Buying into Trade - What's the deal?
Discussion
Hi all,
I'm buying a car from a trader, to then sell near enough staright onto someone else.
I will need to drive the car between buying and selling.
My current fleet insurance policy allows me to add a temp car onto the policy but only if it's owned by myself, or someone else, and not in the trade.
I might be doing a few of these a year, so what's the best way to buy the car into trade (without adding another owner), but still being able to drive it on the road legally as I guess I will also need to tax it?
Thanks all.
I'm buying a car from a trader, to then sell near enough staright onto someone else.
I will need to drive the car between buying and selling.
My current fleet insurance policy allows me to add a temp car onto the policy but only if it's owned by myself, or someone else, and not in the trade.
I might be doing a few of these a year, so what's the best way to buy the car into trade (without adding another owner), but still being able to drive it on the road legally as I guess I will also need to tax it?
Thanks all.
DexterMorgan said:
If the current trader already has it 'in the trade' you can't move it to another trader without registering it.
Can you not put it directly into the persons name you are selling it too if it's a sure thing?
So a dealer could not sell a car to another dealer without putting another owner on file? Can you not put it directly into the persons name you are selling it too if it's a sure thing?
Unfortunately I won't always know the details of who the new owner will be when I purchase the car, so that's not possible.
I'm assuming that you've got (or will have) a registered business for this?
So it should be relatively easy to transfer between one trader and another trader (i.e. you) for you to then sell on as a trader to a member of the public. Car dealers shift stock around between businesses frequently without adding owners to the V5.
I think it only starts getting difficult if you are trying to avoid appearing like a trader (either for tax reasons, or to avoid having to offer the enhanced consumer protections to the people who buy from you) whilst still gaining the advantages of being a trader (being able to 'own' a car without adding owners to the V5).
As for driving it, if you need to move the car on the road for business purposes, you can get trade plates - negating the need for the car in question to be taxed. You can also get specialist traders insurance policies which usually have a fairly blanket approach to coverage (when I last looked at it, I could get cover to drive any vehicle up to a value of £50k, excluding Cosworths - which gives you an idea of how long ago this was!
). So between the trade plates and traders insurance, you'd be fine to drive a car on the road for business purposes - provided the car in question was in a safe and roadworthy condition.
EDIT: I've just re-read your OP, and realised it can be interpreted in more than one way. I'm assuming that when you say you'll need to drive it, you mean for business purposes (moving it from where you bought it, moving it to where you sold it, going on test drives with prospective buyers, etc.). However, I guess you could also mean that you'd need to use it as personal transport (i.e. you'll need it to get you places, do the weekly shopping, etc.), in which case none of what I've said will be of any help to you.
So it should be relatively easy to transfer between one trader and another trader (i.e. you) for you to then sell on as a trader to a member of the public. Car dealers shift stock around between businesses frequently without adding owners to the V5.
I think it only starts getting difficult if you are trying to avoid appearing like a trader (either for tax reasons, or to avoid having to offer the enhanced consumer protections to the people who buy from you) whilst still gaining the advantages of being a trader (being able to 'own' a car without adding owners to the V5).
As for driving it, if you need to move the car on the road for business purposes, you can get trade plates - negating the need for the car in question to be taxed. You can also get specialist traders insurance policies which usually have a fairly blanket approach to coverage (when I last looked at it, I could get cover to drive any vehicle up to a value of £50k, excluding Cosworths - which gives you an idea of how long ago this was!
). So between the trade plates and traders insurance, you'd be fine to drive a car on the road for business purposes - provided the car in question was in a safe and roadworthy condition.EDIT: I've just re-read your OP, and realised it can be interpreted in more than one way. I'm assuming that when you say you'll need to drive it, you mean for business purposes (moving it from where you bought it, moving it to where you sold it, going on test drives with prospective buyers, etc.). However, I guess you could also mean that you'd need to use it as personal transport (i.e. you'll need it to get you places, do the weekly shopping, etc.), in which case none of what I've said will be of any help to you.
Edited by Rotary Potato on Wednesday 30th October 13:33
Rotary Potato said:
I'm assuming that you've got (or will have) a registered business for this?
So it should be relatively easy to transfer between one trader and another trader (i.e. you) for you to then sell on as a trader to a member of the public. Car dealers shift stock around between businesses frequently without adding owners to the V5.
I think it only starts getting difficult if you are trying to avoid appearing like a trader (either for tax reasons, or to avoid having to offer the enhanced consumer protections to the people who buy from you) whilst still gaining the advantages of being a trader (being able to 'own' a car without adding owners to the V5).
As for driving it, if you need to move the car on the road for business purposes, you can get trade plates - negating the need for the car in question to be taxed. You can also get specialist traders insurance policies which usually have a fairly blanket approach to coverage (when I last looked at it, I could get cover to drive any vehicle up to a value of £50k, excluding Cosworths - which gives you an idea of how long ago this was! ). So between the trade plates and traders insurance, you'd be fine to drive a car on the road for business purposes - provided the car in question was in a safe and roadworthy condition.
EDIT: I've just re-read your OP, and realised it can be interpreted in more than one way. I'm assuming that when you say you'll need to drive it, you mean for business purposes (moving it from where you bought it, moving it to where you sold it, going on test drives with prospective buyers, etc.). However, I guess you could also mean that you'd need to use it as personal transport (i.e. you'll need it to get you places, do the weekly shopping, etc.), in which case none of what I've said will be of any help to you.
Thanks for the reply.So it should be relatively easy to transfer between one trader and another trader (i.e. you) for you to then sell on as a trader to a member of the public. Car dealers shift stock around between businesses frequently without adding owners to the V5.
I think it only starts getting difficult if you are trying to avoid appearing like a trader (either for tax reasons, or to avoid having to offer the enhanced consumer protections to the people who buy from you) whilst still gaining the advantages of being a trader (being able to 'own' a car without adding owners to the V5).
As for driving it, if you need to move the car on the road for business purposes, you can get trade plates - negating the need for the car in question to be taxed. You can also get specialist traders insurance policies which usually have a fairly blanket approach to coverage (when I last looked at it, I could get cover to drive any vehicle up to a value of £50k, excluding Cosworths - which gives you an idea of how long ago this was!
). So between the trade plates and traders insurance, you'd be fine to drive a car on the road for business purposes - provided the car in question was in a safe and roadworthy condition.EDIT: I've just re-read your OP, and realised it can be interpreted in more than one way. I'm assuming that when you say you'll need to drive it, you mean for business purposes (moving it from where you bought it, moving it to where you sold it, going on test drives with prospective buyers, etc.). However, I guess you could also mean that you'd need to use it as personal transport (i.e. you'll need it to get you places, do the weekly shopping, etc.), in which case none of what I've said will be of any help to you.
Edited by Rotary Potato on Wednesday 30th October 13:33
The only driving will be business yes. Already have a company so all good there.
So it seems I need Trade Insurance, and then once I have that, I can apply for trade plates?
This should help you with the trade plates:
https://www.gov.uk/trade-licence-plates
I'm afraid I have no current contacts for insurance, but I'd assume a Google search should throw up a number of suitable firms/brokers.
https://www.gov.uk/trade-licence-plates
I'm afraid I have no current contacts for insurance, but I'd assume a Google search should throw up a number of suitable firms/brokers.
Depending on your other business you may get cover for both BUT most will expect the motor trade to be your main business.
It's not particularly cheap these days either.
And if you tell your current insurer that your new business description is whatever you do now AND buying and selling vehicles they are likely to be displeased
It's not particularly cheap these days either.
And if you tell your current insurer that your new business description is whatever you do now AND buying and selling vehicles they are likely to be displeased
ChristianW said:
DexterMorgan said:
If the current trader already has it 'in the trade' you can't move it to another trader without registering it.
Can you not put it directly into the persons name you are selling it too if it's a sure thing?
So a dealer could not sell a car to another dealer without putting another owner on file? Can you not put it directly into the persons name you are selling it too if it's a sure thing?
Unfortunately I won't always know the details of who the new owner will be when I purchase the car, so that's not possible.
ChristianW said:
Hi all,
I'm buying a car from a trader, to then sell near enough staright onto someone else.
I will need to drive the car between buying and selling.
My current fleet insurance policy allows me to add a temp car onto the policy but only if it's owned by myself, or someone else, and not in the trade.
I might be doing a few of these a year, so what's the best way to buy the car into trade (without adding another owner), but still being able to drive it on the road legally as I guess I will also need to tax it?
Thanks all.
So you are effectively becoming a trader? Buy from trade and sell to public?I'm buying a car from a trader, to then sell near enough staright onto someone else.
I will need to drive the car between buying and selling.
My current fleet insurance policy allows me to add a temp car onto the policy but only if it's owned by myself, or someone else, and not in the trade.
I might be doing a few of these a year, so what's the best way to buy the car into trade (without adding another owner), but still being able to drive it on the road legally as I guess I will also need to tax it?
Thanks all.
Im not sure thats a great business model, trade wont want to give cars away and wont give you any warranty if you are trade + you'll be liable for any faults on the car for 90 days. Why wouldn't you just buy privately or from an auction?
ChristianW said:
Hi all,
I'm buying a car from a trader, to then sell near enough staright onto someone else.
I will need to drive the car between buying and selling.
My current fleet insurance policy allows me to add a temp car onto the policy but only if it's owned by myself, or someone else, and not in the trade.
I might be doing a few of these a year, so what's the best way to buy the car into trade (without adding another owner), but still being able to drive it on the road legally as I guess I will also need to tax it?
Thanks all.
it will be owned by you. Your name on the V5C is not proof of ownership, its the keeper of the car.I'm buying a car from a trader, to then sell near enough staright onto someone else.
I will need to drive the car between buying and selling.
My current fleet insurance policy allows me to add a temp car onto the policy but only if it's owned by myself, or someone else, and not in the trade.
I might be doing a few of these a year, so what's the best way to buy the car into trade (without adding another owner), but still being able to drive it on the road legally as I guess I will also need to tax it?
Thanks all.
DexterMorgan said:
If the current trader already has it 'in the trade' you can't move it to another trader without registering it.
Can you not put it directly into the persons name you are selling it too if it's a sure thing?
You can move and trade vehicles from trader to trader without the need to register them out of the trade and back into the trade again. It happens all the time. Can you not put it directly into the persons name you are selling it too if it's a sure thing?
In terms of insurance OP - you say you have an existing fleet insurance policy and can add temporary vehicles onto it. There will be an exclusion clause in your fleet T&C’s which will prohibit the use of any vehicle in connection with the motor-trade which is what you’re proposing. You will need specialist motor trade vehicle insurance for at least road-risk. Note that trade insurance will only cover you for genuine vehicle movements in connection with the motor trade, and for nothing else - for example, you could not use a trade vehicle to go to the seaside on a Sunday afternoon.
Likewise with trade-plates. The DVLA will want to see specialist motor-trade insurance to process your application. Trade-plates are much more difficult to get hold of than people originally think.
Good luck with the new commercial venture.
If you are buying from trade and they know you are trade the car will be in trade with DVLA anyway. You will need trade insurance and trade plates to drive the car.
You say you are selling straight away so you'll be providing warranty etc as well I assume?
Theres two ways to do car sales one is ducking and diving risking the insurance off your own policy the other way is to do everything above board which is incredibly expensive. A neat way around all the road risk stuff would be to hire a trailer and just dont drive the car on the road.
You say you are selling straight away so you'll be providing warranty etc as well I assume?
Theres two ways to do car sales one is ducking and diving risking the insurance off your own policy the other way is to do everything above board which is incredibly expensive. A neat way around all the road risk stuff would be to hire a trailer and just dont drive the car on the road.
fridaypassion said:
If you are buying from trade and they know you are trade the car will be in trade with DVLA anyway. You will need trade insurance and trade plates to drive the car.
You say you are selling straight away so you'll be providing warranty etc as well I assume?
Theres two ways to do car sales one is ducking and diving risking the insurance off your own policy the other way is to do everything above board which is incredibly expensive. A neat way around all the road risk stuff would be to hire a trailer and just dont drive the car on the road.
The last bit won't really work as he will driving the vehicle towing the trailer for the purposes of his business in the motor trade.You say you are selling straight away so you'll be providing warranty etc as well I assume?
Theres two ways to do car sales one is ducking and diving risking the insurance off your own policy the other way is to do everything above board which is incredibly expensive. A neat way around all the road risk stuff would be to hire a trailer and just dont drive the car on the road.
fridaypassion said:
The alternative is paying about £3000 for a trade X basic trade policy. If you are just doing a handful of sales it can never be financially viable to do it properly so you have to cut corners. I pay £5000 for legit comprehensive trade cover to get around this issue.
Agree the days of cheap trade cover are well behind us.Gassing Station | Car Buying | Top of Page | What's New | My Stuff