New performance car registrations are falling and buyers that have the need for speed will be looking at the used car market. This could mean that now is the perfect time to start your sports car trading business.
Fortunately, to become a successful trader, you don’t need to know the A-Z of fast cars or be a petrolhead. As long as you’re able to find a bargain and negotiate a good deal with potential customers, you’ll do just fine. If you can identify what your target market is looking for, you could see profits of £500 to £5,000 per sale. The one thing you will need when selling sports cars compared to other standard everyday vehicles is that you’ll need a larger budget to purchase stock. The outlay is higher but this also significantly increases the amount of profit that can be earned on each vehicle sale. Additionally, you will also need the right motor trade insurance policy that meets the requirements of your business. You can compare cover at Utility Saving Expert, an online comparison site.
Becoming a performance car trader isn’t readily accessible to everyone but can be very rewarding for those that have a keen interest in motorsport. Plus, there’s flexible working which appeals to many in this industry. Ready to start your engines?
Before accelerating your plans, you need to ask yourself – what models of cars are buyers after? Would they want to buy vehicle covers too? Keep a close watch on niche websites and online forums to understand buyer behaviour and current trends. The Society of Motor Manufacturers and Traders (SMMT) represents the interests of the industry and offers a wealth of data and research valuable to someone new to the market, such as used car sales data, car registrations and sustainability. Although the latter won’t be a top priority for enthusiasts but is still worth mentioning.
By keeping up to date with market trends you can understand what cars are selling and what cars will end up costing you heavily as they may be hard to shift. Pricing will be a key consideration and the following factors will have an impact on the value of the car:
- Age
- Model and specification
- Modifications
- Mileage
- Condition
Sites like Autotrader can give you a good insight into prices of sports cars, there’s thousands of different models that can be compared. When selling, offering a fair price is crucial but you’ll need to factor in your profit margins.
The average time it takes to sell a car is between 25 to 45 days. Although, it will likely take longer for those trading in the performance niche. Due to the nature of the business you’re in, it will be imperative that you only buy cars that potential buyers are interested in to ensure your business remains healthy and viable in the foreseeable future. There’s no point in buying a bunch of cars that no one is interested in whatsoever even if you get a great deal on them. Having large sums of capital tied up in an undesirable vehicle will inevitably push you towards cashflow problems, resulting in financial losses later down the road.
As with any type of business, your motor trade venture will require a robust business plan. This roadmap will help you visualise the future direction of your company. This doesn’t have to be complex either. A successful plan for those in the auto industry will include your projected costs and how much you think you’ll be able to realistically earn. Remember that your expenditure will include things like car repairs and aesthetic improvements to make your vehicles more appealing to potential buyers.
Knowing what your costs are will determine how much you can afford to purchase any given car for. Having enough cash to sell multiple cars simultaneously will help you attract more interest.
When you’re ready to start selling, you will need to ensure that you have a suitable motor trade insurance policy. This covers all cars in your possession, meaning you don’t have to insure each one individually. You’ll be able to add and remove vehicles without incurring additional costs. The four main types of motor trade insurance are: road risk, third-party, third party fire and theft and comprehensive.
Next, you’ll need to contact the Driver and Vehicle Licensing Agency (DVLA) to apply for a trade licence to be able to use trade plates. This will save you money as these mobile tax discs will mean that you don’t have to tax and register each car that is in your temporary possession. Typically, they last between 6 and 12 months.
You can purchase used cars on online auction websites such as eBay, car selling sites like Autotrader or by visiting an auction house in person. Remember that auction houses come with added risk, which is offset by lower prices. They offer reduced legal protection compared to other avenues of purchasing.
Finally, now that you’ve bought some performance cars, it’s time to start selling. To be successful you’ll have to market your business effectively to attract customers. Remember to always be honest and provide excellent customer service as this will help you gain referrals and succeed in the long term.
