Let’s get one thing clear right away. If you are selling cars to make a profit, this is not a personal investment, it’s a business venture.

It’s commonly called car flipping which is similar to property flipping. This is not the same as selling your old car that you have been driving.

Most people do this every few years so learn the difference. If you are investing in cars and selling them, that’s business. If you are using a car and selling it, that’s personal.

We are going to be talking about the former, selling cars as a business. It should be quite simple really.

As long as you know the car industry you can buy stock and sell it on at a profit. But it isn’t, and there are a few mistakes you need to avoid.


Mistake 1: Eyes Bigger Than Their Bank Account

This is the mistake of thinking too big at the start. What happens is a car seller buys a huge amount of stock, taking out massive loans to pay for them. They then find they can’t sell them on as quickly as they had hoped or at high prices.

Immediately they are making huge losses on their business and struggling to survive until they make a sale. You may see car business that seemed to become a success overnight, but they didn’t really.

Successful businesses start small and then expand slowly. You can start your car trading company selling cars from your driveway and keep costs low, easily making a profit

people inside a car



Mistake 2: I’m Not A Motor Trader

We’ve already touched on this one but let’s look at it in a little more detail. You may think if you sell around ten cars a year this is a good investment and keeps it personal.

That means you don’t need to pay business tax and you don’t need to pay insurance.

It’s a clever idea but unfortunately rather flawed. There is no fixed amount on how many cars you sell that makes you a motor trader by law.

This will be decided case by case. But, you should understand if you are selling on a site like Ebay, they keep an eye on your number of sales and your earnings. When you start to make a large number of sales they will force you to register as a motor trader.

If you are going to be selling cars as a business, it’s best to think of yourself as a business straight away, even before you sell your first car. Compare motor trade insurance to get the best deal and start coming to terms with the fact you will be paying business tax.


Mistake 3: I Don’t Need To Know About Cars…Right?

The final mistake is small but still quite serious. People start selling cars without any knowledge of car mechanics.

Technically, you could do this if you are buying new cars to sell. But if you are buying them secondhand and selling them on you need to know exactly what’s under the hood.

Otherwise, you could buy cars, not be able to ready them for sale and make losses rather than profits.

Avoid these mistakes and you will have a happy ride selling cars as a business.