Thinking of Starting a Car Dealership? Follow These Steps to Make It Happen!

Young couple shaking hands with sales agent after a successful car buying.

People are buying more vehicles than ever today which means that starting a car dealership might make sense. These steps can help you launch your operation!

Picking the right business for you can be a challenge. You’ve already gone through the process of narrowing your business choice down to starting a car dealership. Now you have to figure out the best practices for starting your dealership.

There are over 1 billion cars in the world and you can be the one to sell them to the people that want them in your area. When you know what you’re doing, it’s not that difficult to start a car dealership. 

Continue reading this article as we talk about how to open a car dealership.

The 411 on Starting a Car Dealership

Some of the things you need to do to run a successful car dealership might be obvious but the other things you need to do to make it work might not be so obvious. The following tips will help you get the obvious and not-so-obvious parts right.

Choose a State That Will Be a Good Business Climate

Not every state is going to be as good of a business climate for car sales as the next state. Where you choose to do business has a big part to play in the amount of profit that you’re going to make as well as the number of sales you’re going to do in a given year.

You should keep in mind that when you choose a state that has a good business climate for car sales, there is going to be a lot of competition. While competition isn’t necessarily a bad thing, you should keep in mind that you’re going to have to up your marketing game so you can get the sales.

Choose the Type of Dealership You Want to Own

Do you want to sell used cars or new cars? Do you want to sell Dodge or Mercedes? Do you want to open a new dealership or are you going to open a franchise?

These are all important decisions you’ll need to make before you can get started on the next steps toward beginning your car dealership.

Develop a Sound Business Plan

You need to have a sound business plan along with a plan on how you’re going to finance it. Your business plan is going to help you stay on track while you’re making business decisions.

Your dealership should have information about how you will run the dealership, your vision for it, business structure, the products you’ll offer, how you’ll market your business and any other important parts about your business.

The more in-depth you go with your business plan, the easier it will be for you in the future when you’re expanding your business or making changes. You’ll be able to look back on your vision statement so you remember why you started your business and the vision you had for it when you first began.

Meet All Licensing Requirements

Each state has different licensing requirements so make sure to check about the state you’re looking to do business in, even if you’ve checked in other states before. Some of the things you might see when you’re looking through licensing requirements are requirements for your showroom, passing a criminal check, getting an EIN from the IRS, passing a state-mandated dealer training and more.

While this might sound like a lot, this does create a barrier to entry which means you won’t have as much competition as you would if it were easier to start a car dealership.

Meet Any Other Legal Requirements

When you’re selling cars, there are other state and federal requirements you have to follow. You’ll have your state dealer’s license as well as FTC’s used car rule to remember. You will also likely have to get a surety bond and are meant to keep the consumers safe in case the dealership doesn’t live up to their end of the agreement.

Making sure you have all legalities taken care of is important. If you don’t, your business could be in jeopardy.

Putting the Finishing Touches on Your Dealership

Everything about your dealership is important because it speaks to your brand’s identity. If you have good coffee like the coffee at this link, people are going to think and feel differently than if your coffee was subpar.

Another major part of your dealership is the people that you hire. When you think about how you want people to feel when they come into your dealership, make sure you hire the right person to greet people. If the person at the front desk isn’t kind and courteous, people aren’t going to have a good feeling about your business.

Think of all of the things that make you glad to go into a business and make sure you implement them in your own business. Some of those things might be the cleanliness of the floors and the bathrooms or the free snacks when people are waiting for their paperwork to go through.

The more attention to detail and the better the service you provide to people, the more likely they are going to come to your dealership vs. going to one of your competitors.

Learn More About Business & Beyond

Now that you know more about starting a car dealership, why stop learning there? We have plenty of articles that will give you information on how to be successful in business and more.

Browse our site, find your favorite section, drop a bookmark and come back soon for more great reads.

Tom Brown
Tom Brown is an automotive market enthusiast living in the United States. He holds a diverse background in automotive marketing and enjoys utilizing that to produce insights into the inner workings of the industry.