Becoming a full trader advice

[tradelad 0]

Hi guys

new to the forum here and apologies in advance if you experienced people have answered these questions many times before

i need advice on a few things jumbled up below -

i am looking to start of by stocking 6 - 8 cars at a time and would be looking to sell cars between the value of £1000 to £3 - £4000

currently all my stock is bought privately from sites like gumtree and fb marketplace.. will auctions be worth it for me knowing the price range of cars i will be selling? 
i know that franchised dealers already have agreements in place with independent dealers to purchase all their part exchange vehicles, what would be the best way for me to form a relationship with a dealer to start taking some of their px cars?

 

i will be selling cars that usually between 8 and 12 years old so can i pick up these from dealers that take px? 

i will start by working from home until i am big enough to warrant buying a unit.. who is the best warranty company to use that actually pays out as i want to build a reputable brand with returning customers. 
 

my trade insurance is coming to £5k for the first year due to a previous conviction but i am more than happy to pay this as i want to do things the right way.

 

i guess i am seeking advice from the experienced players in the field to just guide me and tell me if what i am going to do is the right thing for me moving forward.

thanks for your help in advanced all responses are truly appreciated

Edited January 2, 2020 by tradelad

[andymc1973 199]

I stopped reading at “selling cars privately as a part time hobby” 

[Stalker 180]

1 hour ago, Uzzy100 said:

 i have been generating £3000 to £5000 profit every month

Wow... part time..... If you can id get another job and keep up the good work.

[justina3 518]

with that level of turnover stock and profit generated i dont think you need any advise from us, clearly the other way around. 

Your vat bill must be a killer.

[trade vet 704]

Hi Uzzi

I have to tell you.When you claim you have been doing 10 and generating 3 to 5 grand profit each month for 2 years part time ,nobody believes you.

[Mikey360 68]

1 minute ago, trade vet said:

Hi Uzzi

I have to tell you.When you claim you have been doing 10 and generating 3 to 5 grand profit each month for 2 years part time ,nobody believes you.

I bet the tax man would 

[Rory RSC 596]

2 minutes ago, Uzzy100 said:

What your telling me you dont average £500 from each car you sell?

corsa auto 07 08 models buy for £1000 £1200 sell for £1500 £1700

same with honda jazz models

5 cars £500 profit - £2500

whats not to believe

any genuine advise givers out there on how to form relationships with dealers for their px cars? Its getting quite tiring sourcing cars privately and travelling 50 to 100 miles every night to buy and pick up stock

Everyone starts somewhere, the hard part is buying. Sack off the job and just think with an extra 30 hours a week how much more you can make.   No shortcut, no easy way to buy stock. Its private and travel all over the place or its the auction.  

Do you have a website yet?  

[trade vet 704]

13 minutes ago, Uzzy100 said:

What your telling me you dont average £500 from each car you sell?

corsa auto 07 08 models buy for £1000 £1200 sell for £1500 £1700

same with honda jazz models

5 cars £500 profit - £2500

whats not to believe

any genuine advise givers out there on how to form relationships with dealers for their px cars? Its getting quite tiring sourcing cars privately and travelling 50 to 100 miles every night to buy and pick up stock

You are referring to gross profit,we all make good gross profits.I would think you may be netting £200 per car,which is still very good.When you go ‘legit’ your net profit will reduce again with VAT and tax etc.BTW I also have to tell you that HMRC might already know all about you so you need to get a proper accountants advice to help reduce your liability.

[justina3 518]

20 minutes ago, trade vet said:

You are referring to gross profit,we all make good gross profits.I would think you may be netting £200 per car,which is still very good.When you go ‘legit’ your net profit will reduce again with VAT and tax etc.BTW I also have to tell you that HMRC might already know all about you so you need to get a proper accountants advice to help reduce your liability.

There is zero chance he isnt registered doing 10 a month surly ?

[Mark101 536]

1 hour ago, Uzzy100 said:

What your telling me you dont average £500 from each car you sell?

corsa auto 07 08 models buy for £1000 £1200 sell for £1500 £1700

same with honda jazz models

5 cars £500 profit - £2500

whats not to believe

any genuine advise givers out there on how to form relationships with dealers for their px cars? Its getting quite tiring sourcing cars privately and travelling 50 to 100 miles every night to buy and pick up stock

You need to drastically increase your gross margin.

Purchase Price £1000

Selling Price £1500

Gross Profit £500

Less VAT margin £83

Less MOT £35

Less Service £100

Less Transport/Fuel/Time/Internet/Phone Calls £100

Less Valet £25

Less Warranty £60

£97 pre tax profit (plus a little VAT reclaimed), providing you don't get a screamer/claim not covered by warranty provider.

It is nowhere as easy as you have found this to be when doing it full time.

Increase your margins and retain the same numbers and you'll do ok. Welcome by the way and good luck.

[MarkTVS 209]

Uzzy, are you vat registered? What is your vat registration number? Also your companies house number? 

[Pip 12]

4 hours ago, Uzzy100 said:

Hi guys

new to the forum here and apologies in advance if you experienced people have answered these questions many times before

i have been working full time and selling cars privately for two - three years. i have been generating £3000 to £5000 profit every month (bar december) for the past 2 years from car sales, focusing on £1000 to £3000 cars and selling around 10 cars a month, with a maximum of 4 cars at a time. I sell genuine motors with the minorest of defects but always let customers know and do a fair bit of negotiation from asking price offered. During the last year my passion for car sales has overtaken my passion for my full time job, i have recently been made redundant and feel this is the kick up the backside i needed to start selling cars properly as a registered trader.

i need advice on a few things jumbled up below -

i am looking to start of by stocking 6 - 8 cars at a time and would still be looking to sell cars between the value of £1000 to £3 - £4000

currently all my stock is bought privately from sites like gumtree and fb marketplace.. will auctions be worth it for me knowing the price range of cars i will be selling? 
i know that franchised dealers already have agreements in place with independent dealers to purchase all their part exchange vehicles, what would be the best way for me to form a relationship with a dealer to start taking some of their px cars?

 

i will be selling cars that usually between 8 and 12 years old so can i pick up these from dealers that take px? 

i will start by working from home until i am big enough to warrant buying a unit.. who is the best warranty company to use that actually pays out as i want to build a reputable brand with returning customers. 
 

my trade insurance is coming to £5k for the first year due to a previous conviction but i am more than happy to pay this as i want to do things the right way.

 

i guess i am seeking advice from the experienced players in the field to just guide me and tell me if what i am going to do is the right thing for me moving forward.

thanks for your help in advanced all responses are truly appreciated

Crikey I’m jealous. So you are making 60 large ones a year profit selling from home and buying privately? I’m doing something wrong.  I take it you are Vat registered and pay tax on this lol. I don’t think you need advice from me. I think I need advice from you. I know a guy at the block who was doubling up on everything he bought . Old shitters I wouldn’t touch. He told a good story. He don’t sell cars anymore though. 15 months was enough, his a Tesco delivery guy now. 

[sellect2 19]

If you sell 10 cars a month, between £1000 and £3000- let’s say £2000 per car. 
That’s £20000 per month or £240,000 per year. 
You must have hit the VAT threshold? 
 

need to register now even if you keep it part time. 

[Pip 12]

28 minutes ago, Uzzy100 said:

Not vat registered as i haven’t passed £80k turnover

im self employed 

thanks for all the advice guys going to weigh up my options as to whether i should get a unit or continue the way i do

will post again next month when decided

I’m a little confused. You sell 10 a month which is 120 a year. Your telling me you haven’t passed the k80 vat threshold. 120 cars at £800 each is k96 

sorry if all the Xmas drink has made me thick. 

Seriously mate, I would sort things out and keep all records. Even purchase receipts and sales receipts. If you have a prang trade insurance wants to see everything. I’ve had it this year. Don’t mess with the VAT man. They aren’t daft.

[Blenheim Car Sales 111]

You will also need to advise them you have been trading part time for the last two years so they can calculate the  Lost revenue you have cost them, There will be a  fee and interest for late decleration, Its turnover not profit thats the VAT threshold, You definitely are over the  mark and 24 months of VAT is a  tidy sum, good luck 

[Stephen 21]

Good luck hope you saved you vat bill will be at least 25k based on your rough figures then you have tax etc 

[Stephen 21]

Hope you have 25k plus sitting in bank for vat man, then tax man will want his bit aswell good luck 

 

[justina3 518]

20 minutes ago, Uzzy100 said:

Yeh i calculated wrong

i just spoke to a friend who said i need to register asap so first thing monday im getting registered!!

Part of the registration form will ask for your current turn over and that’s the tricky moment for you right there. 
 

option 1 don’t declare and pray it doesn’t get noticed 

option 2 declare your previous fife years and u less your records are bomb proof you will get an estimated vat bill and be warned they won’t  use lube when they enter you. 

[Casper 272]

2 minutes ago, Uzzy100 said:

Yeh i thought it was on profit.. luckily i got all my receipts for all cars sold

No you've made a mistake there but hope you get it sorted .  

[David Ayers 171]

21 minutes ago, justina3 said:

be warned they won’t  use lube when they enter you. 

How is the Mrs?

[Stalker 180]

I presume the moderator of the forum can pass on your contact details to HMRC

[justina3 518]

27 minutes ago, David Ayers said:

How is the Mrs?

Painful, we have a pact I don’t go on her forums and she doesn’t come on mine thankfully. 

[Dave c 5]

Ummm...sorry , just read the entire thread.
If the OP is accurate, then he could teach a few of us lessons in how to get such a great part time income

but  sounds like he’s getting Great profits with very limited overhead, ( let alone VAT and tax, I’m assuming zero is currently being paid )
Unsustainable outside of short term.

you really need to start to declare before the time bomb goes off .

 

btw, we’d all like to get hold of cheap, clean stock. Those who can, won’t share for obvious reasons!

 

Good luck with keeping this up , keep us posted, mate. (Just so we can copy your trading model. lol)

Edited December 28, 2019 by Dave c

[Boycie 30]

Just curious, if you are buying your stock from Gumtree and Facebook, and then selling them on Gumtree and Facebook, how could you charge more than you got the car for in the first place? Why wouldn't your customers just buy the car from Gumtree and Facebook the first time it is advertised?

[Casper 272]

17 minutes ago, Boycie said:

Just curious, if you are buying your stock from Gumtree and Facebook, and then selling them on Gumtree and Facebook, how could you charge more than you got the car for in the first place? Why wouldn't your customers just buy the car from Gumtree and Facebook the first time it is advertised?

Ive seen it being done in the past with with previous employers badly presented or photographed car etc or cars needing cosmetic work just the odd car though not all the stock  

Edited December 29, 2019 by Casper