How To Become A Used Car Dealer

You can learn how to become a used car dealer and make money in the process! The biggest challenge you will face when starting this business is trying to complete all the paperwork required by law. Take your time and follow all local, state and federal laws and you can be successful running a used car dealership. The amount of money that you make is determined by the skills you develop and the way that you treat the customers that buy your used cars.

  1. Decide if you can afford to become a used car dealer. Read as many books and publications as you can about how to become a used car dealer and practice what you learn. Call or visit used car dealerships and set up a phone interview or an interview in person with the owner to find out how he became a used car dealer. Apply for a position to work or volunteer at a used car dealership and learn exactly what the business entails and how the owner operates the business.
  2. Contact a local commercial real estate agent in your area to help you become a used car dealer. Let the agent know that you are trying to become a used car dealer and that you need to find a lot with a building to help you get started. Say that you need at least 90 days to take care of all the paperwork before you can lease or rent the property. The agent may want to charge you a fee for this. In addition, acquire all of the necessary paperwork to help you become a used car dealer; your real estate agent can help with this.
  3. Head to your city or county office and apply for a permit or a license to operate a used car dealership. Register your dealership as a sole proprietorship on the application form because this type of business is easier to start. Apply for your state’s department of revenue tax ID number and call (800) 429-4933 to apply for your federal tax ID number. You need tax ID numbers to pay taxes.
  4. Make sure that the building that the agent located will enable you to operate your business and become a used car dealer. Rent or lease the building and buy business insurance for your used car dealership in your city and state. Get ready to start your used car dealership.
  5. Formulate a business plan for your used car dealership. Arrange the marketing section to primarily focus on finding ways to attract used car buyers to your used car dealership. Write the management section of the plan to show exactly what you are going to do each day to operate the used car dealership successfully. Develop a financial plan to manage income and expenses and hire an accountant to make sure all taxes are being paid. Go to the Small Business Administration (SBA) website to get help with your business plan.
  6. Use every resource that you can think of to help you purchase used cars so that you can become a used car dealer. Hire a good mechanic to help you buy cars that will run efficiently. Look at what a vehicle is worth by reviewing the Kelley Blue Book. Consider buying cars from an auction at greatly reduced prices and put them on your lot to sell them. Buy a newspaper and look in the used car section and buy used cars from distressed owners at a lower price. Remember, always try to buy cars at the lowest price possible, and get your mechanic to help you make sure that the cars are worth the money you pay and that you can make a profit when you sell them. This is how you become a used car dealer.


National Automobile Dealers Association

U.S. Bureau of Labor Statistics

Small Business Administration

Kelley Blue Book

show comments

What Others Are Reading Right Now.