26k miles, dark metallic green (similar to BRG), 5 doors. Leccy windows and mirrrors, CD player. No aircon though, which in my haste i didn't check for - doh!
Still got over a year of manufacturers warranty left, which i thought would be a big selling point. My phone remains silent though.
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id park her up in a nice spot with notice in the window, i think alot of people buy cars that are advertised like that
once word spreads around that you sell decent cars people will look out to see if youve got any good uns....small cheep to insure cars are best....and advertise the price,people dont like "offers" or "poa"
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I would like to, but i don't really want to fall foul of planning or neighbours. Also, it's not taxed so can't be kept on the road.
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steve - do you know anyone who has bought a car from a roadside ad? I can't see it working - driving past, one isn't likely to stop, and if looking for a used car one isn't likely to drive round the neighbourhood in hopes. So tell us how (if) it works.
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Agree with you Andrew. Don't believe it works. There's been a Subaru Forrester sitting on Tower Bridge Road by the Bricklayers Arms for possibly 2 months now with a 'car for sale' sign.
Quite apart from being an invitation to the local car thieves... it hasn't shifted, and it's supposed to be a very popular car that is hard to find second hand. I think it's about 4.5k, which is 1.5k below any other on Autotrader.
[This thread must be doing wonders for HJ's revenue from Autotrader...]
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Agree with you Andrew. Don't believe it works. There's been a Subaru Forrester sitting on Tower Bridge Road by the Bricklayers Arms for possibly 2 months now with a 'car for sale' sign. Quite apart from being an invitation to the local car thieves... it hasn't shifted, and it's supposed to be a very popular car that is hard to find second hand. I think it's about 4.5k, which is 1.5k below any other on Autotrader.
Oooh! I might go and have a look at that. Don't suppose you've noticed age/mileage have you?
[This thread must be doing wonders for HJ's revenue from Autotrader...]
Where they also have "that" pop-up.
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Sorry, should have put a TIC smiley on that one.
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I'll try to remember to get off the bus [green credential]early to have a look at it for you. No promises that I've got any of the details right though...
Whereas droppping it casually into a semi-relevant thread on the BR has already generated some interest for the vendor. [Me in disguise?] Has that metallic green Pug gone yet?
IIRC, HJ's warning was 'don't expect an offroad vehicle, it has no more ground clearance than a car.' And IIRC, they're thirsty. But they're very popular.
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Ah. I should have made the TIC comment a bit clearer. The thought of a mechanically complex car, sold at a 25% discount from the side of a main road would have my wallet trying to claim asylum at the nearest bank.
Apologies. I've had more than a few long days of late.
ND
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.. and, mapmaker, if I were to feel tempted by such a vehicle, I would think 'what's wrong with it to make the seller that desperate?'. The only positive feature may be that if you aren't in a hurry to sell, your advert costs nothing. But the car's a sitting duck, as you say.
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And so ends my short career of making matched bargains of second hand cars. I was hoping to get a buyers commission from ND, and a seller's commision from Tower Bridge Road.
Given I've never sold a car in my life, what would I know...
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Being nosy, I searched Autotrader for a 2 year old <40k miles 1.1lx metallic green cd and came up with 3 cars. I guess the Ashby one is yours.
2002 PEUGEOT 206 1.1 LX 5dr Hatchback
Metallic Green, CD player, central locking, electric windows, electric mirrors, driver and passenger airbags, full service history, 15 months manufacturers warranty remaining, excellent condition inside and out. 26000 miles. £5695 Williams Motors.
2002 PEUGEOT 206 1.1 LX
5 Doors, Manual, Hatchback, Petrol, 23,000 miles, Green Metallic. Adjustable seats, Adjustable steering column/wheel, Air conditioning, Anti theft system, Central locking, Colour coding - Body, Driver airbag, Electric windows, Foglights, Metallic paintwork, Power assisted steering, Rear armrest, Remote locking, Tinted glass, CD. Usual Dealer Facilities Apply. £5,950.
2002 PEUGEOT 206 1.1 LX
3 Doors, Manual 5 speed, Hatchback, Petrol, 13,000 miles, crystel green, 1 Owner. Adjustable seats, Adjustable steering column/wheel, Air conditioning, Anti theft system, CD, Central locking, Child locks, Driver airbag, Electric mirrors, Electric windows, Head restraints, Metallic paintwork, Passenger airbag, Radio, Remote locking, Tinted glass. £7,395. JJ Cookson Ltd
Just comparing the ads, the first one doesn't mention 'petrol', nor 'manual 5 speed', nor 'tinted glass' nor 'anti theft system'. Maybe all these are standard - I've no idea and most of your punters won't know either! ND's granny certainly won't!
There are doubtless loads of useless extras that you could add to your ad (colour coded floor mats, adjustable seats. Personally I usually think they're silly, but PG in her infinite knowledge would probably disagree. (In any case, you're not trying to sell it to an old curmudgeon like me who thinks any car under 12 years old is a complete waste of money.)
It seems to be fully priced compared to no. 2 ('proper' dealer) - by putting a 'T' at the end of the ad, does that make you able to charge full 'dealer' prices? To answer your question regarding pricing, repeat the search I did above, but without 'green'. Yours is very much the highest mileage example - and the cheapest, but not by much.
For a dealer, your ad possibly isn't quite swishy enough. I dare say that you have to pay extra for that.
Look at how other people present their ads. Imagine you are your chosen punter (Motormouth's daughter, your grandmother); what would you want to know?
Finally, I (being me) would sell older cars. If you look in Glass's (go to your local library and have a browse) and identify the cars where the spread between trade in and forecourt is greatest percentagewise, then I think you would find that with old bangers you would be risking less of your hard-earned capital on each car.
I hope that you have told the Inland Revenue that you have started trading (there are penalties if you do not warn them in advance). I also hope that your insurance is the 'right sort' and will cover you for any third party claim by a customer. e.g. if he test drives your car and it blows up with him inside it.
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Green? Didn't you know that was bad luck for a car? Everyone told me that when I bought a green one. Didn't believe them.
Three rear end shunts, one flying piece of debris from a skip lorry, and an EMS fault yesterday morning (30 days out of warranty & leaving me with a dead engine in the outside lane of the M40) and I've changed my mind.
Next car is blue. Or black. Anything but green.
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Personally I like a green car, provided it is a refined sort of dark green (though maybe I will never manage to sell it :( ). I think the traditional reason for disliking green was the difficulty of accurate paint matching, because the eye is most sensitive to small differences in that part of the spectrum.
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Traditional reason I believe is that it is the fairies' [old fashioned use of word] colour and they will come to reclaim their rightful property. Hence unlucky.
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I'd go along with that - I had a juice green Mondeo for 20 months, and had more minor dents, scratches, and accidents in that than in the previous 30 years of driving!! No more green cars for me.
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All BMWs are blue, black or silver - where did you get a green one from?
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So you've got it on for £5695? Doing a national search for 206LXs between £5-£6k shows a fair number with aircon. Whilst some are older, many of these have similar or lower miles.
The biggest thing against it is the colour. It really doesn't do it any favours. 206 looks great in silver, met.red and blue, but that dark green kills it for me and is unlikely to appeal to the younger market. Many people still consider green to be an "unlucky" colour for cars.
I would try it at £5250 to pitch it below the cars with A/c, get a new 'photo (less obvious it's a price cut to regular reviewers of Autotrader) and see what reaction you get from there.
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Thanks for all the advice, it's all gratefully received!
ND, i would like a bit more than £5250 from it, though it would appear that perhaps i paid a bit too much for it in the first place.
Also, good point Mapmaker about the ad, i also tend to think that most people buying a car know what it will have, but i do possibly need to embelish it a bit.
Oh well, you live and learn, it is my first one after all!
(P.S. yep, everything is above board tax and insurance wise).
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Owen,
Why dont you stick it in ebay, then you will get what the car is worth.
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ND, i would like a bit more than £5250 from it
Well I guessed that, otherwise you wouldn\'t be advertising at £5695. ;o)
Something I heard every day I was in the trade myself: \"Remember, you\'re in it for the money, not the metal.\" Holding out for a price rather than getting shot and moving on to the next one will cost you a lot of money fairly quickly.
Hope it works out on this one.
ND
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Picking up on mapmaker's point, I'm not sure a home trader can ask as much as a forecourt dealer. Many of the home trader ads seem to ask no more than private sellers. Some mention accident damage which though honest does give the impression that the home traders have the worst cars to sell.
The Auto Trader charges home traders £30 for a single magazine spot + 1 week on the web. Is there a cheaper way to advertise that's still effective?
Any successful home traders out there? How do you do it?! What margin can you make on a car like Owen's?
Stokie
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ND, i would like a bit more than £5250 from it
But your phones not ringing. You won't be able to sell it for more than someone is prepared to pay.
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Owen,
I'm afraid i have to agree that the colour is the problem. Jaguars & Land Rovers look godd in dark metallic Green, but 206s don't. The main market for the 206 is young drivers, particularly women who generally tend to be fashion and style conscious. Green just isn't trendy. These buyers will be looking for silver or light metallic blue.
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Slightly off topic. I saw an interesting feature on the local news recently. One of the cities in the east midlands (I think it was Leicester) has a street which has become a focus for people trying to sell cars. The idea is you park the car in this particular street and display your price and a phone number and leave it there all day ! The scheme seems to be common knowledge, there was a long row of cars for sale on the clip I saw. The item made the news because, not surprisingly, the local residents became fed up with no parking spaces available for themselves.
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Owen,
Assuming your ad is the Ashby one, it says year is 2002, buyers may want to know whether it's a 51, 02 or 52 reg.
The trader website is marvellous but I have my doubts whether private buyers use it, i.e. you may triple your target audience by buying the joint magazine/website ad. I've no figures on this, just gut feeling says people who are seriously gearing up to buy a car will invest in the magazine. Good luck.
Stokie
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I've been thinking quite hard about Owen's business model today.
We're 'always' told, when telephoning small ads from private sellers to say 'I'm ringing about _the_ car.' Then when the chap on the other end says 'which one?' we know that he's a trader. Owen's thread has made me wonder. When responding to 'Trade' ads, should we the same question, so if he says 'Yes, it's done 26k', we know that he's a home trader.
Now, 'home traders' have a bad reputation (largely I suspect because they claim to be private sellers so avoid any requirements under SOGA, and also think they can dodge tax - as cars are CGT exempt but not exempt income tax if you trade them).
Whilst I'd possibly buy an old banger from a 'home trader' - these are pretty pot luck at the best of times, I think if I were buying a newer car from a 'trader', I'd want the security that came with buying from a 'proper' trader.
Owen seems to be charging the 'extra' premium over private sale as he claims to be (no offence meant - 'is') a trader. When you buy a second hand car from a trader, SOGA applies, so if it has a blown exhaust then he'd have to point it out to you. Whilst a garage would (should anyway; if it didn't you could take it back) point it out, I (rightly or wrongly) wouldn't trust a home trader to do so. If he didn't, I also wouldn't trust him to still be there when I came to take it back to complain, nor would I trust him to be able to rectify, or to be able to afford to rectify, the problem.
You essentially have as little possibility of comeback against a home trader as against a private seller. So you need to be paying private seller prices. With a mass market new car like that young Pug, I should have thought that nobody is going to buy from a home trader.
On the other hand, buying up cars like the ones I identified on eBay earlier this week, and tarting them up and sticking them together tinyurl.com/2expo must be a way to make money. If you make sure you stick to one particular type of mass market car of the right age like Mondeos or bmw 3 series (HJ says in a recent review that there are more 3 series than Mondeos on the roads), then with a couple for scrap you can probably get lots of them going again.
A thread last month 'hard to sell cars' tinyurl.com/2tsjj was a fascinating read for me - dba identified an alfa 145 cloverleaf as a car where 2 days with a vacuum cleaner made him almost 2k profit (between £400 and £2250).
Would anybody else choose to buy a car from a home trader? What do you all think? Have I got the wrong end of the stick? I know I'm not your typical car buyer.
And if the car is SORNed, how can you take it for a test drive? Do you have trade plates for it?
Best of luck, though.
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Owen, my opinion is that the price is OK but no aircon is the problem. People expect it on something of that age and value. I think if you sell from home then you really must have cars that "tick all the boxes"
If the phone remains quiet for a few more weeks then try ebay and move on to the next one! Good luck!
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I have to take issue with that, smartdealer. If the price was right for the car it would sell. If the lack of A/c is a problem for that car and as a result it isn't selling, the price is wrong.
At £5250 today, Owen get's to move on to the next car. Sticking it on e-Bay could mean accepting £4,500 for it. What has he got to lose from dropping and readvertising at a lower price?
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I think I'm with mapmaker. I also have (knowingly) bought one car from a home trader - it was a C-reg Swift for daughter no.2's first car, and I think cost £1400. (It did OK). I think Owen is aiming too far upmarket, where he will be competing with the big boys. He can only do this by undercutting their prices, as he can't offer repair facilities or (I suppose) warranties, unless he buys standard ones. I suspect most punters with £5K to spend will do it in more trade-like surroundings.
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I'd like to try and add a few points here.
Mapmaker suggests buying cars where glass's says there is the biggest difference between trade and retail. I think for a home trader this would be a very bad idea, particularly one starting out. To me the difference between trade and retail illustrates the risk the car presents to the trader. Most stuff will be bought at auciton where inspections will be limited. On popular reliable cars traders are prepared to bid far nearer their anticipated selling price as they know demand for said car is high and they can turn it over quickly and they are not likely to be faced with unexpected costs, and hassel of repair which will slow stock turn-over. Glass's guide suggests a trader could turn 4300 into 7150 if he buys an xj12 6ltr. Now this wont be an easy car to sell, he has the prospect of many very expensive repairs. Not many are bought and sold so guide prices are likely to be far less reliable. these sort of cars would be boght by specialists with a reputation within their field with expert knowledge and workshop facilities to bring these cars back to top condition. this is not anyhting a home trader could hope to do.
Home traders that are successful exist through reputaiton. this will take ages to achieve- years probably.
Owen i think you should focus on turn over to maximise your chances of success. buy a load of mid-range reliable cars and flog em dead cheap to get you going. Have a couple of bread and butter cars in stock before you start trying to make big gains on risky motors.
I think 5695 is a bit strong, but imagine 5250 isnt much more than you paid for it. i dont think advertising on autotrader on-line is sufficient. The majority of people who have viewed cars i have tried to sell have seen them in the printed edition- i always make a point of asking. Ebay is becoming an increasingly important player, and is a great way of establishing your reputation as buyers can actually see that customers have been satisfied with cars from you. However, i am not sure of the cost of adverts in the trader for trade- i would be very intersted to see how they compare with Ebay charges.
I' stick it in the trader for 5450 with a new photo.
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Thanks all for some fantastic advice.
It's interesting to hear all your comments on home traders. I'd like to add that i'm trying to run a fully legit business; i've got trade plates, proper trade insurance, i'm aware of the SOGA and am on the local trading standards list of car traders. Cars i sell will have a warranty (insurance backed, like most dealers, although the Pug is still covered by manufacturers warranty) so in terms of my obligations to customers they are the same as if you bought the car from the local Peugeot dealer. Although i take the point that i need to build up a repuation to convince customers that i am willing and able to resolve any problems.
I also agree with most of you that perhaps this car isn't the ideal sort to be selling in this way, to be honest the cars i was interested in at the auction all went for more than i was willing to bid, so this was a bit of an impulse purchase - i'll know better next time!
I need to present my adverts better, and think more about where they are advertised. Ebay is a possibility, and the charges are reasonable. The Pug was only on the AT website because i didn't have time to sort out a slot in the magazine as well (i work full time too!).
I'm going to drop the price to £5450 for the remaining few days of the autotrader advert; if it's not sold then i'll probably put it in the local press.
Thanks once again for all the good advice, keep it coming, it looks like i need all the help i can get!
On the other hand, if anyone's looking for a Pug 206 without aircon in unfashionable green, then drop me a line!!
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As requested, I had a look at the car, and spoke to the seller 'hey man, whadda can I do f' ya?' 'I say, my good man, that Forester' 'cool car man'
Anyway, 88k, 6 months MOT, R reg. Good tyres and in your favourite colour - metallic green.
But as I'm told you don't have a proper job..., may I suggest that you would be better off not driving something way out of your league. There's a very nice Formule E 1983 Polo with a 'recorded' 83k and no history in red for sale for £300. Much more like your sort of car I'd have thought! ;)
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Hmmm, mouldy, good shoes and wearing the miles. Bit lacking in gravy, that one. Far from minty. I'll show 'im a gibbon if he chucks in a fettle..... Not going to light my aunty at those trousers.
Ok, must stop reading Carcoat Damphands at Sniffpetrol.
He might get a buyer if he parks it in a village known for it's hill farmers. Not sure about London Bridge Road.
Wasn't the Formule E the one that cut out if left to idle for more than a minute or so?
Proper job? Cheeky wotsit.....
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That's not my Formule E. Somebody else's.
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Ok. Must make my posts clearer and stop talking at cross purposes......
IIRC, VW made a version of the Golf and Polo aimed at frugal city driving, with minimal emmissions. Their answer was to develop a low-output engine which was designed to cut out if there was no throttle input for a predetermined period. This was combined with narrow profile, low rolling resistance tyres and a poverty spec to keep the weight down. I thought this was what they badged as "Formule E"
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I was told when I bought it (here's a picture of it, in fact tinyurl.com/3h355 (when it belonged to its previous owner)) that the 'economy' bit was because 4th gear was closer to 5th than 4th. I think the cutting out facility was only on the later versions. Sounds almost as bad as automatic windscreen wipers on a Megane for potential trouble! The carburettor has tiny holes in it, which means they often burn rather lean (giving such good economy that they won't move!). IIRC, replacing with the carburettor off a 1.05l polo often cures this as it has bigger holes.
It didn't give me any better mpg than my merc on the motorway - 30mpg - probably as the poor thing was never designed to travel at that sort of speed. At 50mph, you could go forever on a pint of petrol, though. Brilliant for going to Tescos, shocking for going to Northumberland & north Cumbria (once) but it gives me a perverse pleasure to motor quite so cheaply!
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Owen,
Admire the way you are calmly taking this advice on the chin and turning it into thoughts for the future...you deserve to succeed but often it is the most unreasonable of folks who make good* home traders!
*Sorry, good is perhaps the wrong word...profitable might be better!
Been following the thread with great interest so here's my bit...
Cars, car maintenance and the busines of buying/selling cars has been a geat interest of mine for almost 30yrs. For the last 10yrs I've looked after a group of cars/owners and this has expanded into giving buying/selling advice/inspections.
Possibly the greatest concern to me is that you seem to have started this business with no contacts...is this correct? Contacts are everything in the business and they can add 50% to your profits, or enable you to actually make a profit!
With my involvement in the service/repair/MOT side of things I hear of cars I could buy cheaply every single week. There are a variety of good reasons that prevent both private folks and sometimes even traders maximising a particular car that, given another week or two, you may be able to turn round nicely.
I do not buy these cars but point customers or other contacts in their direction.
Here are some examples from recently...
Car offered into trade at £800 sold 3 days later for £1400.
Car offered free sold in a week for £350.
Car offered into trade for £125 sold for £500.
Car offered into trade for £800 sold in 10 days for £2000.
Car offered into trade at £750 sold at £1950.
All these were undamaged, taxed, MOT'd cars with some/all history. None of them needed more than a valet, new MOT, oil change tyres or silencer to retail.
You can work out that you could have bought the lot for £2475 and sold them on for £6200. The costs to a home trader of getting them to retail would have been about £400 for the five. Only one of them needed an advert, the rest sold on word of mouth.
Really I'm in agreement with mapmaker, his last post in particular. I think you are setting yourself a hard task starting out with the £5K market one car at a time. Folks are less inclined to seek a home trader at such a price and your opportunity to pull some cash back in is very limited when the whole £5K is in one car, whereas my example would have given you five cars for half the cost....and about six times the profit.
Also folks expectations are lower with cheaper cars and you are less likely to be hassled to do this or that to stop that "funny noise" when "I turn left over a speed hump on a Tuesday".
It is worth saying when I'm helping someone to buy we exclude all the trader's ads for at least the first two weeks, looking, only going onto them as a last resort. This may not apply for anything specialist or over £10K though. My logic is that "we" can go to all the same sources as you to get a car and exclude paying you a profit for standing it at home for a week.
Also I'm worried about the warranty aspect with looking at a home trader's car. Doesn't matter so much at £1K but at £5K plus I would expect you to fit an exchange transmission to a Renault you'd sold me that suffered failure...even if it did cost you £1500 and your own warranty cover didn't pay.
Many buyers feel uncomfortable with the home trader selling setup. The last one I dealt with was some four years ago and it happened his car was OK when we couldn't get one elsewhere. But the private buyer was less than happy with doing the deal in someones garden/drive, and also less than impressed at doing the paperwork in a domestic kitchen with no evidence of a business apart from a document folder and receipt pad.
I'm sorry Ben I don't agree that maximising the difference between buying in at trade and selling at retail is a bad thing at all...it is what makes a good trader. I do agree though never ever be tempted to buy anything risky like exec' or large engined cars, particularly if offered by a more experienced fellow trader you meet in the hall!
By the way dark metallic green is one of my favourite colours, but on larger cars. A bright metallic blue 206 with aircon and alloys would have been much easier to see away. 206s are very popular/common these days and I hear of deals on them all the time. Buying in a car similar to yours, but a 1.4 with better spec/higher miles, can often be done at £4k with a retail sale of £5.5K in prospect....a better return than you are facing I guess?
Good luck with it all anyway.
M.M
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M.M- i didnt mean to say dont try and maximise profit- merely that those cars glass's indicates the biggest differrence between trade and retails are the riskiest pruchases, such as big old jags etc. Big profit is possible, but the chance of trouble is far greater. Hence such cars would not be suitable for the home trader. Of course, always buy as cheap as you can.
Those prices you have been buying cars at sound wonderful. I will definately post here when i start looking for an intersting car when i have finished uni in june.
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Mapmaker actually suggested the biggest _percentage_ difference, not the biggest actual difference. Huge difference. I would focus on cars whose valuation is a grey area, where forecourt cost is 500% greater than trade-in. It's all in the marketing.
Look at tinyurl.com/2bvwl to see how the marketing ought not to be done. It should focus on the good bits and say 'chrome arches, good stereo, good tyres, brand new ignition system costing £xxx, etc.), a bit of T-cut on those brown streaks, some water on the mud, a second hand door lock for the driver's door (very cheap - wd40 is probably what it really needs, not different keys) and hey presto, a £500 car. I'm almost tempted to give the old girl a home myself, but she deserves better than to be broken for spares in Africa.......
'£100 non refundable deposit to be paid' - he'll be lucky to get that much!
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Fair enough Ben, we're in agreement to steer well clear of the exciting vehicles. Bread and butter stuff is best.
The two vehicles I'm asked for more than anything else are...
A youngster's first car under £1000. Say a tidy 1.1 106 or similar in a bright colour with sensible mileage. Average families seem to want to pay £1000 for the car and £1000 for the insurance in the first year.
A second/budget local use family car up to £2500. Escort, Astra, ZX, 306, Megane or similar. Usually want diesel and a 5dr. A tidy condition metallic helps. If a diesel many folks will accept higher miles. If not diesel 1.6 petrol seems favourite size.
Above these prices, and particularly at £7K and above, I find folks tend to look towards the larger dealers with choice and full facilities.
Agree absolutely with mapmaker about making the most of a car....
These days I find interior trim materials last and of course you shouldn't buy anything that rusts. Means that a good wash, perhaps polish and interior valet will bring a 10yr old car up like 3yrs.
Unless there is a record of a recent service change the oil and filter using a good branded filter, inflate the tyres and try and get a new MOT if less than say 3/4 months.
If there are service records/receipts then maximise them by getting everything in order, seeing if they contain any selling points like timing belt etc and putting it all tidly in an otherwise clean and empty glovebox. Very good selling point to reach for all of this at the appropriate time...and know it doesn't contain any nasty surprises. The number of times I've had a trader giving the bull about a particular car being reliable and the owner being sad to let it go....only to pull out and show him horrendous recent bills in the service folder that show *exactly* why the previous owner got shot!
David
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Sorry mapmaker- i should read more carefully and not post so late. Sorry.
In June i hope to sell a 2000W Mondeo 2ltr GLX hatch which currently has 103k miles. It has full history, and is in very good condiiton. Upon purchase i had the cam-belt and tensioner changed with genuine ford parts, and the brake fluid changed. Car has good michelin tyres all round, traction control, eleltric roof, cd player, steering column mounted controls, alloys etc. Drives very well- but whats it worth?
I expect this is a bad car to make dough on- i just wanted something reliable that was unlikely to generate any unexpected expenses. From experience of selling these cars, traders pay very near a "private sale" price for these at auction. I expect then this disqualifies it as a good choice for a home trader if bought at auction?
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I've just spent a very interesting (don't dare say anything) half hour reading a copy of Glass's in our library. I'm sure you all knew this, but I was surprised to see that the turn for a trader on a specific model of a car was irrespective of age (according to Glass's). Don't try to reproduce these figures as I'm working from memory but the rule goes something like this:
M reg volvo 440 (trade-in £400, forecourt £1400, thus garage gets mark up of £1,000 which is 250% on cost)
Or an identical one 4 years younger (trade-in £3,400, forecourt £4,400, mark up of £1,000 which is 29% on cost)
Which would you rather?
For the capital that would otherwise be tied up in the business, you can have 8 of the former cars in stock for each of the latter. Eight times as many opportunities to make £1,000. Lets say £800 as you're not being greedy. And the chances of having to sell a £400 car at a loss are minimal (unless you are foolish, or it dies on you). And if it fails, you can break it and put the bits onto your other ones.
Neighbours will love you too!
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M.M - good advice again, thanks. Yep, you are right in saying that i have very few contacts in the trade, i'm doing my best to work on that though. In the meantime, if any of the sort of cars you described come your way, then you could always pass a few my way ;-)
Mapmaker - the point of looking at older cars is a good one, %wise they make sense. I am reluctant to go too old, as there is a greater risk of them breaking in the next few months, but i'm sure there's a sensible middle ground inbetween bangers and the nearly new pug i've got now. I also think you're right when you say that more expensive cars are likely to be a problem for the home trader to shift.
Oh well, it all goes down to experience!
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The M reg car is more likely to need a lot more work done to it to bring it up to "retail" level. This will slow your stock turn over.
Also you have to factor in certain fixed costs. A warranty for the older car will cost more money if you can get one. If not you would have to provide it yourself.
Transportation costs of vehichles will be the same.
Auction buying fees will be slightly higher for the more expensive car, but not by much.
The risk of buying a complete dog is far greater for the M plate car. The trade prices in glass's are really auction prices. An m reg 440 you buy for 400 hundred could actually be worthless if the gearbox is knackered, meaning you would loose a bit and your cash would be tied up while yo put the car through the auction house again. Your 400 quid car will easily need a min of 250 spent on it to sell it (auction fees, transportation, warranty, road tax, valet, service etc etc), so it is not that difficult to loose money on it. Since EU law changed, for a six month period after sale faults which were present at point of sale are the responsibility of the trader. The trader has to factor in his "warranty" costs. A couple of blown heads and a gearbox can soon wipe out the profit. Such occurances are far more likely on the older car. The £1000 from the newer car will be realsied much more easily with less risk. You will have to invest much more of your own time selling the older car. this all has to be factor into the equation.
Glass's retail prices are suggested prices dealers should advertise cars for in mint condition with a comprehensive warranty and full service history, not the sort of prices you would advertise an M reg 440 if you wanted to sell it.
I take you point but i dont think it is quite as clear cut as it appears. Above is my understanding of the situation, but from what others have written , i think i'm missing something.
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>Ben wrote ...i think i'm missing something.
Apart from CAPITAL LETTERS? :)
Yes, you're missing MM's post where he is quite clearly offering evidence of real cars bought for 400 and sold for 1400, without spending £250 on the car. I'm only a theoretician - there's some evidence for you!
>Ben wrote: for a six month period after sale faults which were present at point of sale are the responsibility of the trader. The trader has to factor in his "warranty" costs. A couple of blown heads and a gearbox can soon wipe out the profit...
As I wrote above, you'd have to be pretty foolish with the experience I presume a home trader would have, to buy a car with a blown head gasket. Focus on the words 'at the point of sale'. You're not providing a 6 month guarantee! You're just guaranteeing that for 6 months, any faults present at point of sale will be rectified.
In an attempt to limit the application of this law, most cars sold in this price-bracket by dealers are sold with a disclaimer along the lines of 'this car is being sold for repair or breaking, and I agree not to drive it on the road until I have satisfied myself as to its condition.'
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Just to clarify things these were genuine examples of actual vehicles I've seen about recently...but I haven't bought or sold any of them....just acted as part of the grapvine that "enables" these deals.
Ben has a fair point in anticipating more problems with older vehicles...but buy with care and this can be minimised. Also I know some much newer vehicles with "temp repaired" potential disasters. Like £7K Espaces with air-con units u/s and heater matrix leaks temp stopped with radweld..potential £1500 bills at a dealer.
As I think I said above many folks will accept a greater level of (niggling rather than serious) faults on a cheaper car. So will Trading Standards. If you go to them with a problem on a £1K 10 year old car they will not expect it to be resolved to the same standard as a £10K year old car.
The point I was making is that the examples I give offer a profit to outlay ratio about 10 times better than that of a single £5K car with minimal profit...and with the advantage that the uplift is spread across several vehicles to smooth out cashflow and any warranty liability.
By the way mapmaker that old Ebay MB has to be worth £200 for parts alone?? Oh and you really are lucky you don't like 190Es. I have the one I mentioned here after the owner died and it is as good a 190E as you will find in the country. Under 100K, full history in the glovebox, near mint in/out, original MB alloys, MB fit plip alarm, recent front pads/calcium battery/silencer, taxed, new MOT. Going to be a steal at £1500 or thereabouts.
;-)
M.M
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>Car offered into trade at £800 sold 3 days later for £1400.
>Car offered free sold in a week for £350.
M.M. how do you get to be the one to whom these offers are made?
Are they auction prices? Or was the offerer a main dealer trying to offload unwanted part-exchanges?
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>>that old Ebay MB has to be worth £200 for parts alone??
Probably though I don't know whether you'd be guaranteed to get that if you tried to break it yourself & flog the bits on ebay. There are loads of them about, but if you needed a new ignition system and a new set of tyres then £200 would be a bargain.
I'm right off 123s at the moment. They just don't havng around long enough! I'm really glad I never got round to fixing the front exhaust pipe on the first one, and kept with the baked bean tin, putty & jubilee clips I put on on Christmas Eve.
190 sounds very nice.
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Stokie,
Well it's just like the folks you will know asociated with whatever you do. These things are a bit closed shop though, there are those who won't give me the time of day....like major dealers with a "scrap K-reg and older...auction the rest policy". They say it is just not worth the hassle of dealing with individual buyers.
But if you want a specific example or two...
Doing an MOT at the place I use, salesman knows I like a certain model so asks me to look at one they've parked out front. Guy has just been in to MOT it and on something of a whim wants to do a deal with one of their used cars. His car is one you would expect to see up at £3500. Taxed with its fresh MOT and no serious work needed. Damn good clean and an oil change service would do. They are unable to sort a deal with him on their car as they feel unable to take in and retail his car. So if I gave the owner £2000 he would be able to do a no trade-in deal at a good price and everyone would be happy.
Were I a small trader I could have done the pre-sales work for about £100 and put it up as a £3295 bargain, leaving a bit of leeway to draw £1000 or so on a straight sale.
Another case is the MOT failure. Take a prety straight ZX diesel that should retail for £1200. This will only have a trade value of perhaps £600 on a good day. But the thing has just failed its MOT on handbrake effort, front discs/pads and 2 tyres. Guy has already shelled out for a heater matrix, cambelt and other things so far this year so decides to call it a day when quoted £200 plus for this latest stuff. Quite likes a used car on the forecourt and finds £250 discount for no part-ex. That gives his car a nominal value of less than £200 as it stands so he happily sells it to a trader contact of the garage for £250.
Now this trader knows exactly what the cars condition is because he has a fresh MOT failure sheet...which the owner has just paid for! So the trader buys it knowing that he needs two budget tyres, rear brake shoes, pads and discs to get a free retest. He'll have contacts that might do these repairs for about £170 so he'll have spent £420 with a potential profit of almost £800.
That's the right sort of ratio!
M.M
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m.m
did you not see the reply by johncyprus who was interested in your merc 190 ?
www.honestjohn.co.uk/forum/post/index.htm?t=20481&...e
" M.M.
I would be interested in the 190E . Would you let me know more on 07759816766, thank you.
John "
www.honestjohn.co.uk/forum/post/index.htm?t=20481&...e
" M.M.
That 190E sounds interesting! Would you please let me know more on 07759816766. Thank you.
John "
dalglish
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Many thanks Dalglish for bringing John's enquiry to my attention, sorry I had missed it.
John I tried to call on your mobile just now but it must currently be off. No matter I just wanted to thank you for your interest and say I'm 99.9% sure the 190E is sold. The chap isn't paying until next week but he's a contact of mine and, short of a radical change of mind, I trust he'll keep to his word.
If the 0.1% thing happens and he doesn't come good I'll call you first, that would be by this Wed at latest.
It is a truly superb original example that I've looked after over the past 4yrs. Rather too many at this age/price are getting blacked out windows and big stereos....or is that what you wanted it for??
;-)
M.M
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Indeed M.M -i appreciate you have the ability to buy with such care and ability as to minimise the chance of prolems with older vehicles.
I just wished to say my studying of glass's etc, shows that the difference between trade and retail of vehichles many beleive on this forum to be reliable are smaller than unreliable vehicles. For example Lagunas often sell at auction for less than glass's states, but such examples are advertised in the same proportion to the "retail" figures as relaible cars.
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hoped i MIGHT add to the debate Mapmaker. I anticipate some of what i say is wrong, please prove this wrong so i may learn.
I played devils advocate to draw out the other side of the argument. Indeed, i said i accepted your point. Owen bought a car and all posts dissagreed with his choice and price etc. I offered a different view.
Mapmaker- I know many successful traders whom would not agree with what you have posted. I wished to show that selling older vehicles CAN be a difficult job, if you wish to offer people reliable , good value vehicles. M.M is an expert in his field, I don't doubt that- he has bought many older vehicles and knows what he is doing. Does M.M's post offers no "clear evidence"- ican not come to this conclusion. I have stated what I believe to be the case, and what I have heard from many traders in the north. Often these purchases are from auction. Many traders buy a majority of stock from there. Cars with high percentage returns on outlay at auction can be risky . You do not find cars for the price M.M buys at, at auction in Newcastle. You state i would be foolish to buy a car that later developes a head gasket fault. I beleive this is more likely than you predict. What about a gearbox fault? The car goes wrong; the punter says it was like when he got it. You can tell the gearbox is great from not driving it? When you purchase at auction you must add to the price: auction fees, road tax, tansportation costs, warranty, valet, advertising, and the cost of your personal labour. Auction fees may be £50, transportation we will ignor, autotrader ad 35, tax 90, plus warranty. Thats 175 without warranty cleaning the car, labour cost and transportation. Cost of £250 on an M reg car are not excessive. How many cars have you bought and sold from auction in the past year?
You say most cars sold in this price limit are sold with the discliamer you state. Can you substantiate the claim you make- I know NO traders that put this on their receipt.
Do you honestly beleive you could buy a car from auction , sell it yourself and achieve the retail prices stated in Glass's guide? I have tried and failed. I want to know where i am going wrong if it is possible.
I do not have time to spend sitting in my local library looking at Glass's guide. I read and look at all information on this site of a night over about a 10 -15 minute period, and contribute where i beleive i have something to add. If this is contrary to what you say, so be it. I apologied twice for mis-representing what you posted. I go to the pub and post whatever! I like "debate". Tomorrow i will appraise my comments. Discredit all the above, but what has my use of majuscule letters got to do with it? Not having a go, but an honest question.
Opinions kindly posted on this forum show i am too pessimistic, and suspicious of sellers of old cars. I always wonder, why do these people sell- if they value has fallen to 400, why sell if there is nothing wrong?
This is an internet forum, i could be anyone. I hoped to share experience of what i have personaly bought and sold. This amounts to about 12 vehicles over the past year. I beleived my experiences MAY (some majuscule letters again for you) of been of interest to some viewers of this thread. If this proves not to be the case i will not post further.
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Oh dear just read my post from last night- too much Hop Back Summer Lightening last night! I get a bit touchy about my spelling- i loose loads of marks in University course work due to it. I must sort it out- thanks for pointing to it.
Sorry mapmaker sounded like i was having a go.
One thing i have noted when people come to view cars i have tried to sell is that they seem far more inclined to make a purchase if when they arrive the car is better than they expected. I am now careful not to oversell a car over the phone or in the advert. I dont know what that guy with the merc was doing though- he went to the trouble of taking all those photos, why not give it a wipe over first? Purhaps if you have the time you might buy it- it would be an interesting project.
My belief is that as making money from cars has become increasingly difficult, dealers have sought different ways to make money from cars. The rise of these car finance operations means more buyers on the auction floor being prepared to pay a bit extra for a certain type of car, as they make most of their profit from the finance packages they sell. I think some of these places are prepared to make very little profit directly from the sale of the car. Owen- do you, or have you thought about offering finance, and selling people extended warranties etc?
With regard the receipt, some traders will put for spares or repair on the receipt if you buy "trade"- as in totally sold as seen, no warranty no nothing. But if you are a trader and you sell on to a customer in the normal way there are certain things you cant get away with. It will be interesting to see how the new law is interpreted. I expect if precendent is set that traders must effectively warrant any car they sell themselves for a six month period, many older cars, say over 7 years could become increasngly worthless to the trade. When i come to purchase my next car i plan to drive round all the local dealers to see if they have any intersting part exchanges in that i can snap up before they hit the auctions.
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