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How to Become a Car Trader in 4 Easy Steps

If you love cars, like to sell and know a good bargain when you see one, you may be able to become a car trader, running a part-time or full-time business. There are a number of benefits to being a car trader – you can start with relatively little investment and you will have the ability to work your way up to owning a full car dealership. Let’s look at how to become a car trader in 4 easy steps.

Learn about the Market

A love of cars and knowing a couple of people eager to sell junkers stored in their garages isn’t enough to start a profitable business. Determine which used cars are in demand, since these are the cars you’ll want to prioritise finding and offering for sale. There’s no point trying to sell vehicles for which there is neither demand nor profit.

Compare what you learn to your own interests and expertise. Do you want to specialise in a particular model of car or car make? If so, you’ll need to identify the customers for these cars and how to market to them. 

Another area to research is pricing. How much can you realistically sell the vehicles for? And how much can you typically buy them for? There needs to be a wide enough spread between these two numbers to allow you to earn good money for the effort. Don’t forget to factor in costs like cleaning up and making minor repairs to vehicles.

Craft Your Business Plan

Once you’ve determined the type of vehicles you’ll sell and who will likely buy them, you’ll need to craft a business plan. This is what allows you to move up from a hobby car trader to a full-fledged business. 

How will you find a steady stream of vehicles to sell? Where will you store them? Where will you offer them for sale or show them to potential customers? How will you cover losses if someone sells you a lemon? These are all questions you’ll need to answer before you can start building a roadmap for your business.

Research the Rules

While you could cut costs by selling cars from home, check with the local council before you start doing this. They’ll be able to tell you how many cars you can store on your property before you have to find storage space. Furthermore, you’ll learn the local rules regarding advertising.

You will also need motor trade insurance. This insurance is necessary to transport vehicles without having insurance on each car individually. Services like Quotezone will allow you to compare motor trade insurance policies, find a policy that suits your needs, and get a quote by filling out a single short form. 

Register as a sole trader by the time you complete your first sale. Notify HMRC immediately so that you aren’t fined. You probably want to get set up with a merchant account so that you can process card payments, as well.

Start Filling the Pipeline

You could start looking for vehicles in classified ads and online listings, and advertise yourself as a car buyer as well as a car seller. Start selling once you have one or two cars so you can get cash rolling in. This will also prompt the word of mouth referrals that will bring you future customers and possibly car sellers as well.


Car trading is an incredibly accessible business. However, there are a number of steps you need to follow to avoid running into problems. Make sure that you’re ready to do your homework and go the extra mile if you want to transform your hobby into a full-fledged business.

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