Starting up a car business is as challenging and viable as any other business.

Before venturing into the business there are some factors you should put into consideration. These include what cars to deal, the location of your business, insurance, licensing, boarding among others as discussed below.

New or used

The first step is deciding whether to sell new or used vehicles. This is crucial since it determines the initial capital on your business.

When starting a new car selling business, you will need a higher initial investment than used car dealership which translates to the need of having financial support from investors or a bank or a credit repair company to look and clean up your credit report.

With that in mind, it is important to note the potential earning from used cars will be much lower.

Cars of focus

Once you decide whether to sell new or used cars, the next thing will be choosing the cars of focus.

This involves expressing which brands to begin with especially if you need to acquire finance. More preferably the cars off focus should be Toyota, Honda or Nissan as they have a good resale price, a new car depreciates by 60 percent in the first five years.

In addition to this you will need to determine the cost of business equipment to be used, your employees’ salaries as well as set aside money for advertisement, in addition, you can consult credit repair companies to obtain your credit report. Since most of your buyers will be millennial customers using the social media platform will be a bonus.

Licensing, Bonding, and Insurance

Thirdly, you need to look into the issue of licensing bonding and insurance. Before venturing into the car selling business, you need to obtain a dealer’s license to permit your business as well as guaranteeing your institution meets the Consumer rights and safety laws.

As far as bonding is concerned, it is also necessary in this venture as it shields your activities against contract defaults as well as safeguarding transactions taking place between your dealership and contacts you will be doing business. In this business, a comprehensive insurance coverage is very much a requirement. The car insurance covers general liability, lot coverage, and detailed plans which include everything from inventory loss to property damage.

Learning the tradesman sale

Another key aspect is learning the tradesman sale.

The key to success will be your delivery. You need to ensure that you customers know what exactly they are getting which include the condition of the vehicle and the promises made during the selling process.

You should be able to handle a negotiation properly leaving the potential buyer with some breathing room.


The location of your business is another factor that needs to be considered.

Therefore, you need to consider the following. First, note if the site supports your business. Second is the size of the population. A large population often attracts more sales. Then there is location’s visibility to take into consideration.

As a car dealership owner, you need to ensure that your customers have options. Because of this, you will have to update the inventory regularly and prognosticate when you need to restock and what you will need to restock with.

Choosing a credit repair company is essential to help in removing negative items from your credit report which contribute to improving your Fair Isaac Corporation (FICO) score facilitating ease in obtaining the cars or insurance. You should also ensure that the credit repair company is of high reputation.

In conclusion, it is necessary to keep in mind that you will be looking to start a company with as little resources as possible to maximize profit.

It is, therefore, advisable to start a used car selling business to save on the cost of purchasing new vehicles but not compromising on the quality.

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