I've bought all our familys cars from auctions for years now, then it extended to helping friends and relatives buy cars from auctions, hell I even bought my rally car fully prepared from auction!
The only thing that has stopped me from selling cars part time is the hassle of advertising a car in the local paper, when you live 5 miles out of town.
So i've been watching ebay grow in popularity with interest, and am considering buying a few cars to sell on Ebay. (no, seriously - stop laughing!)
I have the bookkeeping/accountancy knowledge to set up and keep the records for a limited company. Also am uptodate with second hand car VAT rules
I?ve had reasonable quotes for comprehensive motor trade insurance, to include public liability and sales indemnity cover. (Anybody want to suggest some good companies to get quotes from)
I?m assuming the trade insurance allows me to tax vehicles registered in my name, hence I can actually save money on my current premium as I can drop the insurance on my road car, 4x4 and rally car.
I?ve got a 4wd and trailer which I use for my rallycar, this would enable me to collect cars from auction, although I aim to get a set of trade plates. Anyone know what the DVLA would require to satisfy them to issue a set?
Space to store the cars off the road is not a problem as I live on a farm. But do traders need to notify the DVLA that they have particular cars on their forecourt and SORN them? I don?t want to register them to myself, as I don?t want to add additional names to the logbook, and wait a month for it to come back. However equally I don?t want the DVLA to find half a dozen untaxed cars on the farm!
What kind of things would the major auction houses require for a trade buyers account. (I usually use a small independent which charges very little commission). Is certificate of Incorporation / Company Bank Account / Trade Insurance / Reference from small auction likely to satisfy them?
The commissions charged by BCA/Manheim to private buyers are extortionate. If I remember correctly its over £100 on a £500 car. What reductions can you expect as a trade buyer, and do you have to buy x number of cars a year to retain the account?
As for selling the cars I?ve been comparing the Ebay prices of local vehicles hitting their reserve and not bought by Singaporian con-men! Against the main dealer px?s with good MOT?s at the local auction which meet reserve.
I think I?ve identified an opportunity in the more unusual or slightly higher mileage fleet cars (basically the stuff the independent garages don?t want on their forecourts). From about £500 to £2500. I?ve ?dry run? it with a couple of cheapies successfully, so am raring to go.
I have good Ebay feedback from my private dealings to instil confidence for customers
I have set up a checklist to try to ensure I find (and disclose or repair) any faults with each car before I sell it, and an adequate accounting / stock system.
More importantly I don?t need to make a living out of this (I have another flexible job), just could do with some extra money to fund the rallying.
So you?ve heard the story now, any comments/advice/answers to above questions? Or anything I should consider but have forgotton about?
Thanks
James
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Hi James,
You are doing precisely what I am doing, and a few of the q's you have raised I will be interested to see answers for, but in response to a couple...
Yes, you can tax vehicles in your name provided that your insurance covers you for SD&P. However, as I have found out you cannot tax trade cars and there is no loophole or legal way around this. If you need to use the car for trade purposes only (test drive, repairs, valet etc) then you will need trade plates.
Which takes me nicely on... you need to ring up the DVLA 08708 500007 and ask for the forms to apply for trade plates. You then send this off and your local DVLA centre will invite you for an interview. If they are happy, the will issue you with plates for an annual fee of £165 (cost of taxing a single car for a year). Not sure what criteria makes them 'happy' but there you are..
You do not need to post a SORN if the cars are for trade purpose and are not kept on HM Highway, provided the 'sold to trader' part of the V5 is sent off. Obviously, if you go on the road for a test drive you will need the trade plates.
You sound like you have the right attitude, especially with respect to Sale of GOods Act and account keeping, you are already way ahead of some part time traders in that respect!!
And for what its worth, I think you are looking at the right end of the market. I have really struggled in my first few months with cars that I percieved to be 'safe' at around the 5-6K mark. I think that the thought of spending this sort of money with a part time trader does not sit well with this market, hence in the new year I too will be operating at arount 1-3K. Also remeber that you will not be able to offer warranties any more soon (unless registered with the FSA, £1500pa for a sole trader) so cars of higher value may be difficult to shift.
Best of luck and I shall watch with interest on your progress and the responses..
Cheers,
Pad
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You do not need to post a SORN if the cars are for trade purpose and are not kept on HM Highway, provided the 'sold to trader' part of the V5 is sent off. Obviously, if you go on the road for a test drive you will need the trade plates.
>
That's an interesting point, which I think another home-trader raised recently. You seem to be saying that trade plates not only give insurance cover, but also allow a trader to take an untaxed car on to the road for test purposes - ie they give road tax cover too.
Is that correct? If so, it would seem to solve the dilema that someone else raised of how to bring home a newly-purchased untaxed car.
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I don;t think so, from my understanding the trade plates work as a tax disc for the trader for his motor trading activities, so collecting, delivering, test driving the cars (presumably not going to the pub).
However they would not give insurance cover, that would be under the traders road risk insurance policy.
I would imagine that proof of insurance would be one of the requirments to get the trade plates in the first place.
Guessing a bit here!
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Someone from the local VRO will come to visit you to check your books and your premises before they will issue a trade licence.
For a BCA account card you need to keep at least £10k permanently available a nominated cheque account. I guess it's the same for Manheim (when I bought there I bought cash or on the accounts of the dealers I bought for).
There is now a cash limit of £9,000.
Can use Switch or Delta, but then you pay private buyer's auction commission which is much higher than a recognised trader's.
You will need to get VAT registered and keep complicated 13 column books.
I use norton insurance www.norton-ib.co.uk, e-mail service@norton-ib.co.uk, tel 0121 246 5050.
HJ
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>What kind of things would the major auction houses require for >a trade buyers account. (I usually use a small independent >which charges very little commission). Is certificate of >Incorporation / Company Bank Account / Trade Insurance / >Reference from small auction likely to satisfy them?
Don't know about the account yet, but BCA Preston gave me trade commission price just by showing them my trade insurance cert, they did photocopy it for their records I guess.
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Don't know about the account yet, but BCA Preston gave me trade commission price just by showing them my trade insurance cert, they did photocopy it for their records I guess.
What kind of difference is there between trade and public commission rates at BCA?
Trying to persuade them to give me trade rates without an account may be my best approach, as I don;t intend to go to BCA very often, but when I did it would be to buy several cars. Also would pay for cars on day via card/cash, so not after (or expecting) any credit.
I don;t like the idea of having to keep £10k in an account doing nothing purely to satisfy BCA, i'd rather have that tied up in cars earning for me!
I spoke to Manheim and they are sending me a form, apparantly it costs £50 to get a basic buyers account, need two trade invoices and insurance, and must buy 12 cars per year.
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Sorry, I must have put it down wrong - I wasnt implying that you were covered for insurance with trade plates, just tax. And yes, you cannot use the car to 'go to the pub' which causes me problems as I use my trade cars for Social Domestic & Pleasure.
And I think I was said home trader that posted a couple of weeks ago!! :) As you can see I have done some digging, the upshot of it all is that if I want to tax the particular car in question I am going to have to register it in my name. You lives and learns....
Pad
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These people are very helpful when it comes to trade insurance.
www.roadrunnerinsurance.co.uk/
There is a legal requirement to inform the Motor Insurance Database of the cars you have in stock, if you have had, or are likely to have them in for more than 14 days. This only applies to vehicles you have in stock which are taxed, AFAIK. The above website has information on this.
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thats interesting about the £9K cash limit - I was under the impression that all cash transaction for more than £5K had to be reported to ncis under the new monry laundering rules.
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No sorry, disagree.
The requirement is to register as a 'high value dealer' with HM Customs and Excise before you accept cash payments exceeding ?15,000.
There is no requirememt to report, but simply a requirement to maintain records.
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> I would imagine that proof of insurance would be one of the
> requirments to get the trade plates in the first place.
No, you can get trade plates without insurance. The DVLA will visit your premises and check you're legimate (I run an import business from home). The DVLA guy who visited me was a retired traffic cop and turned out to be a nice guy. He just wanted to see that I kept proper records etc.
As it happened I never used the trade plates (any car deliveries were handled by a transported) and so I chopped them in after a year. They cost the same as a tax disc (£165) and are effectively tax for unlicensed vehicles but can only be used for business use (no trips to pub). The car can't be left parked anywhere on trade plates either.
Your DVLA local office will advise.
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