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Anyone know how to become an auto trader?

25
Found 8th May 2012
I'm looking at dabbling with auto trading mainly so we can get a private vehicle cheap from a dealer's auction but also to make some extra coin.

I spoke to a Peugeot dealer who said I needed to register for VAT and also contact my local council. My local council didn't know what I was talking about when I called so I guess I'm just after advice as to how to register.

Thanks in advance.
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Vat only if you clear 80k or so.

Be aware that auction prices have been pushed up in the passed 4 years. That much so that ive thrown the towel in as there wasn't much profit In it after you work out hoe much time you've invested.

Everyone and their dog thinks they are a dealer so push up the prices at the block.

Anything German and diesel fetches ridiculous money and I honestly don't know how these people make their money back.
you just need to get business car trader insurance before you start trading and register your business for vat....thats it unless youre in scotland
You buy a car, you sell it..

You buy a car, you sell it...

You buy a car, you sell it....

You bu.. see the pattern here?

Keep doing that, register as self employed within 3 months of trading and maintain a good filing system until you reach the VAT threshold, then register for VAT.


This is a hard trade to get into. Mainly because 90% of the vehicles we sent to auction were dogs. Most dealerships have a trader whom they do most of their "trade" vehicles to as the dealership gets what they need for the car and also the trader does not need to buy at auction and compete with others whilst paying an indemity fee.
Its not really worth it as you will need to buy motor trade insurance (which isnt the easiest to get as well as VERY EXPENSIVE) a set of trade plates (as almost every vehicle sold at auction has no tax disc) which needs to be gotten from the local DVLA/Council and they will not give you trade plates unless you have a trading premesis. And before you think about it, they will NOT let you trade from the house.
On top of this you have to have a LOT of liquid cash to have tied up in a vehicle and dont expect it to turn around quickly, as you are not the first one to think about doing this and selling vehicles in your area. There are MANY people trading vehicles and making a profit after all above is said and done takes a huge effort. There is a very big chance to make a loss as well.

Also remember if you sell a bucket to someone they have a comeback to you (hence why like I said before most vehicles sold at auction have a problem of one sort or another)

If it were so easy EVERYONE would be doing it!
Thanks for the replies.

I went to 2 dealers (pug and ford) and both say that they are no longer allowed to sell to 'self employed' traders or locals and that ALL their cars went to a traders auction. It's a shame coz I seen a really nice Pug that would have been ideal for us.

Not looking to get a premises and I recently looked into traders insurance which was around £100 a month.

Generally speaking I would like to 'buy to order' where, like us who are not able to access traders auctions, would just take an order from someone who wants a particular car for a particular price.

I think i'll speak to the VAT people as it's not clear if you have to be/should be VAT registered to be a trader.

Once trader I spoke to said:
"I but a car for £1000 + VAT = £1200"
"Sell if for £1800"
Output VAT = £200
Input VAT = (sell price - cost price) * .2 = £160
VAT refund for the sale = £40 therefore a befefit of being VAT registered and not hitting the upper threshold.

^^ the above was loosly explained to me by a trader and it's probably false so any clarifiaction on the numbers is much appreciated.

Edited by: "TheGimp" 8th May 2012
Auction prices even for salvage (which my brother deals) has gotten silly. Waaay more outgoing than possible income.

Lots of eastern europeans paying top prices as the vehicles can be worth more over there than in the UK.

A friends car lot has slowed down massively due to the recession also and hes let salesmen go.

The trends to now go for 'throwaway' cars which can be had for peanuts and long warranties. Plus tax is cheaper too.

Wrong time to try and get in this biz.
I'd like to be a billionaire. Anyone got any tips?
Im 2/3rds towards being stinky filthy rich.
TheGimp

Thanks for the replies.I went to 2 dealers (pug and ford) and both say … Thanks for the replies.I went to 2 dealers (pug and ford) and both say that they are no longer allowed to sell to 'self employed' traders or locals and that ALL their cars went to a traders auction. It's a shame coz I seen a really nice Pug that would have been ideal for us.Not looking to get a premises and I recently looked into traders insurance which was around £100 a month.Generally speaking I would like to 'buy to order' where, like us who are not able to access traders auctions, would just take an order from someone who wants a particular car for a particular price.



This is what most will tell you to get rid of you, trust me they have one or two particular traders whom they do all their business with. We told the same to any traders coming through the door, but dealt solely with one local trader.

Also you run the risk of getting caught with no tax disc with no trade plates, which means if caught by the traffic police a nice fine or ever impound the vehicle depending on how they feel. Or you can buy the tax disc which adds extra cost and you cannot claim it back unless you are the current or last registered keeper on the logbook.

As far as buy to order goes be prepared to be messed around with buyers who maybe thought it was the light blue not the light light blue so not interested and now youre stuck with a car.

Just a word of advice also most people from the public are "wise" to traders and will have nothing to do with them.

Also BTW everyone has access in one way or another to a motor auction.
Surely if the prices to sell are massive.... Then it's a good time to find a bargain and sell it to these Europeans?...
thanks again. I'm pretty sure something has changed recently as the Pug dealership specifically said they 'used' to sell to their local prefered dealer (even gave me his number but the car he tried to flog us was a POS for top £).. anyway, the dealership said they 'have' to send all their cars to a traders auction << this traders auction is more of what I was interested in tbh.

Just to clarify we're not looking at high-end cars more likely the £1000 - £2000 mark. I totally agree with and respect what you're saying it's just that I see all these cars on autotrader that are either superinflated or super cheap so there must be someone somewhere making at least beer money (note we have other income so it's literally just to have a hobby that may make some money).
TheGimp

thanks again. I'm pretty sure something has changed recently as the Pug … thanks again. I'm pretty sure something has changed recently as the Pug dealership specifically said they 'used' to sell to their local prefered dealer (even gave me his number but the car he tried to flog us was a POS for top £).. anyway, the dealership said they 'have' to send all their cars to a traders auction << this traders auction is more of what I was interested in tbh.Just to clarify we're not looking at high-end cars more likely the £1000 - £2000 mark. I totally agree with and respect what you're saying it's just that I see all these cars on autotrader that are either superinflated or super cheap so there must be someone somewhere making at least beer money (note we have other income so it's literally just to have a hobby that may make some money).



Im just saying its not as easy to make some "beer money" as you may think. By the time you add indemity, insurance, tax, money tied up in a vehicle, also you have to remember you may make a loss.

jasonodell

Surely if the prices to sell are massive.... Then it's a good time to … Surely if the prices to sell are massive.... Then it's a good time to find a bargain and sell it to these Europeans?...



Problem with UK vehicles is that we drive on the other side of the road. Some EU Countries do not allow RHD cars to be registered there.
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Anyone can buy at auction although some auctions will be restricted access.

As above, it may seem like a good idea, but it's probably more hassle than its worth

How will you know if you're buying the cars at the right price?
Could you not just be a little naughty?

Buy a car (it's my own personal car, honest guv)
Sell the car
Buy another car, (again, it's just my own personal car)
Sell the car

Trade up or down on the car as you see fit..... It's not your fault that you like to change your car frequently, obviously you won't get rich this way. A few years ago I watched a programme where some guy did this, started out with a banger and ended up with a much better car by reinvesting the proceeds from each car sale, I think he literally bought the car, cleaned it and flogged it onwards whilst getting the use of it whilst waiting to sell
I'm sure plenty of sellers do this. There is a different part of the V5C form for traders so it kind of stops you from driving the vehicle as your every day car. You can however do as you say for 2 weeks and then flog it .. guess it would give you enough time to see whether the car is a lemon or not. After 2 weeks you need to complete the form as a private user.

I just spoke to the VAT people who said the above calcs are part of a 'margin scheme' (only pay VAT on the profit) but only apply to private purchases (excludes buying at trade auction where you pay VAT on your purchase). Again, this all assumes you are VAT registered and it's not necessary if you are not hitting the threshold.

TheGimp

I'm sure plenty of sellers do this. There is a different part of the V5C … I'm sure plenty of sellers do this. There is a different part of the V5C form for traders so it kind of stops you from driving the vehicle as your every day car. You can however do as you say for 2 weeks and then flog it .. guess it would give you enough time to see whether the car is a lemon or not. After 2 weeks you need to complete the form as a private user.I just spoke to the VAT people who said the above calcs are part of a 'margin scheme' (only pay VAT on the profit) but only apply to private purchases (excludes buying at trade auction where you pay VAT on your purchase). Again, this all assumes you are VAT registered and it's not necessary if you are not hitting the threshold.



Not true, Vat is only applied to vehicles where the vat has already been claimed back commercially. Once a vehicle is originally purchased from a dealership it is not subject to vat (because its already been paid once) as long as the original vat has not been claimed back through a business. Also to be vat registered I believe you need to have turnover of over £100k but its not worth it as you will pay more vat through margin (from your profits) than you will claim back from fees ect.
dga

DVLA: How many V5 forms can you submit before your name is flagged. And … DVLA: How many V5 forms can you submit before your name is flagged. And before you think about putting family members names on the documents, is it really worth dragging them into your plans when you know it's wrong?



There is no number you are free to do what you want with regards to how many V5's are in your name, but most members of the public will be wary if you only "just got the car" and are selling it soon.
crebera

Not true, Vat is only applied to vehicles where the vat has already been … Not true, Vat is only applied to vehicles where the vat has already been claimed back commercially. Once a vehicle is originally purchased from a dealership it is not subject to vat (because its already been paid once) as long as the original vat has not been claimed back through a business. Also to be vat registered I believe you need to have turnover of over £100k but its not worth it as you will pay more vat through margin (from your profits) than you will claim back from fees ect.



Sorry, confused me a little.. which part isn't true? My intention is to get access to the trade-ins to dealerships by the public. The dealership would not pay VAT to the customer but when sold at auction would indeed have to sell it with a VAT margin?

Equally, if I purchased a vehicle direct from a dealership/auction, paid VAT and was VAT registered I would still need to charge VAT on the sales price and then pay the difference to the tax man quarterly.



Edited by: "TheGimp" 8th May 2012
Stick to picking 6 numbers.....
TheGimp

Sorry, confused me a little.. which part isn't true? My intention is to … Sorry, confused me a little.. which part isn't true? My intention is to get access to the trade-ins to dealerships by the public. The dealership would not pay VAT to the customer but when sold at auction would indeed have to sell it with a VAT margin? Equally, if I purchased a vehicle direct from a dealership/auction, paid VAT and was VAT registered I would still need to charge VAT on the sales price and then pay the difference to the tax man quarterly.



Sorry should have said only BRAND NEW vehicles are subject to VAT. The only used vehicles which are VATable are ones where the vat was previously reclaimed by a business. For what you are wanting, there will be no vat to worry about. unless YOU decied to become vat registered but then again as Ive said before it wouldnt be worth it.

Youre probably best to leave it to the professionals, its not just a case of buy a car and overnight make some beer money... Sorry...
Thanks again. I do know a bit about cars so I'm not just diving in. We've looked at so many cars from so many 'dealers' that it's laughable what they try pull which is why I'm considering doing myself and becoming one of the more honest traders out there.
I'm still not convinced it's not worth the time or the effort since I'll have a few spare days a week for the next 2 years.

Thanks for clarying the VAT side of it as well.. time to make some calls about traders insurance.
[quote=TheGimp]Thanks for the replies.

I went to 2 dealers (pug and ford) and both say that they are no longer allowed to sell to 'self employed' traders or locals and that ALL their cars went to a traders auction. It's a shame coz I seen a really nice Pug that would have been ideal for us.

Not looking to get a premises and I recently looked into traders insurance which was around £100 a month.

Generally speaking I would like to 'buy to order' where, like us who are not able to access traders auctions, would just take an order from someone who wants a particular car for a particular price.

I think i'll speak to the VAT people as it's not clear if you have to be/should be VAT registered to be a trader.

Once trader I spoke to said:
"I but a car for £1000 + VAT = £1200"
"Sell if for £1800"
Output VAT = £200
Input VAT = (sell price - cost price) * .2 = £160
VAT refund for the sale = £40 therefore a befefit of being VAT registered and not hitting the upper threshold.

^^ the above was loosly explained to me by a trader and it's probably false so any clarifiaction on the numbers is much appreciated.

[/quote If i was you i would go back to school - Maths and English would be a good start......
If I was you I'd kill myself because I'm an obvious waste of space and air. GFY!
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