Starting a used car dealership.

mackinfella

Myself and a mate brought in a few cars from the UK last month, 2 puntos (1.2L) and 2 polos (1.0L) we vrt them and nctd them... even threw on 6 months tax and they sold within a few days... so we were thinking of setting up a dealership for used cars (uk imports)

anyone any info regarding what we need to do? we can get our hands on a premesis easily enough but not sure legaly what we need to do...

The cars we would be selling would be hand picked in the uk and would have a good history, genuine miles and would be showroom condition.

we would b offering up to a 1 year warrenty with all our car free and all our cars would be vrtd and nctd/taxed 3 months min so ready to drive away..

any info regarding what we need to do (setting up vat numbers etc) would be great

thanks in advance

Drummerboy08

You'll need to set up a VAT number, register with the CRO, get yourself a TAN number from VRO in Shannon, register with SIMI.

All of the above takes a fair amount of wedge up front. Obviously, if you want to do things properly then do the above. If you want to chance your arm, just register for VAT.

shergar22

Register with SIMI? Sure there's plenty of dealers out there who operate without being members

-Corkie-

shergar22 wrote: »

Register with SIMI? Sure there's plenty of dealers out there who operate without being members

SIMI is a waste of time IMO.

ShadowHearth

If I am not mistaken most of these things takes ages to get done with irish govermemt workers productivity.

Selling bangornomics these days can bring profit. Bigger profit then selling something half new.

Fi you got a friend accountant he could look in to it. I know you can hire accountant who will be looking after this paperwork. It's not that big of the money untill you decide to do it yourself.

Drummerboy08

shergar22 wrote: »

Register with SIMI? Sure there's plenty of dealers out there who operate without being members

-Corkie- wrote: »

SIMI is a waste of time IMO.

I know it is, but there is still a large amount of people who will not deal with you if you don't have the SIMI symbol above your door.

Thats why I recommended it.

Delancey

SIMI members used to not touch imports , in fact SIMI used this as a ' selling point ' - has their position changed ?

mickdw

mackinfella wrote: »

The cars we would be selling would be hand picked in the uk and would have a good history, genuine miles and would be showroom condition.

we would b offering up to a 1 year warrenty with all our car free and all our cars would be vrtd and nctd/taxed 3 months min so ready to drive away..

Sounds like great intentions and all that but it might be hard to make the figures work when offering tax and very long warranties specially if you are travelling to hand pick stock and only stock with verified miles and good history.
You would certainly need to be dealing in more expensive stuff I would think to make that plan work. Then you have to consider is it wise to jump straight into dealing in expensive stock?

bazz26

Delancey wrote: »

SIMI members used to not touch imports , in fact SIMI used this as a ' selling point ' - has their position changed ?

Yep, their motto now is "If you can't beat them, join them."

coylemj

bazz26 wrote: »

Yep, their motto now is "If you can't beat them, join them."

Similar to the about-turn pharmacies did with 'ready to go' reading glasses!

If you are offering a year's warranty on 2nd hand UK imports I hope either yourself or your mate are a mechanic as if ye are paying someone to carry out warranty work the profit margin will be shot to shreds. Sheer Lunacy offering a years warranty on 2nd hand yokes. There is a good reason why it's not common practice.

Also your business will be very dependent on currency exchange rates, not a good idea, I've seen loads of UK 2nd hand car importers go t1ts up over the years. If you can't grind out a living buying and selling Irish stuff as your bread and butter you won't last at the game.

vtsboy

Have you been involved in the motor trade before or just decided one day that you and your friend were going to buy a couple of cars in the Uk and sell them?

hanloj1

6 months warranty is plenty. think you're also being hard on yourself with the 3 month tax, people will still buy without the tax if its a decent car. I would. buy decent makes of cars so you won't have lads coming back. uk models are the way to go. higher spec than irish.

robtri

just to clarify.. you went out and bought 4 cars, imported them, vrt's them witht he intention of seling them.. BEFORE you looked into what you need to do the legally sell them???????

at no stage sis you or your friend think .. hey hang on maybe we should look into this more before we spent a lot of cash....

cruizer101

Pretty sure they are ok you can import a certain number of cars before you have to start worrying about stuff like that, it might be 2 although for some reason I think its 3.

So 2 each makes 4, again I'm not 100% sure on the ins and outs of it but there is some rule along those lines which I'm sure they checked out.

dirtydiesel

Be sure to check the cost of business rates in the area you choose to set up in, ive seen a few people set up new ventures where I am , only to be stung by the council for ott business rates, its something that quite often people forget to check when they go into business, rates are higher in different streets in the same area.
3 months warranty is plenty on a 2nd hand car, let the buyer tax it.
Could you run the business from home for 12 months to see how it goes and then expand if it is successful, you can still do this legal and above board from home.
A good business plan is essenital to the success of any new business, you can refer to it and ajust it through out the year.

Bigus

robtri wrote: »

just to clarify.. you went out and bought 4 cars, imported them, vrt's them witht he intention of seling them.. BEFORE you looked into what you need to do the legally sell them???????

at no stage sis you or your friend think .. hey hang on maybe we should look into this more before we spent a lot of cash....

That's what an entrepreneur does, goes out and takes a chance and learns as he goes ! You wouldn't believe the amount of successful people who got going through sheer determination and ignorance ( where ignorance is a good thing) ,we often hear them say "if i knew then what i know now i wouldn't have even started"


to the op
First off well done for trying this out instead of just talking about it, you're well on the way.

Secondly to be totally legal all you need now is to pay your taxes(keep proper books& records) and get motor trade insurance.

After that everything else is optional.

What you don't need is any Degrees training or qualifications.

You don't need to comply with any legislation particularly if you are subcontracting the mechanical work.

You don't need any premises!,

The motor SALES trade is effectively an INTERNET based business now, but if you need a home, there is plenty of surplus space being paid for by other people that you could use by there agreement or by giving them work or a small cut of the action.

If you go for your own premises you will start to bring various legilsation into play, i.e. planning permission, health and safety, rates etc along with security and additional insurance issues.

On the warranty front , why should you give a long warranty on a product that the original Manufacturer has washed its hands of ?

While your aspirations are laudable regarding your warranties you are building up huge contingent liabilities which could really get you into serious trouble,legally and financially and could ruin your reputation, of which you only have one.

You didn't manufacture the car so why take all the responsibility ?

Also from past experience giving all this good service in car sales does not necessarily , mean repeat or even referred business, particularly now with sales been driven by internet searches.

For now keep your current business model(and your Day job) pay your taxes and grow it slowly,

but keep overheads low

you got this far by using a simple model, keep it simple as long as you can,

after-all as RoverJames says a big change in exchange rates may bite you in the arse and make the whole thing un-viable, but in the mean time make hay while the sun shines .

And for all the begrudgers who say i am advocating double jobbing and bad warranties, and they would'nt buy a car from somebody like me, boo-hoo, i've said it so you don't have to.

Better for somebody to double job and get a viable business going over time than give up a job ,then fail in business and end up on the dole.

People also have this idea in Ireland that the taxman and the state hate to see you making profit, and therefore it must be illegal !!! baloney, the opposite is true because this is what pays the bills and creates employment and hope .

Reloc8

Just one other consideration that occurred to me - make sure you're ok on planning permission for what ever premises you are considering.

You might run into difficulties selling from home if the volume gets up to a point where neighbours complaint, and if you're looking at a dedicated premises do a planning search/get legal advice to make sure you don't sink money into it/sign a lease only to find out your use is prohibited. Lots of small businesses get caught out on that, and end up with a 12 month lease commitment for a premises that they then get served a planning enforcement notice on, shutting them down.

vtsboy

Just out of interest how many people commenting on this thread are involved in the motor trade?

robtri

Bigus wrote: »

That's what an entrepreneur does, goes out and takes a chance and learns as he goes ! You wouldn't believe the amount of successful people who got going through sheer determination and ignorance ( where ignorance is a good thing) ,we often hear them say "if i knew then what i know now i wouldn't have even started"

.

most actual understand the cost and requirements of a business before they go out and throw their money around....

Bigus

robtri wrote: »

most actual understand the cost and requirements of a business before they go out and throw their money around....

Absolutely not; a lot don't have a clue, but determination luck and timing can carry even the worst prepared out the gap and onto success. But not all are successful though first time round , i'll agree.

-Chris-

vtsboy wrote: »

Just out of interest how many people commenting on this thread are involved in the motor trade?

Why do you reckon it matters? To be honest I'd rather take advice from an accountant than a car salesman when it comes to the fundamentals of a decision like this.

MidlandsM

A few things from the top of my head -

To get a TAN no to allow you to sit on imported stock, you need a suitable premises. You can't operate from your home.

The proposed premises will be inspected by a revenue offical prior to them approving you for a Tan no. They check for rental/lease agreements etc.

But if you don't bother with the TAN no and declare your imported stock within 7days and have them plated up within 30, you'll get no hassles, such as long as you pay your vat and make a tax return, like any business.

I say GOOD LUCK TO YOU! Fair play, we need more guy like you and yer mate to pull us out of the shyte were in, and if you are a good honest trader, you'll be of benefit to the trades reputation.

mickdw

Do you not need a TAN number to be able to buy auction stock etc without registering them to you personally?

MidlandsM

mickdw wrote: »

Do you not need a TAN number to be able to buy auction stock etc without registering them to you personally?

no

mickdw

What is needed for this?

MidlandsM

whats need to buy stuff at auction..........?

Money!

mickdw

IM pretty sure you are wrong there. Without some sort of garage number, I believe the auction will register the car to you personally, sending the log book to shannon and thereby adding another owner to the car.

MidlandsM

mickdw wrote: »

IM pretty sure you are wrong there. Without some sort of garage number, I believe the auction will register the car to you personally, sending the log book to shannon and thereby adding another owner to the car.

I was'nt referring to that earlier - I was advising the OP re a Tan no for importing/vrting cars.

NewApproach

There's a lot of overheads if you want to do everything by the book

mickdw

MidlandsM wrote: »

I was'nt referring to that earlier - I was advising the OP re a Tan no for importing/vrting cars.

Fair enough but I specifically asked about the auction registering cars to the buyer personally and you gave an almost smart answer which is wrong.
I realise that you were likely referring to buying at auction in uk but I wasnt and to be honest any dealer needs to be able to buy at auction here too.

vtsboy

-Chris- wrote: »

Why do you reckon it matters? To be honest I'd rather take advice from an accountant than a car salesman when it comes to the fundamentals of a decision like this.

Because the car trade isnt like the majority of other business's. But sure what would I know?

What does an accountant know about
-Tan numbers?
-The legal warranty situation?
-Importing of car?
and so on

^^^^^^^^^

Sure if you know so much why not offer some suggestions to the OP.

-Chris-

vtsboy wrote: »

Because the car trade isnt like the majority of other business's. But sure what would I know?

I dunno, what do you know??

mickdw

vtsboy wrote: »

Because the car trade isnt like the majority of other business's. But sure what would I know?

What does an accountant know about
-Tan numbers?

Quite a bit I would have thought.

vtsboy

-Chris- wrote: »

I dunno, what do you know??

I dont know all and I dont mean to sound like I do but I do know that the majority of people commenting on this thread dont have a clue what they are talking about. Imo as has been said its grand going out buying the odd car from the Uk but if you dont have contacts of buying cars in Ireland or know what you are doing you wont make money. The majority of cars can be bought cheaper in Ireland than they can in the Uk, although it works for some people and thats great for the Op if it does.

vtsboy

mickdw wrote: »

Quite a bit I would have thought.

By Tan number I mean garage code.

-Chris-

vtsboy wrote: »

By Tan number I mean garage code.

You mean Trader Account Number?

DickyC

vtsboy wrote: »

Because the car trade isnt like the majority of other business's. But sure what would I know?

And here's me thinking that car dealers bought cars to sell on at a profit. Not too dissimilar from anybody in business who buys stock to sell on at a profit.

The one thing I would be concerned about as mentioned before is the exchange rate as you have no way of controlling it. I have brought a few cars in from Japan before but the present exchange rate/shipping rates have put and end to it.
Don't go overboard with a free one year warranty, if people want a one year warranty let them pay for it by building it into your asking price. One year is a long time so if you are taking a gamble you may as well cover yourself, and the reason I said build it in is if you offer it as an extra cost people want it for nothing.
Best of luck with the rest.