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Sunday, 31 January 2010

Choosing a price bracket

It may be that when you are starting out as a motor trader your choice of price bracket may be dictated by the amount of available funds that you have. Once you have started to trade however you should have a supply of money with which to source stock. The beauty of trading from home is that you have the freedom to have a very wide price bracket unlike most dealerships. Even now I will happily trade a £500 car one day and a £20,000 car the next. A profit is just that. A profit. 

You will find that the large dealerships refer to stock as metal. They really have no emotive interest in what they sell. They are just interested in shifting units. I'm guessing however that most independent traders do actually have an interest in cars/bikes etc. They are more than just metal. If you wanted to sell units you could have chosen to trade pallets or fridges or washing machines.

So lets assume you've got a few thousand to spend. What value of cars/bikes/vans should you be looking at? To be honest, that is down to personal choice. There have been times and I'm sure I'm not alone where I have spent thousands on a car and actually made a loss. Equally so, I have spent just £500 on a car and made £1500 profit. 

In fact recently I bought a classic TVR 350i. The car had been off the road for 5 years, It was fibreglass and so hadn't rotted but the interior was appalling, it was in need of a full re trim. The engine hadn't been started in 5 years either. The whole car was covered in green moss and tree sap. It was a sorry state when we went to view it. The car was owned by someone that we knew and it cost me £500 but I knew that there was a big following of these cars and so I took a punt on it. 

I often buy with a friend. We bought this one together, paid a recovery guy to collect it and got it home to my friends house. We made a list of what we needed to do. It wasn't a long list. We had decided that instead of restoring it we would simply get in running, clean it up the best we could and advertise it as a restoration project. Once we had assessed the car over a cup of tea and a cigar we made the following list:

  1. Mini Service including oil, plugs filters
  2. Get the engine to fire
  3. Steam clean the chassis and the underbody, 
  4. Wash and Polish the body work, door edges, glass
  5. Vacuum the interior
  6. Clean the hood
  7. Remove the wheels and check the brake operation.
  8. Investigate the pop up headlight that wasn't working.
We spent a FULL (albeit enjoyable) 8 hour day on this car. Both of us got dirty and got stuck in. I'm not hot on mechanicals so my buddy took care of the service, headlight etc. and I cracked on with the valeting duties.  

After 10 hours it looked superb (see photo) and started, The engine luckily was sweet with a typical TVR V8 soundtrack. I put it on ebay using a tried and tested method (I'll tell you my ebay secrets another time) I was brutally honest about the car, I listed it with 12 detailed photos showing just how bad the interior was and the thing went ballistic. We literally had people fighting over it, In the end we chose to end the Auction early and made a sweet £1500 profit for just 1 days work! most of all, It was enjoyable as we were working on a lovely piece of British Motoring history.

Normally if this were a regular car then I wouldn't have got so involved, I would have paid for a service, a valet and took pictures and then advertised the car. This was nirvana, an enjoyable days work and a £1500 return on a £500 investment! superb.

As a rule I have always tried to work to the following formula as a MINIMUM

  • On a car that cost less than £500 then try to double your money but at least go for £250 profit
  • On a car costing £1000 - £5000 then try to make at least £500 profit. 
  • On a car costing £5000+ then try to make 15 - 20% profit.
There will always be exceptions, some good, some bad. As I mentioned earlier, I will always consider dealing in any price bracket as long as there is a margin. As long as you are buying right then the worst scenario should be a break even or a small loss. 

When you are dealing with regular run of the mill cars you have to be aware that because you trade from home you need to be considerably cheaper than the dealers. You will always then appeal to the cash buyers. Generally the people who need finance will always go to a dealer and will end up paying over the odds, in return they'll get an extended warranty, a cheesy smile and a phone call every 12 months asking if they want to upgrade. 
You need to be buying at the right price in order to beat the big guys and still make a profit (We'll cover this in later posts) Alternatively, if you deal in niche markets such as the classics that we've described here today or 4WD or just white vans etc you stand more of a chance of getting a little more money. 

I hope this article has been a good example of turning a big profit from a small outlay. It's all about preparation and presentation! A car well presented is a car sold! 

Until next time......

Friday, 29 January 2010


So you've probably arrived at this blog because you are either A) a car trader or B) you want to be a car trader.

Either way, welcome! If you are reading this post then rest assured you are one of the first here. Fear not, this blog will grow very quickly indeed. Each day or so I will share information on how to buy and sell cars, vans and motorbikes for profit.  I will predominantly concentrate on the UK market although a lot of the articles here will be relevant to European, USA and the rest of the world. I will be covering such topics as Sourcing cars, dealing with other dealers, buying at auction, finding stock at low prices. I will also cover Preparing vehicles for sale, effective advertising, using ebay effectively and other secrets and techniques. I'll cover topics on car preparation, adding value to cars in just a few short hours and again sharing inside information that I have learned along the way. I'll let you know about any of the products I have used good and bad. I'll show you to sell a car once a buyer arrives and much much more.

All the information I give you on this blog is totally free. I hope to have a book published in the next few months which will give even more information in a well presented format which will be a bible for car dealers. I'll post about it on here when it's published.

If you have a topic that you would like me to cover then please let me know and I'll try my best to cover it.

Just to tell you a little bit about me, In addition to other businesses I have always for the past 23 years traded motor vehicles. I have a passion for cars and an eye for a deal. I have learned so much in this time that I thought I would share it. So many websites exist that are just full of bullshit. Very often they aren't even from the UK and discuss topics that just aren't relevant here. Many are just ebooks that were written when Mk2  Escorts were new! I hope that this site is of interest to you.

By the way, That is me at the top of the screen, That was a Ferrari F355 that I owned in 2005 I bought it on ebay and sold it again some months later for a profit on ebay. I'll tell you about it later no doubt. The photo above is also me with a CLK convertible Merc and a Porsche that were my own cars. I'm not showing this to brag, I'm just earning a bit of credibility. the bullshit sites that I mentioned earlier are usually written by losers who have no experience of car dealing let alone any success. I have included these pictures (and will include more as the blog progresses) to verify that I can back up what I say and to show what is achievable.

I've bought and sold everything from £400 bangers to top of the range Jaguars, Ferraris, Porsches etc. If you are keen to make money from Cars, bikes or vans then hopefully I can help you.

Thanks for dropping by, Click on "Follow" and I'll give you regular updates, They wont be in any particular order, I may discuss buying at auction one day and Cleaning alloy wheels the next. If you want a full instruction manual then you'll have to wait for my book (I'm working on it I promise :) )

Best Wishes