How To Register Cars As A Service Member

May 23, 2022 15 min read

In that location'due south no denying the COVID pandemic has damaged the car sale sector. Figures reported by the Society of Motor Manufacturers and Traders (SMMT) revealed that British new car registrations in August 2021 cruel 22% year on twelvemonth.

But despite this refuse, the used car sales market has seen exponential growth over the by year. Every bit 2.1 million used vehicles inverse hands in Q2 of 2021 solitary across the United kingdom, the potential to succeed in the used car trade business concern is huge.

But how do you capitalise on this growing market? The pandemic has hitting many UK households difficult, and with NI increases and rising taxes, we all will be aiming to minimise our expenditure – including on motorcar purchases.

This is where y'all come in, a budding, enthusiastic automobile trader fresh to the game. You lot have the bulldoze and the entrepreneurial spirit, merely do yous have the market insight and knowledge needed to thrive?

For example, are you aware of the pledges contained in the U.k. regime'southward recently published 'Net Zippo Strategy' that will bear on the car trade industry? Do you understand the importance of running car registrations through the regime'south vehicle database?

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At Startups.co.u.k., we're here to aid small UK businesses to get started, grow and succeed. We have helpful resource for helping new businesses get off the ground – you tin utilise the tool beneath to get started today.

We will cover all of this information and more in this all-encompassing 'how to' guide, as you acquire about the 11 steps needed to take to jumpstart your new career.

We'll cover things like Motor Trade Insurance, how to use for merchandise plates, and how to register as a sole trader. Nosotros too talk to successful car traders to discover how they've turned their garage side hustle into a polished showroom concern.

And the slap-up news is, to become a successful auto trader, you don't need to be a petrolhead.

But you need to know how to strike a bargain, recognise a bargain when yous see one, and understand exactly what your target market is later. Get that right, and yous could see profits of £200 to £two,000+ per sale – all for a couple of hours of work.

Fix to go? Then commencement your engines…

Research the market place

The outset question you need to ask is simple – what type of motorcar are your buyers after?

Car auction trends are in the midst of a huge shift, as diesel fuel motorcar purchases go on to decline year on year, electrical vehicle sales continue to increase. The SMMT reported that one in five new cars registered final month are 'zero-emissions capable' every bit 33,000 new battery-powered cars were purchased from showrooms in September.

So, you'll want to avoid delving besides deeply into diesel car sales and instead focus primarily on petrol and electrical vehicles to ensure you get the balance of supply and demand just correct.

You should besides keep an center on what's going on closer to dwelling house. For example, Clean Air Zones are in operation in and around the Uk's major towns and cities, which means a gas guzzler with high emission levels may non exist the easiest auto to sell.

An excellent source of automotive stats is the Society of Motor Manufacturers and Traders (SMMT) . Too equally representing the interests of the manufacture, it provides a wealth of car data and enquiry valuable to someone new to the market, including:

Used machine sales data
Car registrations
Sustainability

Then what cars are selling?

Keeping upwardly to date with buying trends is the kickoff step to knowing which cars are the best to purchase and sell.

The latest data from SMMT states that Ford Fiestas and Vauxhall Corsas are the best-selling machine models and so far in 2021, with 27,381 Corsa registrations and 24,578 Fiesta registrations respectively. Purchasing these models is a certain-fire fashion to guarantee interest and go yous that stride closer to an easy sale!

How should I price my cars?

There are lots of factors that could affect the value of a car. These include:

Overall condition
Mileage
Age
Gearbox
Modcons (due east.thousand. aircon, Bluetooth, hands-gratuitous, heated seats)
Type of engine

To find out how the above factors could affect the value of the car you're selling, local market enquiry is key.

Hop onto sites similar Autotrader to approximate the guide prices for cars of a similar spec. You'll and so exist able to offer a fair cost while keeping profit margins in mind.

The other thing to think about is the time of year .

For example, convertibles tend to sell for more in the warmer months, meaning purchasing one in late wintertime and selling it in mid-leap could exist an piece of cake way to see a profit.

Or consider the fact that a lot of students acquire to bulldoze in the summer holidays, which means in that location could be a higher demand for inexpensive runarounds in the summertime – and nosotros all know that when supply outweighs need, prices increase.

How long does it take to sell a car?

While data collected past Autotrader suggests it takes on boilerplate 25-45 days to sell a machine, if yous judge demand right, y'all could see it rev off your drive in less than a week.

But make sure y'all gene in the fourth dimension information technology takes to sell a car into your business plan. This is then you can assess the viability of your new venture. If you lot constantly have money tied up in an undesirable vehicle, you may experience cashflow issues, and end upwards losing money in the long run.

Write a business organisation plan

This may seem similar a premature step when you haven't fifty-fifty bought your first car, but having a roadmap is essential to visualising the direction in which you want your business to go.

And a business plan doesn't have to be complicated, especially when information technology comes to setting up a machine trader business. In fact, Andy King, founder of original car buying comparison service JamJar , says:

"A successful business programme for automotive companies [is] more of a guideline for the future. After all, startup costs are low, y'all have zero or few employees to worry about, and y'all haven't got a huge original outlay to claw back. It's more about giving yourself that "'jerk room' [to] scale the company, [and then information technology can] become what y'all want it to become."

To start, you'll demand to carry out projected calculations for each motorcar you sell. This will assist forestall y'all from carrying out whatsoever work which may breach the ceiling cost of the car.

Yous should factor the post-obit into your auto trader business programme:

Any repair bug the cars may take
Whatsoever aesthetic improvements you might want to brand
Legal regulations and marketing considerations you will want to be aware of

In one case you lot've worked out your costs, you'll know how much yous can afford to pay for a car, and tin assess if you need to raise any finance.

Yous'll too be able to work out how much you can afford to sell the auto for, and estimate any profit. This can then help you ready financial goals for the residual of the quarter/year.

It might exist that you aim to have plenty cash to offset selling two cars at the same time. Eventually, y'all may even be able to plan ahead so you have enough greenbacks to purchase or lease a premises, and plough your side hustle into a full-on business.

Need aid organising?

Project management software is a useful tool for organising your business plans. Create simple workflows to help arrange your own time, or the fourth dimension of your teams and colleagues.

Find out which project management software we recall is best.

Notify your local council

Selling cars from abode is a corking way to salve money when you're starting out every bit a car trader. If this is the route y'all decide to get downwardly, you'll need to notify your local council in order to define how many cars y'all tin can have parked on the route at in one case.

Find and contact your local council here.

Get accreditation from the Motor Ombudsman

The Motor Ombudsman is an impartial dispute treatment service. By becoming accredited, you're telling your customers that you lot're dedicated to providing an honest, high level service.

And if a heir-apparent does enhance a complaint, the Motor Ombudsman will guide you lot through the dispute resolution procedure so the complaint can be resolved fairly.

But that'southward non the only reason why you should go accreditation from the Motor Ombudsman.

Here'south a list of benefits:

Get unlimited access to its information line and arbitrament service
Apply of the Motor Ombudsman logo
Collect valuable feedback from your customers
Set up upward a customisable profile page to promote your business
Get access to Alternative Dispute Resolution and Consumer Rights training
Do good from increased exposure and potential buyers!

How exercise I do information technology?

You lot'll need to head over to its Register Online folio. From at that place, you lot'll be asked to telephone call them, or make full in the online grade. Either fashion, you'll need to dedicate some time to chat over your application with a member of its business services team – nosotros reckon it'll be worth it!

Get Motor Trade Insurance

Once you've been given the become ahead by the council, yous need to go yourself some Motor Trade Insurance, which covers all cars in your possession so they don't have to be insured individually.

Motor Trade Insurance is a groovy pick every bit, unlike private insurance, it allows you lot to add and remove equally many cars as you like without having to pay boosted costs.

There are 4 types of Motor Trade Insurance:

Road risk – the minimum comprehend necessary to satisfy the legal requirements of the motor trade. But covers vehicles registered on the Motor Insurance Database (MID)
Tertiary-political party – covers you lot in the case of an accident that amercement another vehicle
Third party, fire, and theft – covers everything above, as well equally in the event of theft or fire impairment
Comprehensive – covers all scenarios mentioned above for any vehicle yous own, and allows yous to claim for personal injury

Desire to learn more almost motor trade insurance? Visit our guide.

Apply for trade plates

Next, y'all need to utilize for trade licence plates . These are mobile tax discs that save you having to tax and register every automobile that is temporarily in your possession.

Apply to the Driver and Vehicle Licensing Agency (DVLA) for a trade licence to be able to use merchandise plates.

These plates last for between 6 and 12 months, and elapse on thirty June or 31 December. First fourth dimension applicants can apply for seven to 11-calendar month licences.

Buy a machine to sell

There are a few unlike avenues you tin go downwardly when purchasing a used car. These are:

Auction and list websites (such as eBay)
Car selling sites (such as Autotrader)
Auction houses

Just bear in mind that auction houses, while being the best place to get a bargain, come with the highest purchase risk. This is because you have less legal protection at an auction business firm, and you don't ever know what you lot're getting.

Make sure you lot thoroughly check the terms and conditions and background of the vehicle, otherwise you could end up purchasing a tin can of worms.

Our tip – if you're not an auction aficionado, make sure y'all visit a few times before making a purchase.

Some tips on buying used cars

No matter where you decide to source your cars from, brand sure you exercise the following:

Bank check the condition of the motorcar you're buying – use the government website to check out the automobile's previous MOT history
Ask for the service history – the car could be worth upwardly to 26% less without its log book
Brand sure at that place are no outstanding hire purchase or conditional sale agreements – otherwise the automobile is unsaleable
Have the car for a test bulldoze to run into how information technology feels and functions. Examination the brakes, examine the lights, ensure the gearbox transitions smoothly
Make sure the vehicle has a V5C registration document, which is used every bit proof of ownership – without information technology, it could be the case that the car is stolen
Ensure the purchase is in line with your business organization plan. Will it requite you the profit margin yous need?

What is a V5C registration certificate?

A V5C registration certificate registers your vehicle with the Driver Vehicle and Licensing Agency. (DVLA)

It includes essential data such equally the engagement the car was starting time registered, its manufacturer, its engine size, and who is the registered keeper – i.e the person responsible for taxing the vehicle (not necessarily the owner).

Offset selling cars!

Here's what yous need to do to get your vehicle ready for resale, and what to do when at that place'due south interest.

Getting the car out there

Make sure the motorcar has passed its MOT – otherwise, you'll detect information technology difficult to sell on. It may also be worth sorting out any advisories.
It's ever a skillful thought to become the car valeted to give information technology more entreatment
It doesn't cost much to touch up any scratches. Information technology may even exist worth getting the car resprayed
Once you've carried out whatever piece of work, get the car listed on websites such as eBay and Autotrader. You could even investigate local newspapers or motorcar dealer magazines
Make sure y'all have some clear photos of the car – inside and out – and listing all the relevant information

Keep on height of your finances

Starting a business takes money and time, and accountancy software can assistance with both. Whether you're self-employed, a sole trader, or running a business organisation with staff, you'll need to stay on acme of your finances. If yous're non ready to employ an accountant to help out, so we suggest using an online accountancy tool.

If you're ready to buy and sell cars, you volition want to brand sure you have the right tools and processes in place to proceed track of your money. Keeping an eye on your approachable cash and incoming revenue is a necessary part of any successful business. But yous don't need to rely on spreadsheets and manual documents if yous want to make life a bit easier.

Accountancy software is designed to simplify the circuitous processes related to money. From tracking your outgoings to managing your taxes, y'all'll detect any finance process simpler with the right tools in place. Take a look at the accountancy software that we're rated best.

Or, take a quick look at our summit recommended picks for accountancy software below:

Behave in mind...

                    eBay takesx% of upward to £250 of the selling price. Meanwhile, Autotrader offers a range of listing packages, with a basic parcel to listing a motorcar worth over £ane,000 costing£36.95.                      
Ensure whatever work you carry out doesn't breach the ceiling value of the vehicle – otherwise y'all could be in for a loss!
                  

What makes a expert motorcar advertisement?

A detailed description, including unique and noteworthy features
The request price and negotiating terms (be realistic)
The mileage
An honest cess of the car's condition and any issues
Plenty of photos
Maintenance and service history

Some tips on selling cars

It'south non all well-nigh creating a peachy advert – you need to be mindful of the legalities, too.

Make sure yous observe the Consumer Rights Human action (2015)

What does this hateful?

The vehicle must be of satisfactory quality. Just put, the condition of the vehicle should be what any reasonable person expects.

The vehicle must exist fit for purpose. In other words, the heir-apparent should be able to employ the motorcar for the purposes any reasonable person would look, including purposes advertised (e.m. towing).

The vehicle must appear as described. This ensures that you are not liable for any damages that have been pointed out, nor any breakdowns that may occur through normal use after purchase.

Too…

Be transparent – tell your buyers everything y'all know about the machine, or else there could exist legal consequences
Call back that the buyer is entitled to a repair, replacement, or refund unless you can prove a fault wasn't in that location at the time of purchase
Take the buyer for a test drive – this is a good opportunity to tell them near the car
If the buyer agrees to purchase the auto, make sure yous both fill out the relevant parts of the V5C and transport it to the DVLA – don't let buyers accept photographs of the documents (to avoid fraud)
You can choose to gear up your ain warranty, or not have one if you wish. Simply think to provide the buyer with a receipt if you lot practise include a warranty

Annals equally a sole trader

One time you've sold your first motorcar, you should annals every bit a sole trader (read more in our guide on how to register every bit a sole trader ). It is important that you inform HMRC one time you lot start trading and so that you are registered for self assessment tax. You could be fined if you lot don't exercise this!

As you start buying and selling more than cars, you may decide to form a company rather than operate as a sole trader (read more in our guide on sole trader vs limited visitor differences ). Fifty-fifty if you don't set up a company, you lot may want to set up a split up bank account for your car trading activities to be able to track them more than clearly.

Soft skills you need to exist an splendid car trader

While y'all don't quite need the selling charisma of Del Male child to become a automobile trader, y'all do demand to accept a certain air of confidence, and the natural ability to negotiate and overcome objections. We've summarised the cardinal skills you lot'll probable demand below:

Conviction
Ability to give corking client service
Likeability – customers demand to be able to warm to you
Strong negotiation and objection treatment
The ability to ready and encounter sales goals (recall that all important business organization program!)
Honesty, and the ability to run across from the customers' perspective
Maths skills

Creating a visitor and career progressions

So yous're making lots of money, yous know you've fabricated the right career selection, and now you desire to expand your car trading business beyond the driveway. To create a proper company, you'll need to create a succinct plan featuring KPIs (primal performance indicators) to continue you in line.

First things beginning – y'all don't need to become at this alone. Michael Austen, CEO of Large Van World , successfully grew his business concern from a minor van trading startup to a thriving enterprise with an £18m turnover. He says:

"If y'all find information technology difficult to translate your vision into a program involving KPIs etc., so bring in someone who loves that kind of thing to formalise it for you. Someone who will help you lot have that vision and turn it into something more formal. Accept what y'all are expert at and let others do the rest."

It's as well about employing people that share your vision. Austin says: "For a plan to succeed, you have to accept good people around you – a good squad." So if you're looking to expand your business, make sure you practice it alongside people who are going to help yous make the next chapter a success.

And then how do you lot get nigh turning your side hustle into a fully fledged concern? Well, there are two articulate options.

1. Franchise

Having a recognisable proper noun attached to your business always helps to go customers through the door. If you manage to become your hands on a franchise agreement, you'll be able to partner with machine manufacturers who'll let you employ their branding and their marketing cloth.

Becoming a recognised dealer isn't like shooting fish in a barrel, though. You lot'll demand to accept all the figures which show to the automobile manufacturers that you lot're the real deal – that you can sell a car, or two, or three, and make a decent profit.

ii. Consider financing

If you lot want to aggrandize, but don't accept the uppercase to do then, y'all can ask the bank for a business organisation loan.

Once more, this won't exist easy. You'll take to present them with clear projections and a well-drafted business organization plan for the banking concern to fifty-fifty remember about handing over its wad of cash. And bear in mind that you'll need to be prepared to forfeit your cars and whatever other assets equally collateral.

Taking credit card payments

An increasingly high percentage of car purchases are made using credit cards. Such cards present a range of advantages to the customer, including:

Avoiding paying involvement
Protection past Consumer Credit Deed 1974
Various reward schemes

Not taking card payments could be a major disadvantage for your business. Think of all those high-value sales you could lose!

Here's what you need to take card payments for cars:

A merchant account

A merchant account is simply a blazon of bank business relationship that allows you to have credit or debit card payments.

It automatically authorises card payments made to your business organization for a small fee, and so deposits the earnings from the sale in your bank account.

Merchant accounts can too protect against card fraud.

Check out our comparison of the UK's best merchant service providers

Card machines for small-scale businesses

You'll also need a carte du jour machine to take credit card payments.

Carte readers are becoming increasingly meaty and powerful, and at that place are many providers to choose from.

Nigh accept similar functionality, and so you're probable to base of operations your decision on:

The price
The transaction fee (ordinarily between 1-ii% of the value of the payment)
Reliability

Non sure which bill of fare auto is right for your car trading concern?

Non to worry – we've compared the half-dozen all-time carte machines for small-scale business organization and then yous don't have to.

Becoming a car trader: main takeaways

And then there you accept information technology – your guide to becoming a auto trader.

It'due south a lot to have in, and so nosotros've summarised the article into 3 articulate points.

It's non hard to showtime a car trading business – at to the lowest degree not if y'all're looking to buy and sell cars off your driveway. Simply be clever with the cars you acquire, and make sure whatever piece of work you do to them increases the value without breaching the ceiling price of how much you tin can actually sell the car for.
Make sure you embrace your ain back. That means you should conduct business ethically, and sign up to the Motor Ombudsman merely in instance y'all need a third party to resolve a dispute fairly.
Make certain you have a business plan, especially if you want to aggrandize your business in the future. A potential franchising partner, or bank manager, will want to run into proof that you're the real deal before signing over any money.

Startups.co.uk can assistance your business succeed

At Startups.co.uk, we're here to aid small UK businesses to get started, grow and succeed. We have helpful resources for helping new businesses get off the ground – yous can use the tool below to get started today.

Aimee is Startups' resident proficient in business tech, products, and services. She loves a great story and enjoys chatting to the startups and pocket-size business customs. Starting her own egg delivery business from the age of 12, she has a good for you respect for cocky-starters and local services.