Would an EV Only Used Car Dealership Work in Ireland?

blobert

Hello,

Having run for about 10 years and then sold an online business a few years ago, part of what I do now is invest into other businesses. I also have a wierd love/interest in EVs (I have had about 10 different EVs in the past decade, like to drive around Europe in them in the summer etc) and my wife had suggested (in jest) I should set up a used EV dealership. Now while I have no experience in this area, and close to zero interest in the prospect of the day to day running of a used car dealership I was just having a think about how it could run as a business and if it would be worth doing (hiring in an operator to take care of the day to day aspects of it).

I watch Youtube videos of Richard Symons in the UK doing an EV only dealership and he does a great job of promoting his business.

How I'd imagine things working here, quite differently than most used car dealers:

(1) I'd imagine most people want to buy/sell from garage as opposed to privately, especially with €20k+ cars. We'd look to to be the best value in used EVS of any dealer so people would hopefully come to us if they want to buy a used EV from a dealer.

(2) To be the cheapest we'd look to run a very lean business. We'd only sell EVs that are currently under warranty and have at least 6+ months (ideally quite a bit more) of warranty left and (assuming that's allowed) we'd not do any servicing repair work ourselves, ie, if you have issue with your Kia E Niro, it's under warranty and you go to Kia.

(3) Joe Public can't bring in cars from the UK without VAT but I believe as a dealer we can (obviously there is the 10% customs there vs prior to Brexit) and we'd also look to mainly deal in cars that are sub €40k so no VRT. There's a lot of fleet EVs available from UK auction houses. Again I'd be hoping that by only buying cars under warranty we're removing the risk factor here of stuff being wrong with the car.

(4) We'd also buy EVs from Irish customers that did not want to sell privately (I always do but the majority of people don't). I see lots of talk here of Tesla offering miserable trade in values on 1/2 year old cars. There is presumably a price between that and what we could sell the car from where we'd do ok out of it and customer would be happy to sell to us. I did a few tests with the likes of autobuy.ie and the prices they are offering are also very low. So there may be space to offer a decent price to sellers and still be able to make a decent margin

(5) Our aim is to sell as many cars as possible while keeping it as lean as possible. So no showroom, probably no forecourt, a yard on the outskirts of Dublin or similar with absolute minimal staff would be the extent of this. The business would be nearly online only, ie we photograph the cars professionally to make them look nice, give you as much detail as possible online. Ideally we encourage people to test drive the same from another garage to see if they like it. Maybe have it that you can only come inspect the car/test drive it if you pay a refundable deposit, ie we don't want people test driving cars unless they are very serious about buying them.

(6) If you want to buy the car we'll deliver it to you (for a fee) or you come and collect it. The aim would be to sell as many cars as possible with minimal human interaction as possible. We don't really want people coming in saying "I'm thinking about an electric car" in fact we're actively discouraging them, we're looking for people that have probably done their recon and know what they want. And if they want to buy a used EV from a garage we'll have the reputation of being the cheapest option around.

(7) While we're not making any money from servicing (I'm assuming you couldn't really offer to service EVS under warranty anyway as they have to be done by the dealer) but I'm guessing we can make some money from finance options also. If we have a guy to valet/photograph we could maybe offer that as a service also.

(8) Richard Symons guy in the UK also offers a brokerage service which we could do also where he'll take your car, make it look nice and sell it for a broker fee which might be an option also. I guess the benefit to the dealer is they don't have to buy the car and for the seller they don't have to deal with the public.

So the basic idea is we're selling EVs under manufacturers warranty only for cheaper than any other garage can manage (due to the leaner business model) and basically at no risk to the customer. We talk up how the smartest way to buy cars is always when they are 2-3 years old and how buying from us is seamless/risk free etc.

Now the question is if that's a viable business in Ireland. Let me know if you have any thoughts on this?

And the other question is whether it's somthing worth doing. I suspect the average used car dealer does not make mega money and I'd be wary of putting a lot of time, resources and effort into a business that might ultimately not make that much money for the effort involved.

Any thoughts on this would be much appreciated!

ELM327

A couple have tried and failed so far.

Buddy Bubs

Yeah it could work and work well but you'd really need to know what you are doing and how to source cars, source finance, sell for a profit, provide warranty etc. I can't see a newbie being able to carve a niche just because they have an interest.

Maybe try buy one and sell for a profit, then another, and another, one at a time before investing much into it and see if you have the knack for it, and what's more important whether you even like it as a way to make a living. You could make a few quid in the first, second, fifth, tenth sale and think it's great then get landed with a big loss on a sale wiping out many profits on previous sales and possibly getting stuck with stock.

Opening a fully functioning 6 day a week dealership straight away with staff and overheads would be lunacy.

Gumbo

We had one. Phil in Electric Autos.

We could deffo do with a one stop shop for EV’s.

...Ghost...

https://www.boards.ie/discussion/comment/121711664#Comment_121711664

Yeah, I heard great things about him. He was too early. I think now would see someone like that having a good chance of success.

Gumbo

https://www.boards.ie/discussion/comment/121711657#Comment_121711657

And it’s not your typical mechanics you need, you need HV qualified people, and electronics engineers or people that can dig into the diagnostic side of things using ISTA (BMW) or similar.

Buddy Bubs

https://www.boards.ie/discussion/comment/121711713#Comment_121711713

Yes, I'd be half decent at that kind of thing, I'm an accidental IT manager in work among other things, but there's no way I'd be quick enough at doing it to earn money full time at it.

Interesting idea though from the OP, not revolutionary as I am sure many have thought of it as well but a few people with a few different skill sets and business brains might pull it off in 2024.

Frought with danger though, like any business

vicM

I think if the OP was to go at it the way he has framed it, it will fail. being a relatively new product he/she is selling the seller needs to inspire confidence and offering no service or warranty I don't see that inspiring much confidence in the buyer.

Besides you will be competing with the Main dealers as they will be happy to resell their stock which is still under warranty.

I watch RSEV on youtube as well and his channel and business seem to be doing well, but crucially he invests his time and energy into it. OP wants to hand it to someone else from the onset.

I also watch Wisely on Youtube as well and their business model is slightly different. they Specialize in the BMW i3 and know it inside out. They can source cars, repair/refurbish and sell on with confidence and trust. Maybe this model has a better chance of success

All in all i think you will need to have more than just a passing interest and with time and effort could build it up

tlaavtech

Isn't that basically what Next Eco Car do? Up until now, the choice from him has been mostly Leaf or Zoe, but in the next year or two, there should be a much larger range of 2nd hand EV's to choose from at the lower price range. My daughter bought her Leaf from Simon and we couldn't be happier about the service we received.

witchgirl26

My main issue (as a consumer) would be with parts 5 & 6 of your plan.

For part 5, while yes it's a good idea to look at the car in a showroom & test drive the original, I'm always going to want to test drive the actual car I'm buying to make sure there's no issue. I don't know anyone who doesn't do a test drive in the car they're buying before making the purchase, especially when you're talking the price of EVs. Also I wouldn't bother going anywhere that wanted to charge me a deposit to come and inspect the car I'm looking to buy. I would see that & move on to purchase somewhere else. Even if that deposit was refundable. It genuinely would make me feel like I'm being viewed with suspicion by the dealer that they don't trust me either not to show up or to do something to the car. Doesn't foster the best customer relationship from the start.

For part 6 - the problem is that people want the human interaction. I get the point of not wanting to be a knowledge centre for EV's but even in the most basic car showrooms (I'm thinking the non-main dealer related ones), they have people there would would be able to give basic advice to people who are looking. Even just directing them around. For example, we were looking for a VW Golf a few years ago & in any dealership, they were able to talk to us about the differences in models based on year & also show us to each of the Golfs they had on site to look around. Online shopping is amazing & I use it a lot but for the amount of money I'd be putting down on a car, I want to talk to someone & not just have a click & collect service.

I think there is a space in the market for a dedicated second-hand EV dealership but I think the way you're suggesting the model is going a bit more lean that would be appealing to the average person who may be looking to buy.

One thing you don't mention as well is the fact that you would have to set up some chargers on the site so that you could ensure that the cars are charged if people wanted to do test drives etc. One thing I'd be looking at if I was buying an EV second hand is to see it fully charged so I could see the range at that level for it. I don't want to view one that has 20% battery on it as that doesn't tell me the actual range properly.

handpref

https://www.boards.ie/discussion/comment/121711688#Comment_121711688

Phil was flying it, Brexit stopped his supply of cars overnight. Such a shame, genuinely lovely guy and great service.

ednwireland

Plenty to go wrong with cars that isn't manufacturer warranty covered ? I don't telling customers to get off and talk to local dealer or manufacturer if there's an issue doubt that will win many friends.

Sale of goods act ? First port of call would you wouldn't it ? Or am I missing something.

Hellrazer

While its a good idea and something that the trade could probably do with Id feel that you would really have to be very sensible in your purchasing and reselling of the EVs that you bought. Theres not that much profit in used cars when you take into account rent, staff, utilities, rates etc. All that has to come out of a couple of grand at best profit on each sale. Throw a non covered warranty repair into the mix and all that profit goes out the window.

In any dealerships Ive worked in the service and parts departments covered the business costs and the sales were the cream so to speak. Ive very rarely seen it work the other way around.

If it was me Id set it up in a similar way to what you are saying but make it an EV specialist dealership and include all aspects of EVs ie maintenance , servicing but what would sell it would be fully qualified technicians / EV specialists that could rebuild and recondition batteries and diagnose and repair EV problems - in my opinion thats going to be the next big thing in the motor trade. You could then buy cars with iffy batteries, recondition them and increase the profits massively.

tlaavtech

https://www.boards.ie/discussion/comment/121712521#Comment_121712521

Totally agree with the last part here. If you are in the lower end of the market from a budget point of view, you don't want to pay main dealer prices for services. Traditional mechanics are afraid of EV's, so an EV specialist is something that is going to be needed more and more in the future.

Del2005

Numbers 2, 5, 6 and 8 are your issues.

2) Selling as a business to a consumer anything that goes wrong it's your job to fix, it's not the buyers job to chase up a warranty claim with the manufacture

5) Not many people are willing to make such a large purchase without test driving the car as it's easier to get any issues fixed before the you buy than after and then we get back to my issue with point 2.

6) If you are the only place with a large selection of used EVs people will want to try a few. If you have a big selection then people will want to sit in and test drive a few different models instead of having to drive around for hours to multiple garages.

8) People trading in want to do a deal where they drive in their old car and drive out in their new car. They don't want to have to wait several weeks for you to sell their car, which will be sitting in your yard so they have no car!, and then buy their new one. Will you keep the car on hold while waiting to sell the other car?

blobert

Thanks very much for the replies, I appreciate them!

To clarify a few bits:

I watch RSEV on youtube as well and his channel and business seem to be doing well, but crucially he invests his time and energy into it. OP wants to hand it to someone else from the onset.

I'd be planning to spend quite a bit of time on the setup/strategy/website/business side of it but not the day to day running of it. I'd look to bring in someone with experience of this (I have none)

In terms of the no warranty side of things, I've probably not framed that right.

What I'm suggesting is that the warranty we'd offer would always be less than the manufacturers warranty so we did have to do any repair work ourselves. So if you buy a 2 year old Tesla from us it has 2 years of remaining warranty. If I had an issue with my Tesla in that time I'd be happier with the manufacturer fixing it than a 2nd hand dealer as I'm sure most people would be. So we'd be selling cars that had at least 1 year of manufacturer warranty remaining and the peace of mind that if anything went wrong the manufacturer will fix it. To me as a buyer this would be far more reasusing proposition than a dealer warranty for a car that's out of manufacturers warranty.

In terms of the no test drives/trying to avoid tyre kicker type customers. I'm probably unusual but if I'm buying anything, and much more so for somthing expensive like a car I will have done a lot of research myself and know what I want, will test drive a few options to be sure and pick out the one I'd want. I've often test driven a car here before buying from the UK in the past and been amazed at how little the dealer of them here will know, especially with EVs. I would personally place close to zero value in the opinion/advice of someone trying to sell me somthing. But as I say I'm probably unusual. Maybe plenty of people do go into dealers and do essentially say "I'd like to buy a car, which should I get" but if I had to guess I'd say that's changing over time.

Having thought about it if the cars are located in an out of town location that's probably enough of a barrier to stop time wasters, ie if you come out to us that shows a level of intent. Obviously I'd be looking to let potential customers try cars out, give useful advice etc but would be trying to push as much of this onto the site as possible. I know from running experiments with customer service before that when you gave customers more options to talk/ask questions that it didn't = more sales, it just led to a bunch of people that liked to ask millions of questions taking up a disproportionate amount of my customer service people's time! I was out in Tesla doing a test drive previously (I bought one after) and the guy ahead of me (I had to wait ages) was asking a million incredibly basic questions that suggested he knew absolutely nothing about them, I'd bet anything he didn't buy a Tesla. I hung around out in Kia for a good while while getting my EV6 repaired previously and was amazed at how unproductive the whole operation seemed. Really fancy showroom, loads of staff, very few customers and a couple of people wandering in with similar vague queries. It seemed like a really inefficient setup. The Tesla collection system seemed a lot more streamlined in comparison, portacabin out on the outskirts of nowhere, only a few guys there getting through quite a lot of collections.

Isn't that basically what Next Eco Car do? 

I hadn't heard of this place. It looks like they are focusing on lower cost models out of warranty. As I said I'd be looking at newer/more expensive cars. The first wave of 60+kw cars should be getting into the 15-20k price bracket so I think they could be of good appeal. I think for a lot of people they'd be the first EVs that can legitimately work as a main car/allow trips anywhere in Ireland. Most of the car prior to this (I've had a bunch of Leafs) are more used to being a 2nd car/quit a bit of compromise if you're doing long trips. The likes of 2021 Kias/Hyundais will still have a good chunk of warranty to go so fit the bill as a good 2nd hand option.

Anyway thanks again for all the input and keep it coming

blobert

Also does anyone have any figures on how many 2nd hand car sales there are in Ireland each year?

I can find the new car sales but dont know how 2nd hand compares to this. Probably a tricky thing to get figures on when private sales involved.

blobert

https://www.boards.ie/discussion/comment/121712521#Comment_121712521

Thanks for that, that may well be the way to go.

I guess I was wary of the level of complication of having an EV service station, mechanics etc.

User1998

https://www.boards.ie/discussion/2058334375/would-an-ev-only-used-car-dealership-work-in-ireland

This is coming from someone has owned their own car dealership in Ireland.

1 & 2: You are right, most people in the €20k price bracket want finance and dealer facilities. And yeah, if you sell a car with manufacturer’s warranty the only time you might have to do a repair is if the manufacturer refuses to do it for whatever reason.

3 & 4: Yeah, UK is a good option, but don’t disregard Ireland and Northern Ireland either. There are good deals to be had here as well. From auction and private buyers.

5 & 6: I get that you want to keep overheads low, but selling €20k+ cars from a yard in the middle of nowhere isn’t a good look. Customers like glass showrooms and indoor viewings etc. Even a big warehouse would suffice. But being in the middle of nowhere would put a lot of people off. People like convenience.

Telling customers to test drive the car in other dealers is not going to work. Unfortunately not everyone is a buyer and you’ll just have to deal with that. People need to test drive and compare to other cars. Not many people are willing to buy a car online without test driving. It was the norm during Covid but not anymore. If you have lots of stock you’ll need a staff member on call to handle viewings. Working on an appointment only basis helps quite a bit with scaring off the time wasters and saves staff a lot of time.

7 & 8: You can make money from add ons like extended warranty, gap insurance, alloy wheel cover, stuff like that. I don’t think you can take commission from finance unless you are CCPC registered or something like that. I never made anything from any of the finance deals.

That service you mention is called SOR (Sale or return) its a good way to get stock as theres no money upfront to pay for the vehicles.

Your business model is no different to anyone else’s. Keep overheads low and profit high. High overheads are okay as long as the overhead per car is kept low. In an ideal world, everyone would buy the cars online, and everyone that walks through the door is a serious buyer, but unfortunately that just isn’t the case in real life.

It’s definitely a viable business model. The EV market is a bit all over the place at the moment which is a concern, and your completely ignoring the huge market of petrols, diesels, and hybrids. You should at least be considering plug in hybrids too with cheap VRT. Jumping head first into a large scale dealership and importing without any previous car knowledge isn’t the way to do it tho. Start slow and build your way up. Best of luck with it.

Firblog

Why would I buy from you before buying from a private seller? What more do you offer?

zg3409

Firstly the market is very unstable. Some used cars are dropping in value by 10k overnight due to new car price drops. If you have say 50 cars in stock that could be 50 x 10k lost.

Lots of stories of used car dealerships not wanting any EVs as trade in, not at any price as stock is depreciating quickly and not selling. Dealers are concentrating on non EVs as there is more used EV supply than demand.

Many specialist dealers in the past sourced most stock from UK, but brexit stopped that overnight. The rules have relaxed a bit recently but many EVs are more expensive anyway in UK and NI.

There are lots of specialist dealers, there was at least 3 Irish EV ones, also hybrid specialists, jap import specialists (including EVs) etc. What do you know that these do not know? How are you going to make a profit of 1000 euro a week while paying rent, staff, taxes etc? Most used sales are via done deal even when people are only considering dealers, so website will make little difference.

Some dealers have a finance package so they don't have to pay out cash to buy stock, instead they get them on dealer finance, meaning you don't need lots of cash to have 50+ cars, but again depreciation and cost of finance may be massive costs with high interest rates these days.

What's to stop 20+ used car dealerships switching to EV only to compete with you? Many car sales people are good at closing a sale and convincing people to hand over deposits. They often are not that knowledgeable or deliberately lie or play down issues such as many sales people saying public charging not an issue and ranges on brochures are "optimistic".

I can't see it being a low risk venture, if you have no free premises and no free staff such as yourself. You may be competing with others with 20+ years experience, that own their own premises and have Jo staff costs besides themselves. You are also competing with hundreds of private sellers and main dealers and dodgy done deal traders.

Sorry to be so negative but it's easy to start a bad business thinking there is easy money to be had.

What do you mean sub 40k cars pay no vrt? EV pay less vrt but you still have to pay it or am j wrong?

User1998

https://www.boards.ie/discussion/comment/121715544#Comment_121715544

EV’s with an OMSP of €40k or less pay no VRT

blobert

https://www.boards.ie/discussion/comment/121714081#Comment_121714081

Thanks a million for the very detailed reply, I appreciate it.

The Richard Symons chap that seems to be doing a good job in the UK is operating from a circa 500m2 warehouse with his cars kept inside.

I could maybe rent somewhere similar like here which would probably hold about 20-30 cars. Probably a decent location in that it's not miles outside of Dublin also.

I'm trying to get an idea of scale/how many used cars the average dealer might sell in a week/month/year.

Obviously I'm guessing it would vary depending on your size, how many cars you have in stock etc but what do you think as a very rough idea of how many cars you could hope to expect to sell. As mentioned previously I'd be looking to sell cars relatively cheaply, ie more volume with lower margins.

Finally I think there are 1/2 people here that have BCA/other auction memberships in the UK? If so I'd be happy to pay someone to allow me access/do some recon on my behalf into auction prices in the UK to get an idea of the prices there.

Thanks again for all the help/advice with this.

Buddy Bubs

https://www.boards.ie/discussion/comment/121737207#Comment_121737207

Where will you get 20 to 30 cars from and how will you pay for them? You're looking for cars in warranty so relatively new you are looking at least at half a million euro of stock there, probably far more in reality.

Have you ever bought and sold an EV at a profit?

I can't see 1 guy with no motor trade experience being able to set up a showroom full of stock and pay wages straight off the bat. You'd need both partners and investors here and banks very much on your side

Used EVs are also not selling very well unless very keenly priced nowadays, that could change of course. Your high volume low margin plan might fall down there.

User1998

https://www.boards.ie/discussion/comment/121737207#Comment_121737207

Have a look at European Prestige in Kildare, they sell loads of expensive cars from a warehouse and it works well for them, they’ve even expanded to the UK.

This will vary greatly depending on the type of cars your selling, but for every 10 cars you have in stock your likely to sell 1 of them per week. So 30 cars could be 12 sales per month.

For BCA prices, just go on to Auto Trader and take away about 15% from asking prices there. Bearing in mind you can also get VAT refunds but will need to pay VAT here to import.

blobert

https://www.boards.ie/discussion/comment/121737239#Comment_121737239

Thanks, am in the very fortunate position where in theory I could do this money wise. However obviously I'd rather not lose all of that money!

I'd only be interested in doing it if it were likely to be a business that would make a decent return, and it seems like probably that wouldn't be the case. Or rather it would be a lot of work for probably pretty minimal returns.

blobert

https://www.boards.ie/discussion/comment/121737245#Comment_121737245

Thanks again, I really appreciate the advice.

That looks a good business for them alright, they've got €3.5m of cars in stock with an average price of €65k. Assuming 20 sales a month with 15% markup that's €195,000 a month before any costs. So over the course of the year that would work well.

Looking at my own hypothetical example of selling a bunch of €20k Kia E-Niros. If I have 30 of them in stock selling 12 a month I'm looking at €36,000 a month before any costs, €432,000 a year. By the time I had a warehouse, few staff etc that would very much not be worth my while to do.

I might have see if I can have a chat with R Symons in the UK about it to see how things work for him but based on the above I think I can reasonably lay this plan to rest as not worth doing.

On a side note people paying €150k for Range Rovers makes me shiver. While in theory I could afford to buy one the pain of that massive depreciation over time would far outweigh any joy I'd get from it!