How to become a car trader

Buying and selling cars is an easy way to make some cash. Find out here how you can get into the automobile trade business...

Car trading couldn’t sound more straightforward. The trick is to buy a car cheaply and almost immediately sell for more with car traders typically fetching anything from £400 depending on the car. You do not have to be a car expert to be successful selling cars. What is more it can be done on a part-time or full-time basis – perfect for an entrepreneur looking for a simple business idea.

Before you take the wheel: read this first!

Before you buy your first car you should do some market research so you can find out what types of cars are selling. Once you have an idea of what kind of cars you want to sell you can go ahead and create a business plan, raise finance and set your budget. Do keep in mind that you will have to repair any issues the car may have and that will also be something you will need to budget for.

When you’re just starting out you’ll probably want to start selling from home, which is a great way to save money. If this is the route you decide to go down, you’ll need to notify your local council in order to ascertain how many cars you can have parked on the road at one time.

Once you have the go ahead from the council you need to get yourself some Motor Trade Insurance which covers you when driving cars without having to insure them individually. Motor Trade Insurance is a great option as unlike private insurance it allows you to add and remove as many cars as like without having to pay additional costs. There are three types which cover you for different things and vary in price. Next you need to apply for trade plates which are essentially mobile tax discs that save you having to tax and register every car that is temporarily in your possession. Finally, you can register as a sole trader and hit the road!


There are a few different avenues you can go down when purchasing a used car. The most convenient is online on auction and listing websites such as eBay, Copart UK and Gumtree and car selling sites such as Auto Trader UKcarwow and Carspring. Alternatively, you can find cars at auction houses, which tends to be a very cheap option; if you’re not an auction aficionado go a few times before actually purchasing.

Be sure to check the condition of the car you are buying. Check the car’s history online using the free government site and make sure there are no outstanding hire purchase or conditional sale agreements as you cannot sell cars that have either of these. Once you go and see the car you should take it for a test drive to get a feel for how it drives and any repairs you may have to make should you decide to purchase.

Finally, make sure the car has a V5C registration document, this can be used as proof of ownership and as a way to keep track of registered keepers. If the person you are buying from does not have this it could mean that the vehicle is stolen. You should check the vehicles history to be sure.

Fix it up

After you’ve purchased your first car you need to make sure it is ready for resale. Firstly, making sure the car has passed its MOT will save a lot of hassle when selling on, and of course make sure it’s clean; you could also give it a spray job to make it more appealing.

You must observe the Consumer Rights Act that stipulates that the car must be in a satisfactory condition before sale. The consumer has more rights than you so it is very important that you tell prospective buyers everything you know about the car as if there is anything wrong once purchased you as the seller will be liable.

There are different ways to price your vehicle; you could look at existing car adverts or car price evaluation sites to gauge how much you should charge, and don’t rule out haggling with interested buyers.

Simple advertising

Another advantage of this business is that you can save money and time on essentials like advertising. There are a plethora of car listing websites that allow you to create an advertisement quickly and easily, or you could advertise in your local newspaper or car dealer magazines. The best way to get your car noticed is using some good quality images that give a clear indication of what you are selling, and ensuring you have listed all information in your advert.

If you are selling from home, you are not allowed to have any signage on your house, price boards on the cars or to make any alterations to the premises.


So now you’ve found a prospective buyer and they want to come and see the car. You don’t know who you are selling to so it might be an idea to have a friend or family member present to ensure that you feel safe when meeting the customer.

Take the buyer for a test drive and make sure you let them know everything about the car, have all the documents, such as MOT certificates and service records and V5C to hand. Both you and the buyer will have to fill out the relevant parts of the V5C and then send it to the DVLA who will then send to the new owner with updated details. Do not let buyers make copies or take photographs of vehicle documents, but make sure you hand them over once you’ve reached an agreement. You can set your own warranty or not have one if you wish, and remember to provide the buyer with a receipt.

Once you’ve sold your first car you can go out and do it all over again, and call yourself a car trader.

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