daily car that wasn't going to depreciate and then slowly turned into make a couple hundred here and there. 

It's something I want to start doing a more serious level, I've been to a few local car auctions with a friend. He's bought and sold a few cars now since August (with my help, but I haven't been financially involved), and we are looking to doing it together. So I'm basically here to reach out to look for some advice, or have any pointers as to where to look for solid advice.

There's a few things that I'm unsure of of.

• Motor trade insurance. We're both under 25, which I've been told is going to make getting trade insurance difficult. Would it be possible to have trade insurance in my dad's name, if we involved him in the business? So that he (my dad) would be the main policy holder, and we be additional ones - or is that going to be just as difficult as getting trade insurance ourselves?
• Responsibilities. Is there anywhere I can find information about the responsibilities you have as a trader? As I'm aware there's responsibilities you have as a trader, when it comes to fixing problems with cars if they have issues after selling them. I've had a good search online and all I can find is the consumer side of things, which doesn't answer a lot of my questions. The cars we will be starting off with are going to be in the price range of £500-3000. So 7+ years old with a fair amount of miles, and cars of this nature are obviously more likely to have problems, so it's something that is a bit concerning for us, and we want to make sure we understand the responsibilities we would have a seller.

Any advice would be appreciated. I apologise if this is not the right place to ask for advice!

 

Thanks.

 

 

Welcome and as said above refreshing to see a nice intro.

The dad element is 'fronting' unless he is actually involved in the company registered director ETC.

Have a look through the CRA 2015 and also go and see and accountant and get registered.

[Kieran 2]

4 minutes ago, justlooking said:

Hi Kieran,

Great opening post, quite refreshing considering some of the recent one post wonders that have sought advice and disappered in to the night.

Someone will be along soon to recommend an insurance broker who may be able to help get you an under 25 policy, unsure on the dad-element.

Responsibilities, yes, you need to read up on/google/learn understand, the Consumer Rights Act 2015 like the back of your hand, but also take note that it differs slightly for the sale of used cars, versus, say, a TV. Probably worth calling a motortrade focused law firm like Lawgistics to have an initial free chat for 15 mins, I'd probably look at signing up to their help for 12 months, and do that, mechanically prepare the cars properly, MOT'ing, rather than say, spend money on warranties.

All the best!

Thank you. Hopefully, I'll be here a while, hoping to learn what I need to learn then help others in my situation in the future. Quite active on quite a few car forums, so this is now on my list haha!

Yeah I think that's definitely one of the first things we're concerned about. Definitely need to find learn/understand CRA 2015 like you say.

1 minute ago, JA Trader said:

Welcome and as said above refreshing to see a nice intro.

The dad element is 'fronting' unless he is actually involved in the company registered director ETC.

Have a look through the CRA 2015 and also go and see and accountant and get registered.

Yeah, we definitely wouldn't be looking to front the business. He would be involved, he started housing development a couple years ago and is looking to get into another business once his next house sells - so it's perfect timing really. Thanks!

[JA Trader 58]

7 minutes ago, Kieran said:

Yeah, we definitely wouldn't be looking to front the business. He would be involved, he started housing development a couple years ago and is looking to get into another business once his next house sells - so it's perfect timing really. Thanks!

Sorry i wasn't quite clear.

Having your dad on the policy is perfectly fine in the way your are talking about above. If however you was going to have him as he policy holder and him not be involved in the company that is 'fronting' of a policy

At this point you are talking about 3 people being involved in the company and the profits my only concern is how many cars you are going to need to sell at 750- 3000 to pay 3 wages ???

[Kieran 2]

Just now, JA Trader said:

Sorry i wasn't quite clear.

Having your dad on the policy is perfectly fine in the way your are talking about above. If however you was going to have him as he policy holder and him not be involved in the company that is 'fronting' of a policy

At this point you are talking about 3 people being involved in the company and the profits my only concern is how many cars you are going to need to sell at 750- 3000 to pay 3 wages ???

It wouldn't be something we would all be doing on a full-time basis, we all have our main occupations. With three of us it makes it much easier for us all to run this on a 'part time' basis, there's 3 of us to attend auctions and collect cars, myself and my friend are able to prepare (wash, mechanical work, etc...) the cars between ourselves, and we can all be available for car viewings etc...

Whereas if there was say just me, it would be difficult to go car auctions and collect cars. I would have to arrange transport to the auction, or invest in a flatbed/trailer. It would be difficult for me to be available regularly for car viewings, especially out of normal working hours. So by having three people involved it basically allows us to have a full-time business, with minimal risk  (as none of us need/have to give up our normal occupations until the business is proven) if that makes sense. 

[JA Trader 58]

6 minutes ago, Kieran said:

It wouldn't be something we would all be doing on a full-time basis, we all have our main occupations. With three of us it makes it much easier for us all to run this on a 'part time' basis, there's 3 of us to attend auctions and collect cars, myself and my friend are able to prepare (wash, mechanical work, etc...) the cars between ourselves, and we can all be available for car viewings etc...

Whereas if there was say just me, it would be difficult to go car auctions and collect cars. I would have to arrange transport to the auction, or invest in a flatbed/trailer. It would be difficult for me to be available regularly for car viewings, especially out of normal working hours. So by having three people involved it basically allows us to have a full-time business, with minimal risk  (as none of us need/have to give up our normal occupations until the business is proven) if that makes sense. 

Makes perfect sense and sounds like you have your head screwed on with the plans you want.

Find the niche and cars that sell for you and im sure it will be a success.

[Kieran 2]

2 minutes ago, JA Trader said:

Makes perfect sense and sounds like you have your head screwed on with the plans you want.

Find the niche and cars that sell for you and im sure it will be a success.

Thank you 

[chrishowie 14]

Good luck, don't catch a cold with the CRA 2015 though.

But grass isn't always greener, don't forget HMRC's cut of everything + VAT plus plus plus.

You are the last guys to get paid but have all the headaches.

With everything, you will have good days and bad though and still can be fun : )

[Casper 272]

Good luck hope you do well . 

[Arfur Dealy 823]

Great intro Kieran, welcome. 

[TangoVictor32 90]

I would personally stick to the detailing body shop side of things and become a total pro at it.

Why?

Because there's a lack of bodyshops about and the ones that are about mess you about on time / quality or money.

This trade is lacking good quality body workers unless you go to the arm and leg insurance type places.

[David Ayers 171]

Welcome.

Have you seen the top of the home page? How to become a car dealer?

Worth a read.

Edited October 24, 2019 by David Ayers

[trade vet 702]

Sorry but my view is different.If the valeting/ detailing business works,getting into retailing from the same premises may be a distraction.Involving 2 others with no experience will not help and will substantially increase your workload and you will likely fall out.OK using your Dad as he should work for next to nothing.While it is easy to sell cars,the bottom line is that even if you have years of experience,it is now very hard to make any decent money in this job.

[Kieran 2]

19 minutes ago, TangoVictor32 said:

I would personally stick to the detailing body shop side of things and become a total pro at it.

Why?

Because there's a lack of bodyshops about and the ones that are about mess you about on time / quality or money.

This trade is lacking good quality body workers unless you go to the arm and leg insurance type places.

Thanks for the advice, I won't be completely moving away from detailing to do this - if anything it'll be a bit of a USP for the car sales, especially once/if we get into higher value cars.

 

18 minutes ago, David Ayers said:

Welcome.

Have you seen the top of the home page? How to become a car dealer?

Worth a read.

I haven't! Thanks, will look at that!

 

8 minutes ago, trade vet said:

Sorry but my view is different.If the valeting/ detailing business works,getting into retailing from the same premises may be a distraction.Involving 2 others with no experience will not help and will substantially increase your workload and you will likely fall out.OK using your Dad as he should work for next to nothing.While it is easy to sell cars,the bottom line is that even if you have years of experience,it is now very hard to make any decent money in this job.

Thanks, really appreciate the different view. I think car sales and detailing can go hand in hand, if done and marketed correctly. As above, it can almost be a bit of a USP to the car sales, as when we get into higher value cars they'll be prepped to a very high quality. Then when a car is sold we'd be able to offer protection packages, etc...

The detailing business does work, but I'm always looking on ways to improve, grow and I want to have my eggs in different baskets. 

Edited October 24, 2019 by Kieran

[David Horgan 564]

3 hours ago, Kieran said:

Hi guys, I'm a professional detailer, based in a unit, mainly dealing with paint correction and ceramic coatings. Recently, I've been looking into starting up as a motor trader, as I have the space and equipment (all the detailing equipment, plus tools for any minor work) to prepare, buy and sell cars basically - I've also got a great relationship with a garage who can deal with more involved work and MOTs.

Over the last year or so, I've kind of been buying and selling cars on a private level, bought a Suzuki Swift as a daily runabout on Facebook for £400 drove it for 4/5 months sold it for £650, then got an MX5 for £600 a couple weeks later sold it for £950, then back into another Suzuki Swift bought for £300 sold for £750 a few months later, now in another car which I bought for great price and if I sell it I'm looking at £600 'profit' - this didn't start of as intentional, just wanted a daily car that wasn't going to depreciate and then slowly turned into make a couple hundred here and there. 

It's something I want to start doing a more serious level, I've been to a few local car auctions with a friend. Bought and sold a few cars now since August, and we are looking to doing it together. So I'm basically here to reach out to look for some advice, or have any pointers as to where to look for solid advice.

There's a few things that I'm unsure of of.

• Motor trade insurance. We're both under 25, which I've been told is going to make getting trade insurance difficult. Would it be possible to have trade insurance in my dad's name, if we involved him in the business? So that he (my dad) would be the main policy holder, and we be additional ones - or is that going to be just as difficult as getting trade insurance ourselves? (just to confirm, not looking to front the business, my dad would be involved in the actual business)
• Responsibilities. Is there anywhere I can find information about the responsibilities you have as a trader? As I'm aware there's responsibilities you have as a trader, when it comes to fixing problems with cars if they have issues after selling them. I've had a good search online and all I can find is the consumer side of things, which doesn't answer a lot of my questions. The cars we will be starting off with are going to be in the price range of £500-3000. So 7+ years old with a fair amount of miles, and cars of this nature are obviously more likely to have problems, so it's something that is a bit concerning for us, and we want to make sure we understand the responsibilities we would have a seller.

Any advice would be appreciated. I apologise if this is not the right place to ask for advice!

 

Thanks.

 

 

HI Kieran 

Welcome aboard . Nice intro as the others have said 

Trick to selling is make sure you do three things , Prep , prep ,prep , make sure the car is mechanically sound and fit for purpose , service it , inspect it very well , then it wont come back to bite you .If it does man up and fix it, but equally dont be a soft touch as they will try to skin your last breathe if you do . 

Regards detailing cars and selling them , I can tell you now that people who buy cars haven't got a clue about detailing and whats involved , but its a very useful skill to shall we say enhance the paint work and make the interior look sparkly clean too . We are pro detailers too so we know how they react to that word  When you get to the higher prices 12/16k then its a different story but in the price range you said don't confuse the customer with sealants , nano products , machine polishing , carnuba waxes and the rest .

Insurance !, put it dads name and add yourself on at the same time , we did when my son was 19 and it was easy , better when he was 25 so you shouldn't have any trouble really . 

Above all have fun , its hard work but done correctly it makes money , I get a sense of satisfaction from every sale . But I live for the deals .Like detailing too mind sometimes pick on a car and go to the limits of shine and finish , just because i can 

Just took a 66 plate Audi A3 quattro that wants detailing , the £900 will give me an internal glow when he pays me on Monday 

 

[umesh 336]

12 minutes ago, David Horgan said:

HI Kieran 

Welcome aboard . Nice intro as the others have said 

Trick to selling is make sure you do three things , Prep , prep ,prep , make sure the car is mechanically sound and fit for purpose , service it , inspect it very well , then it wont come back to bite you .If it does man up and fix it, but equally dont be a soft touch as they will try to skin your last breathe if you do . 

Regards detailing cars and selling them , I can tell you now that people who buy cars haven't got a clue about detailing and whats involved , but its a very useful skill to shall we say enhance the paint work and make the interior look sparkly clean too . We are pro detailers too so we know how they react to that word  When you get to the higher prices 12/16k then its a different story but in the price range you said don't confuse the customer with sealants , nano products , machine polishing , carnuba waxes and the rest .

Insurance !, put it dads name and add yourself on at the same time , we did when my son was 19 and it was easy , better when he was 25 so you shouldn't have any trouble really . 

Above all have fun , its hard work but done correctly it makes money , I get a sense of satisfaction from every sale . But I live for the deals .Like detailing too mind sometimes pick on a car and go to the limits of shine and finish , just because i can 

Just took a 66 plate Audi A3 quattro that wants detailing , the £900 will give me an internal glow when he pays me on Monday 

 

Hi Kieran , Like everyone has said .. but this man always talks a lot of sense @David Horgan  #fun and Enjoy what you do, if you'ev got a passion for it, you'll make it work...

[David Horgan 564]

1 hour ago, umesh said:

Hi Kieran , Like everyone has said .. but this man always talks a lot of sense

Hi Umesh 

Coming from your self my friend I will take that as a compliment . 

Hope your well ?, must ring you some time 

 

[Casper 272]

13 minutes ago, David Horgan said:

Hi Umesh 

Coming from your self my friend I will take that as a compliment . 

Hope your well ?, must ring you some time 

 

David I agree mate not only do you talk sense your a general all round decent chap as well .. 

Edited October 24, 2019 by Casper

[David Horgan 564]

17 minutes ago, Casper said:

David I agree mate not only do you talk sense your a general all round decent chap as well .. 

Thanks Casper appreciated  , I haven't got a like or smiley face button any more  

[Casper 272]

Just now, David Horgan said:

Thanks Casper appreciated  , I haven't got a like or smiley face button any more  

[trade vet 702]

1 hour ago, umesh said:

Hi Kieran , Like everyone has said .. but this man always talks a lot of sense @David Horgan  #fun and Enjoy what you do, if you'ev got a passion for it, you'll make it work...

He certainly does.£900 for minting an A3,that is where you want to be Kieran.

[Arfur Dealy 823]

No offence intended at all David / detailers, but I am confused..... why would anyone spend £900 on cleaning a car ? I really can't get my head around "detailing" surely its just an Americanism for a good quality valet ?