What is the law on buying and selling cars?

[Davyy]

I see some dirt cheap cars and think i could make tidy profits.. but what is the law on buying and selling??? Boundaries with tax etc, licenses??

Thanks guys

[Rudpud]

I remember reading somewhere you can only buy and sell 5 cars before being classed as a business type person? Not sure how true that is though.

[Gandi699]

You also cant sell two cars within a certain amount of yards from each other if you arent a registered business I believe

[Davyy]

'a certain amount of yards' what does that mean? And ive heard something like that rudpud!

[Lewis]

You would need some sort of dealer licence or something as the number of owners will go us if you purchase

[Rudpud]

'a certain amount of yards' what does that mean? And ive heard something like that rudpud!

In other words, dont sell them next to each other, place them at opposite ends of the road and shit like that.

[Davyy]

ayyy? Id only do one at a time and be selling them off my driveway? And lewis when does it cross the line that i need a license?

[joe333]

I remember reading somewhere you can only buy and sell 5 cars before being classed as a business type person? Not sure how true that is though.

Oh didnt know this so you only aloud to sell 5 cars a year without being classed?

And how do you apply to get the business card/license???

[DeanAngell1234]

Depends how many you were thinking of selling. I would do it occasionally but not all the time :)

[Rudpud]

Oh didnt know this so you only aloud to sell 5 cars a year without being classed?

And how do you apply to get the business card/license???

Im not sure how true it is though so dont take my word for it.

[Davyy]

For a trades license it costs a fair bit, plus trading insurance! And i think youre right rudpud, its something like if you sell more than 5 cars a year you must be declared so that you arent avoiding tax etc

[Rudpud]

For a trades license it costs a fair bit, plus trading insurance! And i think youre right rudpud, its something like if you sell more than 5 cars a year you must be declared so that you arent avoiding tax etc

Im sure you could get away with one every few months though. Just choose well.

I know people that have gone through like 9 cars in 2 years... Not sure what gets said about that?

[Davyy]

Ive owned 3 cars since may 2011 and 4 mopeds from 2010-2011 so i must be near the boundary !

[Furio-Gazza]

What rule lol, just buy and sell...simples

[Davyy]

Must be many rules/laws about it as youre making money without it being declared!

[stupotvtr]

Check insurance too btw mate. I phoned up to add a car to my policy for 24hrs because I was being given it free so was going to scrap it and get the money, insurance company said that's a scrap merchant so wouldn't insure me lol

[LSOfreak]

ive never heard of any of these rules lol

aslong as you dont have a forecourt full of cars for sale lol you should be fine to just buy and sell as many cars as you want

[joe333]

What rule lol, just buy and sell...simples

I like it alot!:zainy:

[W103_A5H]

Found this on the net:

There's no numerical limit. It's a question of whether the tax man or the council consider that you are running a business. If so, you may be liable for business rates and you cannot use the street as your premises to sell from. You'd also be subject to all the legislation as a motor trader.

Another:

The legal definition of a 'motor trader' is:
"A person or persons actively operating a formal business on a full or part-time basis for profit, either selling vehicles or providing a service relating to repair or maintenance of motor vehicles."

In other words. if you buy any vehicle with the specific intention of selling it for a profit, then you are a trader and you must abide by the Sale of Goods Act.

Link: http://uk.answers.yahoo.com/question/index?qid=20100408151205AAkEIaD

Hope that helps somewhat!

[Giraffe]

Few things you ought to consider as well if you're gonna try and dodge becoming a registered motor trader...

How you going to explain why you've had the car for such a short period of time? How are you going to explain the cars history etc?

If you are going to fob them all off as private sales, methinks you will fall down when it comes to those hurdles.

If you are going to do it properly, then consider that as a "motor trader" you are now bound even more tightly by that sale of goods act and you need to describe everything properly, sold as seen DOES NOT APPLY, and you are obliged to give a 3 month warranty on every car sold. Small print or text CANNOT absolve you of responsibility, so saying "sold as seen and no warranty given or implied" is utter bullshit, it's something you just HAVE to do as a motor trader.

Depends how many cars you sell and their value, but if you do enough, you may have to keep an eye on turnover for VAT purposes, cos cars are usually high value so you can hit the threshold quick enough if they sell well...

[Gandi699]

'a certain amount of yards' what does that mean? And ive heard something like that rudpud!

I think its 500 or 1000 yards they must be apart. Cant remember the exact distance

[rorz_vts]

Take it your going to do one at a time if so just sell them who cares, as for if they ask why you haven't had it long then reply got it in a px

[Giraffe]

Take it your going to do one at a time if so just sell them who cares, as for if they ask why you haven't had it long then reply got it in a px

Realistically, who takes cars in part ex other than a motor dealer... The minute you start saying stuff like that, is the minute people think you're a trader...

[Nik_L]

Im pretty sure that i read somewhere that it was anything over 75 cars a year and you have to class yourself as a trader. I know some1 who buys cars for himself, but sells them pretty quick, will deffo be over the 5 cars a year that was mentioned in this thread, but he's not registered as a trader.

I maybe wrong on the 75 cars part, but its deffo not as low as 5 cars.

[Giraffe]

Im pretty sure that i read somewhere that it was anything over 75 cars a year and you have to class yourself as a trader. I know some1 who buys cars for himself, but sells them pretty quick, will deffo be over the 5 cars a year that was mentioned in this thread, but he's not registered as a trader.

I maybe wrong on the 75 cars part, but its deffo not as low as 5 cars.

It's probably subjective. If they feel you are making an income on buying and selling cars, then that's it. If you're clearly making profit on them and turning them round quick, then if you get sussed, you'll probably have a case to answer to. Or your mate would, as it were. General you.

[LSOfreak]

Take it your going to do one at a time if so just sell them who cares, as for if they ask why you haven't had it long then reply got it in a px

Who??
can't really imagine anyone saying anything unless you are literally sending off a v5 every day or week lol

[Giraffe]

Who??
can't really imagine anyone saying anything unless you are literally sending off a v5 every day or week lol

The people buying the car I'd imagine. Don't you want to know why someone is selling a car when you buy it?

[ha_x3]

For a trades license it costs a fair bit, plus trading insurance! And i think youre right rudpud, its something like if you sell more than 5 cars a year you must be declared so that you arent avoiding tax etc

If your only selling one occasionally, I wouldnt bother with a licence, it probably wounldnt be worth it, unless you were selling quite a few at a time etc.
My step dad buys and sells cars, he doesnt have a licence,if you go through auto trader your allowed to sell I think its 12 a year from the same address!

When he sells them he just says something like bought it for my daughter, but she doesnt like it, or the engine is too big for insurance purposes etc etc

[Davyy]

Cheers for the info guys!

[LSOfreak]

The people buying the car I'd imagine. Don't you want to know why someone is selling a car when you buy it?

oh in that case then yeah, i think i read it wrong.
But i meant other than the potential buyer asking you why you are selling, surely no one from the dvla will come knocking at your door asking why you are selling alot of cars :S

[Giraffe]

oh in that case then yeah, i think i read it wrong.
But i meant other than the potential buyer asking you why you are selling, surely no one from the dvla will come knocking at your door asking why you are selling alot of cars :S

They will if you aren't paying tax on the income, or suspected profits should I say...