Buying and selling cars can be a very rewarding business strategy. Firstly, there’s no better feeling than helping motorists drive away in the perfect cars for their budgets and preferences. Secondly, and more importantly from an entrepreneurial perspective, there’s a lot of money to be made too.
The statistics show that nearly 40 million vehicles are on the British roads. Even when you take out large business lorries, that’s a lot of potential custom. However, there are a variety of things that could go wrong, which is why you must slam the brakes on them ASAP. Here are the things to look out for.
Bad Debts
A lot of people cannot afford to buy a car outright in cash, even if it’s a used vehicle. Therefore, being able to offer flexible repayments and even leasing can be vital. Of course, this does come with the threat that a buyer could stop making payments.
Even if you can get the asset back, it won’t be worth nearly as much due to depreciation. Having motor trade insurance can protect you against serious damage caused by these issues, as well as various others. For the sake of your sanity as well as your bank balance, you should take advantage.
After all, vehicles are very costly assets. Even one bad debt could hit the business to the tune of thousands.
Part-Ex Problems
Given that many drivers are looking to upgrade their existing vehicles, they may want to trade in their old one to secure a discount on the price. While this can work well for all parties involved, you need to protect yourself as a dealer. This means knowing exactly what you’re getting.
If you are taking on an exchanged car, you’ll need to know exactly what it’s worth. Running a computer check will give you a ballpark figure, but you must have it checked over properly too. This is why it pays to have talented mechanics on the team in addition to your salespeople.
It’s not only part-exchanges where this can come in handy, especially if you are a used car dealer. Knowing that you’ve assembled the best team possible, and provided them with the right tools is key.
Lack Of Traffic
Unlike traditional stores, you’re unlikely to get much passing trade. People visit showrooms and dealerships when they are actively in the market to buy. It is rarely a spontaneous car purchase, which is why you must do everything possible to ensure clients choose your business.
There’s nothing like seeing cars in the flesh, but consumers still do the bulk of their research online. This is why your local SEO strategy should sit at the heart of your marketing endeavours. This is particularly true when your premises are located in an isolated area. Meanwhile, it’s crucial that adverts explain exactly what you provide, including the manufacturers.
Customers are the most important aspect of any modern business. Not least when working in a field where sales aren’t as frequent as most traditional stores. As long as you get this aspect right, the other elements of the business should fall into place.
