Hello!

I was chatting with a friend yesterday in a hypothetical way about building kitcars as a business. We had some questions that we didn't know the answer to;

-I you were to build a car for a customer (kit + new/second hand parts and completed SVA) would you have to legally give a warentee? and would you need any other insurance other than general public liability insurance?

-then taking that a step further if the company then started producing there own design of car instead of building someone elses "kit" what else would need to be done to do this legally and sell as a new built car.

Sorry if these are basic questions I really dont have any background in this area and would be interested to learn

I don’t know the answers but you’re going into very difficult market to succeed in, giving the amount of time and money usually invested in doing a kit car, do you think you could really make a viable profit? If it were you I’d speak to a small business advisor and do a proper business plan just to see what the reality would be.

As above, really I just can't see there being enough ££ in it to make it worthwhile. For the majority the whole point of a kitcar is the achievement of building it yourself and with the amount of part builds and completed cars going for similar prices to a stack of components I woul dhave thought you'd struggle to get enough customers.

If you were to design and market your own kit then that's a whole different ballgame.

I thought there were plenty of people offering build services, so there must be money in it.
Seem to remember a chap building race spec caterhams was charging ~£1500 per build. Guess you'd need to do about 2 a month to make the money per person.
Supporting a race series is a good way and a least up to last year there was no shortage of buyers.
The climate as it is at the minute though may not be a good starting time

Just my opinion!

Mike

It is mainly just talk and ideas at the moment as im not going to be starting a business in this line in the near future, I am just interested in the legalities of it all.

quote:

---

everything you buy new, has a statutory warranty

---

I thought about doing something similar to get out of a real hell hole of a job and not many jobs due to financial climate and migrant workers. being in northern ireland thought not many folk doing similar.

Whats put me off is current climate. Know a few folk that do rally cars and they've already noticed a slow down. People aren't spending on luxuries because their sacred of the crunch.

I started a Company five years ago and here's my two pennies.

Why not start smaller by doing smaller project work, you can do it at break even then by perhaps part timing.

Build a reputation and then expand slowly based on that.

Avoid all debt that you can by only investing against work you know you'll get.

Most big Auto companies started by making either components or something smaller (bike's, Engines etc..)

If you go big bang Please...Please do a business plan thats realistic and stick to it

Life is a gamble and if you never take one you will always wonder what might have been...
If it goes pear shaped then so what, at least you gave it a shot.

Mark

I know a bit about this stuff.

Kit building for other people (I do some of this)-

If you advertise you may well get some work, depending on your labour rate (you will have to charge by the hour as you have no chance of accurately estimating how long it will take to put a kit together, as so much depends on the details.

Most of the work you will be offered will be abandoned projects. Nobody has ever asked me to assemble a new car from scratch (unfortunately). The project will usually be one that either they abandoned or one that the bought or inherited from somebody else who abandoned it. Usually there will be a reason why it was abandoned (a common one is that the kit was manufactured pre SVA)

Never-the-less, doing such work can be quite satisfying if you get a good client.

Insurance to cover the workshop, and your tools and your or the customers' cars and the all important product liability can be had from about £2000 upwards, it's basically motor trade insurance and will normally cover your own car as well. The insurance will cover you if someone crashes as a result of your negligence etc.

There aren't any specific legalities to actually manufacturing a kit as long as the produce will pass SVA, but you can't AKAIK get insurance to cover you for design faults.

John

could just start off simple and do it as a bit of a jobby on the side? I.e. a book locost or book haynes roadster with some nice touches (but don't make it too personalised). Keep track of how much it costs you in parts and time, then when finished, flog it in a kitcar magazine "built for a hobby to pay for new project, just sva'd, NO MILES at all.. brand new locost!" etc...

Use the profit to pay for another project or go on holiday & start again... If you make a decent bit of cash each sale then it could be worth pursuing professionally?

quote:

---

Originally posted by paul the 6th

Use the profit to pay for another project or go on holiday & start again... If you make a decent bit of cash each sale then it could be worth pursuing professionally?

---

To put it bluntly, kit cars are non-essential toys. When cash is short, people don't spend money on them. Also, these cars eat petrol 'cos we can't keep our right foot off the loud pedal, and that's not cheap (as we all know).

Finally, raw ingredients are going through the roof, especially if they're oil-based (see the top article here for an example - polyester resin price rises.)

Personally, I wouldn't be looking to make money in this field just now - it's hard enough when the general public has spare cash in their pockets. At the moment it's going to be a struggle, and I won't be too surprised if a few well-known suppliers give it all up (sadly).