The used car trade is often treated with suspicion by the general public and viewed as a world of Arthur Daley-style dodgy dealers; however, there are plenty of honest and reputable car traders. If you are interested in and have some knowledge of cars, this can be a tempting business opportunity.
Do your homework
As with any new business, you need to make sure you know your market. What types of car are most popular in your area? What are the typical selling prices and what is the average age of cars on sale?
Thanks to the growth in popularity of leasing, the average age of used cars on the market has come down in recent years, with cars usually coming off lease deals after two or three years.
If you are going to start a dealership, you need to look at where you can source your stock. Auctions are a common option, which is where knowledge comes in to ensure you avoid cars with problems. Also, think about how you are going to dispose of part-exchange vehicles that you do not want to sell on.
If you are serious about motor trading, you will need premises. While it is possible to trade from home, you will be restricted in the amount of stock you can hold and will need to inform your local council. When looking for premises, consider the location; for example, is it easy to find and access and on a route that will attract passing trade?
There are some things that are essential as a motor trader. Firstly, you will need to budget for repairs and cosmetic improvements to the cars you buy. You will also need motor trade insurance so that you don’t have to insure each car individually. The easiest way to obtain this is through a broker such as quotemetoday.co.uk/motor-trade-insurance.
You will also need trade plates to avoid having to register and tax each car individually. You can apply for this on the gov.uk website. It is also a good idea to subscribe to one of the trade price guides, as this will help you to price your stock and value trade-ins accurately.
Trading used cars can be a fun and profitable business; however, if you are going to do it, you need to take it seriously.