How To Make Money Buying And Selling Used Cars Part 4
In the first part of this mini series on how to make money buying and selling used cars, we looked at which personal traits someone wishing to be successful in this business would have to have. In the second part we looked at the best sites to locate such a business; in the third we looked at sourcing our stock – our vehicles and in this section, we will look at valuing that stock.
Whether you obtain your vehicles from auctions or from private persons, you will have to be able to work out their worth accurately, so, how do you work out the worth of used cars or trucks? The easiest way to know a vehicle’s typical market, trade-in or wholesale value is to subscribe to a car dealers’ used car guide. Most western countries have one, but in the USA the most used one is called the National Automobile Dealers’ Used Car Guide or N.A.D.A.
NADA not only issues monthly guides to used cars, it also publishes monthly guides on older or classic cars, smaller boats, larger boats, SUV’s, mobile homes, RV’s, snow mobiles and motorcycles. Look them up on the Internet and join their subscription list for the kinds of vehicles that you are interested in.
These used vehicle guides normally include foreign or imported cars nd trucks as well and are a consensus of sales and auctions over the whole country, therefore a little local intelligence is indispensable as well as your area may operate at slightly above or slightly below the national norm, which could present you with further chances for (wholesale) sales by shipping cars into or out of your district.
Sometimes or in some areas, a permit is required to operate a used car business. This is nothing more than tax by another title normally, so just requires you to pay a fee. In other regions, it may be a way of weeding out dishonest traders and may require an test of same variety, so it is worth checking your district’s requirements before you begin trading.
Some regions have laxer laws than others on buying and selling used cars, permitting ‘occasional sales’. ‘Occasional sales of motor cars or trucks’ is normally intended to be no more than five sales in a twelve month period.
When you are starting out you could make use of this allowance, if your region allows it, to keep your operating costs down to a minimum in the costly early days of establishing your business, but once you see yourself passing this maximum quantity you should submit an application for a license straight away to avoid incurring any penalties. These penalties can be severe ranging from a fine to disbarment from trading, so be warned.
You will also have to learn how to collect taxes from your sales and your wages to yourself and to your employees. You will also have to learn how to hand these monies over to the correct authorities on time, although your accountant or book-keeper can assist you there.
Owen Jones, the writer of this piece writes on different subjects, but is now involved with entry door locks. If you would like to know more, please go to our website at Escort 8500.