Looking to Become a Motor Trader

[RJEauto 18]

On 10/24/2019 at 11:42 AM, 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.

 

 

Welcome 

My partner, Ryan, is a detailer and did that full time prior to us opening a year ago so similar starting situation to yourself.

Insurance - If your dad is actually involved in the business, could be possible but I believe the insurance "policyholder" is normally company and it's director/s so may need to look into this. I'm 23 and Ryan is 27, he's the director and policyholder of the business which wasn't an Issue, I'm covered for business use, SD&P. I can drive anything business use but our cover has me limited to 1600cc for SD&P, which in our case isn't an issue.

Responsibilities - as others have said, read up regarding CRA as much as possible. We make sure everything leaves with long MOT's, fresh service and full inspection, PDI sheet signed by customer, etc. They are cars, you will have issues occasionally, but treat your customers fairly and prep everything as well as you can - it's all you can do.

Good Luck! Kelly 

[Kieran 2]

Thank you everyone for the advice! Wasn’t expecting this many responses haha, I really appreciate it. 
 

One question I have is, are motor traders allowed to sell a car “sold as seen” so you have no responsibility for the condition of it? Say you have a scenario where you’ve got a car that’s been part ex’d and it’s not something you would usually sell or clearly has a problem - or is it just a case of sending it off to an auction? 

[MattR 177]

Spares or repairs, to be towed away for spares.

[Arfur Dealy 823]

5 hours ago, Kieran said:

Thank you everyone for the advice! Wasn’t expecting this many responses haha, I really appreciate it. 
 

One question I have is, are motor traders allowed to sell a car “sold as seen” so you have no responsibility for the condition of it? Say you have a scenario where you’ve got a car that’s been part ex’d and it’s not something you would usually sell or clearly has a problem - or is it just a case of sending it off to an auction? 

As a retailer you cannot sell a vehicle SAS, you cannot dissolve a consumers rights.

You can however sell it as unfit for purpose, unroadworthy, untested, without a current MOT and only fit for parts or to be repaired. It must be trailored away and the billy must be fully aware and has signed / agreed in no uncertain terms 

Edited October 29, 2019 by Arfur Dealy

[trade vet 704]

37 minutes ago, Arfur Dealy said:

As a retailer you cannot sell a vehicle SAS, you cannot dissolve a consumers rights.

You can however sell it as unfit for purpose, unroadworthy, untested, without a current MOT and only fit for parts or to be repaired. It must be trailored away and the billy must be fully aware and has signed / agreed in no uncertain terms 

Well summed up Judge Dealy

[David Ayers 171]

53 minutes ago, Arfur Dealy said:

As a retailer you cannot sell a vehicle SAS, you cannot dissolve a consumers rights.

You can however sell it as unfit for purpose, unroadworthy, untested, without a current MOT and only fit for parts or to be repaired. It must be trailored away and the billy must be fully aware and has signed / agreed in no uncertain terms 

Spot on.

Check out Lawgistics. They do specific invoices for this as well as pre delivery checklists.

[Arfur Dealy 823]

22 minutes ago, trade vet said:

Well summed up Judge Dealy

Like 

[Casper 272]

7 hours ago, Kieran said:

Thank you everyone for the advice! Wasn’t expecting this many responses haha, I really appreciate it. 
 

One question I have is, are motor traders allowed to sell a car “sold as seen” so you have no responsibility for the condition of it? Say you have a scenario where you’ve got a car that’s been part ex’d and it’s not something you would usually sell or clearly has a problem - or is it just a case of sending it off to an auction? 

Dont do it it will come back and bite you in the arse 

[Kieran 2]

Thank you again everyone! 

[Casper 272]

3 minutes ago, Kieran said:

Thank you again everyone! 

Your welcome .. know where we are if you need us ..

[Kieran 2]

Hi guys! Another question/query. If you sell a car that has issues, and the customer knows of these issues before buying it, are you still liable for those issues?

For example, say I've got a very cheap, sub £1k car that has a light oil leak, which has been highlighted as an advisory on an MOT. It might not be worth fixing, but the car drives well, and it's it's only a very minor leak, but it isn't worth fixing, let's say it costs £500 to fix. If this is highlighted to the customer before they buy it and they're okay with it, are you, the dealer, still liable for that problem (even if the customer accept/acknowledge the problem before agreeing to buy it)?

Obviously this isn't something I plan to do and probably something that isn't recommended, just curious as to what the answer is

Edited November 18, 2019 by Kieran

[MattR 177]

41 minutes ago, Kieran said:

Hi guys! Another question/query. If you sell a car that has issues, and the customer knows of these issues before buying it, are you still liable for those issues?

For example, say I've got a very cheap, sub £1k car that has a light oil leak, which has been highlighted as an advisory on an MOT. It might not be worth fixing, but the car drives well, and it's it's only a very minor leak, but it isn't worth fixing, let's say it costs £500 to fix. If this is highlighted to the customer before they buy it and they're okay with it, are you, the dealer, still liable for that problem (even if the customer accept/acknowledge the problem before agreeing to buy it)?

Obviously this isn't something I plan to do and probably something that isn't recommended, just curious as to what the answer is.

A remarkably specific circumstance for a hypothetical question.........

[Kieran 2]

2 minutes ago, MattR said:

A remarkably specific circumstance for a hypothetical question.........

Just to put into context is all. If you're trying to suggest I'm seeking advice here for an actual issue you'd be wrong, I haven't even started trading cars yet - just trying to cover all bases so I have the best understanding possible, will help aid decisions when buying cars to sell and what to do with px'ed cars etc...

[NOACROSS 414]

Hi Keiren,  I’ll bite.  If you’re upfront about the issues, and spell it out in the advert and document it at sale, getting the punter to sign to say they are aware and understand and that you won’t entertain any comebacks etc, then you’re still officially ***ked if they kick up a fuss. After all, we are the ‘professional’ motor trader and they are the poor old had-over innocent customer. 
 

However, that’s the worst case scenario. Most people are normal and if you’re up front with them, you will normally be fine. From time to time however....

On the whole, I would try not to sweat every detail.  Just get on with it and treat as you would like to be treated etc. 
Better off selling well prepared cars with a new mot and all that  

Good luck. 

[Kieran 2]

3 minutes ago, NOACROSS said:

Hi Keiren,  I’ll bite.  If you’re upfront about the issues, and spell it out in the advert and document it at sale, getting the punter to sign to say they are aware and understand and that you won’t entertain any comebacks etc, then you’re still officially ***ked if they kick up a fuss. After all, we are the ‘professional’ motor trader and they are the poor old had-over innocent customer. 
 

However, that’s the worst case scenario. Most people are normal and if you’re up front with them, you will normally be fine. From time to time however....

On the whole, I would try not to sweat every detail.  Just get on with it and treat as you would like to be treated etc. 
Better off selling well prepared cars with a new mot and all that  

Good luck. 

Great thank you! Pretty much what I expected. Yeah definitely don't aim to sell a car that isn't mechanically sound, but I'm sure there'll be one that ends up having an issue which doesn't effect the car and won't be worth putting right - so just wanted to see if it's a case of getting scrapped/auctioned or if we'd be in a position to sell it still.

Edited November 18, 2019 by Kieran

[J.T 39]

On 10/29/2019 at 2:02 PM, Kieran said:

One question I have is, are motor traders allowed to sell a car “sold as seen” so you have no responsibility for the condition of it? Say you have a scenario where you’ve got a car that’s been part ex’d and it’s not something you would usually sell or clearly has a problem - or is it just a case of sending it off to an auction? 

As others have said selling a car stating 'sold as seen' is a big no no, you can sell cars like that without any warranty but you can't take away the customers consumer rights. 

5 hours ago, Kieran said:

Hi guys! Another question/query. If you sell a car that has issues, and the customer knows of these issues before buying it, are you still liable for those issues?

For example, say I've got a very cheap, sub £1k car that has a light oil leak, which has been highlighted as an advisory on an MOT. It might not be worth fixing, but the car drives well, and it's it's only a very minor leak, but it isn't worth fixing, let's say it costs £500 to fix. If this is highlighted to the customer before they buy it and they're okay with it, are you, the dealer, still liable for that problem (even if the customer accept/acknowledge the problem before agreeing to buy it)?

Obviously this isn't something I plan to do and probably something that isn't recommended, just curious as to what the answer is

It would be probably cheaper to get a new MOT on it from a tester that is a bit more reasonable, I think the MOT test should be if oil drips on the head of the MOT tester then that is an oil leak but if it's a slight misting of oil because it's a second hand car and perfectly normal then it shouldn't even be mentioned. 

[Kieran 2]

Just now, J.T said:

As others have said selling a car stating 'sold as seen' is a big no no, you can sell cars like that without any warranty but you can't take away the customers consumer rights. 

It would be probably cheaper to get a new MOT on it from a tester that is a bit more reasonable, I think the MOT test should be if oil drips on the head of the MOT tester then that is an oil leak but if it's a slight misting of oil because it's a second hand car and perfectly normal then it shouldn't even be mentioned. 

That's exactly what I mean by like an issue that doesn't really effect the car, but yeah that seems like a good way to go as well, thank you.

[Casper 272]

8 hours ago, NOACROSS said:

Hi Keiren,  I’ll bite.  If you’re upfront about the issues, and spell it out in the advert and document it at sale, getting the punter to sign to say they are aware and understand and that you won’t entertain any comebacks etc, then you’re still officially ***ked if they kick up a fuss. After all, we are the ‘professional’ motor trader and they are the poor old had-over innocent customer. 
 

However, that’s the worst case scenario. Most people are normal and if you’re up front with them, you will normally be fine. From time to time however....

On the whole, I would try not to sweat every detail.  Just get on with it and treat as you would like to be treated etc. 
Better off selling well prepared cars with a new mot and all that  

Good luck. 

I agree with this .. fresh mot on all stock pdi and checked and repair but as Noa says must customers are ok if your up front with them .stuff like your pretend car is better. Sold on to others traders as a trade sale or sent to auction 

[Arfur Dealy 823]

When selling an old banger it is going to have faults. You just have to over yourself by stating them clearly in the advert and on the PDI / purchase invoice.

The customer signs and agrees the faults were present at the point of sale, they are then excluded from being covered by the CRA. 
 

In all sales scenarios protect yourself, your business and the consumer. If they’re a pain on collection, they’ll be worse post sale. Don’t sell them the car, don’t sell yourself trouble.

There is nothing wrong with doing the above, but the car MUST still be roadworthy. If the car is unroadworthy it must be sold as unroadworthy and trailored away. Don’t compromise the above and never sell a car as “sold as seen”. 

Buy some Lawgstics PDI and invoice pads. Good luck. 
 

 

[RHO 15]

Would have though a Pro Detailer would have Trade Insurance anyway. Driving or working on other peoples vehicles, usually nice one's if they are being detailed.

 

[BHM 994]

I’d say a small oil leak on a secondhand car that’s a few years old isn’t a fault, it’s wear & tear and comes with the territory. 

Most older cars have some sort of minor leak or oil seepage from what I see.

Not wishing to tempt fate I’ve never had a complaint or a car returned due to an oil leak, but admittedly I’m not selling 40 grand Porsches. However I’ve had the occasional punter walk away from a minor leak but I’ve also had punters walk because they don’t like red cars (after coming to see a red car) etc.

[trade vet 704]

2 hours ago, BHM said:

I’d say a small oil leak on a secondhand car that’s a few years old isn’t a fault, it’s wear & tear and comes with the territory. 

Most older cars have some sort of minor leak or oil seepage from what I see.

Not wishing to tempt fate I’ve never had a complaint or a car returned due to an oil leak, but admittedly I’m not selling 40 grand Porsches. However I’ve had the occasional punter walk away from a minor leak but I’ve also had punters walk because they don’t like red cars (after coming to see a red car) etc.

Ha Ha,I agree.However years ago a close friend wanted a Metro ( if anyone remembers them ) just to go to the shops. ( that’s about all they were good for ).So having been given a budget we get one as good as you can get,friends and family price ( that means no profit and usually a loss ).We drop it off but the next morning she called in some distress as their was a big problem with the unpaid for Metro as it had a huge oil leak which had marked her block paving.It turned out it had dropped a small spec of oil.I explained that Metros usually drop far more oil than that .However, it was the potential shame of having an oil stain on the block paving of their new cardboard house.The main concern was what would the neighbours say,so I advised to buy a new car but not a Metro.

[Casper 272]

40 minutes ago, trade vet said:

Ha Ha,I agree.However years ago a close friend wanted a Metro ( if anyone remembers them ) just to go to the shops. ( that’s about all they were good for ).So having been given a budget we get one as good as you can get,friends and family price ( that means no profit and usually a loss ).We drop it off but the next morning she called in some distress as their was a big problem with the unpaid for Metro as it had a huge oil leak which had marked her block paving.It turned out it had dropped a small spec of oil.I explained that Metros usually drop far more oil than that .However, it was the potential shame of having an oil stain on the block paving of their new cardboard house.The main concern was what would the neighbours say,so I advised to buy a new car but not a Metro.

Lol 

[CCC 31]

If she’d left most metros a week it would stained most of the drive the same colour. Hateful things, my wife’s first car and I seemed to spend most weekends fixing it. Last time she had any input into a car purchase.

[Dave c 5]

They were a rebodied mini, using same engine, suspension etc designed the 50s. But the mug punters lapped it, up, for a year, it was Britain’s best selling car. No doubt aided by the fact BSM choose them for their fleet in the early 80s. ....

 

PS I was a mug punter as I bought a new one. Things were a bit  different back then .There was a good trade of fetching back from Europe then converting them (as new) to RHD and saving a fair bit of cash. The “importer “ changed the steering rack, the dashboard and the speedo to be legal. He wasn’t so fussed about the headlights, he just turned the bulb 45 degrees which skewed the beam enough and saved him the cost of new headlight units.....but the European spec was higher than the uk one so I was happy enough, not bad for under £3.5k  new.

I lived with the clutch pedal being an inch higher than the brake....Till the bloody thing leaked water..had an inch swishing in the front footwell....stuck some draught excluder on the door to channel the rain water away from the poor door seal. And it misfired on the motorway at cruising speed 
Bloody awful thing. Talk about emperors new clothes...