Owning a Used Car Dealership

While becoming a second hand car salesman used to be the subject of many a comedy sketch, modern day used car dealerships are a far cry from that cliché and are proven successful small businesses, even beating the recession successfully. car dealershipSo if you want to run your own used car small business, what kind of things do you need to bear in mind?

Here are a few things to consider before you start investing in second hand cars to sell:

  1. Do your research – We asked the guys at Big Motoring World for their advice. Here’s what they had to say… “Make sure there is a demand for second hand cars in your area, otherwise you won’t be making many sales. Have a look at how many other vehicle sellers there are already in the area that you want to operate in and check out what type of cars people are buying and selling”.
  2. Make sure it’s affordable – you need to work out the numbers to make sure the business will actually make any money for you year on year. There is no point spending money opening a dealership that’s not going to turn a profit.
  3. Franchise vs ownership – look into the choices for becoming both a franchisee and an out and out business owner as the costs may prove to be considerably different.
  4. Sales and servicing – consider if you are just planning to sell cars or whether you want to offer car services as well as part of the business. This will have an impact on the type of premises you might end up with.
  5. Work out your finances – assess how you are going to pay for the business in terms of start-up and ongoing costs. Where are you going to get the money from to buy all the cars to start out with?
  6. Make sure you are authorised – look into all the correct licensing you need to be able to legitimately sell cars as a trader.

All of these things need to be taken into consideration before you look to get your dealership up and running but once you have done the research and have the right paperwork and finances in place; there is no reason why you shouldn’t be able to start up a potentially profitable car business.

Once you are up and running there are a whole number of different things to take into consideration to make sure your used car dealership is a profitable and successful small business, so let’s take a look at some of the issues which need to be considered:

  1. Take on a team – you need to choose your team carefully as their behaviour and style will reflect on your business and they will be working directly with your customers so choose wisely.
  2. Invest in the office – make sure your business is up to date with the latest dealer management system to help you keep track of all the admin, sales, inventory etc… so that you keep up with the professional level expected of a serious, successful business
  3. Quality check all cars – ensure that you are only ever selling good quality cars to your customers as just one dodgy sale could result in irreparable damage to your business reputation.
  4. Marketing and promotion – you need to tell the local community that you are in business by advertising and marketing your services professionally and effectively.
  5. Use car experts – engage a car expert to support you when buying lots from car auctions or other sources, to make sure you are only buying good quality vehicles which will be worth selling in the future
  6. Keep your showroom neat, tidy and clean at all times, with a welcoming ambiance for visitors – include a waiting area and drinks on hand so that customers are encouraged to stay and look around the vehicles for as long as they want to.
  7. Good customer service – always greet customers who come through the doors and make sure the telephones are always answered promptly with trained staff who are able to answer any questions.

As you can see, there are lots of steps to think about when considering setting up and running a used car dealership but the industry really has come on leaps and bounds over the past decade, with the clichéd pushy car salesman image long since gone.

If you think this could be the business for you, then start with the research and financial planning to see if the idea if both viable and profitable potentially, before making any kind of commitment. Don’t just jump in with both feet and start buying up cars at auctions as the last thing you want is to be left stranded with lots of cars you can’t sell on.

It might take a year or so to start making a profit, once you have spent money on premises and vehicles and staff so make sure you factor that into your plan and keep going, don’t give up at the first hurdle.

About Nate Goodman

Nathan Goodman is a freelance fiction writer and the bestselling author of The Special Agent Jana Baker Spy-Thriller Series. "A terrorist on the loose, a country in panic, and time is running out..." For a free copy visit the author's website.