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How to Open a Car Dealership

How to Open a Car Dealership Photo

Opening a car dealership can be a good business move. Cars have grown to be necessities rather than just wants. According to the US Environmental Protection Agency, the number of cars in the United States have grown twice as fast than the population. That’s more than enough to prove that a big market is out there for a car dealership. If you want to get in on the trend, try following these few tips:

Get requirements

Different states have different requirements for opening a car dealership. Make sure to call the right office to inquire about the necessary things you need to comply so you can open your new business. You may need to file a lot of papers at this time. Part of this is securing a good location where you want to put up your car dealership.

Raise a capital

Business capital is as important as the business idea. You can raise this yourself through your own funds, getting private investors, or going to the banks to get a business loan. If you are going to get a loan, you’ll need to fill out and comply with a lot of requirements first. If you plan on getting private investors, you’ll need a good business plan first to convince them into investing.

Make a business plan and set up

You will need to find a very good location, decide on the type of car dealership – used or brand new cars only, full-blown dealership or a sub-dealership, and many different things. You’ll also have to project how much capital you’ll need and how much profit you may get. You can hire a professional to help you with this. A good business plan can make a big difference between success and failure.


Any business needs a boost from good advertising. You can have your car dealership advertised through various ways like radio ads, billboards, television ads, flyers, and through the web. The types of advertisements you use will depend on your budget.

Advertising can be costly if not done right but it can also be beneficial when it works. An innovative way to market your car dealership is through word-of-mouth marketing. It is not common yet in the world of car dealerships for now but that will soon change as time passes.

There are many things to consider when opening any business more so with a car dealership. Not only does a car dealership need a big capital, but also a car dealership commands a big responsibility. You will be storing high-priced vehicles inside your building. Your building must be safe and secure. Any damage to the vehicles will greatly affect its value and saleability.

Selling cars is also not an easy thing to do. No matter how your dealership is set up or how great your cars are, without good car salesmen, you’ll have a hard time making a profit. This business requires a high operating capital. Selling one vehicle per month won’t make the cut. You’ll have to sell several cars just to break even. Opening a car dealership is not something you can do without focus and determination.