How To Make Money Trading Used Cars Part 2

By Owen Jones

In the first part of this mini-series on how to make money buying and selling used cars in the present financial climate, we examined which sort of individual is suitable to set up a used car business. In this section, we will look at where to actually set up your used car business.

So, how do you go about setting up your own used car business? The first thing to realize is that no matter whether you are establishing a part-time or full-time company, your patrons and the government will expect you to conduct yourself and conduct your business in a professional way and they have every right to do so.

If you do not conduct yourself appropriately, you will present a bad impression to your customers and get a bad name with them and you will get a bad standing with the taxation authorities and maybe the health and safety people too and be beleaguered by them with more that the average number of check-ups.

Decide what your most important market is. Do you want to specialize in used luxurious cars, middle-market or cheap vehicles? Or do you want to sell trucks, vans, buses or motorbikes? It is helpful to specialize, if your catchment area is big enough. For instance, if you live in a village miles from anywhere, it might not be worth specializing in second-hand buses, but second-hand farm gear could be a hit.

Pay a lot of attention to the site of your business. If you propose to sell one or two cars from adverts, this is not quite so important, but if you have thoughts for the future, you might want to get a small lot that you can expand on later.

This plot should be in a highly visible location, say beside the highway that leads into town. If your location is less than ideal, you will have to spend a lot more on advertising, which is something to keep in mind, when trying to work out what you can afford to pay for the lot.

Another important issue to bear in mind before signing any contracts, leases or mortgages, is to find out whether you are allowed to start a used car business in that location. Some countries have a highly complex set of rules and regulations governing which types of business can be located where. This is frequently called 'zoning'. Sometimes you can get a 'zoning variance', but not every time.

Once you have your site and have chosen what type of used vehicles you want to specialize in, you should concentrate on establishing a unique corporate image - one that is instantly recognizable to local people as denoting your business. Use a motto, an emblem or a motif or a permutation of these, put up a sign and sign-write your van or tow-truck with them as well.

In the next part of this mini series, we will be looking at how to buy in your stock in trade - your vehicles.

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