According to the National Automobile Dealers Association, there are more than 16,000 car dealerships scattered throughout the country right now. They sell over 6 million vehicles each year and are responsible for generating almost $450 billion.
If you’d like to get in on the action, starting a car dealership isn’t all that difficult to do. As long as you take some time to learn how to start a car dealership, you should be able to get one off the ground in your city within just a year or so.
Whether you want to go about starting a car dealership that sells new cars or starting a used car dealership, you can get the job done. You just need to make sure you take the right approach to ensure that you’re able to set your car dealership business up for long-term success.
Here are seven tips for starting a car dealership from scratch.
1. Start by Seeing How Many Car Dealerships Are Already Operating in Your Area
Before you even think about starting a car dealership, it’s important for you to take a look around you to see how many car dealerships are already operating in your area. The last thing you want to do is open a car dealership in a very saturated market.
You should Google “car dealerships near me” and check out all of the different dealerships that pop up. You should count how many of them there are, see what kinds of cars they sell, and figure out the type of reputation that they have in your community.
By doing this, you should be able to gauge whether or not starting a car dealership is a good idea.
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2. Do the Necessary Research on the Consumers in Your Community
In addition to looking at how many car dealerships are operating in your area at this time, you should also do your homework on the car consumers in your city or town. You’re going to want to take a deep dive into the statistics to find out:
- How many cars people in your area are buying every year
- What kinds of cars people in your area are buying the most
- How long people in your area tend to keep their cars before buying new ones
The more data you can drum up, the better! You’ll put yourself into a much stronger position when starting a car dealership when you know the ins and outs of your local market.
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3. Look for the Ideal Location for a Car Dealership
If you were to start a car dealership today, where would you put it? The location of your car dealership is going to play a big part in the success that it does or doesn’t have.
You should scour your area to see where the ideal location for a car dealership would be. You should be able to picture yourself starting a car dealership in one particular location.
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4. Decide What Kinds of Cars You Want to Sell at Your Car Dealership
Are you going to sell nothing but new cars from one specific auto manufacturer at your car dealership? Or are you going to sell used cars from a bunch of different auto manufacturers at your car dealership?
You’re more than welcome to do either of these things. But you should narrow down your options right from the start.
You should see what kinds of cars the other dealerships in your area sell and try to find the types of cars that they’re not selling. This will help you find the right niche in your market.
5. Figure Out How to Obtain the Funding You’ll Need to Open a Car Dealership
As you can probably guess, it’s not going to be cheap to start a car dealership. The owners of car dealerships typically have to invest millions of dollars into them right from the very beginning.
If you have enough cash on hand to take care of making this investment on your own, awesome. But if you don’t, you’re going to have to figure out how to obtain the necessary funding elsewhere.
In some cases, that might mean bringing other investors on board. In others, it might mean taking out large business loans and coming up with a plan to pay them back.
Whatever you do, don’t overlook this aspect of things! You’re going to have to pay for everything from the cars that you’ll have on your lot to the security system that you’ll set up to keep your cars safe.
This article digs a little deeper into why it’s so important to set up a great security system for your cars regardless of what it might cost you to do it.
6. Surround Yourself With Smart Employees at Your Car Dealership
When you’re first starting a car dealership, you might be able to get away with running it on your own. But as it begins to grow, you’re going to need to hire employees who can help you run it.
You should look for smart employees who know just about everything there is to know about selling cars, fixing cars, and answering questions about cars. It’ll help you run a tighter ship at your car dealership.
7. Learn How to Market Your Car Dealership Effectively
From the moment that you first open your car dealership, marketing it is going to be of the utmost importance. You’ll need to spread the word about your new business and get people to walk through your front doors day in and day out.
You can market your car dealership by:
- Running ads in local newspapers and on local radio stations
- Setting up a fully functional website
- Connecting with people on social media
You can market your car dealership yourself or hire a marketing specialist to help you. Either way, it’s a job that’s going to have to get done for your dealership to enjoy any success.
Starting a Car Dealership: Are You Ready to Do It?
Starting a car dealership isn’t something you should do on a whim. You’re going to need to put a lot of time and effort into doing it.
Are you ready to get started? If so, get out there and use these tips to get your new business going. You should be able to have it up and running in no time at all as long as you put your mind to it.
Read through the other informative articles on our blog to get more advice on starting a new business.
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