How to start a used car business from home

Buying and selling cars is a good business and it has a six-figure paying potential if you become a full-time car dealer or trader. But you can also make a great living or additional income selling cars from home. All you need to get started is a car to sell and a smartphone, it really is that simple.

But that’s not to say selling cars from home is a good idea for everyone. Firstly you will have to give consideration to how you will conduct business and decide whether your home is suitable for this kind of operation, it may also be illegal in your state or country. You will also require suitable insurance and will need to adhere to local operation guidelines.

But operating from home can offer a much better work life balance than is traditionally found in the motor trade. Allowing you to start and end your day largely when you choose, as long as your work is complete and leads have been followed up.

Below we will answer the most common questions asked by people looking to start selling cars from home so you can understand what you need to get started and learn if its the business for you.

Do you have to have a license to buy and sell cars?

You don’t need a licence to trade in cars at all in England and Wales. You do however require a licence to deal in cars in Scotland, you can apply for a temporary or full licence via your local authority and fees do apply. If you are in the USA in most cases you will require a license to trade in cars but the laws vary and you should contact your local authorities for clarification on the requirements in your local area.

How much money do you need to get started selling cars?

To get started flipping cars all you need is the money to buy you first car. You can then reinvest the same money once that car is sold. You then repeat the same process as many times as you like whilst taking a profit on each deal, with the initial money from the first car being reinvested again and again.

You can then decide whether you want to invest in more stock or simply flip the occasions car to subsidise you income. Either way selling cars from home requires very little seed money and is largely self funding.

Where do I find cars to flip?

You can find cars in lots of different ways to find stock. But the easiest way to find quality used car is from you local franchised dealers. The reason your local franchised dealer is your best bet is that they have a constant supply of used cars that they need to clear, and every garage has a limited amount of money and space. So most garages have a network of dealer they pass cars on to. We cover this in detail in our article – how to buy cars at trade money.

But there are other options, you can also buy car auctions or search eBay, Craigslist or Autotrader for cars to resell. Placing an advert in your local news papers classified section can also yield good results as can joining selling groups on social media sites.

Word of mouth is another great way to find stock. So let your friends and family know that you’re in the market for cars. If you know the seller checking the vehicle and its history is much easier.

So there are lots of ways to buy cars, but whichever way you choose it’s important that you establish a steady supply as without this you are going to find it hard to be successful. If you plan to make car flipping a full time business you really need to nurture a relationship with a franchised dealer, this is the only way you will fine enough stock in the longterm.

Which cars should you buy to flip?

If you are just starting out you should start by focusing on small cars with low running and insurance costs. The sort of car that would appeal to a first time driver, senior driver or someone looking for good reliable transport. This type of car is usually easy to appraise. So if you make some mistakes you shouldn’t get any big bills, you can learn how to inspect car car here – Inspecting a car you intend to flip. These cars are also generally fast moving and easy to value.

Your ideal car flip should be:

  • ​​A small car with low running and insurance costs
  • Retailing between two & three thousand pounds, with a £1000 margin
  • In either Grey, Black, Blue or Silver
  • In the appropriate trim level and interior colour
  • It should have a manual gearbox
  • It should be Petrol powered
  • Having covered under 80,000 miles
  • Have full service history
  • ​With no major bodywork or mechanical issues​​
  • and be HPI clear

We have written a detailed article on covering everything you need to know about which cars you should flip which you can find here – Which cars should you buy to flip.

Valuing a car

Putting an exact valuation on a car can be hard we cover how to do this in detail in my article – How to value a car you plan to flip.

Valeting a car

Giving a car a thorough valet is the easiest way to add value and it’s import that every car you sell goes through this simple process. You can either valet every car yourself or outsource it to a local professional. Again we cover the subject in detail here in a step by step guide – Car valeting a step by step guide. You can also find a list of every item you will require to start valeting here – 28 Essential pieces of car valeting equipment.

Advertising and marketing a car

The best way to advertise and market a car will often depend on your location. But in most cases social media will be most effective and cost efficient option closely followed by online classified adverts.

We would suggest you start with selling cars on Facebook. Either via local Facebook groups and Facebook Marketplace as they represents a huge opportunity.

Posting to Facebook can be done via desktop or the Facebook app, and is super simple. You can post simultaneously to marketplace and buying and selling groups. Simply start by posting the car to the marketplace and Facebook automatically asks if you want to also add the advert to the groups you are a member of. All the cars you have listed across all the groups can then be managed in app. Once a car is sold you just mark it as so and it’s removed from all the listings, notifying anyone who has enquired that the item is now sold.

Facebook Marketplace and groups guide you through the posting process. But it’s still important to list all the relevant information regarding the spec and options. Make sure to include the following facts in order:

  • Year of registration & registration plate info
  • List of equipment and special features
  • Approximate mileage
  • Full service history if it has it
  • Number of owners if low
  • Price
  • Contact details if you want to be contacted directly.

Great photos are also important on Facebook. They don’t need to look super professional but you do need to photograph the correctly. Check out my advice on how to photograph a car with a Smartphone here – How to photograph a car with a smartphone.

If you want to learn more about selling cars on Facebook you can checkout our comprehensive guide to selling on the site here – How to sell cars on facebook (with tips).

If you are looking for an alternative, Autotrader.co.uk, Craigslist, Gumtree, Motors.co.uk or similar could be just what you are looking for. Craigslist is hugely popular it some parts of America and can be a great way to buy and sell cars and Gumtree offers a similar opportunity in the UK. We have written about selling cars on these platforms in these articles – Flipping cars on Gumtree and Craigslist car flipping.

But it is import that you advertise where you local audience is looking so research your local area and experiment to see which option works best for you and the type of car you are selling.

How do I handle selling a car from home?

Selling cars doesn’t have to be complicated and we have broken it down into a few simple steps that you can find in this article – Selling a car in 5 simple steps.

Taking payment for a car

This can vary from country to country but in most cases taking payment via bank transfer, cash or debit card is the safest way to take payment for a car.

What paperwork do I need to complete once I’ve sold a car?

Again this varies depending on you location. But wherever you live it’s important that you process any legal documents that relate to a cars ownership as your local laws require. But in addition to this it is important that you provide the buyer with either a bill of sale or an invoice.

The receipt or invoice should also include the following :

1.  The date
2.  Price
3.  Make and model
4. Registration number
5. Vin number
6. The names and addresses of the buyer and seller

Make two copies – one for you and one for the buyer – and make sure all parties sign both.

We cover the UK change of ownership process here – ​How to transfer ownership of a car in the UK.

Do I have to pay tax on the profits I make flipping cars?

Yet again this varies depending on you location. But wherever you live it’s important that adhere to your local laws. In the UK HMRC have introduced a tax free allowance to cover “self-starters” with small, hobby-based businesses. We cover the subject in detail here – Do I have to pay tax on the profits I make flipping cars?.

Conclusion

It takes a great deal of time and effort to become successful car dealer, and it’s not always an easy business to be in or setup. But it most definitely is a good business and has the potential to make big profits. The barriers to entry are low and you don’t require any specific qualifications. But you will have to look and your own situation and need to decide whether this is the right strategy for you.

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