There are no arguments that the car trade is a competitive industry, but it can also be extremely lucrative – so long as you take the time to do your research and make sure you fully grasp the market. If you have a natural love for cars, know how to identify good deals, and have a knack for selling, becoming a car trader could be a great way to start a full-time or part-time business.

Note that the benefits of this business model are that you can either start with minimal investment and work your way up or set up your own dealership from scratch. With new car registrations falling to their lowest level since 2013, now could be the ideal time to get your car trading business venture on the road. The great news is, to become a successful car trader, you don’t need to be a petrol head.

You only need to know how to initiate a deal, recognize a bargain when you see one and understand exactly what your target market is after. Get that right, and you could see profits of £200 to £2,000+ per sale – and all for a couple of hours’ work. With a decent profit margin potential, minimal outlay (if you are selling from home), and flexible working hours, becoming a car trader is one of the most accessible and rewarding business ideas to set up and run. There are just a few legalities and practicalities you have to sort out first.

Before you start considering buying your first car, you should try to find out which cars are in demand. Also, find out how much they are selling and for how much you can get them for. You will also have to decide if you are going to target a specific market. For instance, if you decide to specialize in one model or car make only.

You should also find out where your target market buys their cars from. Do they prefer buying cars second-hand directly from the seller or do they typically buy their cars from a dealer? This will make a huge difference in how you will advertise your vehicles and where you should put more attention. You should also know the specifics like how long it takes to sell a car. Even though some vehicles might seem like a steal, they might take much longer to sell whereas a vehicle with a lesser margin might be a better acquisition since it will leave the lot sooner.

Pricing is also something you have to understand extensively if you want to be successful. There are different valuation sites that will allow you to get an approximate idea of how much you will be able to sell a car for. Nonetheless, they might not always tell the full reality of the market. Sometimes, looking at adverts and seeing how much vehicles are selling for first-hand is a better way to evaluate how much you can expect to get for a particular vehicle.

It is important that you take your time and set yourself a realistic budget. Costs need to cover the rent of the premises, business rates, electricity and refuse disposal. If you want to dispose of your own hazardous waste (car oil, batteries, and tyres) you may need a waste carrier license. Being organized will help you avoid sleepless nights and a load of paperwork. It is imperative that you keep all your records up to date, such as sales receipts and invoices to provide proof to insurers that trading has been taking place on the premises in case a claim is made.

How to Become a Car Trader from Home in the UK

Whether you have been considering this for a long time and are just deciding to take the plunge, there are things you need to know on your way to becoming a car trader. They include;

  1. Research and Know About the Industry

The first step in the process of becoming a Car trader in the UK is to thoroughly know the industry and understand what type of business you’d like to create. Are you looking to specialize in specific cars such as classics or high value cars? Getting to know what is popular in your area can be helpful, but also noting any developments in the news that could affect the market – especially at the moment with the problem of COVID-19.

  1. Know the Legal Requirements

To run your business legally, you will have to register as a sole trader, limited company, or partnership. Note that there are different benefits and requirements for each kind of setup, so it is worth doing a bit of reading to find out what will suit your business needs best.

Also, you will need trade plates in order to legally drive the vehicles you buy to sell or to test vehicles on a public road. Trade plates simply mean that you don’t have to individually register and tax each vehicle – instead you pay a license rate for a designated period. If you only repair vehicles, you may not need trade plates.

In addition, insurance is a legal requirement for car traders – based on your business plans, will you need part time or full time car trade insurance? Do you plan to run your business from home, or from a dedicated business premises? If you are thinking of employing staff, you need to ensure that you have insurance that covers them too. Employers liability insurance is a requirement for anyone employing even one other person.

  1. Apply for Trade Plates

Once you have set up your car trade insurance policy and checked out the legalities behind the business, you will need to apply for trade plates. Just like it was briefly explained above, the trade plate is a temporary number plate used by car traders or vehicle testers to save them the cost and time to register and tax every vehicle temporarily in their possession.

DVLA guidance on applying for trade plates states that coupled with your trade license application form, you will need to provide a copy of your Car Trade Insurance Certificate, which must match the name on the application. If you don’t have one, you will need to tell DVLA why and give details of your Companies House registration number.

  1. Buy a Car to Sell

After you must have set up the above, you can look for the first car or cars you’d like to buy. Have it in mind there are different areas you can buy cars such as websites like AutoTrader, or attending an auction house. Currently, a lot of auction houses are only running online auctions, but this may change when lockdown restrictions are further eased.

Always ensure that you have done your research on the car, that you have checked the condition and taken it for a test drive if possible. You can check MOT history using the government’s online MOT checker service. Other things to check:

  • Does the car have a V5C document? Without this proof of ownership, it is possible that the vehicle is stolen
  • Does it have a maintenance history? You need to know if there’s anything that could affect its reliability and value
  • Various websites offer car history checking services that will let you know further details about the car such as whether there is any finance on the vehicle that could make it unsellable
  • Once you have found a car that you are certain will make some profit, ensure that it is in the best possible condition and is ready to sell. Consider removing any scratches, carry out any work on advisories from the previous MOT, and make sure that the car is clean and presentable.
  1. Figure out Your Pricing

It is also necessary to understand how to price your cars. If you are selling too high, you can put off potential customers, but selling too low will mean you make no profit. Finding the right balance doesn’t have to come with years of experience; online auction sites such as AutoTrader can give you an insight as to the price that others are selling the same spec vehicle for.

Have it in mind that so many car traders sell through word of mouth recommendation and social media listings, but when you are new to the trade, it might take a while to get this established. You could set up your own website, or use a car sales forum like AutoTrader to get going. Cars can also be sold on eBay. Whatever you choose, make sure you have checked for:

  • Selling fees
  • Listing restrictions
  • Details like delivery and collection arrangements are included in your listing


Becoming a car trader is one of the easiest businesses to enter and demands very little money to get started. However, you have to be prepared to do your research before you enter the field if you want to reach any kind of success. This unique business opportunity could be extremely lucrative with little capital investment. You can start small and then gradually grow the business.