Hi,
I'm thinking of buying the odd car at auction to sell on. Nothing serious, just now and again to hopefully make a few quid.
I'm now thinking about what are the safest and easiest cars to do this? I reckon I'll stick to small cars so perhaps Fiesta's, Golfs, Clios - something easily identifiable where demand is fairly constant? I'm not sure about what sort of age car to buy yet. The nearly new stuff would be the safest bet I suppose but then again after visiting a local auction recently I was quite surprised how expensive these cars were. Cant be much margin in it for the dealers I would have thought! Then you look at the older cars which, on the face of it, seem like bargains but I dont want the risk of a money pit either!
Anyone got some good tips?
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My tip would be, don't bother.
Unless you are going to register the cars in your own name and run them as your own for a while, you will be regarded as a "trader", and will need to make this clear when you advertise the cars and declare any profits to the inland revenue. Have you thought about insurance? You will need proper Motor Trade insurance, otherwise you will need to keep ringing your insurer every time you buy a car at the auction before driving it away. Also you need Demonstration cover to allow other people to test drive the cars. It all costs rather a lot of money, as you can see, so just doing the odd one or two cars now and then isn't going to pay.
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Take your points king arthur. Actually I was thinking of running them as my own for a while, perhaps 2 or 3 months and then sell. I realise the implications of 1 extra owner on the V5 but theres no way round that as far as I know. Hoping to get a monthly insurance policy so would only make sense to buy low insurance cars. Would probably only buy 2 or 3 a year so not exactly "trading" although I guess some people may see it that way. More of a hobby/sideline as and when I get the time to go to auctions.
With that in mind anyone got any opinions on safe bets for the type of car?
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Less risky than auction is buying from friends, they often undervalue the car and will even deliver it thus solving the insurance conundrum. Trouble is these gems don't come along exactly when you want them. Auctions tend to be held in the working week and if ou take time off from work that puts you under pressure to buy something.
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If you are buying to sell on then you are trading. Of course there are some people who change their car every 4/5 months, maybe sooner, so I suppose there is a grey area. However, I belive the 'authorities' take a dim view of a dealer porporting to be a private individual. Perhaps HJ could comment.
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If you do this in North Yorkshire then you will have to register with Trading Standards as a Dealer in Second Hand Goods and keep certain records.
A number of other counties considered following N Yorks example in attempting to keep tabs on what goes on in the second hand market, so check with your LA.
DVD
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The Inland Revenue dont regard it as trading unless you sell more than 4 cars for profit each tax year.
If its a personal car then its not trading. If you make a profit then fairplay.
Try Saabs (they seemed v.cheap when i was at Blackbushe) or even the common old Ford Escort - easy to shift.
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As an ignorant outsider, it seems to me that as an occasional trader (for a hobby) the best you might manage by trading say 4 cars a year, is to cover normal depreciation on one of them, even by making a fair profit on each deal? So relatively cheap motoring, with variety, but with quite a lot of hassle. And you have to factor in the cost of getting to all the sales.
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If you buy/sell three or four cars in a year and use them as your own transport then I would think it unlikely that you would run into any real problems with the authorities(plenty of 'private' motorists swap their cars this often). On the other hand you are unlikely to make any money either! Think about all the messing around with tax discs, possible MoT's and changes to insurance documents (which you usually get charged for) - plus cost of advertising and collecting cars from auction site etc. :-(
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Out of interest, does anyone have any experience of how much trade insurance actually costs? I know this is a bit of a "how long's a peice of string" question, but just a rough idea - £1000, £2000, £5000?
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I agree with Aprilia. I change my car about that often. On the last three cars i have had, i have seen two small profits after auction fees, road tax etc, and one loss which more than cancelled out the gain. I don't do it to try and make a quick buck, i just want to keep my motoring costs to a minimum while i am a student.
Which cars are best for you all depends on your skills and where you live. If you are not good a fixing things, buying £1000 cars to do up wont be a good idea. It all depends how much cash you want to tie up , and importantly how much risk do you want to take- fancy that sold as seen p reg laguna etc.
I use elephant who don't seem to mind me changing cars- i see no logic in one month policies if you wish to be driving cars for the foreseable future.
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This is some info for \'Smartdealer\'
Here are some recent prices realised from an auction in the midlands area.
Could you see a profit on these cars ?
98S Vauxhall Corsa 1.0 merit 21k warranted mot Aug 04 £1425 (P)
00X last old model Corsa 1.0 trip with pas 29k warranted £2500 (Sold).
00W Mondeo 1.8TDLC Estate 57k warranted mot early 2004 a shade over £3k. (Sold)
96P Citroen AX Dimension 70K with long mot £400 (Sold)
99T Astra CDX estate auto with starship mileage about £1450. (P)
00X New shape Volvo V70S Estate 118k warranted - £5800. (Sold)
Book on this car, even taking account the mileage is about £9000.
Regards A.
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Thanks for the info And1
Certainly see some profit in that Volvo! They always seems popular at the auction I've been going to....now I know why!
I'm wondering if theres much regional variation with auction prices? At the auction I've been going to competition seems quite fierce for pretty much anything that has decent level of equipment i.e aircon!
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I heard that there are certain dealers who buy a transporter-load up Norf then bring them down Sarf to sell later in the same week. If it's true, there must be considerable regional variation.
I've only attended auctions a few times, but there is no doubt that BCA Blackbushe has a much larger audience than either Preston or Nottingham, although Blackbushe has 3 (or is it 4?)halls operating at the same time whenever I've been.
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Smartdealer
I went to the Scotland Central 'Auction Man' main sale on a Wednesday. Drove six hours up there looked around the sale, watched how it went for an hour or two and got back in the car
and drove home. The BCA sale the same day was no better. Having said that, some people from the Midlands make regular flights up there to buy and bring back so maybe it was just a bad day that day.
However, back down in the Midlands not long after a 99V Vectra SRI 140 hatchback was mine for £2900. I have heard rumours that Manheim Bristol is supposed to be good.
Never ever bought a car from BCA - prices seem higher, the deposits are £500 each for non account holders (£300 Manheim)
and for some reason they are often rather crowded. Good advertising ? If there is auction talk in the Midlands among the general public one word always comes up - Measham. I'll say no more.
Good look in your quest. A.
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