Perhaps your New Year resolution is to start a new business, but maybe you’re lacking an idea on what to do? Well you could get into the business of Flipping Cars. In this short guide I’m going to tell you the ins and outs of it, what you need to know and how to get started.
How to get started
First off, you don’t need to be a mechanic or have loads of experience, but always remember Knowledge is Power. Investing in your knowledge before starting, will save you from losing money and failing.
A good start is to come on my Car Auction Buyers Course. It will teach you the basics of buying cars from auctions. It will also teach you how to sell cars for profit. However for those who just want a guide and will go for it anyway, here it is…
You need to do some research. Where will you buy from? How much will you spend per car? Where will you store the cars whilst selling them? Where will you advertise them? How will you handle the money (sole trader or limited company)? etc etc the list goes on.
Lets Get Started With Research
First off, you need to find a source of cars to buy. The obvious choice is the car auctions or online car sale sites. Visit these and write down the sort of cars you think you will be interested in and the prices they go for. If going to the auctions, get a copy of the running order. It will show you the trade price of the car and you can write down the sale price of the car and then research the web for what they actually resell for.
From this you should set your budget per car. You should select maybe 3 to 5 different types (make and model) of cars you think you’d like to sell. It helps if you know something about these cars, such as the common faults as well as all the other pros and cons associated with the cars you are likely to experience. So maybe go for cars that you have owned in the past. Start off selling just one. Don’t go and buy 3 or 4 different cars on day one or you will get yourself swamped.
At this stage you should now know your budget and types of cars you will buy, where you are going to buy them from and how much they cost to buy and the resale value of them too. With this knowledge you are nearly ready to buy, however….
Plan the Buying and Selling Process
Decide whether you will trade as a Limited Company or Sole Trader. If you are likely to sell over 3 cars per month, its beneficial to register as a proper company. If you will only do a few a year then trading as a sole trader will work fine.
Will you trade in cash or will you need a business account? Its wise to declare all your money. Not only will it save you headaches, if you ever have a problem with a sale you will of declared all your funds and if it ended up in court you will be OK. Auctions also charge a cash handling fee so it will cost you more to buy a car in cash. In the auction world, cash isn’t king.
Before you commit to buying a car you need to know how you will get the car back to your place and where you are going to store it. If buying from an auction this post shows you how to get a car back home. Don’t make the mistake of not being insured. This company will help you get the best value motor trade insurance for your circumstances. You will also need to ensure the car has road tax. This is where traders plates come in handy. Yes trade plates are for road tax and not insurance purposes like most people mistakenly think.
Go and Buy
Eventually you need to take the leap of faith and go and buy a car. You should of been on my car auction buying course buy now and feel confident. Remember you will need to add on the buyers fees that auction houses charge. If you are buying from a private seller instead, prepare yourself to haggle and get a deal. The more you can get off the sale price the more profit you will make for yourself.
The key here is to get the maximum resale price you can. A good valet and doing any jobs that need doing is important. Get a full 12 months MOT on the car and before any viewings you should give the car a quick once over. Showing the car in the best condition you can will help you maximise the sale price.
There are lots of places you can advertise your car for sale online. Advertise in as many places as you can. Remember everyone will haggle with you so set your price accordingly. I always point out any faults with the car the moment someone turns up. Show them the good and the bad. It stops them finding them and pointing them out and then trying to haggle based on them.
Always make out a receipt. No matter how nice a buyer is when they buy the car, you must issue a used car sales receipt and keep a copy for yourself and issue the buyer with a copy. You should then complete the V5 new keepers details and send this off. Just give the new keepers slip to the new owner.
Bank the money. Remember when you go past the VAT threshold you will need to register and pay VAT. As a used car dealer you will normally pay VAT margin. This means you will pay VAT only on the profit. The amount of money between the cost of the car and the sale price.
That should be your first flip completed. Now you need to repeat the process. Remember this is a short guide and you really should come on my course to learn the ropes. Its cheap as chips and you’ll learn so much whilst having a laugh with me.