If you’re looking for a change in the form of a new career, and have decided that you want to turn your passion for cars into paid employment, then there’s no better way than to start a used car sales business.
Dip Your Toe in the Water First
You may be unsure of whether or not to take the plunge, so you could start selling used cars in your spare time in addition to your current full time job. Get a feel for it and work out if it is something you could do on a full time basis and earn the type of money you are expecting to earn. This would allow you to get some experience without fully committing to it, which could be especially useful if you’re coming from a background in something other than vehicle sales.
Where To Store Your Cars
Before you get to buying cars to sell on, you first need to decide where you are going to store your stock. If you own property with enough land to store vehicles on, such as a long driveway or off road parking, then this might not be much of a concern for you. However, if you don’t have that luxury or the land you are using is rented, then you should make sure that you aren’t breaching any terms or conditions.
If you are starting up without anywhere to park cars at your home or a plot of land, and intend to use streets near to where you live, then you may need to check with your local council. Your parking/storage location can affect your insurance policy as well.
Motor Trade Insurance
Following on from that point, getting a Motor Trade insurance policy such as Vehicle Sales insurance is an important part of your used car sales business. However, if you are only doing it on a part time basis, you will need to take out a Part Time Motor Trade insurance policy.
A Vehicle Sales insurance policy will allow you to insure multiple vehicles, as well as adding and removing vehicles as and when you buy or sell them. In addition to using a specialist insurance broker, the most important thing to do when getting a Motor Trade insurance policy is to make sure the details you provide to your broker are accurate. Avoid leaving things out or omitting certain details in order to try and get a better quote. If you do this, you are likely to be found out, and your policy could be cancelled or even declared void – which means that if you have any unsettled claims, you will have to pay for them yourself, leaving you severely out of pocket. In addition to this, you will also find it more difficult to get insurance again in the future – so this definitely isn’t a risk worth taking.
Trade Plates and Tax
After having secured insurance and somewhere to keep your vehicles, you may want to get trade plates, which will allow you to drive any vehicle you acquire, on the road without having to individually tax it. Saving you both time and money. Trade plates are only meant for use on cars temporarily in your possession and you won’t be able to use them for your personal vehicles. Once you start working as a motor trader you will also need to register with HMRC as a self-employed sole trader or business.
Second Hand Car Stock
You’re finally ready to acquire vehicles, so where do you go? You might find some bargains on the numerous online selling/auction websites, but you might find your best avenue for profit will be to go to an auction house. Remember to give any car a thorough looking over before you purchase it, and a test drive too where possible. If you’re going into the used car business there’s a chance you will already be pretty savvy about buying a used car. Even so, it might still be worth reading a few guides on the subject so you know what to look out for. If you’re handy with cars it does open you up to more possibilities, you may be able to pick up a diamond in the rough enabling you to make a higher profit margin.
Leverage The Internet for Free!
When it comes to selling your cars, you may find that setting up a website is too much of an expense when you’re just starting out. However, in the meantime you could set up Facebook, Twitter and any other relevant social media accounts to help promote your venture and the cars you will be selling. From there you can post links to advertisements on websites such as AutoTrader, Gumtree and eBay, as well as making use of Facebook’s buying/selling pages.
Presentation & Photos
Presenting your cars is an important part of selling them. When advertising your vehicles online, make sure to take plenty of pictures, and from good angles. Try to take the pictures in a good location and in good weather (although that’s easier said than done in the UK!). Be up front with any blemishes or faults, as the consumer has more rights than you do and you will be wasting your own time as well as theirs by not declaring them. When pricing vehicles, research what similar cars are selling for online to get on idea on how you should price your cars.
Don’t Forget Your Admin
Finally, don’t forget to keep your records up-to-date as your start to move vehicles in and out of your business. Keep all of your receipts and paperwork organised, as this can help with your proof of trading. Don’t forget to update the Motor Insurance Database (the MID) every time a vehicle comes into or out of your business, to ensure you don’t end up being held responsible for someone else’s mistakes. The administration side of the business may seem a pain initially, but it can save you a lot of time and hassle in the long run if you keep on top of it as you go. So stay organised!