Lots of people dream about trading cars. Not only is it an opportunity to make money and work hours that suit you, but it is also great fun.
And the good news is that you do not have to be an experienced car salesman in order to be a successful car trader.
You simply need to have a passion for cars, some previous sales experience, and an idea of what your target market wants.
You will also need to invest a little bit of time and effort into understanding all the regulations and dangers around car trading.
The more you understand about trading cars, the more successful and profitable your business will be.
Here are some of the other things you need to know before you start buying and selling cars:
- Check the Local Laws and Regulations
All countries have their own laws regarding the buying and selling of vehicles, how many vehicles can be sold privately, and who can sell and buy cars.
You will need to check to see what the laws and regulations around buying and selling cars are for where you live.
It is also important to remember that buying and selling cars is no different to any other business.
You will need to pay income tax on your profits and if you trade above the threshold, you will have to register for VAT.
- Understand the Consumer Rights Act
All car traders need to be familiar with the Consumer Rights Act. This act states that all vehicles being sold need to be fit for purpose, of satisfactory quality and as described.
This means that you need to be honest with your customers about any faults or you will be liable to put them right.
You also need to bear in mind that you will only get one chance to fix the vehicle before you legally must issue your customer a full refund.
- Make Sure You Get the Proper Insurance
To safeguard your new business, you will need to make sure you have the correct insurance policies in place. Not only will you need liability coverage in case of a car accident, but you will also need open lot coverage and errors and omissions coverage too.
Another option is to purchase motor trade insurance. Motor trade insurance is not just one type of policy; it is a bundle of policies put together to give a business the cover it needs.
You can compare motor trade insurance quotes at quotezone.co.uk. Not only do they offer a professional, unbiased service to their customers but they’re one of the leading comparison sites in the UK.
- Make Sure Vehicles Have a V5C Before Purchasing
Before purchasing a vehicle, check to see whether a V5C document is available.
This document gives you numerous details about the car including who the registered keeper is, the date it was registered, the engine size and the manufacturer.
- Find a Trustworthy Mechanic
Before you start buying and selling cars, it’s a good idea to find a reliable and trustworthy mechanic who is willing to help you with your business.
You will need a mechanic to repair any vehicles you purchase as well as to conduct vehicle inspections.
Another great reason to become friends with a qualified mechanic is that they may be willing to help you decide whether a particular car is worth the money or not.
It is not a good deal if you purchase a car for £200 and must spend £500 doing it up and can only sell it for £600.
- Get the Price Right
When buying and selling cars, the price matters a lot. If you are just starting out, then a good tip is to price your cars at £5000 or less.
This is a reasonable amount that most individuals can manage. It is also a good idea to do some research into the local market to see how much your competitors are selling similar cars for.
You may want to price your cars at a similar level to them, or slightly lower to attract customers.
Likewise, it is also important not to spend too much money when buying cars. Before purchasing a car, check to see what the car is worth, and make sure it does not need a lot of money spent on it.
If the car isn’t worth the money, you can try and haggle the price down. If this does not work, start looking for something new.
- Think About the Amount of Storage Space You Have Available
Wherever you choose to run your business from, you want to make sure you will have enough space for your cars. If the location you had in mind is not very big, you might want to consider finding somewhere new.
- Preparing a Car for Sale
Once you have purchased a car, there are a few things you need to do before putting it on the market.
You will need to check that the vehicle has an MOT certificate, you will want to clean the vehicle so that it looks at its best, and you will want to get rid of any dents or scratches that may put customers off.
- Consider Offering a Warranty
One of the main things that put potential buyers off purchasing a car is if the car does not come with a warranty. Although it costs money to include a warranty with a sale, it will give more buyers confidence in your products.
With new registrations plummeting to their lowest level in 8 years, now might be the ideal time to start buying and selling cars.
The good news is that in order to become a profitable car trader, you do not have to know everything about cars.
You simply need to know all about your target market as well as how to strike a decent deal and spot a good bargain when you see one.
Get this right, and you will have a successful business in no time.