How to Become a Used Car Dealer?
Nearly every family owns one car in their household, which creates a stable market for entrepreneurs. Over 6.3 million vehicles sold in the United States in 2017. Did you know that 3 of 4 of those automotive sales involves a used car? If you are looking to jumpstart your career, becoming a used car dealer is a great option for success.
Becoming a Used Car Dealer
First, you need to save money to open up your business. Although this is the case with any company, a car dealership requires more initial investment. Purchasing the right licenses and filling your inventory costs at the minimum $50,000.
Depending on the state you choose for your dealership, there are specific requirements for each one. Acquiring a car dealer license should be the priority when you look into opening your business. You will also need a salesperson license to have the ability to sell the cars on your lot. Some of these certifications require taking a class and passing an exam, so research what’s needed beforehand.
Choosing A Location
Selecting a place with lots of traffic will help increase your sales. Also be aware of any competitors in the area. Understanding what another car dealer offers at your chosen location allows you to stand out. Find out how you can appeal to customers to have them visit your dealership.
Develop a Business Plan
Keep track of your budget and strategic goals by developing a business plan. Start with a mission and vision plan that you want to achieve for the company. This will help guide you through the process as you grow your business.
The outline of the plan should include an executive summary, business description, services, industry and competitive analysis, operations and management, and financial assumptions and projections. Make sure you understand the target audience and market you want to focus on to purchase vehicles from your company.
This will be the most challenging part of opening the business. Finding used cars to fill the lot costs the most amount of money and you want to ensure you profit off the selection. The best option for gathering your inventory – car auctions. These vehicles sell at lower prices than usual and allow you to purchase them with the ability to earn a decent profit margin.
Before opening the doors of your business, don’t forget to register the name. Visit the DMV and obtain a business license. This will ensure you are legally covered to sell as a used car dealer.
Check that the location of your choosing is zoned for an automobile dealership, and if not, apply for the license. Obtain a surety bond. An auto dealer bond guarantees that your dealership complies with state regulations while in operation.
Hiring and Partners
It’s best to hire people with prior experience in car sales for a new business. You need to consider having skilled salespeople on the lot. They will help you sell your inventory and drive the business to success.
Consider partnering with other automotive companies like repair shops and paint shops. These businesses can help sell the vehicles by maintaining them and enhancing the appearance. Sometimes used cars require work before they are available for sale so it benefits your business to have a trusted mechanic.
Once all the documents are signed, employees hired, and inventory is full, you’re ready to open the business! Focus on advertising and marketing to help push the company to success right out of the gate.
If the aspect of a used car dealer doesn’t seem like the right fit for you, consider another avenue. Joining a well-established franchise company could jumpstart your career instead. Consider DetailXPerts, an eco-friendly, mobile auto detailing company. All the steps to opening your business will be taken care of with support from the company. They take the time to walk you through every aspect to ensure the success of your location.