How To Become a Used Automobile Dealer

A car dealing business has always been one of the most progressive setups in recent times. Given the rising prices of new cars, many people prefer to buy used automobiles through dealers. It is a huge setup and is usually difficult to start as there are a host of requirements to fulfil according to the respective state and province laws.

However, once setup it has a very high margin of profit. Dealers buy used cars for only a fraction of their value and spend some money on repairing. The cars are then sold for a very decent price, thus providing a great profit.


  • 1

    Determine the business structure

    To start a business, the first important thing is to determine the structure you want to set. The structure would mean whether you want the business to have partners or you want to run it on your own. This is very important for the initial paperwork to set the business as every business structure has different requirements.

  • 2

    Set a business plan

    It is very important to have the knowledge of what you are doing. For that, a business plan or strategy is crucial. Many businesses fail to perform despite having a great idea as they do not have a plan of what they want to do. The business plan should include the product you want to make or endorse, the target market you will be catering to, the location of the office, how you plan to run your work etc.

  • 3

    Determine capital

    Every business requires an initial investment. Before you start to operate, it is crucial to determine how much money the business requires and whether you would be able to accumulate the sum. There are many costs to run a business including rent, bills, salaries, furniture and marketing. It is important that you must have a sufficient amount in the beginning considering most businesses do not make a profit until the sixth month of operation.

  • 4

    Obtain the licenses

    In order to set up a showroom for used cars, you require the licenses to operate. Every state or province has different requirements for a license for automobile dealer. For the application process or the requirements, a person will have to consult the states’ Automobile Dealers Association.

  • 5

    Enhance your network by joining business groups

    When everything is set, a dealer has to have a very good channel or network. This can be done through joining different business groups who will provide you business. Apart from that, marketing in car magazines and newspapers would also help in reaching potential customers and sellers.

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