Selling Cars on Behalf of Customers

[johny1980 4]

Hi All,

I note some dealers offer a service for selling customer cars, ie a fixed fee or percentage.

I'm just wondering how it works in regards to the  service itself and the accounting in particular. 

It's something I am considering but I presume you are taking on the warranty risk?

Any input welcome.

[David Horgan 564]

3 minutes ago, johny1980 said:

Hi All,

I note some dealers offer a service for selling customer cars, ie a fixed fee or percentage.

I'm just wondering how it works in regards to the  service itself and the accounting in particular. 

It's something I am considering but I presume you are taking on the warranty risk?

Any input welcome.

Risky game is that one Johny 

You have to make it very clear that a few things are at their risk , Insurance while in your care can be an issue as its not your stock is it .

Warranty is also an issue as the previous owner will deny any fault existed 

profit margins can be contentious too as the owner wont understand the profit you need to even really think about selling it , "you sold my car for 8k why have i only got 6/7k for it " 

My advice is DONT do it , Sounds good but when the shite hits the fan its going down big time , all on your shoulders too 

Regards the accounting , its simple , you sold it on commission + VAT , return was x , profit Y plus the VAT charged to the owner 

[johny1980 4]

Thanks David,

I've only recently started out so it does sound like to much hassle/risk at this stage!

[Blenheim Car Sales 111]

I would also add that you need to allow 3 months for the car to be sold, Your customer might imagine it will be sold in 2 weeks...........................if they take it back within the 3 months you should have a fee for the cleaning and the advertising, 

I recently had this issue with a distant friend and thought will not be doing that again

[metcars 397]

Just don’t do it!

[David Horgan 564]

1 hour ago, johny1980 said:

Thanks David,

I've only recently started out so it does sound like to much hassle/risk at this stage!

No worries Johny 

As the others have agreed , and I stated , DONT go that way at all . 

there is  better ways to make money in this industry without going there my friend 

[umesh 336]

4 hours ago, johny1980 said:

Hi All,

I note some dealers offer a service for selling customer cars, ie a fixed fee or percentage.

I'm just wondering how it works in regards to the  service itself and the accounting in particular. 

It's something I am considering but I presume you are taking on the warranty risk?

Any input welcome.

Like everyone said " Don't do it" ! Risky and I know of a few who've got caught out. remember also if you do sell a car, pay for the car once you sell it, have you enought cash to buy it if it's a problem car? you'll be holding the baby. too many risks.

I've done the odd one or two over the years for good friends,  but with people I don't know who've 'offered' the opportunity as they see it I won't, if they don't accept my bid to bid I don't really want to get involved on SOR. 

[BHM 994]

It’s not something I like to do but I wouldn’t automatically poo poo the idea - this industry is about risk/reward so if the risk is low for a few quid return I don’t see a great problem on an older bit of stock, especially if you are more ‘trader’ than ‘shiney showroom’. Tbh I see more of a problem with owners who think they can palm off any shite & don’t understand why we spend money on preparation to sell or the need for us to make a profit.

You may wish to go the ‘advertised on behalf of customer & it’s them you are buying from’ route. I’d say you should insist on it being MOTed & prepped to your standards (however good or bad your standards are) but if it’s priced right the great unwashed won’t give a toss & will sign any invoice put in front of them. Any comeback & you can offer them the comfort of two fingers. Well, that’s my two penneth worth.

[have a word with the wife 299]

7 hours ago, Blenheim Car Sales said:

I would also add that you need to allow 3 months for the car to be sold, Your customer might imagine it will be sold in 2 weeks...........................if they take it back within the 3 months you should have a fee for the cleaning and the advertising, 

I recently had this issue with a distant friend and thought will not be doing that again

add 3month that the buyer may return with a fault covered by warranty or not adds the grief factor 

[It's me 615]

buy it for an amount you are happy with off mr big shorts or  run away,they only come to you because they is stuck and or greedy

Edited October 10, 2020 by It's me

[Frank Cannon 812]

17 hours ago, metcars said:

Just don’t do it!

This x10000000000, been there, got the t shirt, cap and scars

8 hours ago, It's me said:

buy it for an amount you are happy with off mr big shorts or  run away,they only come to you because they is stuck and or greedy

N this too. 

[Dave2302 387]

22 hours ago, David Horgan said:

My advice is DONT do it ,

Ditto

Agreed with everyone, either buy it or don't do it !!

[johny1980 4]

Thanks all for very good input.

I will be giving it a miss!

[DCS01 27]

Put it this way Guy Salmon stopped doing it about 7 years ago because it was just too much agg. 
 

On the odd occasion when I have had someone personally that was half sensible I have written out some terms and conditions which confirmed the amount that would be returned to them in the basis of the sale price (listen costs such as VAT/workshop/warranty) then it is crystal clear to both parties. 

 

[JDM1983 28]

As everyone else has said, it’s a pain in the arse. I’ve done it a few times, and it wasn’t worth the hassle. People only want to go this route so they can get more back for their car, which ultimately squeezes your margins, yet your still doing the same work and taking the risk. The upside though is you have an opportunity to make a margin, which you otherwise wouldn’t have had (if you couldn’t have afforded more stock).

It can also cause an issue with part ex’s, because once your SOR car has gone, you have to pay the customer in full, whilst still having the cash to buy in the other customer part Ex. Maybe not an issue for the big boys with plenty of cash, but I’ve found I’ve had to pass on a couple of opportunities because I couldn’t afford to buy the part Ex.

[Tony911 79]

If you have only recently started, it may be a good idea for you to try it out as it might work for you and if not its a learning curve. You will never know unless you try it. Good luck

Personally I wouldn't recommend

[CRW 73]

I have done it in the past but personally never have the enthusiasm when a punter comes sniffing.  You will always try to talk them into something else you have in stock as that should yield a nice wedge for you to go again with.  A profit is a profit I agree, but prep costs, part exchanges and warranty post sale means I lose interest fast.