Eight Steps To Getting A Used Car Dealership Up And Running


One type of the business that has proven difficult to get up and running successfully is a used car dealership. One would think, given the nature and money associated with buying and selling cars, that wouldn’t be the case. However, there are a lot of dealers that tend to go into this type of business unprepared. They haven’t thought of all the caveats they need to consider. In this article, we’re going to take a good look at what you need to get a used car dealership up and running, if that is something that you are considering.

The business plan

First thing’s first, you need to have your plan ready to go. You need to have done your market research and found a good location. You need some idea of what it’s going to take in terms of funding as well as how you’re going to break even. These financial projections are a good way to give you direction when you’re running the day-to-day operations. They’re also important in terms of getting the kind of funding you need to start the business in the first place. There are plenty of sample business plans you can find to base your own plan off of. Take your time and don’t rush to start the business until you’re satisfied with your plan.

The protections you need

As you undoubtedly know already, you’re dealing with large finances in this type of business. Particularly in the vehicles you’re trading and the premises of the business as well. For that reason, you need to protect your business. Particularly from the financial catastrophe that could come from losing them or suffering damage to them. One of the biggest reasons that businesses fail is inadequate financial protection. Even cheap motor trade insurance can be enough to cover you in the event that something happens to a car which turns it into a loss. Of course, you also need to make sure that you have all the licenses and qualifications to manage the dealership in the first place too.

Recognizing the real value of the car

Of course, to really be successful, you’re going to have to make sure you make a profit on the cars you’re selling. You need to be able to distinguish between the value you think a car has and the actual market value. This means looking far and wide to source vehicles at the prices you’ll be able to profit from. You need to devote plenty of time to buying cars, not just selling them. This means highlighting your services a place to trade in vehicles too. It could also means taking the time to visit auctions. If you don’t have the expertise to find real value when making car purchases, you may need to hire someone who can focus on this.

Make friends with a good mechanic

If you really want to be able to make a profit on the cars you’re selling, you will have to put a bit of investment into them as well. This means making sure they’re in the best condition they can be in before you put them back out on the market. This means you need to have a keen grasp on how much work on them is economically viable. After all, you need a return on that investment. One way you can lower the price of getting a car up to snuff is by making a partnership with a good mechanic. You need to make sure you find the best mechanic you can afford, however. You don’t want your business to be lagging behind because of another’s poor service.

Service is king

A lot of people are going to think that the salespeople are the star of the show when it comes to a dealership. There’s no denying that they are a vital part of the operation. However, what really matters is the reputation of the business as a whole. Used car dealerships do not start off with an advantage on that field. So you need to build that advantage to be successful. This means putting a priority on service and never losing focus of that. Not just in terms of how much your salesmen smile. Your salespeople might want to guide customers to the options that get them more in return. However, don’t skimp on the service just because they want to look at other options as well. You want everyone who comes in the door to have a good experience so they’re more likely to help you through word-of-mouth. Every customer is important! Even the ones that don’t buy.


You also need to build the awareness and brand of your business. This is best done through a wide marketing campaign. Social media can be a great way to keep people up-to-date on the latest models available as well as your promotions. It can also be a risky place to interact with the customer. For that reason, you also need to be prepared to deal with complaints online. It’s not all about your online presence, however. As a local business, you are in one of the industries that can most benefit from sending mail when a new promotion is on. Similarly, be prepared to invest in local radio advertising as well. There are plenty of sites you can partner with as part of a listing, too.

The importance of good salespeople

We’ve already mentioned how salespeople are a crucial part of your business. If you want the best deal for a sale you can get, you need to think beyond pricing strategy. You need salespeople who can get that value for you through negotiation. Not everyone has the charisma to do well at the job, so you need to have a talent for hiring the right people for your business. Then you need to be able to train them on using the tricks of the trade. Training a rookie car salesman is all about getting them to use questions and to get to know the customers and what they are looking for. Asking questions means they can help guide the customer to choices they might have not have initially expected to go for. In the end you want you salespeople to have the customer’s best interests in mind and help them make choices that are right for them.

The sales environment

It’s not just the people doing the sales that matter, either. The environment they’re doing those sales in is just as important. This is why you need to put as much effort into your premises as with everything else. First, you need to make sure that it looks professional at all times. This means putting money aside in the budget not just for cleaning, but for upkeep and repairs to any damage or wear and tear done inside or outside the premises. How you display the vehicles matters as well. For example, creating a bright show-room inside. Putting together a small collection of all the vehicles you would consider the very best in the dealership. Visual branding and visibility matters as well. So it’s a good idea to have a sign highlighting your business.

Hopefully, reading this article helps you prepare for some of the challenges that are going to be coming up ahead. Make no mistake, it is a challenging business. You need to get not only your sales process right. You need to make sure you’re planning with economic viability in mind at all times. Maintaining your investments and making sure you get a return back on them. Then you use the benefits of good marketing and quality customer service to maintain a good reputation. With these tips, it will still be a difficult business. However, it might also be a much more lucrative one, too.



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