For people looking to start a successful business, owning a car lot can seem like one of the most reliable ideas for success. Maybe you have a good knowledge of cars that you want to put to use, or maybe you’re simply a good negotiator. Whatever the reason, a lot of budding entrepreneurs find themselves curious as to what exactly it takes to get started in the used car business. In reality, there is a checklist of things to consider.
1. Make Sure You Can Get Financing
If you have money saved to go towards your small business, that puts you ahead of the game. But to run a used car lot, you will need a lot of capital. The cost of buying vehicles, plus operating, insurance, utilities, and employees means you will probably need to look into business loans. Look for credit unions that typically work with car dealerships. Many successful dealerships are also financed by private investors, but getting that kind of support can be a lot more difficult.
2. Get Licensed
Read up on the laws in your area regarding business and dealership licenses, and what is required from you. In some cases, there could be a written test, proof of age or income, or proof of zoning clearance. Depending on where you live and what kind of lot you by, you may need a license before you purchase property.
3. Buy the Right Lot
Your success as a used car dealer can depend entirely upon choosing the right location. Look for a commercial, highly visible street, but also as safe as you can find. Make sure it is large enough for you to be able to expand the number of vehicles you sell, and also that it is zoned properly for a dealership – you may have to pay permits, depending on your city. If you’re not going to perform your own repair work, you may also need to be near a service station that you can contract with.
4. Get Insured
Motor trade insurance is insurance that’s connected to the driver instead of the vehicle – so you’ll be able to drive all the cars on your lot without needing a separate policy for each. You can also get a policy that covers your cars being driven by the workers who repair them, and your customers as well. You can shop around to find the sort of coverage that is right for your dealership.
5. Research Cars
Find out what makes a used car valuable and research auctions in your area. No matter how knowledgeable you think you are about used cars, there is a market to keep up with, and you’ll want to stay on top of trends to make sure you’re getting the best deals as a buyer and seller.
Starting a used car lot can be a serious investment that takes a lot of time and money. The best thing you can do to improve your chances of success is to have a plan. If you know what your assets are and what you want to accomplish, you can be prepared for the responsibilities that come along with owning your own business.
Sally Smith writes for insurance blogs where you can find cheap quotes for traders.