Last Updated on Apr 7, 2020 by James W
Buying and selling cars can be a lucrative business, but it’s not as straightforward as it might seem. In order to get started, there are a lot of factors you’ll need to consider. Here, we’ll look at the main things you’ll need to get started with car trading.
Will I need a license?
There’s a lot of contradictory advice out there surrounding car trading licenses. Some say you can buy and sell up to 10 cars at a time without a license, while others claim you don’t need a license at all regardless of how many cars you plan on trading. However, it all depends upon where you are based as each local council tends to have its own regulations you’ll need to follow. So, to check if you need a license, you will need to contact your local authority.
One thing you will need to do is declare the cars you sell as an additional income. If you’re setting up a car trading business, you will need to pay tax on any money you make. So, again, it’s worth doing your research and contacting the HMRC to see what legal obligations you’ll have.
Things to consider
As well as the legal aspects involved, there are a few other factors you’ll need to consider before setting up. Firstly, when you’re buying second-hand vehicles, it can be a risk. There are a lot of fraudsters out there who sell stolen vehicles. So, to ensure you don’t fall victim to automotive scams and fraud, you’ll want to ensure you carry out HPI checks.
These checks can show you the cars history, including whether it’s been reported as stolen or even written off. It costs very little to have these checks carried out, yet they could save you thousands of pounds.
If you plan on repairing and upgrading the cars you buy, you’re also going to need insurance. There’s a few different types of insurance you could benefit from, but Public Liability Insurance is one of the most important types of cover you’ll want to invest in.
Finally, you’ll likely also need to invest in a commercial property to base the business. While it is possible to start out working from home, there are pretty strict rules in place; particularly if you plan on keeping some of the cars on the road until they sell.
Overall, when done correctly, buying and selling cars for a living can be a really rewarding career option. However, you will need to do your research and educate yourself on the legal aspects of car trading before you set up your business.
