A Comprehensive Guide To Setting Up Your Own Used Car Dealership


Many people hesitate to go for a brand new car because of the depreciating nature of its value. Opening a used vehicle dealership can, thus, be a wise choice in the circumstances.

Almost everybody has the opportunity to start a business in this niche provided s/he knows the apt ways of setting up a used car dealership. The following guide can help.

  1. Decide on the location

Based on your financing options, determine whether you will be leasing or purchasing a commercial area for your dealership.

You should meet with a commercial property manager or a local real estate agent to review the locations available in your area. Used car dealerships usually need a reasonable office space and an outdoor area for vehicle display. Make sure yours have one.

Note: Don’t forget to ensure that the location of your choice complies with zoning, health, fire, and safety regulations required by the city code.   

  1. Visit your local bank and secure financing

Calculate in advance the amount of capital you need for starting your business. You should take the approximate cost of your initial vehicle inventory and operational expenses for six to twelve months into consideration.

Complete all the required formalities and get the loan to finance your small business venture.

  1. Get a license

Fill up the applications required by your state government and secure yourself a used car dealership license.

Submit valid proofs of meeting zoning regulations, and provide a voluntary consent for criminal background check. Get a surety bond of the amount as required by the state, and complete all registrations with the official department to collect and pay sales tax on the cars you sell.

Note: You should always expect an official in-person inspection from the licensing authority for used car dealership applications.

  1. Fill up your inventory

Once the licensing part is taken care of, it’s time you divert your full attention to your vehicle inventory.

Attend auctions conducted by the local authorities or banks to obtain vehicles seized as a result of nonpayment or criminal activity. These vehicles often come a dime a dozen; so your budget won’t be much of a problem as far as these investments are concerned.

Once your initial inventory is done and dusted, keep on visiting auctions and trade-ins to maintain the level.

  1. Promote your business

If you don’t showcase your wares to the public, everything will go down the drain.

You can place placards of some of your best deals or vehicles near roadways where people can actually see them. You may also do a fair bit of promotional work online.

Today, most people use the internet to research a used vehicle for purchase. In fact, we have seen people simply “googling” terms like “used cars for sale in Southampton” and coming to a decision in the blink of an eye. If you fail to make such presence known, you will be missing out on a lot.


So that more or less sums things up. Hope you had a great and useful read.