Flipping Cars: A newbie looking for advice

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Mon 9 Sep 2019 13:15
Flipping Cars: A newbie looking for advice - Douglas Forsyth

I have recently decided to take the plunge in trying to buy cars at auction and sell for a profit. I have spent quite some time researching this and purchased my own car at auction as a test run (would have cleared around 800 based upon autotrader prices). I have come across a theoretical problem which I thought I would put out here.

-When purchasing my car I received the green slip from the V5C as proof of ownership but the V5C itself did not arrive for around 2 weeks. This is problematic as I would ideally have turned the car around in this time (MOT, repairs, valet, listed, sold; ideally). I wonder if there is any way around waiting for this as a private buyer? Failing that, what are the requirement that the auction house (BCA) might have to put a car into "in trade" status.

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Mon 9 Sep 2019 13:26
Flipping Cars: A newbie looking for advice - RT

You're trying to act as a trader but want the benefits of a private buyer/seller - just set yourself up as a proper motor trader.

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Mon 9 Sep 2019 13:32
Flipping Cars: A newbie looking for advice - pd

Yes, you need a proper trade account with the auction house and then they'll give you the full V5.

They'll usually do this for you with some sort of proof of trade status - usually a copy of your trade insurance policy.

Note that with BCA you need to purchase a minimum of 12 cars in a 12 month period to get proper trade buying perks of reduced buyer's premium, online buying etc.

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Mon 9 Sep 2019 14:26
Flipping Cars: A newbie looking for advice - Douglas Forsyth

You're trying to act as a trader but want the benefits of a private buyer/seller - just set yourself up as a proper motor trader.

I would just like to sell my first couple without making large outgoings on traders insurance/tax. It is my intention to do so once I have found my feet. Im also not intending to lie to potential customers around where the vehicles are sourced

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Mon 9 Sep 2019 14:39
Flipping Cars: A newbie looking for advice - SLO76
You have to cover yourself properly. You need trade insurance in order to transport and demonstrate vehicles and you’ll usually need proof of it to show the auction house that you’re a trader. The last thing you want is to be pulled over for no insurance and having your name added to the registration doc of every car is time consuming and devalues the motor with an additional owner.

Stop and have a rethink. I did this for years as a sideline but it became increasingly difficult to make a profit with dealers increasingly holding onto decent stock themselves and ever increasing legislation plus the upward march of trade insurance. Auctions also rapidly and vastly above inflation increased their fees to everyone bar the big buyers who were taking hundreds of cars a year or more.

Auctions are also full of traps for the unprepared. I bought privately mostly, from reputation people who wanted to buy a new car would seek me out for advice and a valuation on their old car. I’d help them buy it’s replacement and would buy their old car for slightly more than they were offered in most cases. It meant I could properly appraise cars I was buying unlike at auction where it’s a big risk that there’s nothing costly lurking underneath.

Remember this, all cars at auction are there for a reason. You have to know who sent it and whether they’ll typically retail that sort of stock. If they do then there’s something wrong with it.

Don’t try to do this on the fly, it’ll come back to bite you. In fact today I wouldn’t recommend it at all.

Edited by SLO76 on 09/09/2019 at 14:40

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Mon 9 Sep 2019 15:15
Flipping Cars: A newbie looking for advice - Douglas Forsyth

It was never my intention to drive uninsured but rather temporarily insure the care in my name and take the drop in value assoicated with the extra registered keeper. The problem with V5 timescale was what led to my question as this would drastically increase the length of time the vehicle needs to be insured.

I've done some looking into the sources of cars from auction and know to avoid multi-vendor. I'm aware that vendors like Peter Vardy do not deal with cars under 5 thousand or something similar and send all such cars to auction.

the advice is appreciated though and I will look into trade insurance and compare it against the temporary insurance alternative.

Edited by Douglas Forsyth on 09/09/2019 at 15:21

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Mon 9 Sep 2019 15:56
Flipping Cars: A newbie looking for advice - RT

Best thing to do is to operate just as a private buyer/seller to start with and accept the delay in registration plus the inevitable question about changing owners so soon - then if it works out for you, go into it fully as a trader.

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Mon 9 Sep 2019 16:32
Flipping Cars: A newbie looking for advice - SLO76
“It was never my intention to drive uninsured but rather temporarily insure the care in my name and take the drop in value assoicated with the extra registered keeper. The problem with V5 timescale was what led to my question as this would drastically increase the length of time the vehicle needs to be insured.”

You can temporarily insure it though it’s costly and you can register it as your own car but then what do about road tax? You can’t demonstrate it or transport it without taxing it too. I’ve seen guys try to trade without appropriate insurance and without trade plates and they always get stung. Honestly it’s not a good idea.

Get quotes for trade insurance and get yourself a set of trade plates, these aren’t expensive. Base your business plan around this initial cost and give it a try for a year. If it doesn’t work then you’re not standing a huge loss and you’ll have an intact licence and no criminal record.
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Mon 9 Sep 2019 16:45
Flipping Cars: A newbie looking for advice - sammy1

flipping cars, as a private buyer I would be very wary about buying a car which is being passed on after a very short time and from an individual with no warranty. Presumably the OP would be trading in cash which may add to the difficulties. As for passing on the V5 without being in the trade is a no no

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Tue 10 Sep 2019 13:38
Flipping Cars: A newbie looking for advice - Gibbo_Wirral

Has someone been watching the TV show "Flipping Bangers"?

They're the biggest bunch of cowboys going. If you want a laugh at some absolutely awful bodges, give it a watch, its on Freeview channel Blaze.

One example - they buy an MX5 and spend loads of time welding, filling and spraying where it normally rots.

Yet they leave a rusty wheel arch which would have took just half an hour to rub, fill and spray at the same time.

Then when it comes to sell, the buyer sees this and wants money knocked off for it.

The best one was the Alfa - a barn find. They paid £400 for it, spent £400 refurbing the wheels. THEN they looked under it and found the entire floor pan and sills had rotted away.

They ended up scrapping and crushing it - WITH THE REFURBED WHEELS STILL ON IT!

Edited by Gibbo_Wirral on 10/09/2019 at 13:39

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Tue 10 Sep 2019 16:35
Flipping Cars: A newbie looking for advice - daveyK_UK
If you get a BCA trade account, buyers fees are still considerably higher than they were in 2005 percentage wise; since then the fees have rocketed.
Manheim feee are just as bad.

To make money as a small trader is tough, you need to specialise.

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