Auto Salvage: Know how to start your own used car dealership

Autos & TrucksCars

  • Author Alden Walton
  • Published July 28, 2011
  • Word count 409

The used car industry is growing increasingly profitable as persons would rather opt for buying used or pre-owned vehicles instead of new ones in order to save. Not only are these customers saving more on their vehicle purchases but also on insurance; used vehicles cost less to insure. With sufficient knowledge of the industry you will know how to start your own used car dealership in no time. There are many things to consider before starting a used car business; the legalities of operating such a business, securing a suitable location, where to source used cars, and who to employ.

Legal Aspect

Depending on the country or state in which you plan to operate, the legal requirements will vary. A car dealer license is usually needed but the documents needed to obtain it will differ from state to state (country to country). You will also need to register your business with the proper authorities. Additionally, ensure that the location is suitable (i.e. located in a commercial area) and that you have the required permit for operating this type of business on the property. If you are planning to import these used vehicles from an overseas market you might want to consider an import license.

Sourcing Used Cars

This is the core of your business and is not as difficult as it appears. As a new dealer you can explore several options to supply your car lot.

  1. If you are starting out with little capital you might want to consider offering your services to persons around you who already have cars for sale. Many car owners will be willing let someone else go through the hassle of finding a customer to buy from them and you get a percentage for being the go-between. The down side of doing this is that there might be a problem negotiating a price with the buyer as it is already set by the owner.

  2. Buying used or damaged vehicles is another option to consider when starting this kind of business. Here you will need a reliable staff to deal with body work and repairs. Damaged vehicles are cheap, and having your personal stock means you solely determine your final price.

With a fulltime staff; from the mechanics who transforms these vehicles into road worthy machines, to the sales personnel who handles the proper documentation of each sale, you will be able to have your used car business up and running in no time.

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