It is interesting to see that there is little choice in Gibraltar to buy second-hand cars. In an ever-growing demand for motorcars, there is some room for opportunity for those that wish to enter such motoring business. There are however certain rules to follow, and regulations to comply with, as well as the usual procedures that one would go through in any new business. Business plan, site rental, sales hut, finance and the long usual etcetera that goes with every business.
The first step is to find out on your own what the market is like. What are people buying in Gibraltar as far as motorcars are concerned? Is there really a market? There is a market, certainly, but how active is it? Are we going to specialise in a market of everyday utility motorcars? Or are we going to do something entirely different and sell sports cars? Or Possibly small vans? This last idea may be worth analysing.
Honesty and integrity are quintessential in any business.
Once the idea has been decided, the next step is to study that specific market carefully and thoroughly. Some long hours will have to be spent looking into what could it be like if we decided to go ahead with this or that particular type of car we want to sell.
The following step would be to test the market. You do not have to buy big stocks to see some results. Buy one or two cars that you know people could be keen on buying and make sure you buy at the right price. And the right car. Study carefully its service history and have the vehicles inspected by a seasoned mechanic. Make sure the car is clean and never had a major accident. Insist on having this in writing in the bill of sale or contract. Your first deals are of paramount importance. This motor sales business is very much a reputation business and you want to get it straight from day one. Honesty and integrity are quintessential in any business, and probably a lot moreso if you are dealing in second-hand cars. There are some very bad dealers out there… and some honest ones as well. Make sure you become a member of the honest group. If you do, word of mouth will help you tremendously and your business will be on the way to success.
An acquaintance of mine, who we shall call Miguel, started off by selling the occasional German car in Marbella and Estepona, up to five years old and up to 60,000 km. He would have two or three at a time. Now he has stocks of several dozen cars and his reputation is spotless. He never took a client for a bad dishonest drive. He issues a guarantee when a sale is concluded, which is normally covered by an insurance policy he takes and pays for personally. His business is doing well. This is a case to study and copy.
The market in Gibraltar may possibly be smaller. It is not a huge one, but it is certainly a market and a very healthy one as well, so it’s probably worth a good try.
What are people buying? Is there really a market?
Basically, one should start small with a few good examples of what you intend to sell. You should import them or alternatively find out if you are allowed to do the import at a later stage. HM Customs are most helpful and they will tell you what the procedure is at the time. You should get a trading license from the Office of Fair Trading. Bureaucracy in Gibraltar is fairly simple, but like anywhere else, you need time.
Bear in mind that import duty is quite different if you do the importation on a personal level or as a professional car dealer. In this last case, they will ask you to produce your trading license and your tax registration number.
Once you get all the above points sorted, start marketing your product. And how? In every fair and legal way you have at hand. From parking your car in some specific spot where a lot of customers can see it and where a ‘For Sale’ sign and telephone are displayed, car sales websites, adverts in newspapers, Facebook…
There is a lot on offer out there. Try and see what works best. It need not cost all that much. And in the long run a lot can be learnt for not too large an investment.
MOST ROUTES LEAD TO NOTHING WHILST SOME LEAD TO PROFIT.
An extremely important point is your source of supply. You can use Spanish or European websites and buy cars privately which are in excellent condition and have a good and full service history. Always buy well since in this business the profit starts in a well bought motorcar. That will give you plenty of space to manoeuvre and even give discounts to your future clients and still make a decent profit.
A great source of supply are the large leasing or hire purchase firms. You could buy really well from them but this may not be as easy in the early stages. Probably very good later on when your venture is more established. If this is not feasible in the early stages, then try a different route. Business is about trying lots of different routes. Most routes lead to nothing whilst some lead to profit. The more you try the merrier.
Another route to get hold of these stocks is to find out who the big-time dealer is. The one that is buying large amounts of stock from the leasing companies. You may reach some form of agreement and pay a little more to get some very good cars of them. Another source of supply is to purchase from car rental firms. You can also pick up some good deals. Worth looking them up.
Once you get more established and your reputation is spotless, you will start getting orders from clients that wish this or that sort of car and you can ask for a large down payment once a car is located in Germany, Belgium or Italy, for example. This system is brilliant and your risk is nil. It normally works when you are very established in the community.
The bottom line in this business is to understand that second-hand car sales is about buying cars at wholesale prices and selling them at retail prices with a mark-up for you.