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Used Auto Sales Business Plan

Start your own used auto sales business plan

Integrity Auto Sales

Executive summary executive summary is a brief introduction to your business plan. it describes your business, the problem that it solves, your target market, and financial highlights.">, auto sales & parts.

There is a need in Lane County for a large selection of quality used cars, and Integrity Auto Sales will sell these top-quality used vehicles at a competitive price. The owner and sales manager have over 30 years of combined experience in new and used auto sales. We will continue to develop our excellent working relationship with local dealers and auctions to bring the savings to the customer.

We will create a purchasing environment that caters to the customer’s needs. We are selling a professional service and an experience in car buying that will bring customers back again, as well as referring friends and family. We estimate an optimistic gross margin over the industry average. We will be successful because of the excellent team we have assembled and the drive and determination of the owners.

Almost everyone needs a car to get from point A to B. Many families have two or more cars. Due to the recent success of the new car market, there is a large inventory of used cars available for re-sale. New car sales have enjoyed the largest single month gain in October up 24%.

Competition

Used car dealers are notorious for unethical sales practices. Customers are inherently cautious and untrusting as a result. The more we can provide a high-quality sales experience, the more successful we will be. Our salesmen will provide a friendly and personal experience for the buyer. We will follow up and ensure customer satisfaction. We will rely on these customers for an excellent reference to other car buyers. This company will build an excellent working relationship with our suppliers and customers.

Integrity Auto Sales provides a unique car buying experience to the customers in the Willamette Valley. One that focuses on customer satisfaction first. We understand that vehicle purchasing is a necessary, but sometimes unpleasant experience. Our goal is to provide the customer with an enjoyable, honest service by satisfying individual customers practical transportation needs with a quality product.

We also believe it is important to have quality vehicles at a low cost, and will back each vehicle with a 30 day limited warranty. Our company will make a profit by generating sales. It will provide job satisfaction and fair compensation to its employees, and a fair return to its owners. Hard work and performance is rewarded through bonuses and commissions. Job satisfaction is very important for employees and owners, we will create a work environment that is enjoyable and profitable for all.

Expectations

• Growth will be moderate to good, cash flows steady with several months of loss in the beginning
• Marketing will remain below 10% of sales. 
• The company will invest residual profits (10%) into financial markets and approximately 50% into company expansion for the first year.

Financial Highlights by Year

Financing needed.

We need $130,000 funding to start. That includes a $100,000 loan. Jonathan will invest $20,000 and Don will invest $10,000. 

Opportunity

Problem & solution, problem worth solving, our solution, target market, market size & segments.

Almost everyone needs a car to get from point A to B. Many families have two or more cars. Due to the recent success of the new car market, there is a large inventory of used cars available for re-sale. New car sales have enjoyed the largest single month gain in October 2001, up 24%.

4.1 Market Segmentation

Our market segmentation will consist of four basic segments; students, retired, families, and singles.

Current Alternatives

Our closest, similar competitors are AA Auto Sales, Big Apple Car Sales, Frank’s Auto Place, Guaranty, R & L Motors, and Sierra Truck, all on Hwy 99 between Eugene and Junction City.

• The primary competitors will be those in and around Junction City. Guaranty is a large, well-established dealer, with approximately 75% of the local market share. Guaranty has a large operation with a well-trained sales staff. Our sales manager is a former Guaranty sales manager, who understands the competition’s operations very well.
• Frank’s Auto Place offers a limited selection, and appears to be unorganized. Frank’s does not offer any competitive marketing and primarily focuses on the $1-2,000 vehicle.

Our Advantages

Keys to success.

To succeed in this business we must:

• Put together a team of experienced professionals.
• Secure an excellent high-traffic location.
• Establish a network of suppliers, in order to buy and sell products that are of the highest reliability and quality, at a competitive price.
• Ensure customer satisfaction by encouraging the two most important values, honor and integrity.
• Create high morale by rewarding employee success with monetary compensation.

Marketing & Sales

Marketing plan.

Our marketing strategy will focus on four segments. Those segments are described in the following subtopics. We will implement a strategy that treats customers as a community. This means our marketing resources will be centered around advertising both sales promotions (events) and personal sales (customer service, friendly atmosphere).

• The marketing budget will not exceed $6,000 per year.
• 100% customer satisfaction, measured through repeat customers, referrals and surveys.
• To achieve a respectable profit margin within the first three-years.
• To achieve a healthy net profit by year two.

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The  retired  group will focus on practicality. Cost may be less important than quality and features. This group wants comfortable, nicely equipped vehicles at a reasonable price. They will want a vehicle that will last for years.

Families  will focus on safe, practical vehicles. Something that will last for years, can fetch groceries, carry the kids, and perform long trips. Many will be on a budget, and price may be a big factor. They will shop around and educate themselves on vehicles, shopping for a specific make or model.

The last group is the  singles . They are similar to the students in that they want flashly cool cars, but may be a working professional who can afford to pay more for a higher-quality vehicle.

Sales compensation is based on a percent of profits. We will invest adequate time and resources into training each member of the sales team and into good customer relations. Salesmen will be paid a portion of their salary based on commission. Good performance is rewarded with increased commission and bonuses. However integrity will not be sacrificed for sales. Customer satisfaction will continue to be a top priority. All potential sales will be attended to in a timely fashion and long-term salesperson-customer relationships will take precedence over sales closure.

Locations & Facilities

• The company office is located at 12345 HWY 99, Junction City, OR 97666.
• The office is approximately 1,000 square feet and has ample space for the first three years of growth.
• The 20,000 square foot lot and building is leased from the principal owner.

Integrity Auto Sales sells top-quality used vehicles at a competitive price. Integrity buys pre-inspected vehicles wholesale from well known local car dealers, and auto auctions. Integrity continually maintains a diverse stock of vehicles, providing the widest selection for individual needs.

Vehicles are purchased weekly, to add to the current stock on hand. Each vehicle is thoroughly inspected by an ASE mechanic with over 25 years of experience. Only vehicles that pass this critical 26 point inspection are sold on-site.

Integrity Auto Sales sells all types of used vehicles, from sports cars to RVs. We cater to each customer individually, to satisfy their own practical needs.  We buy only the best used vehicles at or below wholesale in order to bring the savings to the customers. Each vehicle is thoroughly inspected by an ASE mechanic with over 25 years of experience. We also offer an auto finding service to customers. If we do not have the vehicle they want in stock, we will find one for them.

Milestones & Metrics

Milestones table, key metrics.

Our key metrics are: 

• # of facebook posts and pageviews 
• # of tweets and retweets
• # of reps that meet and excel their quotas. 
• cogs of our most popular cars
• website page views and shares 
• Follow our customers figure out their favorite cars and features 

Ownership & Structure

Integrity Auto Sales is a privately held corporation. It will be registered as a Subchapter S, with ownership 60%-Jonathan Dinsmore, 40%-Don Mazzioti.

Management Team

Integrity will start with four initial employees. The owner will manage over all operations and the sales manager will manage all buying and selling of inventory. A records clerk and lot attendant will also be hired initially.

Once the gross margin and cash flow will support it, we will hire an additional salesman and lot attendants (tentatively four to six months).

Personnel Table

Financial plan investor-ready personnel plan .">, key assumptions.

We will accept credit cards and trade-ins of any value. Credit cards will have a negative affect on cash flow in that we may not be paid for several days. Trade-ins will also impact cash flow in that they are an asset and have no real value until sold. We will have to limit the number of credit transactions, and only take in quality trades at a wholesale price to facilitate turning a quick profit. The personnel burden is very low because benefits are not paid to part-timers. And the short-term interest rate is extraordinarily low because of current market rates.

We also assume conservative earnings from selling loans and extended warranties will be made.

The other assumption is that current market conditions will remain for the next two to three years. Low rates will have a positive impact on sales and lending for the short term.

Our cash forecast is extremely unrealistic at the far end of the forecast. We leave it like that knowing that we will revise over time. We call it a cushion, and reassurance, not an accurate forecast. 

Revenue by Month

Expenses by month, net profit (or loss) by year, use of funds.

Almost 90% of start-up costs will go to assets. Start-up costs will be financed through a combination of owner’s investment, short-term loans (VA business loan), and long-term borrowing. The start-up chart shows the distribution of financing.

Other miscellaneous expenses include:

• Legal fees for business establishment (ownership, and no sell agreement).
• Stationary, office supplies.
• Marketing/advertising fees.
• Initial consultation to establish records with an accountant.
• Rent for lot and office.
• Establish a Web page for advertising.
• Expensed equipment (two computers, two desk, Fax/copier, phone lines, and office furniture).
• One month initial start-up investment in vehicles.

Sources of Funds

We will be needing $130,000 to start. $100,000 will be a long term business loan. Jonathan will give $20,000 and Don will give $10,000. 

Projected Profit & Loss

Projected balance sheet, projected cash flow statement.

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How to Start a Used Car Dealership: A Definitive Guide

• 4 years ago

If your love for used cars ranks above enthusiast, it may be time to take things to the next level.

Ever thought about owning your own dealership? We’re going to tell you how! Our exclusive interview with Carlos Becerra of Imports & Classics helped reveal the details on starting a used car dealership.

As Carlos explains, starting a car dealership takes some investment in time and money. However, with the right location and a passion for the car business, you can be successful in the industry.

Follow this guide and you’ll be well on your way to becoming your region’s top car dealer.

1. Become an entrepreneur… Or at least get in the mindset!

Carlos had been an entrepreneur his entire life before he even got into the classic car business. He didn’t grow up with a lot and when he wanted something, his parents encouraged him to ask, “How are you going to get it?”

As Carlos said, “At some point, everybody needs to make a decision. And he made that decision at a very young age.”

While his friends were probably playing video games, Carlos was selling berries on the side of the road from fifth grade through high school. He was smart with his money and saved up enough to purchase his first car.

Watch the full interview with Carlos here :

If you’re entering into the dealership of cars, then you too will need to make some decisions about the course of your life. That means getting into the entrepreneurial mindset.

You alone will be responsible for your business and its success. It’s not a decision to be taken lightly, but remember, the rewards have no ceiling. And ultimately, you are in control your time.

To help with your mindset, here’s a list of essays from Paul Graham that are focused on entrepreneurship. He has helped fund over 800 startups over the course of his career. Ever heard of Reddit, Airbnb, Stripe, and Dropbox?

If you don’t want to build from the ground up, find active listings near you, and buy a dealership that’s already operational.

What does it take to start a used car dealership?

If you’re starting a used car business, you better like being around cars. But it’s not enough to just love cars, you have to know about how the car business works.

Carlos gained his knowledge of the industry by flipping cars. After selling his first car, he went to auctions to find cars that would sell for a profit and upgraded to classic cars. If you have the liquid capital to do this, it can be a great way to gain knowledge of the car business.

It helps if you have some base knowledge of how to value a car . Here are some resources to get you started:

• Kelley Blue Book
• Consumer Reports

Get a job as a car salesperson to gain experience.

But if you’re new to the industry, consider some training courses from an accredited institution like the National Automobile Dealers Association or find a job at a local car dealership to get some experience with how car dealerships work.

The U.S. Bureau of Labor Statistics ranks automotive salespeople under the retail sales workers classification, and within that class, automotive dealers have the highest median hourly wage of all retail sales workers.

You can work hard at this position and be one of the highest paid retail workers in the U.S. job market! Which is good because you’ll need that capital and skills like accounting, sales negotiation, social media and web management, finance, and more when you start your used car business.

These are all skills that fall into the entrepreneurial mindset.

2. Organize your startup costs.

Like any business, you’ll need some capital to get things started, and a used car dealership has a lot of startup costs associated. It’s important to get everything organized before you begin.

How much does it cost to start a used car dealership?

There are many aspects to think about when opening up a used car dealership, so let’s break it down step by step based on Carlos’ plan. However, we won’t sugarcoat it. The simple answer is that used car businesses cost anywhere from $50k to $500k (even for a small operation) based on your location and business plan.

Here’s a list of startup costs:

• Business Registration
• Auto Dealer Bond
• Auto Dealership License
• Other licenses (health, fire, software, etc.)
• Business Attorney
• Location (deposit)
• Marketing and Branding (website, social media, flyers, etc.)
• Office Supplies
• Inventory (largest cost, plus insurance)

Business registration, auto dealership licenses and dealer bonds

These three startup costs are the inescapable fees associated with any auto dealership and the most important to ensure you’re running a legal operation.

Complete your business registration at the federal and state levels . The fees vary from state to state based on the type of business you want to create (limited partnership, sole proprietorship, limited liability company, or corporation). It’s best to work with an accountant to find the best option.

Next, to get your auto dealership license, every state requires that you have an auto dealer bond. This is a type of surety bond that protects customers from fraud and the amount differs by state ($30k in Washington, $25k in Texas, $100k in Arizona).

Last, you’ll need an auto dealership license from the state in which you’ll be doing business. The costs vary by state, and in some states, like Washington , costs can run over $1,000 after completing the required training courses.

Additional and ongoing costs

In this guide, we’re not talking about full-on restoration work like Carlos does at his garage. However, any used car dealing business will need to account for maintenance or low-level restoration work associated with the inventory. It’s a cost that’s commonly underestimated, so don’t make that mistake.

Think of it this way, AAA averages the annual maintenance cost of owning a used car at $792 per year ($66 per month). While you won’t be using a car at a consumer level, you will need to maintain the vehicle until you sell it and factor that cost into your business plan.

If you can do the work yourself , you’ll save a lot of money in the long run.

Other ongoing costs associated with the car dealership business:

• Payroll (if hiring salespeople or office help)
• Advertising

3. Knowing Your Market and Choosing a Location

Once you have your initial costs figured into your business plan, it’s time to do the hard work that could make or break your business. You need to understand your market and factor that into your business plan before making any investment into the business.

Conduct market research and find your niche

• Income level
• Marital Status

You also need to factor in your own referrals from friends, relatives, and perhaps former colleagues if you’ve been in the auto business for a while.

These elements help to determine the clients you want to do business with when you open. The U.S. Small Business Administration has great resources to help businesses determine their market.

It’s the due diligence you would conduct for opening any type of business, and knowing your market will help you choose a niche. Here are some examples:

• Luxury Vehicles
• Multi-brand (make/model) Car Dealership
• Classic or Collector Cars
• Online-Only Dealership

Your niche will help you choose a location.

Location, Location, Location

It’s the first rule of real estate, and it’s one of the biggest costs you’ll figure into your business plan.

Based on your market, you want to be sure that your location can support your business. That means it is affordable and visible. Often, dealerships open near one another in direct competition because it gives customers the opportunity to quickly shop for the vehicle of their choice.

We posed the question to Carlos: So if we were to open up a dealership across the street, what would you do? His response was,

Do I need a physical location to sell cars?

Starting a used car dealership from home is one way to avoid a lot of startup and operational costs. It’s certainly possible and many used car dealers are based from home.

Carlos started this way with an online based classic car business where he stored the cars in his mother’s driveway. He said,

However, you need to check your state and local laws (city and county) on storing used cars.

Also, a serious online and social media presence is necessary to be successful without a physical location. If you’re not up to speed on current SEO and web marketing trends, you need to hire a highly capable webmaster and marketing team.

Otherwise, you may want to consider buying a business with an established online following.

4. Inventory

In our interview with Carlos, he explained that you need to be very careful about what you buy and that your target demographic would probably differ completely from his. It’s all based on location.

How do I know what to buy and sell?

Carlos explained about his region:

Some questions you can ask when choosing your inventory:

• Do we have weather conditions in my area that would warrant a specific style of car?
• Is there an industry in the area where workers require trucks or other larger vehicles?
• Are there a lot of families in my area where I could easily market SUVs or Minivans?

It’s up to you to determine what sells very well in your region and to your target market. Edmunds Industry Insights is a great resource for statistical information to help you figure it out.

Researching local car selling marketplaces online can also help you determine what’s selling on the market.

Where am I going to buy the inventory for my dealership?

It takes a lot of effort to find cars to resell on the retail market for a profit. Because of this, most dealers get their inventory from dealer-only auction companies.

The auctions are one of the major reasons (aside from selling multiple cars per year legally) that you’ll need your dealer license. Here’s a list of the top dealer-only auction companies in the U.S.:

• ACV Auctions

But don’t limit yourself to dealer-only auctions. There are several great auto auction sites out there where you can find great deals on used cars that can be sold for a profit.

• eBay Motors
• Auto Auction Mall
• A Better Bid (search normal wear)
• Purple Wave

5. Funding Your Car Dealership

We can talk about startup costs, location, and inventory all day, but to come up with the funds to get things rolling, you’ll need a solid business plan.

What’s in a Car Dealership Business Plan?

For any business to be successful, you need to have a solid business plan to start. It’s also essential if you plan to apply for a business loan to get your dealership off the ground. Make sure your plan includes the following items:

• Executive Summary of the Business
• Objectives and Mission Statement
• Keys to Success
• Company Summary
• Market Analysis
• Management Summary
• Financial Plan

And even if you don’t plan to apply for outside funding , a business plan is necessary to owning a car dealership. It provides the vision and structure your business needs to be successful. Without a plan, a business is destined to fail.

How can I start a car dealership with no money?

Learning how to open a car dealership is hard enough on its own but opening one with no money will be even more difficult. However, it’s not impossible.

Your business plan is the key tool you’ll use to pitch to potential investors and financial lenders. Just know that most lenders require a business to be established and in business for several years before they’ll lend money.

Other options

It is possible, with good credit, to get a credit card with a 0% introductory rate. In Step 4 of our article on how to open a gym , we explain how entrepreneur Jake Brog leveraged his credit to launch a successful gym business.

With that, you could fund a small inventory (1 – 2 vehicles) and pay off the credit card debt before accruing any interest charges. It’s a risk, but with a great business plan, the payoff could be rewarding and help jump-start your dealership.

However, most car dealerships start the way Carlos began his: with money from his own pocket.

6. Volume and Financial Goals

When figuring out how to start a car dealership, you must quickly establish the financial goals for the business.

Buying a car and selling it for a profit is great, but your dealership needs to do it at a high volume to cover the costs of the business and make money. As Carlos said,

Figuring out your volume is all contingent on your financial goals. If you’re a small, one person dealership, with little overhead, your volume could easily be only three to four cars per month to cover your expenses and make a decent profit.

However, as you grow your operation, your volume will need to increase to sustain your business. Look at Carlos’ goal:

Is owning a used car dealership profitable?

The quick answer is yes—if you have a good business plan and knowledge of the industry, car dealerships are a profitable venture. In fact, the Cox Automotive Market Insight Report recently confirmed that the gross profit margin of used cars is now nearly double that of new ones, which is great news for used car dealerships.

Auto industry leaders like Edmunds are putting out great press for independent used car lots, which is helping to drive up sales nationally.

How much does a used car dealership owner make?

How much you make is up to you!

It’s hard to pinpoint exactly how much used car dealers make. Comparably puts the average between $18,902 to $495,413, which is a tremendous gap.

Remember that in entrepreneurial ventures, you get out of the business what you put into the business. As Carlos said in the interview,

7. Customer Service

Here are some key tips you can use to present great customer service before and after the sale:

• Loyalty is king. If you create loyal customers, you’ll stay in business forever.
• A great attitude goes a long way with a potential customer.
• Be genuine. People don’t like to be sold to, but they like it when someone genuinely wants to solve their problems.
• Your sales floor and office reflects your customer service. Keep a clean environment!
• If you can give your customers an amazing experience from start to finish, they’ll recommend you to others.
• Just because the customer is off the lot, it doesn’t mean the service is over. Call to check and see how things are going.

Now go out and sell some cars!

Now that you know all of the basics on how to start a used car dealership, it’s time to get out there and start selling! It can be a tough industry to break into, but with determination and a good entrepreneurial mindset, you’ll be slinging used cars in no time. You might also find starting a rental company attractive if you like the idea of owning a dealership.

Can you think of any other aspects of opening a dealership or have valuable information to add?

As a former restaurant manager in Dallas, Cincinnati, and Los Angeles, Jake Pool has over a decade of experience kickstarting, operating, and marketing small businesses. His prowess for understanding a company’s needs from a customer’s perspective allowed him to transition into content creation. He’s written copy and content for hundreds of clients from companies all over the world.

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How to start your used car business by utilizing APIs

• March 9, 2024
• No Comments

If you’re considering going into the used car industry, you’re entering a lucrative yet competitive market. Understanding the ins and outs of starting your own used car business is crucial for success.

In this guide, we’ll walk you through the steps to start a used car dealership business, from understanding the industry to leveraging API technology to maximize efficiency and profitability.

Used Car Dealership Business

Operating a used car dealership business involves buying, selling, and sometimes trading used vehicles. Simply put, it’s a place where you can purchase or sell a used car. It’s a dynamic industry that requires a deep understanding of automotive market trends, customer preferences, and legal regulations.

Steps on starting a used car business

So, how can you get started? Here are the basic steps to follow to set up your dealership:

Think and act like an entrepreneur

Starting a car dealership comes with the understanding that you’re about to become an entrepreneur and need to prepare your mindset for that. Not only that, you need to make some serious changes to your lifestyle as well. Check out how other entrepreneurs act and think, you can also take entrepreneurial classes. Taking this step before any other gives you a sense of detail and responsibility.

During this process, you should focus on getting experience with selling cars, business license requirements, and surety bonds, and you’ll need to learn the difference between selling new cars and used cars – as a salesperson, working side-by-side with dealers, whatever role you can get, try to get one. It’s best to start on the right foot.

Arrange Capital for Startup Costs

Every small business for new and used car sales needs funds, and before starting up a used car business, you need to find a way to get some means of funding. Apart from the car inventory that you definitely need to build, you also need to cover startup costs for:

• Business registration
• Car dealer license
• Office supplies and furniture
• Workers; salespeople, accountants, etcetera
• Website and mobile applications with Vehicle APIs .
• Marketing, and more.

You may also encounter lots of expenses during startup, so you need to consider costs.

Choose market location

The next step to take in owning a car dealership is choosing the right location for your used car business. There are several factors you need to consider before choosing the right location to set up your dealership, the most important of which is the current market trend.

What kind of cars are more profitable to invest in the long run? What is the demand for those cars now? Where do you see demand in the coming years? What age group are interested in these cars? What about income levels? Ask yourself questions like these to figure out what vehicle brands or types of cars your dealership will be centered on.

When you figure out what your niche should be, you can now start searching for a suitable location to launch your business. Make sure to be very careful when making this step as it is a really important part of your business’ journey.

Create a solid business plan and set financial goals

Creating a comprehensive business plan is essential for success in the used car dealership industry. This foundational document serves as a roadmap, guiding entrepreneurs through all they need to start, grow their businesses, and meet their business needs. To begin, entrepreneurs must clearly outline their:

Company details , including their vision, mission, and values. This clarity helps set the tone for the business and aligns all stakeholders towards common objectives.

• T arget market area,  this is crucial for identifying potential customers and tailoring marketing strategies accordingly. Whether focusing on a specific geographic region or niche demographic, understanding the target market’s needs and preferences is paramount for success.

Clear financial goals and strategies for growth. Entrepreneurs must define measurable objectives, such as revenue targets, profit margins, and market share aspirations.

By establishing these benchmarks, businesses can track their progress and adjust strategies as needed to stay on course. Additionally, outlining strategies for growth enables entrepreneurs to identify expansion opportunities, whether through diversifying inventory, expanding into new markets, or enhancing customer service offerings.

You can consider yourself halfway through the process as soon as you complete your business plan! Next, you should think about how you can make a profit with the business.

READ ALSO: 5 Types of Vehicle Data API Every Dealership Needs

Making Profits in the Car Dealership Business

Now that you have everything scripted and figured out, the next step is to decide how to get cars to fill up your inventory and how to make profits. This involves sourcing vehicles, implementing sales strategies, getting a website/mobile applications, and optimizing operations for profitability and growth. Let’s take a look at these points in more detail:

Locate car auctions exclusive for dealers

Now, the used car dealership business model involves buying used vehicles at a cheaper price and selling them with some profit. For startups, the easiest way to get great deals is by visiting dealer-only car auctions around you. These cars are usually sold at cheap rates and discounts to licensed dealers and you can take advantage of this.

Sure, these cars may come as damaged, but that’s where the next step comes in.

Have an experienced mechanic

Next, you can partner up with an experienced mechanic with good knowledge in inspecting and fixing the cars on your used-car lot. Some auction vehicles may have severe damages, so it is recommended to place the highest importance on this step.

With these vehicles properly fixed and in road-worthy condition. You can now begin sales.

Provide Warranties on Your Vehicles

I know what you may be thinking. Including warranties as extra-cost add-on products means that these vehicles will be more expensive than planned and car shoppers may not like that. Wrong!

Contrary to popular belief, around 66% of American drivers purchase an extended car warranty. Offering warranty coverage also gives consumers some protection, in terms of repairs.

Create a website/mobile application and utilize APIs

Creating a professional website or mobile application for your auto dealership is essential and must provide accurate information about your business. However, ensuring accuracy in providing vehicle data is paramount. By utilizing APIs, you can access real-time and reliable information about each vehicle in your inventory.

What are APIs? They are like bridges between you and an infinite source of vehicle information. Vehicle Databases offers several vehicle APIs including:

• VIN decoding APIs
• Vehicle history APIs
• Market value API
• Vehicle specifications API
• Classic VIN decoding API
• License plate API
• Auction history API
• Sales history API
• Vehicle media API, and more

Imagine showing your customers everything they need to know about all vehicles in your inventory with the VIN and integrated APIs. This ensures transparency and builds customer trust, leading to increased sales and customer satisfaction.

Accuracy vehicle data also streamlines the buying process, reducing the likelihood of disputes or returns. Need more information on APIs and how you can get started? Get a free demo and 15 free credits now!

Place Adverts and Build Your Online Presence

At this point, you need to get the word out to get a successful business. You can start by using advertising channels to reach potential customers. Consider online platforms like Google Ads, Facebook Ads, and local classified websites. Additionally, explore traditional methods such as newspaper ads, radio spots, and flyers.

Leverage social media platforms (e.g., Instagram, Facebook, Twitter) to showcase your inventory, share success stories, and engage with your audience. Regularly post high-quality images and videos of the cars you have for sale.

Calculate a “Bottom Dollar” for Each Vehicle

Determine the lowest price at which you’re willing to sell cars in your inventory. Consider factors such as acquisition cost, refurbishment expenses, and desired profit margin. Be realistic about market conditions and adjust your pricing strategy accordingly.

Try to stay informed about market trends and competitor pricing. Analyze similar vehicles in your area to understand the prevailing rates. Remember that pricing too high can deter buyers, while pricing too low may impact profitability.

Prioritize Customer Service

Here are some tips:

Free Inspections and VIN Reports: Offer free vehicle inspections or provide Vehicle Identification Number (VIN) reports. These services build trust with potential buyers and demonstrate transparency.

Integrated Vehicle History APIs: Use APIs (Application Programming Interfaces) to access vehicle history data. Share relevant information with customers, such as accident history, maintenance records, and ownership details.

• Hire Assistants and Salespeople: Invest in a skilled sales team. Friendly, knowledgeable staff can guide customers through the buying process, answer questions, and address concerns. Excellent customer service leads to repeat business and positive referrals.

Keep the car lot and showroom neat and attractive

The last tip for the day is to keep your used car lot and showroom organized and visually appealing. Arrange vehicles in an orderly manner, ensuring they are clean and well-presented. Regularly wash and detail the cars to enhance their visual appeal.

If you can keep these in mind, you can be sure to have a good start and operate an independent car dealership successfully.

Statistics About Used Car Dealerships

• Total used-vehicle sales in December 2023 were estimated to be around 2.6 million units, up 2.1% from December 2022.
• Retail used sales accounted for approximately 1.4 million units.
• The average car dealership receives 166 qualified sales leads each month.
• Approximately 13.3% of sales prospects do not make it into the car dealership’s Customer Relationship Management (CRM) system.
• The average close rate for car dealerships is 12.5%.
• Car dealerships miss approximately 8.5% of calls from potential sales prospects.
• In 2023, franchised light-vehicle dealers in the United States sold 13.7 million light-duty vehicles, contributing to a total sales value of over $1.2 trillion.
• The U.S. used car dealer market had a size of $138.1 billion in 2021. Despite initial pandemic-related challenges, used car sales rebounded and exceeded pre-pandemic levels.
• The overall used-vehicle market likely finished 2023 near 35.9 million units, slightly below the previous year’s figure. Retail used sales likely closed out 2023 at 19.0 million units.
• Cox Automotive forecasts used-vehicle sales volume to reach 36.2 million units in 2024, with used retail sales estimated at 19.2 million units. The market is expected to regain some normalcy, although supply constraints may persist due to lower new-vehicle sales in previous years.

Frequently Asked Questions

Used car businesses can be highly profitable for dealers, with successful operations generating significant revenue. However, profitability depends on various factors such as market conditions, inventory management, pricing strategies, and customer service quality. You also need to be able to provide accurate vehicle information to consumers at all times. Visit Vehicle Databases to get access to accurate APIs for your business needs.

To succeed in the used car business, it’s essential to prioritize customer satisfaction, maintain transparency, and offer quality vehicles at competitive prices. Additionally, staying informed about market trends, investing in marketing efforts, and leveraging technology like APIs can contribute to success.

Yes, buying and selling used cars can be a profitable venture. By sourcing quality inventory, accurately pricing vehicles, and providing value-added services such as warranties and inspections, dealers can generate profits from each sale.

Owning a used car business has the potential to be profitable, but success depends on various factors including market demand, competition, location, and operational efficiency. By implementing effective strategies, offering excellent customer service, and staying adaptable to market changes, dealerships can achieve profitability and long-term success in the industry.

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500+ business plans and financial models

Car Dealership Business Plan PDF Example

• February 28, 2024
• Business Plan

Creating a comprehensive business plan is crucial for launching and running a successful car dealership. This plan serves as your roadmap, detailing your vision, operational strategies, and financial plan. It helps establish your car dealership’s identity, navigate the competitive market, and secure funding for growth.

This article not only breaks down the critical components of a car dealership business plan, but also provides an example of a business plan to help you craft your own.

Whether you’re an experienced entrepreneur or new to the retail industry, this guide, complete with a business plan example, lays the groundwork for turning your car dealership business concept into reality. Let’s dive in!

Our car dealership business plan is meticulously organized to encompass all key components necessary for a comprehensive strategic framework. It details our dealership’s operations, marketing strategies , market environment, competitors, leadership team, and financial outlook.

• Executive Summary : Offers an overview of your Car Dealership’s business concept, including the range of new and pre-owned vehicles, market analysis , management team, and financial strategy.
• Car Dealership & Location: Describes the dealership’s prime location, accessibility, and facility features, including the showroom and service area.
• Vehicles & Rates: Lists the types of vehicles offered, from economical compact cars to luxury SUVs, including pricing and financing options.
• Key Stats: Shares industry size , growth trends, and relevant statistics for the car dealership market.
• Key Trends: Highlights recent trends affecting the car dealership sector, such as the surge in Electric Vehicle (EV) sales and the shift towards Built-to-Order sales.
• Key Competitors : Analyzes main competitors in the area and how your dealership differentiates itself, focusing on vehicle selection, customer service, and additional services like maintenance and repairs.
• SWOT: Strengths, weaknesses, opportunities, and threats analysis tailored to the car dealership business.
• Marketing Plan : Strategies for promoting your dealership and attracting customers, including online presence, targeted promotional campaigns, and community engagement.
• Timeline : Key milestones and objectives from the initial setup through the first year of operation and beyond.
• Management: Information on who manages the Car Dealership, detailing their roles, experience in the automotive industry, and business management.
• Financial Plan: Projects the dealership’s 5-year financial performance, including revenue from vehicle sales, profit and loss statements, cash flow analysis, and balance sheet.

Car Dealership Business Plan

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Executive Summary

The Executive Summary introduces your car dealership’s business plan, providing a succinct overview of your dealership and its offerings. It should describe your market positioning, the range of vehicles you offer—including new and pre-owned cars, financing options, and after-sales services—its location, size, and an overview of daily operations.

This section should also delve into how your car dealership will establish itself within the local market, including the number of direct competitors in the area, identifying who they are, along with your dealership’s unique selling points that set it apart from these competitors.

Moreover, you should include information about the management and founding team, detailing their roles and contributions to the dealership’s success.

Additionally, a summary of your financial projections, including revenue and profits over the next five years, should be included here to provide a clear picture of your dealership’s financial strategy.

Make sure to cover here _ Business Overview _ Market Overview _ Management Team _ Financial Plan

Dive deeper into Executive Summary

Business Overview

For a Car Dealership, the Business Overview section can be effectively divided into 2 main categories:

Car Dealership & Location

Describe the dealership’s physical setup, focusing on its design, layout, and overall ambiance that welcomes customers. Mention features such as the showroom’s size, the display arrangement of vehicles, and any customer-friendly areas like waiting lounges or consultation spaces. Next, highlight the dealership’s location, emphasizing its accessibility and the convenience it offers to customers, such as proximity to major roads or highways and the ease of parking. Also, explain why this location is strategically chosen to attract your target customer base, considering factors like local traffic flow, visibility, and the presence of nearby complementary businesses.

Vehicles & Rates

Detail the variety of vehicles offered, including new and pre-owned models, different brands, and vehicle types (such as sedans, SUVs, trucks, and electric vehicles). Emphasize any unique or highly sought-after models that could attract customers. Outline your pricing strategy for the vehicles, ensuring it reflects the value offered and aligns with the market segment you’re targeting. Discuss any financing options, leasing deals, or special promotions that make purchasing more accessible and appealing to customers.

Make sure to cover here _ Car Dealership & Location _ Vehicles & Rates

Market Overview

Industry size & growth.

In the Market Overview of your car dealership business plan, begin by analyzing the size of the automotive industry and its growth potential. This examination is essential for grasping the market’s breadth and pinpointing opportunities for expansion.

Key Market Trends

Next, delve into current market trends , such as the growing consumer interest in electric and hybrid vehicles, advanced safety features, and digital sales platforms. Highlight the demand for vehicles that cater to evolving lifestyle needs and environmental concerns, along with the shift towards online purchasing and personalized buying experiences.

Key Competitors

Finally, assess the competitive landscape, which spans from luxury car dealerships to budget-friendly lots, as well as online car sales platforms. Focus on what sets your dealership apart, whether it’s through superior customer service, a diverse inventory, or expertise in specific types of vehicles. This section will clarify the demand for automotive sales services, the competitive setting, and how your dealership is poised to succeed in this dynamic industry.

Make sure to cover here _ Industry size & growth _ Key competitors _ Key market trends

Dive deeper into Key competitors

Begin with a SWOT analysis for the car dealership , identifying Strengths (such as a diverse vehicle inventory and strong customer service), Weaknesses (like limited market presence or competitive pressure), Opportunities (for instance, the growing demand for electric vehicles and online sales channels ), and Threats (such as economic fluctuations affecting consumer spending on big-ticket items).

Marketing Plan

Then, craft a marketing plan that details strategies to attract and retain customers through targeted advertising campaigns, promotional financing offers, a dynamic online presence, and community engagement events.

Lastly, establish a comprehensive timeline that marks key milestones for the dealership’s launch, marketing initiatives, customer base development, and growth goals, ensuring the business progresses with clarity and focus.

Make sure to cover here _ SWOT _ Marketing Plan _ Timeline

Dive deeper into SWOT

Dive deeper into Marketing Plan

The Management section focuses on the car dealership business’s management and their direct roles in daily operations and strategic direction. This part is crucial for understanding who is responsible for making key decisions and driving the car dealership toward its financial and operational goals.

For your car dealership business plan, list the core team members, their specific responsibilities, and how their expertise supports the business.

Financial Plan

The Financial Plan section is a comprehensive analysis of your financial projections for revenue, expenses, and profitability. It lays out your car dealership’s approach to securing funding, managing cash flow, and achieving breakeven.

This section typically includes detailed forecasts for the first 5 years of operation, highlighting expected revenue, operating costs , and capital expenditures.

For your car dealership business plan, provide a snapshot of your financial statement (profit and loss, balance sheet, cash flow statement), as well as your key assumptions (e.g. number of customers and prices, expenses, etc.).

Make sure to cover here _ Profit and Loss _ Cash Flow Statement _ Balance Sheet _ Use of Funds

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Business Plan Template for Used Car Dealership

• Great for beginners
• Ready-to-use, fully customizable Subcategory
• Get started in seconds

Starting a used car dealership can be an exciting venture, but it's important to have a solid plan in place to ensure success. That's where ClickUp's Business Plan Template for Used Car Dealership comes in handy!

This comprehensive template is specifically designed for entrepreneurs looking to establish a used car dealership. It covers all the essential aspects of your business plan, including financial goals, market analysis, sales strategies, operational procedures, and growth projections. With this template, you can easily outline your vision, attract potential investors, secure funding, and make informed business decisions.

Don't miss out on this invaluable tool for setting up your used car dealership. Get started with ClickUp's Business Plan Template today and drive your business forward!

Business Plan Template for Used Car Dealership Benefits

A Business Plan Template for a Used Car Dealership can provide numerous benefits to entrepreneurs looking to establish their business, including:

• Streamlining the process of creating a comprehensive business plan by providing a pre-designed template
• Outlining financial goals, market analysis, and growth projections to attract potential investors and secure funding
• Guiding business decisions by providing a roadmap for operational procedures and sales strategies
• Ensuring a thorough understanding of the market and competition through market analysis
• Evaluating the financial viability of the business and identifying potential risks and challenges
• Increasing the chances of success by following a proven framework for business planning.

Main Elements of Used Car Dealership Business Plan Template

When starting a used car dealership, having a comprehensive business plan is crucial. ClickUp’s Business Plan Template for Used Car Dealership includes:

• Custom Statuses: Track the progress of your business plan with statuses like Complete, In Progress, Needs Revision, and To Do, ensuring that every step is accounted for.
• Custom Fields: Use custom fields like Reference, Approved, and Section to add specific details, track approvals, and organize your business plan sections efficiently.
• Custom Views: Access different views such as Topics, Status, Timeline, Business Plan, and Getting Started Guide to gain different perspectives and effectively manage and present your business plan.
• Collaboration and Task Management: Collaborate with team members, assign tasks, set due dates, and track progress to ensure that your business plan is executed effectively.
• Document Management: Store and access important documents, financial data, market analysis, and growth projections within ClickUp's Docs feature, keeping everything organized in one place.

How To Use Business Plan Template for Used Car Dealership

If you're starting a used car dealership and need help creating a business plan, follow these steps to make the process easier using the Business Plan Template in ClickUp:

1. Executive Summary

Start by writing an executive summary that provides an overview of your used car dealership. Include information about your target market, competitive advantage, and financial projections. This section should be concise but compelling to grab the attention of potential investors or lenders.

Use Docs in ClickUp to draft your executive summary and make it visually appealing with custom formatting options.

2. Market Analysis

Conduct a thorough market analysis to understand the demand for used cars in your area. Research your target market, including demographics, purchasing preferences, and competitors. Identify opportunities and challenges that may impact your dealership's success.

Use the Table view in ClickUp to organize your market research data and create custom fields to track important metrics such as customer demographics and competitor analysis.

3. Business Structure and Operations

Outline the legal structure of your used car dealership, whether it's a sole proprietorship, partnership, or corporation. Describe your dealership's location, facilities, inventory management, and sales process. This section should provide a clear understanding of how your dealership operates.

Create tasks in ClickUp to outline your business structure and operations, assigning each task to the appropriate team member responsible for implementation.

4. Marketing and Sales Strategy

Develop a comprehensive marketing and sales strategy to attract customers to your dealership. Identify the most effective channels to reach your target market, such as online advertising, social media, or traditional marketing methods. Determine your pricing strategy, promotions, and customer retention tactics.

Use the Board view in ClickUp to visually map out your marketing and sales strategy, with each column representing a different marketing channel or tactic.

5. Financial Projections

Estimate your dealership's financial projections for the next three to five years. Include projected revenue, expenses, and cash flow. Consider factors such as vehicle acquisition costs, operating expenses, financing options, and potential profit margins.

Use Dashboards in ClickUp to create financial charts and graphs to visualize your projections. Track key financial metrics such as gross profit, net income, and return on investment.

6. Implementation Plan

Create a detailed implementation plan that outlines the steps you'll take to launch and grow your used car dealership. Include timelines, milestones, and responsibilities for each task. Break down your plan into manageable phases to ensure a smooth and successful execution.

Use the Gantt chart in ClickUp to create a visual timeline of your implementation plan. Assign tasks and set dependencies to track progress and ensure tasks are completed in the right order.

By following these steps and using the Business Plan Template in ClickUp, you'll have a comprehensive and well-structured plan to guide your used car dealership towards success.

Get Started with ClickUp’s Business Plan Template for Used Car Dealership

Entrepreneurs looking to establish a used car dealership can utilize the ClickUp Business Plan Template to streamline the process of creating a comprehensive business plan.

First, hit “Add Template” to sign up for ClickUp and add the template to your Workspace. Make sure you designate which Space or location in your Workspace you’d like this template applied.

Next, invite relevant members or guests to your Workspace to start collaborating.

Now you can take advantage of the full potential of this template to create a solid business plan:

• Use the Topics View to organize different sections of your business plan, such as financial goals, market analysis, sales strategies, and operational procedures
• The Status View will help you track the progress of each section, with statuses like Complete, In Progress, Needs Revision, and To Do
• The Timeline View allows you to set deadlines and visualize the timeline for each section of your business plan
• Utilize the Business Plan View to have a comprehensive overview of your entire plan, including all sections and their statuses
• The Getting Started Guide View provides a step-by-step guide to help you navigate through the template and create your business plan
• Utilize custom fields like Reference, Approved, and Section to add additional information and categorize different aspects of your business plan
• Update statuses, custom fields, and progress as you work through each section to keep stakeholders informed and ensure a well-structured and effective business plan.
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Used Car Dealership Business Plan Template [Updated 2024]

Used Car Dealership Business Plan Template

If you want to start a used car dealership or expand your current used car dealership, you need a business plan.

The following Used Car Dealership business plan template gives you the key elements to include in a winning Used Car Dealership business plan.

You can download our Used Car Dealership Business Plan Template (including a full, customizable financial model) to your computer here.

Used Car Dealership Business Plan Sample

I. executive summary, business overview.

[Company Name], located at [insert location here] is a used car dealership that sells, and services used vehicles to customers in the surrounding community. Our dealership will offer vehicles at a range of price points , for customers across the spectrum of creditworthiness.

Products and Services

[Company Name] will maintain an inventory of used vehicles, and operate a service department for trade-ins.

In addition, [Company name] will also offer financing and insurance options for customers with all credit scores. Sub-prime customers will find financing options at [Company name] that they will not find at other area dealerships.

Customer Focus

[Company Name] will primarily serve the residents within a 30 mile radius of our location. The demographics of these customers are as follows:

• 27,827 residents
• Average income of $45,700
• 38.9% with higher education
• 29.6% in Mgt./Professional occupations
• Median age: 35 years

This bodes well for [Company Name], as the prime demographic for used car dealerships are consumers with subprime credit ratings. Individuals of all ages will be sure to patronize [Company Name] for their extensive vehicle and financing options.

Management Team

[Company Name]is led by [Founder’s Name] who has been in sales for 20 years. While [Founder] has never run a dealership himself, he has worked in the car dealership industry since age 30. As such [Founder] has an in-depth knowledge of the dealerships industry, including the operations side (e.g., running day-to-day operations) and the business management side (e.g., staffing, marketing, etc.).

Success Factors

[Company Name] is uniquely qualified to succeed due to the following reasons:

• The Company will fill a specific market niche in the growing community we are entering. In addition, we have surveyed the local population and received extremely positive feedback saying that they explicitly want to frequent our business when it is launched.
• Our location is in a high-volume area with easy access from multiple residential and commercial district zones.
• The management team has a track record of success in the car dealership industry.
• Used car dealerships are a proven business and have succeeded in communities throughout the United States.
• Local competitors leave a large gap in the market—there are car dealers offering new cars and maintenance services, and a dealership that exclusively sells used vehicles, but nothing that cater to subprime customers.

Financial Highlights

[Company Name] is currently seeking $500,000 to launch. Specifically, these funds will be used as follows:

• Lot design/build: $100,000
• Inventory: $300,000
• Working capital: $100,000 to pay for Marketing, salaries, and lease costs until [Company Name] reaches break-even

Topline projections over the next five years are as follows:

II. Company Overview

Who is [company name].

[Company Name], located at [insert location here] is a a used car dealership that sells, and services used vehicles to customers in the surrounding community. Our dealership will offer vehicles at a range of price points, for customers across the spectrum of creditworthiness.

[Company Name] was founded by [Founder’s Name]. While [Founder’s Name] has been in the auto sales business for some time, it was in [month, year] that he decided to launch [Company Name]. Specifically, during this time, [Founder] took a trip to Fort Lauderdale, FL. During his trip, [Founder’s Name] visited a used car dealership that enjoyed tremendous success. After discussing the business at length with the owner of the dealership, [Founder’s Name] clearly understood that a similar business would enjoy significant success in his hometown.

Specifically, the customer demographics and competitive situations in the Fort Lauderdale location and in his hometown were so similar that he knew it would work. After surveying the local population, [Founder’s name] went ahead and founded [company name].

[Company Name]’s History

Upon returning from Fort Lauderdale, surveying the local customer base, and finding a potential lot location, [Founder’s Name] incorporated [Company Name] as an S-Corporation on [date of incorporation].

The business is currently being run out of [Founder’s Name] private offices, but once the build-out on [Company Name]’s commercial location is finalized, all operations will be run from there.

Since incorporation, the Company has achieved the following milestones:

• Found commercial space and signed Letter of Intent to purchase it
• Developed the company’s name, logo and website located at [website]
• Hired an architect to design the showroom
• Determined equipment and inventory requirements
• Begun recruiting key employees with previous auto sales experience

[Company Name]’s Products & Services

Below are [Company Name]’s products and services:

• Used vehicles
• Parts and repair services
• Finance and insurance

Sales professionals will be available to determine the customer’s needs, budget, and preferences, and recommend options.

[Company Name] will also offer financing and insurance options for customers with a range of credit scores.

[Company Name] will feature a range of used vehicles. It will continue to update its inventory in order to provide fresh options to its customers.

Furthermore, the waiting area will feature a relaxing, welcoming atmosphere, and a coffee bar will be available for waiting customers.

Showroom Design

[Company Name] will develop a 2,000 square foot facility whose key elements will include the following:

• Office area
• Reception Desk
• A waiting area

[Company Name] plans to be open 6 days a week, from 7AM to 9PM. As demand dictates, we may extend or reduce our hours.

III. Industry Analysis

[Company Name] competes against other new and used car dealerships, as well as online-only car dealers and private consumer sales.

According to a report by National Independent Automobile Dealers Association, the used car dealership industry is a fragmented one, with nonemploying dealerships estimated to represent 81.4% of total establishments. The market is estimated to grow to over $150.6 billion in five years. Since there are no truly dominant competitors, barriers to entry are not as high as many other industries, and a start-up can expect to have success in this growing market, [Company Name] is well-positioned for success. There is plenty of room in the industry particularly for conveniently located dealerships that cater to specific demographic trends and demands. In this industry, size does not necessarily mean an advantage, which bodes well for [Company Name].

Market Trends

The market in which [Company Name] will compete is experiencing a number of different trends.

Market-level trends:

• Flat growth. This market is expected to remain consistent, with slow growth of 0.6% annually.
• Success drivers. Customer satisfaction is what ultimately makes one dealership triumph while another fails. The experience a dealership’s customer has will ultimately determine whether or not they return and whether or not they refer others to the dealer.

Firm-level trends:

• Inventory and Price. Most used car dealerships have inventories dominated by vehicles that are at least six years old and have more than 60,000 miles. The variety of vehicles in stock is an important factor in a consumer’s decision to buy, as are financing options.
• Customer service. Happy customers generally tell three friends about their positive experience, while unhappy customers tell five times as many people.

Customer-level trends:

• Availability. Because of the limited used car inventory and slowed vehicle production, consumers are less set on whether they want a used or new vehicle. Instead, they are more likely to make a purchase decision based on available stock and prices.
• Purchasing preferences. Customers are increasingly shopping online, including shopping for vehicles. While not all customers complete an automobile purchase online, many do use the internet to research and compare before making the final purchase decision.

IV. Customer Analysis

Demographic profile of target market.

[Company Name] will serve the residents of [company location] and the immediately surrounding areas as well as those who work in [company location].

The area we serve is populated mostly by lower middle class Millennials; as a result, they are more likely to shop for high quality used vehicles. Further, many are looking to transition to hybrid or electric vehicles, and used EVs are a more affordable option.

The precise demographics of the town in which our retail location resides is as follows:

Customer Segmentation

• Subprime and deep subprime customers: Subprime customers, or customers that have a VantageScore between 501 and 600, are expected to account for 21.7% of industry revenue. In contrast, deep subprime customers possess a score of less than 500 and are expected to account for 3.4% of revenue. [Company name]’s inventory will include a variety of financing options to meet the needs of this demographic.
• Prime and near prime customers: Prime and near prime customers are expected to represent 41.4% and 21.9% of industry revenue, respectively. Prime credit ratings correspond to a VantageScore between 661 and 780, while near prime customers’ credit ratings correspond to a VantageScore between 601 and 660. Customers with intermediate credit scores may choose to purchase vehicles at a used car dealer to protect their credit scores for more important purchases.
• Super prime customers: Super prime customers have credit scores of 781 or higher. With such a high credit rating, these customers qualify for the best interest rates. Super prime customers may choose to purchase vehicles from a used car dealer, whether financed or cash, to protect their favorable credit.

V.Competitive Analysis

Direct & indirect competitors.

The following dealerships are located within a 20 mile radius of [Company Name], thus providing either direct or indirect competition for customers:

Premiere Auto

Incorporated in 1997, Premiere Auto is a privately held preowned dealership. Premiere Auto has consistently been ranked in the Top 20 independent preowned dealerships in the United States and has sold over 50,000 vehicles since it opened. Premiere Auto sources most of its vehicles from private individuals. Most of these vehicles have Carfax available, and come with a 2 year/100,000-mile warranty. Premiere Auto operates a service and parts center and offers financing. Premiere Auto currently has 152 vehicles available on its website; priced from $4,999 to $58,999.

We expect that Premiere Auto will continue to thrive. But since is located in the next city, we expect more and more customers will frequent [Company Name] based on proximity and competitive prices we offer.

Randy’s Auto Sales

Established in 1993, Randy’s Auto Sales, Inc is a privately held preowned dealership. Randy’s Auto Sales has a wide range of vehicle makes and models and offers financing. The dealership offers a range of Warranty coverages provided by GWC Warranty and operates two lots. Randy’s Auto Sales has 71 vehicles available on the two lots; priced from $3,995 to $15,995.

[Company Name] has several advantages over Randy’s Auto Sales, in that offers a larger inventory, and has more financing options.

Boardwalk Auto Sales

Established in 2010, Boardwalk Auto Sales, Inc. is a privately held single location used car dealership. Boardwalk Auto Sales primarily offers In-House Lease Financing on its used vehicles. Boardwalk Auto Sales includes a warranty on every vehicle offered and can arrange traditional financing. Further, the dealership does not preform Credit Check and can offer flexible terms and payment options. Boardwalk Auto Sales operates an Inspection Station & full service facility able to handle anything from routine tire swaps, brake work & oil changes to engine swaps and transmission repairs. Boardwalk Auto Sales has 56 vehicles for sale online; priced from $8,990 to $12,990.

Boardwalk Auto Sales offers some financing options which are unique to the area, and thus we expect it will continue to draw a large clientele. However, because many of its services are geared to subprime clientele, we expect to draw prime buyers who seek better financing terms.

Competitive Advantage

[Company Name] enjoys several advantages over its competitors. These advantages include:

• Location: [Company Name]’s location is near the center of town, giving us access to commuters going to and leaving the train station, local office workers, and passersby shopping in the city.
• Strong inventory: The inventory offered by [Company Name] is large, and [Company Name] offers these vehicles at affordable prices.
• Management: Our management team has years of business and marketing experience that allows us to market to and serve customers in a much more sophisticated manner than our competitors.
• Relationships: Having lived in the community for 25 years, [Founder’s Name] knows all of the local leaders, newspapers and other influencers. As such, it will be relatively easy for [Company Name] to build brand awareness and an initial customer base.

VI.Marketing Plan

[Company name] seeks to position itself as a respectable competitor in the used car industry. Customers can expect to receive personal attention and choose from a variety of used cars offered at reasonable prices.

The [Company Name] Brand

The [Company Name] brand will focus on the Company’s unique value proposition:

• Convenient location
• Highly trained specialists
• Significant personal attention
• Moderate price point
• Comfortable, customer-focused environment

Promotions Strategy

[Company Name] expects its target market to be individuals working and/or living within a 10-mile radius of its location. [The Company’s] marketing strategy to reach these individuals includes:

Local Publications

[Company name] will announce its opening several weeks in advance through publicity pieces in multiple local newspapers and publications. Regular advertisements will run to maintain exposure to relevant markets. Community newspapers, school publications, youth sports programs, and similar channels will be a major promotion effort.

Major Publications

We will make careful use of advertising in selected larger publications. [Publication or newspaper name] has a circulation of xyz and we can expect to reach a wider geographic region of customers on a limited basis. Advertisements with major publications will be used selectively, based on cost effectiveness. These ads will include discount coupons so that response to the ads can be tracked.

Community Events/Organizations

[Company name] will promote itself by distributing marketing materials and participating in local community events, such as school fairs, local festivals, or homeowner associations.

Commute Advertising

We will drive attention toward [Company name] by leasing a billboard alongside [route or highway]. Advertising on heavily traveled commute routes is an opportunity to alert large numbers of working individuals with disposable income of our opening.

Customer Loyalty Programs

[Company name] will create a winning customer loyalty program to keep its best clients coming back again and again. In addition, we will send periodic, regular emails and text messages to customers. These communications will (a) ensure that customers are satisfied with their purchases, and (b) remind customers after a certain period of time has passed that they might want to shop for another car. Long-term customers will have the opportunity to participate in the loyalty program, and referrals will be rewarded as well.

Direct Mail

[Company Name] will blanket neighborhoods surrounding its locations with direct mail pieces. These pieces will provide general information on [Company Name], offer discounts and/or provide other inducements for people to visit the center.

Ongoing Customer Communications

[Company Name] will maintain a website and publish a monthly email newsletter to tell customers about new events, inventories and more.

Pre-Opening Events

Before opening the dealership, [Company Name] will organize pre-opening events designed for prospective customers, local merchants and press contacts. These events will create buzz and awareness for [Company Name] in the area.

Pricing Strategy

[Company Name]’s pricing will be competitive so customers feel they receive great value when shopping for a new car. The customer can expect to receive personalized attention and honest dealing when shopping for a used car.

VII.Operations Plan

Functional roles.

[Company name] will carry out its day-to-day operations on a walk-in basis.

In order to execute on [Company Name]’s business model, the Company needs to perform several functions. The majority of employees will have a primary function as auto sales professionals. [Company name] anticipates using the services of X employees, divided into the following roles.

Service Functions

• Financing and insurance processing
• Auto maintenance and service

Administrative Functions

• General & administrative functions including legal, marketing, bookkeeping, etc.
• Sourcing and storing products and inventory
• Hiring and training staff
• Appointment making
• Customer service/cash register functions

Miscellaneous

• Maintenance personnel

The following are a series of steps that lead to our vision of long-term success. [Company Name] expects to achieve the following milestones in the following [xyz] months:

VIII. Management Team

Management team members.

[Company Name]is led by [Founder’s Name] who has been in auto sales for 20 years.

While [Founder] has never run a dealership himself, he has worked in the auto industry since age 30. He began his career after he graduated from [University Name] in [19xx].

[Other person’s name] will serve as the customer service manager. [He/she] has extensive experience in the auto industry.

[Founder] will serve as the office manager. In order to launch our dealership, we need to hire the following personnel:

• Sales staff (3 to start)
• Finance and insurance processors (2 to start)
• Service personnel (2 to start)
• Porter (1 to start)
• Appraiser (1 to start)
• Assistants (1 to start)
• Receptionist (1 to start)

As dictated by demand and operational maturity, [Founder] will consider hiring the following personnel:

• Sales Manager [Number]
• Assistant Office Manager

IX. Financial Plan

Revenue and cost drivers.

[Company Name]’s revenues will come primarily from the sale of used vehicles and secondarily from the sales of parts/accessories and auto services.

The major cost drivers for the company’s operation will consist of:

• Inventory and parts
• Salaries and commissions

Moreover, ongoing marketing expenditures and cost of goods sold expenses are also notable cost drivers for [Company Name].

Capital Requirements and Use of Funds

[Company Name] is seeking $500,000 to launch. Specifically, these funds will be used as follows:

Key Assumptions & Forecasts

5 Year Annual Income Statement

5 Year Annual Balance Sheet

5 Year Annual Cash Flow Statement

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Car Dealership Business Plan Template

Written by Dave Lavinsky

Car Dealership Business Plan

You’ve come to the right place to create your Car Dealership business plan.

We have helped over 5,000 entrepreneurs and business owners create business plans and many have used them to start or grow their Car Dealerships.

Below is a template to help you create each section of your Car Dealership business plan.

Executive Summary

Business overview.

Wilson Toyota, located in Albuquerque, New Mexico, is a brand-new Toyota dealership that sells, leases, and services new and used Toyota vehicles. Our dealership will feature all the models that Toyota makes, from budget models to hybrids. In addition to our large inventory, we also offer in-house financing and service and repairs for all Toyota owners. With our competitive prices and world-class customer service, we plan to be the #1 Toyota dealer in the Albuquerque area in the next five years.

Wilson Toyota is led by Dylan Wilson who has extensive sales experience, including selling used cars for a previous employer. His experience and knowledge make him the perfect candidate to run a Toyota franchise.

Product Offering

Wilson Toyota will maintain an inventory of new and used Toyota vehicles. We will sell all Toyota models, including hybrid and electric vehicles. Some of the models we plan to sell include:

Wilson Toyota will also have a service center to help Toyota owners with routine maintenance, repairs, recalls, and part replacements. Additionally, Wilson Toyota will offer financing and insurance options for customers with all credit scores. Customers will find financing options at Wilson Toyota that they will not find at other area dealerships.

Customer Focus

Wilson Toyota will primarily serve the residents in the Albuquerque area. The city is home to thousands of families, professionals, and businesses in need of vehicles. We will offer budget vehicles to those who only need a basic model as well as luxury vehicles to those who have the disposable income to purchase something high-end.

Management Team

Wilson Toyota is led by Dylan Wilson who has been in sales for 20 years. Dylan Wilson has sold products in numerous industries, with his most recent experience being at a competitor dealership. Dylan Wilson is a car aficionado. He knows everything about the most popular models and how to find the perfect vehicle for every customer. His experience and knowledge make him the perfect candidate to run a Toyota franchise.

While Dylan Wilson has never run a dealership himself, he has worked in the industry for years. As such Dylan Wilson has an in-depth knowledge of the dealerships industry, including the operations side (e.g., running day-to-day operations) and the business management side (e.g., staffing, marketing, etc.).

Success Factors

Wilson Toyota will be able to achieve success by offering the following competitive advantages:

• Location: Wilson Toyota’s location is near the center of town, giving us access to thousands of residents, local office workers, and passersby shopping in the city.
• Great service at an affordable price: The complete array of auto services offered by Wilson Toyota is comprehensive, and Wilson Toyota will offer these services at a much more affordable price.
• Management: Our management team has years of business and marketing experience that allows us to market to and serve customers in a much more sophisticated manner than our competitors.
• Relationships: Having lived in the community for 25 years, Dylan Wilson knows all of the local leaders, newspapers and other influencers. As such, it will be relatively easy for Wilson Toyota to build brand awareness and an initial customer base.

Financial Highlights

Wilson Toyota is currently seeking $10 million to launch. Specifically, these funds will be used as follows:

• Lot design/build: $100,000
• Franchise fee: $400,000
• Inventory: $9 million
• Office equipment, supplies, and materials: $50,000
• Three months of overhead expenses (payroll, rent, utilities): $250,000
• Marketing costs: $100,000
• Working capital: $100,000

Company Overview

Who is wilson toyota, wilson toyota’s history.

Dylan Wilson incorporated Wilson Toyota as an S-Corporation in February 2023. The business is currently being run out of Dylan’s private office, but once the build-out on Wilson Toyota’s commercial location is finalized, all operations will be run from there.

Since incorporation, the company has achieved the following milestones:

• Found commercial space and signed Letter of Intent to purchase it
• Developed the company’s name, logo, and website
• Hired an architect to design the showroom
• Determined equipment and inventory requirements
• Begun recruiting key employees

Wilson Toyota’s Services

Industry analysis.

Wilson Toyota competes against other new and used car dealerships, as well as online-only auto dealers and private consumer sales. The major trend in auto sales is that more people are purchasing vehicles online rather than through a salesperson. To meet this challenge, Wilson Toyota will offer flexible online purchasing through our website.

Even though the industry is changing, it is still growing and remaining profitable. According to Mordor Intelligence, the industry is expected to grow at a CAGR of 4% over the next five years. Even with the increasing demand for public transportation and cleaner forms of transportation, vehicles are still an essential purchase for most Americans.

According to a report by the National Automobile Dealers Association, the car dealership industry is a fragmented one, as the majority of operators are single-location businesses and employ fewer than 20 people. The market is estimated to grow to over $1 trillion in five years. Since there are no truly dominant competitors, barriers to entry are not as high as in many other industries, and a start-up can expect to have success in this growing market, Wilson Toyota is well-positioned for success. There is plenty of room in the industry particularly for conveniently located dealerships that cater to specific demographic trends and demands. In this industry, size does not necessarily mean an advantage, which bodes well for Wilson Toyota.

Customer Analysis

Demographic profile of target market.

Wilson Toyota will serve the residents of Albuquerque, New Mexico and the immediately surrounding areas as well as those who work in the area.

The area we serve is populated mostly by middle-class Millennials; as a result, they have the means to pay for higher-quality vehicles. Further, many are looking to transition to hybrid or electric vehicles, and middle-class earners are the primary demographic for these types of vehicles.

Customer Segmentation

Wilson Toyota will primarily target the following customer profiles:

• Professionals

Competitive Analysis

Direct and indirect competitors.

Wilson Toyota will face competition from other companies with similar business profiles. A description of each competitor company is below.

Gibson Toyota

Gibson Toyota’s goal is to give its customers the best possible experience online and at its physical store. The professional and fun-loving sales team is committed to its customers’ complete satisfaction. Gibson Toyota prides itself on building relationships with its customers throughout all phases of the automotive journey whether it’s sales, service, or parts. Gibson Toyota provides auto sales and services for both new Toyotas and used cars.

While we expect that Gibson Toyota will continue to thrive. But since it is located in the next city, we expect more and more customers will frequent Wilson Toyota based on proximity and competitive prices we offer.

Johnson Auto

Johnson Auto is an independent used car dealership specializing in certified pre-owned vehicles. The team believes that the car-buying process should be as hassle-free as possible. The team takes pride in serving its customers to the fullest. The service center is one of the best in the area, and the team strives to get its customers back on the road as soon as possible. Johnson Auto maintains a convenient online parts inventory, and if a customer can’t find what they want there, the team will help them find what they are looking for. At Johnson Auto, the team is willing to answer each and every question a customer might have during the car buying process.

Wilson Toyota has several advantages over Johnson Auto, in that it specializes in selling and servicing one make of vehicle. Wilson Toyota will provide these specialized services at an affordable price point.

Foster’s Chrysler, Jeep, Dodge, Ram

Foster’s Chrysler, Jeep, Dodge, and Ram offers both new and used inventory, as well as providing service for these makes. The dealership also retails auto parts and accessories. This location also participates in Toyota Rent a Car, in which new Toyotas are rented by the day. Camrys rent for $48.50 per day and Corollas rent for $37.80 per day.

Foster’s Chrysler, Jeep, Dodge, Ram offers some services which are unique to the area, and thus we expect it will continue to draw a large clientele. However, because many of its services are geared toward a rental clientele, we expect to draw buyers who seek the same level of support.

Competitive Advantage

Wilson Toyota will be able to offer the following advantages over its competition:

• Relationships: Having lived in the community for 25 years, Dylan Wilson knows all of the local leaders, newspapers, and other influencers. As such, it will be relatively easy for Wilson Toyota to build brand awareness and an initial customer base.

Marketing Plan

Brand & value proposition.

Wilson Toyota will offer a unique value proposition to its clientele:

• Convenient location
• Large inventory of new and used vehicles
• Highly trained specialists
• Significant personal attention
• Moderate price point
• Comfortable, customer-focused environment

Promotions Strategy

The promotions strategy for Wilson Toyota is as follows:

Commute Advertising

We will drive attention toward Wilson Toyota by leasing a billboard alongside multiple highways. Advertising on heavily traveled commute routes is an opportunity to alert large numbers of working individuals with disposable income of our opening.

Website & SEO Marketing

The company will utilize the website and SEO to attract new customers. The website will be easy to navigate and provide all the information and pictures needed to show our dealership and the vehicles we sell. The SEO strategy will also be managed to ensure that anyone searching for new Toyota vehicles will see our company listed at the top of the Bing or Google search engines.

Social Media Marketing

Social media is one of the most cost-effective and practical marketing methods for improving brand visibility. The company will use social media to develop engaging content, such as educational content about vehicles and customer reviews that will increase audience awareness and loyalty. Engaging with prospective clients and business partners on social media platforms like Facebook, Instagram, Twitter, and LinkedIn will also help understand changing customer needs.

Advertisement

Advertisements in print publications like newspapers, magazines, etc., are an excellent way for businesses to connect with their audience. The company will advertise its brand in popular magazines and news dailies. Obtaining relevant placements in industry magazines and journals will also help in increasing brand visibility.

Wilson Toyota’s pricing will be competitive so customers feel they receive great value when shopping for a new car. The customer can expect to receive quality services and personalized attention when patronizing the dealership.

Operations Plan

The following will be the operations plan for Wilson Toyota.

Operation Functions:

• Dylan Wilson will be the Owner of the company. He will oversee all staff and manage the general operations of the company. He will also partake in customer service and sales until he has employed a full staff of sales professionals. Dylan has spent the past year recruiting the following staff:
• Janie Wilson will serve as the dealership’s Administrative Assistant. She will assist Dylan with all the operational, executive, and administrative aspects of the business. She will also manage the phones until Dylan hires a receptionist.
• Joe Smith will be the Services Manager. He will oversee all the operations of the services department.
• Maria Kenway will be the Sales Manager. She will oversee all the sales staff and help out with customer service, managing sales, and the appraisal process for used vehicles.
• Dylan will hire a full staff of service technicians and sales professionals to help with the service, sales, and customer services functions.

Milestones:

Wilson Toyota will have the following milestones completed in the next six months.

• 3/202X Finalize lease agreement
• 4/202X Design and build out Wilson Toyota
• 5/202X Hire and train initial staff
• 6/202X Kickoff of promotional campaign
• 7/202X Launch Wilson Toyota
• 8/202X Reach break-even

Financial Plan

Key revenue & costs.

Wilson Toyota’s revenues will come primarily from the sale of vehicles and secondarily from the sales of parts/accessories and auto services.

Labor expenses are a major cost driver for dealerships with service departments. Service technicians are salaried; therefore, attractive compensation packages are necessary to maintain qualified staff. Furthermore, large commissions help the dealership keep the best salespeople on staff. Other major cost drivers for the company include the lease, franchise fees, inventory and parts, and marketing expenses.

Funding Requirements and Use of Funds

Key assumptions.

The following outlines the key assumptions required in order to achieve the revenue and cost numbers in the financials and in order to pay off the startup business loan.

• Average annual franchise fees: $100,000
• Annual lease costs: $100,000

Financial Projections

Income statement, balance sheet, cash flow statement, car dealership business plan faqs, what is a car dealership business plan.

A car dealership business plan is a plan to start and/or grow your car dealership business. Among other things, it outlines your business concept, identifies your target customers, presents your marketing plan and details your financial projections.

You can easily complete your Car Dealership business plan using our Car Dealership Business Plan Template here .

What are the Main Types of Car Dealership Businesses?

There are a number of different kinds of car dealership businesses , some examples include: New Car Dealers, Used Car Dealership, and Online Car Dealership.

How Do You Get Funding for Your Car Dealership Business Plan?

Car Dealership businesses are often funded through small business loans. Personal savings, credit card financing and angel investors are also popular forms of funding.

This is true for a used car dealership business plan as well.

What are the Steps To Start a Car Dealership Business?

Starting a car dealership business can be an exciting endeavor. Having a clear roadmap of the steps to start a business will help you stay focused on your goals and get started faster.

1. Develop A Car Dealership Business Plan - The first step in starting a business is to create a detailed car dealership business plan that outlines all aspects of the venture. This should include potential market size and target customers, the services or products you will offer, pricing strategies and a detailed financial forecast.  

2. Choose Your Legal Structure - It's important to select an appropriate legal entity for your car dealership business. This could be a limited liability company (LLC), corporation, partnership, or sole proprietorship. Each type has its own benefits and drawbacks so it’s important to do research and choose wisely so that your car dealership business is in compliance with local laws.

3. Register Your Car Dealership Business - Once you have chosen a legal structure, the next step is to register your car dealership business with the government or state where you’re operating from. This includes obtaining licenses and permits as required by federal, state, and local laws. 

4. Identify Financing Options - It’s likely that you’ll need some capital to start your car dealership business, so take some time to identify what financing options are available such as bank loans, investor funding, grants, or crowdfunding platforms. 

5. Choose a Location - Whether you plan on operating out of a physical location or not, you should always have an idea of where you’ll be based should it become necessary in the future as well as what kind of space would be suitable for your operations. 

6. Hire Employees - There are several ways to find qualified employees including job boards like LinkedIn or Indeed as well as hiring agencies if needed – depending on what type of employees you need it might also be more effective to reach out directly through networking events. 

7. Acquire Necessary Car Dealership Equipment & Supplies - In order to start your car dealership business, you'll need to purchase all of the necessary equipment and supplies to run a successful operation. 

8. Market & Promote Your Business - Once you have all the necessary pieces in place, it’s time to start promoting and marketing your car dealership business. This includes creating a website, utilizing social media platforms like Facebook or Twitter, and having an effective Search Engine Optimization (SEO) strategy. You should also consider traditional marketing techniques such as radio or print advertising. 

Learn more about how to start a successful car dealership business:

• How to Start a Car Dealership Business

Where Can I Get a Car Dealership Business Plan PDF?

You can download our free car dealership business plan template PDF here . This is a sample car dealership business plan template you can use in PDF format.

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Car Wash Business Plan Template Franchise Business Plan Template Car Detailing Business Plan Template

Used Car Dealership Business Plan [Sample Template]

By: Author Tony Martins Ajaero

Home » Business ideas » Automotive Industry » Car Dealership

Are you about starting a used car dealership business online? If YES, here is a complete sample used car dealership business plan template & FREE feasibility report for starting a used car dealership business .

Used car dealership business as the name implies is all about selling used cars to willing buyers. Aside from the fact that the owners of used car dealership shops are known for selling used cars, they also go out of their way to source for people who want to sell their cars.

They buy used cars at favorable prices and then resell at a good price that guarantees profits for them. In a nutshell, they are in the business of buying and selling used cars.

If you are sure this type of business is what you want to do after you must have conducted your feasibility studies and market research, then the next step to follow is to write a good business plan; a detailed blue print of how you intend raising your seed capital, setting up the business, managing the flow of the business, sorting out tax and marketing your services etc.

The truth is that it is one thing to have a fantastic idea cum business plan but entirely another thing for the business plan to translate to money, which is why it is important to assemble a team of dedicated workers if you want to be successful with your used car dealership business .

Note that you can hardly run this type of business without the right network of other used car dealers. Below is a sample used car dealership business plan template that will help you successfully write yours without much stress;

A Sample Used Car Dealership Business Plan Template

1. Industry Overview

Players in the used car dealership industry sell used cars and they may fall into any of the following niche areas; brick and mortar used cars dealership shop, online used cars dealership shop, used luxury cars dealership business and multi – brand and multi – maker used car dealers.

Recent statistics have it that the total annual revenue for used car dealership in the united states of America is US0 billion with an annual growth of 2.4 percent.

With massive annual sales of nearly US$370 billion, one can confidently say that the used vehicle dealership industry represents almost half of the United States’ auto retail market and it is of course the largest retail segment of the U.S. economy.

For instance, in 2005, approximately 44 million used cars were sold in the United States, which is more than double that of the nearly 17 million new cars sold. The average price of used cars in the United States is $8,786. The industry has 127,940 registered car dealership businesses that employ a total of 237,788 people.

In the United States used car dealership market, the top four major players account for less than 20.0 percent of industry revenue in 2015, with the biggest used car dealer, CarMax dealership, generating about 12.6 percent of revenue. Recent findings also indicate that the industry concentration has increased over the last five years prior to 2015.

The automotive industry with reference to used car dealership is indeed flourishing because more and more consumers are becoming aware of the need to cut unnecessary spending as it relates to purchasing cars, insurance policies and also the need to sell used cars as fast as possible.

Some of the factors that encourage aspiring entrepreneurs to venture into opening a used car dealership shop is the fact that the amount needed to start the business especially when you choose to start a small shop is not on the high side compared to other small – scale businesses.

That makes it easier for entrepreneurs who are interested in the business to come into the industry at any time; the entry barriers are quite affordable and any serious-minded entrepreneur can comfortably raise the startup capital without collecting loans from the bank especially if they can convince owners of used cars who are willing to sell their cars to drop the cars with them while they source for buyers.

Lastly, a used car dealership business might not be entirely easy to start, but one thing is certain, it is a straightforward business that can generate huge and steady profits if well positioned and properly managed.

People often think that starting this type of business does not require any professional skills; in as much as it is true, you would still need a good knowledge of automobiles, good business and bargaining skills and of course customer services skills if indeed you want to build a profitable business.

2. Executive Summary

Jason Hyacinth® Used Car Dealership, Inc. is a registered used car dealership shop that will be located in one of the busiest streets in Spruce, Chestnut and Walnut Streets – Philadelphia.

We have been able to lease a facility that is big enough (a 5 thousand square foot facility) to fit into the design of the kind of standard used car dealership shop that we intend launching and the facility is located in a corner piece along a major road close to the city center.

Jason Hyacinth® Used Car Dealership, Inc. sell and buy used cars from different manufacturers in the United States and abroad. We are set to service a wide range of clientele in and around Philadelphia.

We are aware that there are several large and small online and offline car dealership shops all around Spruce – Philadelphia, which is why we spent time and resources to conduct a thorough feasibility studies and market survey so as to be well positioned to favorably compete with all our competitors. We have an online service option for our customers, and our garage is well secured.

Jason Hyacinth® Used Car Dealership, Inc. will ensure that all our customers are given first class treatment whenever they visit our garage. We have a CRM software that will enable us manage a one on one relationship with our customers no matter how large they may be.

Jason Hyacinth® Used Car Dealership, Inc. will at all times demonstrate her commitment to sustainability, both individually and as a firm, by actively participating in our communities and integrating sustainable business practices wherever possible.

We will ensure that we hold ourselves accountable to the highest standards by meeting our customers’ needs precisely and completely whenever they patronize our used cars.

Jason Hyacinth® Used Car Dealership, Inc. is a family business that is owned by Jason Hyacinth and his immediate family members. Jason Hyacinth has a Diploma in Automotive Technology, over 5 years’ experience in the retailing industry, working for some of the leading brands in the United States.

Although the business is launching out with just one outlet in Spruce, Chestnut and Walnut Streets – Philadelphia, but there is a plan to open other outlets all around major cities in the United States.

3. Our Products and Services

Jason Hyacinth® Used Car Dealership, Inc. is in the used car dealership industry to service a wide range of clients and of course to make profit, which is why we will ensure we go all the way to make available a wide range of used cars from top manufacturing brands in the United States and other countries of the world.

We will ensure that we do all that is permitted by the law of the United States to achieve our aim and objectives of starting the business.

4. Our Mission and Vision Statement

• Our vision is to run a car dealership garage that deals in used cars from all the brands in the United States of America.
• Our mission is to establish a world – class used car dealership garage business that will make available a wide range of used cars from top manufacturing brands at affordable prices to the residence of Philadelphia and other key cities in the United States of America and Canada where we intend opening of chains of used cars dealership garages.

Our Business Structure

Our intention of starting a used car dealership business is to build a standard used car dealership garage in Philadelphia. Although our business might not be as big as CarMax dealership, and AutoNation Inc.et al, but will ensure that we put the right structures in place that will support the kind of growth that we have in mind while setting up the business.

We will ensure that we hire people that are qualified, honest, customer centric and are ready to work to help us build a prosperous business that will benefit all the stakeholders. As a matter of fact, profit-sharing arrangement will be made available to all our senior management staff and it will be based on their performance for a period of ten years or more.

In view of that, we have decided to hire qualified and competent hands to occupy the following positions;

• Chief Executive Officer (Owner)
• Garage Manager
• Human Resources and Admin Manager

Sales and Marketing Manager

Information Technologist

• Accountants/Cashiers
• Sales Agents/Customer Services Executive

5. Job Roles and Responsibilities

Chief Executive Officer – CEO:

• Increases management’s effectiveness by recruiting, selecting, orienting, training, coaching, counseling, and disciplining managers; communicating values, strategies, and objectives; assigning accountabilities; planning, monitoring, and appraising job results; developing incentives; developing a climate for offering information and opinions; providing educational opportunities.
• Responsible for fixing prices and signing business deals
• Responsible for providing direction for the business
• Creates, communicates, and implements the organization’s vision, mission, and overall direction – i.e. leading the development and implementation of the overall organization’s strategy.
• Responsible for signing checks and documents on behalf of the company
• Evaluates the success of the organization

Admin and HR Manager

• Responsible for overseeing the smooth running of HR and administrative tasks for the organization
• Maintains office supplies by checking stocks; placing and expediting orders; evaluating new products.
• Ensures operation of equipment by completing preventive maintenance requirements; calling for repairs.
• Enhances department and organization reputation by accepting ownership for accomplishing new and different requests; exploring opportunities to add value to job accomplishments.
• Defining job positions for recruitment and managing interviewing process
• Carrying out staff induction for new team members
• Responsible for training, evaluation and assessment of employees
• Responsible for arranging travel, meetings and appointments
• Oversee the smooth running of the daily office cum business activities.

Garage Manager:

• Responsible for managing the daily activities in the used car garage
• Ensures that proper records of cars are kept and the garage does not run out of cars
• Ensures that the garage facility is in tip top shape and cars are properly arranged and easy to locate
• Interfaces with third – party suppliers (vendors)
• Controls distribution and supply chain inventory
• Supervise the workforce in the used car garage sales floor
• Manages external research and coordinate all the internal sources of information to retain the organizations’ best customers and attract new ones
• Models demographic information and analyze the volumes of transactional data generated by customer purchases
• Identifies, prioritizes, and reaches out to new partners, and business opportunities et al
• Identifies development opportunities; follows up on development leads and contacts; participates in the structuring and financing of projects; assures the completion of development projects.
• Responsible for supervising implementation, advocate for the customer’s needs, and communicate with clients
• Develops, executes and evaluates new plans for expanding sales
• Documents all customer contact and information
• Represents the company in strategic meetings
• Helps to increase sales and growth for the company
• Manages the organization website
• Handles ecommerce aspect of the business
• Responsible for installing and maintenance of computer software and hardware for the organization
• Manages logistics and supply chain software, Web servers, e-commerce software and POS (point of sale) systems
• Manages the organization’s CCTV
• Handles any other technological and IT related duties

Accountant/Cashier:

• Responsible for preparing financial reports, budgets, and financial statements for the organization
• Provides managements with financial analyses, development budgets, and accounting reports
• Responsible for financial forecasting and risks analysis
• Performs cash management, general ledger accounting, and financial reporting
• Responsible for developing and managing financial systems and policies
• Responsible for administering payrolls
• Ensuring compliance with taxation legislation
• Handles all financial transactions for the organization
• Serves as internal auditor for the organization

Client Service Executive

• Ensures that all contacts with clients (e-mail, walk-In center, SMS or phone) provides the client with a personalized customer service experience of the highest level
• Through interaction with customers on the phone, uses every opportunity to build client’s interest in the company’s products and services
• Manages administrative duties assigned by the human resources and admin manager in an effective and timely manner
• Consistently stays abreast of any new information on the organizations’ products, promotional campaigns etc. to ensure accurate and helpful information is supplied to customers when they make enquiries
• Provides information about warranties, manufacturing specifications, care and maintenance of merchandise and delivery options
• Responsible for cleaning and washing all the cars in the garage at all times
• Ensures that toiletries and supplies don’t run out of stock
• Cleans both the interior and exterior of the garage facility
• Handles any other duty as assigned by the garage manager

6. SWOT Analysis

Our intention of opening just one outlet of our used car dealership in Spruce, Chestnut and Walnut Streets – Philadelphia is to test run the business for a period of 2 to 5 years to know if we will invest more money, expand the business and then open other outlets in other cities in the United States.

We are quite aware that there are several used car dealership garages all over Philadelphia and even in the same location where we intend locating ours, which is why we are following the due process of establishing a business. We know that if a proper SWOT analysis is conducted for our business, we will be able to position our business to maximize our strength, leverage on the opportunities that will be available to us, mitigate our risks and be welled equipped to confront our threats.

Jason Hyacinth® Used Car Dealership, Inc. employed the services of an expert HR and Business Analyst with bias in car dealership business to help us conduct a thorough SWOT analysis and to help us create a Business model that will help us achieve our business goals and objectives. This is a summary of the SWOT analysis that was conducted for Jason Hyacinth® Used Car Dealership, Inc.;

Our location, business model (we will operate both a physical garage and online store), varieties of payment options, wide range of used cars from different manufacturing brands and models and our excellent customer service culture will definitely count as a strong strength for Jason Hyacinth® Used Car Dealership, Inc. So also, our team of highly qualify staff is also a plus for us.

A major weakness that may count against us is the fact that we are a new used car dealership garage in Philadelphia and we don’t have the financial capacity to compete with multi – million dollars used car garages when it comes to retailing at a rock bottom prices.

• Opportunities:

The fact that we are going to be operating our used car garage in a corner piece property along a major road close to one of the largest residential estates in Spruce, Chestnut and Walnut Streets – Philadelphia provides us with unlimited opportunities to sell our used cars to a large number of individuals and corporate organizations.

We have been able to conduct thorough feasibility studies and market survey and we know what our potential clients will be looking for when they visit our used car garage.

Just like any other business, one of the major threats that we are likely going to face is economic downturn. It is a fact that economic downturn affects purchasing/spending power. Another threat that may likely confront us is the arrival of a new used car dealership outlet in the same location where ours is located and even online. So also, unfavorable government policies may also pose a threat to businesses such as ours.

7. MARKET ANALYSIS

• Market Trends

Experts projected that in 2017, the used car dealership shops industry is expected to profit from growing global economic conditions. Per capita income levels have scaled across the globe and the growing middle class in emerging economies have looked to purchase their own cars. As the demand for used cars increase, used car dealership garages will make more sales. A decline in demand for new automobiles has stimulated an increase in the sale of used cars.

One notable trend in the used car dealership industry is that most used car dealers are leveraging on online store to sell their cars to a larger market. As a matter of fact, it is easier to sell and export used cars from the United States and Canada to countries in Africa.

Lastly, in recent time, the used car dealership garage landscape has seen tremendous changes in the last 20 years; it has grown from the smaller outlets to a more organized and far reaching venture. The introduction of franchise and online car dealership garage makes it easier for a used car dealership garage to reach out to a larger market far beyond the areas where his physical store is located.

8. Our Target Market

Those who patronize used cars cut across all genders who are above 18 years and with the financial means; hence the target market for used car dealership garage business is all encompassing. Your target market can’t be restricted to just a group of people, but all those who desire to own a car.

In view of that, we have positioned our used car dealership garage to service the residents of Spruce, Chestnut and Walnut Streets – Philadelphia and every other location where our franchise cum outlets will be located all over key cities in the United States of America and Canada. We have conducted our market research and feasibility studies and we have ideas of what our target market would be expecting from us.

We are in business to retail a wide range of used cars to the following groups of people;

• Middle Class Families
• Low Earners

Our Competitive Advantage

A close study of the used car dealership garage industry reveals that the market has become much more intensely competitive over the last decade. As a matter of fact, you have to be highly creative, customer centric and proactive if you must survive in this industry. We are aware of the stiff competition and we are well prepared to compete favorably with other leading used car dealership garages in Philadelphia and throughout the United States and Canada.

Jason Hyacinth® Used Car Dealership, Inc. is launching a standard dealership garage that will indeed become the preferred choice of residents of Spruce, Chestnut and Walnut Streets – Philadelphia and every other location where our outlets will be opened.

One thing is certain; we will ensure that we have a wide range of used cars brands and models from leading manufacturers available in our garage at all times. It will be difficult for customers to visit our garage and not see the type of used car they are looking for.

One of our business goals is to make Jason Hyacinth® Used Car Dealership, Inc. a one stop used car dealership shop. Our excellent customer service culture, online store, various payment options and highly secured facility will serve as a competitive advantage for us.

Lastly, our employees will be well taken care of, and their welfare package will be among the best within our category in the industry meaning that they will be more than willing to build the business with us and help deliver our set goals and achieve all our aims and objectives. We will also give good working conditions and commissions to freelance sales agents that we will recruit from time to time.

9. SALES AND MARKETING STRATEGY

• Sources of Income

Jason Hyacinth® Used Car Dealership, Inc. is in business to retail a wide range of used cars to the residents of Spruce, Chestnut and Walnut Streets – Philadelphia. In essence, our source of income will be the retailing of a wide range of used cars from different car manufacturing brands.

10. Sales Forecast

When it comes to used car dealership business, if your garage is well stocked with various types of used cars from different manufacturing brands and models and centrally positioned, you will always attract customers and that will sure translate to increase in revenue generation for the business.

We are well positioned to take on the available market in Philadelphia and we are quite optimistic that we will meet our set target of generating enough profits from the first six months of operation and grow the business and our clientele base.

We have been able to critically examine the used car dealership industry, we have analyzed our chances in the industry and we have been able to come up with the following sales forecast. The sales projections are based on information gathered on the field and some assumptions that are peculiar to startups in Spruce, Chestnut and Walnut Streets – Philadelphia.

Below are the sales projections for Jason Hyacinth® Used Car Dealership, Inc. it is based on the location of our business and other factors as it relates to used car dealership garage startups in the United States;

• First Fiscal Year: $450,000
• Second Fiscal Year: $750,000
• Third Fiscal Year: $1.2 Million

N.B : This projection was done based on what is obtainable in the industry and with the assumption that there won’t be any major economic meltdown and any major competitor within our market space. Please note that the above projection might be lower and at the same time it might be higher.

• Marketing Strategy and Sales Strategy

Before choosing a location for Jason Hyacinth® Used Car Dealership, Inc. we conduct a thorough market survey and feasibility studies in order for us to penetrate the available market and become the preferred choice for residents of Spruce – Philadelphia. We have detailed information and data that we were able to utilize to structure our business to attract the number of customers we want to attract per time.

We hired experts who have good understanding of the used car dealership industry to help us develop marketing strategies that will help us achieve our business goal of winning a larger percentage of the available market in Spruce – Philadelphia.

In summary, Jason Hyacinth® Used Car Dealership, Inc. will adopt the following sales and marketing approach to win customers over;

• Open our used car dealership garage in a grand style with a party for all
• Introduce our used car dealership garage by sending introductory letters alongside our brochure to households, offices and other key stakeholders in and around Spruce -Philadelphia
• Ensure that we have a wide range of used cars from different brands at all times.
• Make use of attractive hand bills to create awareness and also to give direction to our garage
• Position our signage/flexi banners at strategic places around Spruce, Chestnut and Walnut Streets – Philadelphia
• Position our greeters to welcome and direct potential customers
• Create a loyalty plan that will enable us reward our regular customers
• Engage on roadshows within our neighborhood to create awareness for our used car garage
• List our business and products on yellow pages ads (local directories)
• Leverage on the internet to promote our business
• Engage in direct marketing and sales
• Encourage the use of Word of mouth marketing (referrals)

11. Publicity and Advertising Strategy

Despite the fact that our used car dealership garage is well located, we will still go ahead to intensify publicity for the business.

Jason Hyacinth® Used Car Dealership, Inc. has a long-term plan of opening outlets in various locations all around key cities in the United States and Canada which is why we will deliberately build our brand to be well accepted in Philadelphia before venturing out.

As a matter of fact, our publicity and advertising strategy is not solely for winning customers over but to effectively communicate our brand. Here are the platforms we intend leveraging on to promote and advertise Jason Hyacinth® Used Car Dealership, Inc.;

• Place adverts on community based newspapers, radio and TV stations
• Encourage the use of word of mouth publicity from our loyal customers
• Leverage on the internet and social media platforms like YouTube, Instagram, Facebook, Twitter, LinkedIn, Snapchat, Google+ and other platforms to promote our business.
• Ensure that our we position our banners and billboards in strategic positions all around Spruce, Chestnut and Walnut Streets – Philadelphia
• Distribute our fliers and handbills in target areas in and around our neighborhood
• Advertise our used cars dealership business in our official website and employ strategies that will help us pull traffic to the site
• Brand all our official cars and trucks and ensure that all our staff members and management staff wear our branded shirt or cap at regular intervals

12. Our Pricing Strategy

Aside from quality, pricing is one of the key factors that gives leverage to used car dealership garages, it is normal for consumers to go to places where they can get used cars at cheaper prices which is why big players in the industry will attract loads of clients.

We know we don’t have the capacity to compete with big players in the used car dealership industry but we will ensure that the prices and quality of all the used cars that are available in our garage are competitive with what is obtainable amongst used car garages within our level.

• Payment Options

The payment policy adopted by Jason Hyacinth® Used Car Dealership, Inc. is all inclusive because we are quite aware that different customers prefer different payment options as it suits them but at the same time, we will ensure that we abide by the financial rules and regulation of the United States of America.

Here are the payment options that Jason Hyacinth® Used Car Dealership, Inc. will make available to her clients;

• Payment via bank transfer
• Payment with cash
• Payment via credit cards / Point of Sale Machines
• Payment via online bank transfer
• Payment via check
• Payment via mobile money transfer
• Payment via bank draft

In view of the above, we have chosen banking platforms that will enable our client make payment for purchasing our used cars without any stress on their part. Our bank account numbers will be made available on our website and promotional materials to clients who may want to deposit cash or make online transfers for our used cars.

13. Startup Expenditure (Budget)

In setting up any business, the amount or cost will depend on the approach and scale you want to undertake. If you intend to go big by renting/leasing a big facility, then you would need a good amount of capital as you would need to ensure that your employees are well taken care of, and that your facility is conducive enough for workers to be productive.

The materials and equipment that will be used are nearly the same cost everywhere, and any difference in prices would be minimal and can be overlooked. As for the detailed cost analysis for starting a used car dealership business; it might differ in other countries due to the value of their money.

These are the key areas where we will spend our startup capital;

• The total fee for registering the business in the Unites States of America – $750
• Legal expenses for obtaining licenses and permits as well as the accounting services (software, P.O.S machines and other software) – $3,300
• Marketing promotion expenses for the grand opening of Jason Hyacinth® Used Car Dealership, Inc. in the amount of $3,500 and as well as flyer printing (2,000 flyers at $0.04 per copy) for the total amount of $3,580
• The cost for hiring business consultant – $2,500
• Insurance (general liability, workers’ compensation and property casualty) coverage at a total premium – $2,400
• The cost for payment of rent for 12 months at $1.76 per square feet in the total amount of $105,600
• The cost for garage remodeling – $20,000
• Other start-up expenses including stationery ($500) and phone and utility deposits ( $2,500 )
• Operational cost for the first 3 months (salaries of employees, payments of bills et al) – $60,000
• The cost for start-up inventory (stocking with a wide range of used cars from different manufacturing brands) – $350,000
• The cost for counter area equipment – $9,500
• The cost for store equipment (cash register, security, ventilation, signage) – $13,750
• The cost of purchase and installation of CCTVs: $10,000
• The cost for the purchase of office furniture and gadgets (Computers, Printers, Telephone, TVs, Sound System, tables and chairs et al): $4,000
• The cost of launching a website: $600
• The cost for our opening party: $7,000
• Miscellaneous: $10,000

We would need an estimate of $750,000 to successfully set up our standard used car dealership garage in Spruce – Philadelphia.

Generating Startup Capital for Jason Hyacinth® Used Car Dealership, Inc.

Jason Hyacinth® Used Car Dealership, Inc. is a private registered business that is solely owned and financed by Jason Hyacinth and his immediate family members. They do not intend to welcome any external business partner which is why he has decided to restrict the sourcing of the startup capital to 3 major sources.

These are the areas we intend generating our startup capital;

• Generate part of the startup capital from personal savings
• Source for soft loans from family members and friends
• Apply for loan from my Bank

N.B: We have been able to generate about $250,000 ( Personal savings $200,000 and soft loan from family members $50,000 ) and we are at the final stages of obtaining a loan facility of $500,000 from our bank. All the papers and documents have been signed and submitted, the loan has been approved and any moment from now our account will be credited with the amount.

14. Sustainability and Expansion Strategy

The future of a business lies in the number of loyal customers that they have, the capacity and competence of their employees, their investment strategy and the business structure. If all of these factors are missing from a business, then it won’t be too long before the business close shop.

One of our major goals of starting Jason Hyacinth® Used Car Dealership, Inc. is to build a business that will survive off its own cash flow without injecting finance from external sources once the business is officially running. We know that one of the ways of gaining approval and winning customers over is to retail our wide range of used cars a little bit cheaper than what is obtainable in the market and we are well prepared to survive on lower profit margin for a while.

Jason Hyacinth® Used Car Dealership, Inc. will make sure that the right foundation, structures and processes are put in place to ensure that our staff welfare are well taken of. Our company’s corporate culture is designed to drive our business to greater heights and training and retraining of our workforce is at the top burner.

We know that if that is put in place, we will be able to successfully hire and retain the best hands we can get in the industry; they will be more committed to help us build the business of our dreams.

Check List/Milestone

• Business Name Availability Check: Completed
• Business Registration: Completed
• Opening of Corporate Bank Accounts: Completed
• Securing Point of Sales (POS) Machines: Completed
• Opening Mobile Money Accounts: Completed
• Opening Online Payment Platforms: Completed
• Application and Obtaining Tax Payer’s ID: In Progress
• Application for business license and permit: Completed
• Purchase of Insurance for the Business: Completed
• Leasing of facility and remodeling the garage: In Progress
• Conducting Feasibility Studies: Completed
• Generating capital from family members: Completed
• Applications for Loan from the bank: In Progress
• Writing of Business Plan: Completed
• Drafting of Employee’s Handbook: Completed
• Drafting of Contract Documents and other relevant Legal Documents: In Progress
• Design of The Company’s Logo: Completed
• Graphic Designs and Printing of Promotional Materials: In Progress
• Recruitment of employees: In Progress
• Purchase of the needed furniture, computers, electronic appliances, office appliances and CCTV: In progress
• Creating Official Website for the Company: In Progress
• Creating Awareness for the business both online and around the community: In Progress
• Health and Safety and Fire Safety Arrangement (License): Secured
• Opening party planning: In Progress
• Compilation of list of used cars available in our garage: Completed
• Establishing business relationship with vendors – used cars auction houses and other used cars dealership garages: In Progress

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This simple fact about a car on a dealer's lot can give you negotiating power

By Doug Demuro

Car dealerships are more willing to drop prices when they've had a car for a while-here's how to find out how long it's been there.

You've probably considered several essential tips and tricks for negotiating the best price as you get closer to buying a car. How long a dealership has had a particular vehicle for sale can be another good negotiation tool, a tactic even savvy car shoppers sometimes overlook. Here's how to determine how long a car has been sitting on a lot and how it can help you get a better price on your next vehicle.

Related: When car dealers are overstocked, that's good for buyers. These brands have the most inventory.

How knowing inventory age helps

In general, car dealerships become more willing to drop prices when they've had a car for a while. The main reason for this is obvious: When a dealership first gets a car, there's no reason to lower prices if customers are immediately interested. But, the longer a dealership has a car without selling it, the less likely the dealership is to find an interested buyer. That's when dealers start to drop prices to help the car sell, and that's when you should swoop in and negotiate the best deal you can.

Plus: Buyer beware: How to spot and avoid car dealer markups

Used car dealers nationwide ended February 2024 with an average of 44 days' worth of stock, up 9% from a year ago. That data is from Cox Automotive, Autotrader's corporate parent. Used car prices are in a slow but steady decline from pandemic-era records, partly because more inventory sits on dealer lots for longer periods.

How long has a car been on the lot?

There are several ways to figure out how long a dealership has had a car. Paperwork is one: Check when the car's paperwork was completed, indicating when it arrived at the dealer. If the title and other documents show the car has been sitting at the dealership for 60 days or more, you can likely negotiate a good deal.

Another tool: Use the vehicle history report from AutoCheck or Carfax. Most dealers are willing to provide a report to show a vehicle's history, including whether the car was involved in any accidents or incidents. However, a vehicle history report also shows another essential piece of information: it reveals when the car was listed for sale. Once again, you can use this information to your advantage when negotiating the price.

And then there's the tried-and-true method of figuring out how long a dealer has had a car: Watch the inventory. If you see a vehicle listed in a dealer's Autotrader inventory for more than a month or two, it's likely the dealer is slowly becoming more and more willing to lower the price.

In the car business, the term "aged inventory" refers to cars that have been sitting on the lot for so long that the dealer is ready to drop the price significantly to make a sale. If you can figure out which models are aged inventory when buying a car, you typically can negotiate a better-than-average deal on your next vehicle.

This story originally ran on Autotrader.com.

This content was created by MarketWatch, which is operated by Dow Jones & Co. MarketWatch is published independently from Dow Jones Newswires and The Wall Street Journal.

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04-18-24 0502ET

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Welcome to University Auto Sales

View our inventory, auto repair book now, rv inventory.

Welcome to University Auto Sales, your reliable destination for quality used cars in Moscow, Idaho , Lewiston, Idaho and the surrounding areas. We appreciate you choosing University Auto Sales as your used car dealership, catering to drivers in Moscow, Lewiston and the surrounding areas. Explore our diverse range of pre-owned vehicles, carefully selected to meet your expectations. Our dealership takes pride in offering a seamless car-buying experience. Navigate through our user-friendly website, where you can conveniently browse our extensive inventory from the comfort of your home. Whether you're in search of a dependable sedan, a versatile SUV, a spacious minivan, or a robust truck, we have the ideal vehicle to suit your requirements and budget. If we do not have the vehicle currently on our lot we can work to find a vehicle that meets your needs.

Buy with confidence.

Why Choose University Auto Sales?

At University Auto Sales, we recognize that purchasing a used car is a significant decision. To ensure your peace of mind, our team of automotive experts rigorously inspects and reconditions each vehicle in our inventory, maintaining stringent standards of quality and reliability. Customer satisfaction is our utmost priority, and our friendly sales team is committed to providing exceptional service.

Exceptional Customer Service

Our commitment to making the car-buying process easy and hassle-free is reflected in the competitive financing options we offer. Our finance experts are dedicated to assisting you in securing an auto loan that aligns with your budget. Visit our Moscow or Lewiston dealership today to experience the University Auto Sales difference firsthand.

Discover the University Auto Sales

Whether you're perusing our inventory online , scheduling a test drive, or seeking personalized assistance, our team is ready to help. Drive home in your dream car from University Auto Sales and understand why we are the preferred choice for used vehicles in Moscow, Idaho , Lewiston, Idaho , and beyond. Thank you for considering University Auto Sales, where quality and exceptional service meet. We have 2 locations 2 serve in Moscow Idaho and Lewiston Idaho so please call us for the location of a vehicle you are interested in. 2308 HWY 95 South Moscow Idaho 83843 157 Thain Road Lewiston Idaho 83501

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How to Start a Car Dealership

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How To Start a Car Dealership

How to start a car dealership faqs.

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• Additional Resources in the Car Dealership Industry

Starting a car dealership can be very profitable. With proper planning, execution and hard work, you can enjoy great success. Below you will learn the keys to launching a successful car dealership.

Importantly the most important step in starting a car dealership is to complete your business plan. To help you out, you should download Growthink’s Ultimate Car Dealership Business Plan Template here .

Download our Ultimate Car Dealership Business Plan Template here

How to Open a Car Dealership in 17 Steps

• Decide Which Type of Car Dealership To Open
• Choose the Name for Your Car Dealership
• Develop Your Car Dealership Business Plan
• Choose the Legal Structure for Your Car Dealership
• Secure Startup Funding for Your Car Dealership (If Needed)
• Secure a Location for Your Business
• Register Your Car Dealership With the IRS
• Open a Business Bank Account
• Get a Business Credit Card
• Get the Required Business Licenses and Permits
• Get Business Insurance for Your Car Dealership
• Buy or Lease the Right Car Dealership Business Equipment
• Develop Your Car Dealership Marketing Materials
• Purchase and Setup the Software Needed to Run Your Car Dealership
• Get Inventory
• Hire a Team
• Open for Business

1. Decide Which Type of Car Dealership To Open

The first step in starting a car dealership is deciding whether to open an independent dealership or become part of a franchise.

An independent dealership will allow you to sell a wider range of vehicles since you won’t be signing any contracts with specific automakers. You will also have more flexibility in pricing your inventory since you don’t have to meet manufacturer requirements. On the downside, you won’t have access to special financing options that come directly through automakers, such as Ford Credit, for your customers and will be responsible for coming up with all your own marketing, branding, and other business materials.

A franchise will limit the brand of cars you can sell and you will have to meet specific franchise requirements and pay fees to join. You will, however, be able to offer your customers more financing options through the automakers and have the backing of a larger brand to help guide you.

Make sure to research both options completely to determine which is best for you. Also, remember that joining a franchise may influence what you can do in the following steps when it comes to marketing and other business decisions.

If you are looking to start a used car dealership, you can learn how to start a used car dealership .

2. Choose the Name for Your Car Dealership

The first step to starting a car dealership is to choose your business’ name.

This is a very important choice since your company name is your brand and will last for the lifetime of your business. Ideally you choose a name that is meaningful and memorable. Here are some tips for choosing a name for your car dealership:

• Make sure the name is available. Check your desired name against trademark databases and your state’s list of registered business names to see if it’s available. Also check to see if a suitable domain name is available.
• Keep it simple. The best names are usually ones that are easy to remember, pronounce and spell.
• Think about marketing. Come up with a name that reflects the desired brand and/or focus of your car dealership.

3. Develop Your Car Dealership Business Plan

One of the most important steps in starting a car dealership is to develop your car dealership business plan . The process of creating your plan ensures that you fully understand your market and your business strategy. The plan also provides you with a roadmap to follow and if needed, to present to funding sources to raise capital for your business.

To enhance your planning process, incorporating insights from a  sample car dealership business plan  can be beneficial. This can provide you with a clearer perspective on industry standards and effective strategies, helping to solidify your own business approach.

Your business plan should include the following sections:

• Executive Summary – this section should summarize your entire business plan so readers can quickly understand the key details of your car dealership.
• Company Overview – this section tells the reader about the history of your car dealership and what type of car dealership you operate. For example, do you only sell vehicles or do you also have a service department? Do you sell many different brands or specialize in just a few?
• Industry Analysis – here you will document key information about the car dealership industry. Conduct market research and document how big the industry is and what trends are affecting it.
• Customer Analysis – in this section, you will document who your ideal or target customers are and their demographics. For example, how old are they? Where do they live? What do they find important when purchasing vehicles or services like the ones you will offer?
• Competitive Analysis – here you will document the key direct and indirect competitors you will face and how you will build competitive advantage.
• Marketing Plan – your marketing plan should address the 4Ps: Product, Price, Promotions and Place.
• Product : Determine and document what products/services you will offer
• Prices : Document the prices of your products/services
• Place : Where will your business be located and how will that location help you increase sales?
• Promotions : What promotional methods will you use to attract customers to your car dealership? For example, you might decide to use pay-per-click advertising, public relations, search engine optimization and/or social media marketing.
• Operations Plan – here you will determine the key processes you will need to run your business operations. You will also determine your staffing needs. Finally, in this section of your plan, you will create a projected growth timeline showing the milestones you hope to achieve in the coming years.
• Management Team – this section details the background of your company’s management team.
• Financial Plan – finally, the financial plan answers questions including the following:
• What startup costs will you incur?
• How will your car dealership make money?
• What are your projected sales and expenses for the next five years?
• Do you need to raise funding to launch your business?

Finish Your Business Plan Today!

4. choose the legal structure for your car dealership.

Next you need to choose a legal structure for your car dealership and register it and your business name with the Secretary of State in each state where you operate your business.

Below are the five most common legal structures:

1) Sole Proprietorship

A sole proprietorship is a business entity in which the owner of the car dealership and the business are the same legal person. The owner of a sole proprietorship is responsible for all debts and obligations of the business. There are no formalities required to establish a sole proprietorship, and it is easy to set up and operate. The main advantage of a sole proprietorship is that it is simple and inexpensive to establish. The main disadvantage is that the owner is liable for all debts and obligations of the business.

2) Partnerships

A partnership is a legal structure that is popular among small businesses. It is an agreement between two or more people who want to start a car dealership together. The partners share in the profits and losses of the business.

The advantages of a partnership are that it is easy to set up, and the partners share in the profits and losses of the business. The disadvantages of a partnership are that the partners are jointly liable for the debts of the business, and disagreements between partners can be difficult to resolve.

3) Limited Liability Company (LLC)

A limited liability company, or LLC, is a type of business entity that provides limited liability to its owners. This means that the owners of an LLC are not personally responsible for the debts and liabilities of the business. The advantages of an LLC for a car dealership include flexibility in management, pass-through taxation (avoids double taxation as explained below), and limited personal liability. The disadvantages of an LLC include lack of availability in some states and self-employment taxes.

4) C Corporation

A C Corporation is a business entity that is separate from its owners. It has its own tax ID and can have shareholders. The main advantage of a C Corporation for a car dealership is that it offers limited liability to its owners. This means that the owners are not personally responsible for the debts and liabilities of the business. The disadvantage is that C Corporations are subject to double taxation. This means that the corporation pays taxes on its profits, and the shareholders also pay taxes on their dividends.

5) S Corporation

An S Corporation is a type of corporation that provides its owners with limited liability protection and allows them to pass their business income through to their personal income tax returns, thus avoiding double taxation. There are several limitations on S Corporations including the number of shareholders they can have among others.

Once you register your car dealership, your state will send you your official “Articles of Incorporation.” You will need this among other documentation when establishing your banking account (see below). We recommend that you consult an attorney in determining which legal structure is best suited for your company.

5. Secure Startup Funding for Your Car Dealership (If Needed)

In developing your car dealership plan, you might have determined that you need to raise funding to launch your business.

If so, the main sources of funding for a car dealership to consider are personal savings, family and friends, credit card financing, bank loans, crowdfunding and angel investors. Angel investors are individuals who provide capital to early-stage businesses. Angel investors typically will invest in a car dealership that they believe has high potential for growth.

6. Secure a Location for Your Business

A big step in opening your own car dealership is finding the perfect location for your business. The ideal spot will be visible from the road, have plenty of parking for customers and your inventory, and be in a high-traffic area. Make sure there is enough space to include a reception area, office spaces, and a service department if you plan to add one.

To find the right space, consider:

• Driving around to find the right areas while looking for “for lease” signs
• Contacting a commercial real estate agent
• Doing commercial real estate searches online
• Telling others about your needs and seeing if someone in your network has a connection that can help you find the right space

7. Register Your Car Dealership With the IRS

Next, you need to register your business with the Internal Revenue Service (IRS) which will result in the IRS issuing you an Employer Identification Number (EIN).

Most banks will require you to have an EIN in order to open up an account. In addition, in order to hire employees, you will need an EIN since that is how the IRS tracks your payroll tax payments.

Note that if you are a sole proprietor without employees, you generally do not need to get an EIN. Rather, you would use your social security number (instead of your EIN) as your taxpayer identification number.

8. Open a Business Bank Account

It is important to establish a bank account in your car dealership’s name. This process is fairly simple and involves the following steps:

• Identify and contact the bank you want to use
• Gather and present the required documents (generally include your company’s Articles of Incorporation, driver’s license or passport, and proof of address)
• Complete the bank’s application form and provide all relevant information
• Meet with a banker to discuss your business needs and establish a relationship with them

9. Get a Business Credit Card

You should get a business credit card for your car dealership to help you separate personal and business expenses.

You can either apply for a business credit card through your bank or apply for one through a credit card company.

When you’re applying for a business credit card, you’ll need to provide some information about your business. This includes the name of your business, the address of your business, and the type of business you’re running. You’ll also need to provide some information about yourself, including your name, Social Security number, and date of birth.

Once you’ve been approved for a business credit card, you’ll be able to use it to make purchases for your business. You can also use it to build your credit history which could be very important in securing loans and getting credit lines for your business in the future.

10. Get the Required Business Licenses and Permits

Every state, county and city has different business license and permit requirements.

Nearly all states, counties and/or cities have license requirements including:

• General Business License – You will need to obtain a general business license in order to operate your dealership. This can be done through the Secretary of State’s office in your state.
• Sales Tax License – In order to collect sales tax on the vehicles you sell, you will need to obtain a sales tax license from your state’s tax collecting agency.
• Franchise License – If you wish to sell vehicles from a particular manufacturer as part of a franchise agreement, you will need to obtain a franchise license from that manufacturer.
• New Vehicle Dealer’s License – In order to sell new vehicles, you will need to obtain a new vehicle dealer license from your state’s motor vehicle department.
• Used Vehicle Dealer’s License – In order to sell new vehicles, you will need to obtain a new vehicle dealer license from your state’s motor vehicle department.

Depending on where you operate your car dealership, you will have to obtain the necessary state, county and/or city licenses.

11. Get Business Insurance for Your Car Dealership

Some common types of insurance to consider include:

• General Liability Insurance – This will protect your dealership from any third-party claims of bodily injury or property damage.
• Commercial Property Insurance – Commercial property insurance protects your dealership’s building, as well as any contents inside of it.
• Business Interruption Insurance – his insurance protects your dealership in the event that it is unable to operate due to a covered event, such as a fire.
• Workers’ Compensation Insurance – If you have employees, you will need this type of insurance to protect them in case of a work-related injury or illness.
• Dealer’s Open Lot Insurance – This type of policy will protect any vehicles that are on your dealership’s property.
• Garage Keeper’s Insurance – If you offer any type of repair or maintenance service, you will need this insurance to protect against any damage that may occur to a customer’s vehicle while it is in your care.

Find an insurance agent, tell them about your business and its needs, and they will recommend policies that fit those needs.

12. Buy or Lease the Right Car Dealership Business Equipment

A car dealership needs some basic office equipment to operate, including computers, printers, phones, fax machines, and general office supplies. You should also plan to have some reception furniture and a break area for your employees. Some car dealerships also offer customers vending areas or free refreshments.

If you plan to offer vehicle services, you will also need to buy a range of mechanic tools and stock your service bays with diagnostic tools, car lifts, and any other equipment needed to service your customer’s vehicles.

13. Develop Your Car Dealership Marketing Materials

Marketing materials will be required to attract and retain customers to your car dealership.

The key marketing materials you will need are as follows:

• Logo – Spend some time developing a good logo for your car dealership. Your logo will be printed on company stationery, business cards, marketing materials, and may even be seen when users load your products. The right logo can increase customer trust and awareness of your brand.
• Website – Likewise, a professional car dealership website provides potential customers with information about the products and/or services you offer, your company’s history, and contact information. Importantly, remember that the look and feel of your website will affect how customers perceive you. If you plan to showcase your inventory online, you will need to update your website regularly.
• Social Media Accounts – Establish social media accounts in your company’s name. Accounts on Facebook, Twitter, LinkedIn and/or other social media networks will help customers and others find and interact with your car dealership. Social media platforms are also great places to run promotions and advertise new vehicles.

14. Purchase and Setup the Software Needed to Run Your Car Dealership

Car dealerships need software to manage their inventory, customers, and finances. Some common software programs used in car dealerships include AutoTrader, Microsoft Dynamics AX, and Salesforce.

Research the software that best suits your needs, purchase it, and set it up.

15. Get Inventory

Next, you need to make sure you have cars to sell. If you are part of a franchise, you may already have a system set up with your franchisee and certain requirements for the vehicles you need to order. If you are an independent car dealership, you can start collecting inventory by going to auctions and contacting private sellers.

16. Hire Employees

A good car dealership requires a good team to run it. You will need salespeople to sell the cars, managers to keep track of inventory and finances, and mechanics to keep the cars in top condition. Hiring the right employees is essential to the success of your dealership.

To find candidates, post ads on online job boards and in local newspapers. You can also reach out to automotive schools and ask them to recommend graduates who might be a good fit for your business.

When interviewing candidates, be sure to ask about their experience in the automotive industry and their customer service skills. You should also give them a sales test to see how they would do in a real-world selling situation.

17. Open for Business

You are now ready to open your own dealership. If you followed the steps above, you should be in a great position to build a successful business. Below are answers to frequently asked questions that might further help you with how to start a car business.

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Is It Hard To Start a Car Dealership?

No, it's not hard to start a car dealership. Your biggest challenges at first will be funding your new business and buying enough inventory to launch. Depending on your area, you might also struggle to find employees to build out your team. If you can overcome those challenges, you will be well on your way to running your own car dealership successfully. Following the steps outlined above will help you get started.

How Can I Open a Car Dealership With No Experience?

If you're looking to get into the car business but have no experience, don't worry. It is possible to start a successful dealership without any prior experience in the industry. However, it will require some hard work and dedication.  You should be certain to do as much research as you can into the car industry in general and how successful dealerships are run. It would also be helpful to familiarize yourself with the licensing, permits, and other legal requirements for buying and selling vehicles. Finally, finding a professional who has experience managing car dealerships to talk with can be very helpful.

What Type of Car Dealership Is Most Profitable?

In general, new car dealerships are more profitable than used car dealerships. Deciding which brands or styles of vehicles will make your dealership the most money comes down to industry trends and demand in your area.

How Much Does It Cost To Start a Car Dealership?

Estimate start-up costs for a new car dealership are approximately $100,000 – $1,000,000.

What Are the Ongoing Expenses For A Car Dealership?

• Purchases – An overwhelming majority of revenue by new car dealers is spent on inventory purchases. These are vehicles held for sale.
• Wages – New car dealerships require salespeople, technicians and office workers to operate. Labor costs have slowly declined over the past five years, reflecting the increasing use of automation by industry operators. Parts and repair service workers account for a growing share of revenue and payroll.
• Marketing and Advertising – Beyond wages and purchases, new car dealers must maintain substantial advertising efforts to draw in customers. According to the NADA, the average advertising cost per vehicle sold was $654.00.

How Does a Car Dealership Make Money?

The general car dealership business model is to sell and service motor vehicles. The main sources of revenue for a dealership are vehicle sales and service, but many dealerships also generate income from financing, parts sales, and other ancillary businesses.

Is Owning a Car Dealership Profitable?

Owning a car dealership can be a profitable venture but, as with most industries, comes with a lot of ups and down. Since cars are fairly big-ticket items, economic changes can greatly impact how many cars get sold. If you can navigate those changes effectively, owning a car dealership can be a great financial decision.

How Much Do Car Dealership Operators Make?

New car dealers typically make around two or three percent of either the invoice or the sticker price of the car.

Why Do Car Dealerships Fail?

The main reason car dealerships fail is due to poor management. Many dealerships are started by people who are great at selling cars, but don't have experience running a business. They may be great at negotiating with manufacturers and getting good prices for their vehicles, but they don't have training in things like inventory management, marketing, or even bookkeeping.

Another common reason for failure is not properly understanding the customer. Too many dealerships focus on selling to people who are looking for a bargain, when in reality, most car buyers are willing to pay full price if they feel they're being treated well. Great customer service is the key to success in any business, but it's especially important in the car business where customers have a lot of choices.

Finally, many dealerships fail because they're not able to adapt to changing market conditions. The car business is constantly evolving, with new technologies, new models, and new competitors entering the market all the time. Dealerships that can't keep up with the changes will quickly find themselves falling behind.

How Big Is the Car Dealership Industry?

There are 18,391 car dealerships in the U.S.with revenues of $834.4 billion.

What External Factors Affect the Car Dealership industry?

A number of factors affect the performance of the car dealership industry. These drivers include:

• Consumer Confidence Index – It is expected that the consumer confidence index will increase as the economy recovered and unemployment reduced making consumers willing to make big purchases like a new vehicle resulting in potential opportunity for the industry.
• Average Age of Vehicle Fleet – An increase in the age of vehicles means suppressed demands for new vehicles. When a rise in disposable income and demand for affordable fuel-efficient vehicle increases, the average age of vehicle decrease all at the same time. But since the quality of vehicles has improved and they can now last longer in running condition it is then expected that the average age of the fleet will shoot up.
• Yield on 10-year Treasury Note – The yield on 10-year treasury note is expected to increase as automobiles are usually financed, therefore the need will likely regress and interest rate is expected to flow and change. The reason behind financing vehicles becomes costly due to high interest rates.
• Per Capita Disposable Income – When there’s a high disposable income expect high discretionary spending however this is also the time when consumers’ are confident to go and get debt-funded consumption such as buying new vehicle. It is then expected that per capita disposable income will as well increase at any time.

Who Are the Key Competitors in the Car Dealership Industry?

In the U.S. there are only two major competitors in the car dealership industry and they are as follows:

• AutoNation Inc.
• Penskie Automotive Group Inc.

Where Can I Download a Car Dealership Business Plan PDF?

You can download our car dealership business plan PDF template here. This is a business plan template you can use in PDF format.

For additional information on the car dealership market, consider these industry resources:

• Detroit Free Pres:  www.freep.com
• Edmunds.com: www.edmunds.com
• National Automobile Dealers Association: www.nada.org

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