starting new

[simon 2]

Ok- so you've probably had millions of these posts but here we go anyway.

So, after 20 years stuck in an office job but with a passion for cars and racing I'm going to take the plunge.

I have £5k capital so where is the best chance of return. Should I start with say 4 x £500 cars (but prob sell 10 a month (bargain buys) and sell at £850...... or buy at £1200 to sell at £1800 approx but sell less a month.

So, daft question probably so be gentle!!  thanks in advance from yet another rookie.

By the way, I am in Buckinghamshire so you don't need to give me advice if your're local as you don't need yet more competition on your block.

[It's me 615]

hi simon,for once in my life im going to be blunt

dont do it

keep the boring job

a £5000 investment  is only  going to get you  bogged down with scrappers in no time or an expensive big lemon

are you thinking of working from home

what are you going to do if the first car you buy non of the electric windows dont work like on that car programme last night

what would you do like on another thread on here where a body computer has had probably water ingress and failed and its a dealer part plus then having it coded it

modern cars you need more than an interest to keep in front of them and not have customers back at your door

put the £5000 into an isa mine made me £134 or buy a car you can run and sell at a later date

 

soz

[JKG 16]

Simon, you need to consider the following.

 

Trade insurance (most policy's cost £1k +

Trade plates (unless you are planning on taxing each car)

If you are working from home you will need planning permission (it won't be long before your neighbours report you)

If you are going to be working from premises you need to work out your in going costs.

warranties (whether you will use a 3rd party or be covering the warranties yourself)

Prep (repairs/mot's/bodywork) unless you know a couple of tradesman or can put lots of work their way you will most likely be paying retail prices.

 

With lot's of overheads, and a lot of time and money going into a car to bring it to retail standards it's not as cut and dried as just buying it for 500, selling it for 850 and bingo 350 profit, unless your lucky, and don't forget the customers who will try and beat you down with a big stick.

 

5K is a small budget for this game, not impossible but hard, if you get a lemon you won't have much to fall back on.

 

It might sound like I'm trying to put you off but after considering the above if you feel it's viable for you then I wish you every success, we all have to start somewhere.

 

Kind Regards.

[Cornish Guy 45]

And you have to contend with the new Consumer Rights Act 2015.

[jimreidvehicle 255]

The guys have basically cover it on the comments above Simon.

There are some major costs incurred with setting up included in the thread above including the fact that at some point you will have to register for VAT. But even if you do manage to keep under that threshold , £500 cars are the cars we move through the auction for a reason! If there was some type of profit in them without customer comeback then we would all be doing it.

Sorry, in my humble opinion you either 'do something right or don't do it at all'! 

[umesh 336]

All said it ! serious thinking Simon, Let us know your decision !

[RJ Magpie 3]

buying for £500 and selling for £850 is not always the case:

bought 2001 diesel focus for £500 sold for £450 and had to spend £300 on it... 

[cvs 1]

Am also hoping to start in the car trade with a budget of around 20k for stock and another 5k to spend on a unit my rent every week is pretty cheap. I am hoping to buy 10-12 cars out of a local trade centre to stock my yard. I am a machanic and have all my tools to repair cars myself. So do yous think that's a suitable budget to start with?

 

[Max Branning 149]

If you are keen to do it then 5k is ample to get you started but my advice would be do it part time until you get a few sales under your belt.

Start with just 1 car, maybe a car you know something about ie what faults to look out for because you previously owned one maybe and try and get a profit out of it.

It takes a lot of hard work this game and a very thick skin.

Good luck.

[Rory RSC 596]

I started with less than that 3 years ago and now have approx 30cars in stock and am selling 30/40+ a month and making a good living. 

It can be done. No one helped me, no one bailed me out and I have learnt a hell of a lot along the way. 

I I had another means of income for the first 2 years so never needed to take a penny out. 

 

5k is simply not enough for a full time job. 

[Phil H 124]

simon if you're going to make it work you need to keep your costs down without comprising on your customer experience. One way of doing this is if your can carry out the mechanical work or paintwork yourself. Don't know if you have the skills to do this but before you leave a secure income just dip your toes in and see how you go before going b@lls deep. I do hope you're not one of these people who are brainwashed by tv programmes like wheels steals and deals who imho fantasize about how easy our Job is because in reality it's not. Done right you can make good money, done wrong and it could wreck your life and health. Don't be afraid to ask for advice on here as a lot of genuine people post on here but you'll also find out very quickly that there are a lot of t@ssers in this job who will lie to you and stab you in the back and see harm done to you easier than a dog cocking his leg for a p@ss. I'd also think about going in with someone who you trust as this will halve the profits but as the saying goes 2 heads are better than 1. Good luck with whatever you decide and keep us posted.

[umesh 336]

Great Point Phil H , We're all here to help and guide anyone who needs advise ..! Various forums either here ot twittercardealers !  #support 

[simon 2]

Thanks guys. My overheads are exceedingly low. £400 per month and I aim to get a part time job to help out financially over first two years.

I do know a mechanic that can help at cost. I am not being swayed by car programmes- I have thought about this for about 3 years !

I even dabbled and bought a Clio for £450 and sold it for £700. So it can be done. Anything can be achieved if you want it enough.

My current job keeps me indoors, all day meeting hardly anybody. It will get me outside, working and learning about cars and meeting people.

I will prob do my own warranties too or maybe warrantywise.  I will buy off ebay- do them up and sell them on.

All I need is a good autotrade insurance company - any ideas ?

 

Thanks again and I hope your're happy to help with future daft questions !

[Phil H 124]

give John France a call at premier insurance in winsford 01606863400, dead straight bloke who handles insurance for a couple of thousand dealers, he'll see you right. tell him scouse van Phil gave you his number.

[Jack Regan 116]

I agree with what some has said start doing it part time at first , with £5000 now a days and how quite in can go for periods out there you may find yourself running out of money pretty sharpish .

10 or 15 years back when it was busier ..then I would say yup dive straight in you'll be ok but not today .

[Max Branning 149]

Thanks guys. My overheads are exceedingly low. £400 per month and I aim to get a part time job to help out financially over first two years.

I do know a mechanic that can help at cost. I am not being swayed by car programmes- I have thought about this for about 3 years !

I even dabbled and bought a Clio for £450 and sold it for £700. So it can be done. Anything can be achieved if you want it enough.

My current job keeps me indoors, all day meeting hardly anybody. It will get me outside, working and learning about cars and meeting people.

I will prob do my own warranties too or maybe warrantywise.  I will buy off ebay- do them up and sell them on.

All I need is a good autotrade insurance company - any ideas ?

 

Thanks again and I hope your're happy to help with future daft questions !

When i first started out i use to go to auction buying the cheapies, corsas were my favourite at the time as they always sold quick. I would often pick up something for 400-500 quid and bung it on good old ebay for £695 and they would sell sometimes within a day. This got me going and i then started going a bit more expensive and getting better margins.

The biggest problem now is with these consumer laws, its very hard to sell a car for 695 without it having a few faults or developing some fairly quickly after sale!.

I dont know about anyone else here but buyers even at the cheapie price range seem much more fussy than they was 5 or 6 years ago.

[simon 2]

well I have been told to buy one at £1200 as opposed to two "old bangers". But I agree with Corsas- I would be aiming at the low cost, low insurance, low running costs end of the market. Thanks for heads up on the Insurance firm too !

When I start i'll bore you to death with my weekly progress !!  

[Rory RSC 596]

I used to buy privately.

you could go to the person, suss if genuine test drive haggle over faults and it teaches good negotiation skills. 

I used to find adverts on gumtree and ebay that were quite badly written and came up with a story about how the cars were for my brother. People don't like selling you their car if they feel you are going to make money on it. 

 

A good clean, good pics and on Autotrader and they sold for more money. Harder to buy at auction as faults can be hidden limited time with the cars etc. 

[Jack Regan 116]

I used to buy privately.

you could go to the person, suss if genuine test drive haggle over faults and it teaches good negotiation skills. 

I used to find adverts on gumtree and ebay that were quite badly written and came up with a story about how the cars were for my brother. People don't like selling you their car if they feel you are going to make money on it. 

 

A good clean, good pics and on Autotrader and they sold for more money. Harder to buy at auction as faults can be hidden limited time with the cars etc. 

 

 

So you was buying as a private man so they would not think you was making money on them  ? 

Did you put them in your brothers name , wait for the log books to come back with another owner on them ?

ive bought private on occasion just  told em I was trade , no problems

 

 

 

[Rory RSC 596]

Used to tell them I had a car sales business dealing with higher end stuff. Needed the full v5 for insurance a it was being driven back on trade insurance. 

I dont have have a brother.

 

most people do not like to think you are making money off them . Worked for me. 

[sparky 274]

 

 

 

Edited October 30, 2015 by sparky

[umesh 336]

Bought a few from private sellers specially when sourcing for sold orders, just told the seller's the full story -I'm in the trade have a customer - no problem. 

[Daylight 28]

I would think long and hard before just jumping in. I speak to people on an almost daily basis that think what we do is easy money and easy work "You pay £1000 for the car, wash it and sell it for £2k, easy £1k profit!" they say. As we all know this couldn't be further from the truth.

If you're going to seriously look at doing this you need to work out all of your business overheads, £5k working capital is basically nothing really. Remember your outgoings are more than just the cars you want to buy i.e

Mechanical repairs, bodywork (inc. smart & dentman), work phone (DON'T use your own phone!), website, business cards, advertising, insurances, unit rental, trade plates, tyres, MOT, servicing, warranties

I would look at the others advice on here and start part time, you can quite easily work it around another income to begin with until your pot is big enough to swallow up the cost of the lemons you WILL buy and the quiet times when the phone doesn't ring but the mortgage is still due!

[simon 2]

exactly !  

So I definitely need a part time job plus my £5k.

So I appreciate all the advice but let's turn this around for a discussion.

If it's so difficult then why do you do it ? If profits are really as bad as you say ?

Surely you can make more than £500 profit on the car values discussed earlier. Even dabbling I made £250 on a clio bought for £400 and sold for £700 approx.

What do you like about your profession- what do you love about your profession ??

What do you hate about it and why ?

Interesting to hear your thoughts as you haven't put me off- just more determined !  ::)

 

 

[Jack Regan 116]

It's not all doom and gloom .... when it's good it's the best job in the world ... When it's bad it's bad, and with only a little bit of money behind you when it's bad it could be really bad.