9 Steps How To Become An Auto Dealer

(doylc.com) How to Become an Auto Dealer - Becoming a car dealer is a process that requires an investment of time and money but can yield huge profits. A car dealership can make money in a number of ways: running a used car repair shop, buying/selling wholesale cars on demand, or investing in a franchised branch of an established car dealership. It doesn't take any formal education to trade cars, but it does take some training. This list outlines the steps required to become a car dealer.

Steps by Steps :

1. Save money Almost every step on the way to the car dealership costs you money. Depending on the type of business you want to run and the amount of inventory you want to hold, your costs could range from $30,000 to $1,000,000 or more.

2. Get a dealer license. Each state has its own licensing requirements for car dealers, most of which involve taking a course and passing a certification exam.

3. Brush up on your business acumen. As with running any business, working as a car dealer requires a certain level of knowledge in accounting, inventory, bookkeeping, marketing, management and customer service. You don't need a business degree, but you should be able to find any information about running a business at the library or online.

4. Decide how you want to run your business. Because being a car dealer means being self-employed, there are many questions you need to ask yourself before moving on to the next step. You have to pay attention to these things:

- Would you like to be a one man show and operate exclusively through a company website?

- Do you want to sell new or used cars?

- Or would you rather own a property and hire sellers?

- How many employees do you need and which ones?

- Do you offer self-financing or do you require your customers to provide their own financing?

- How will you market your business?

- What kind of money do you need to invest and how much money do you need to make?

5. Create a formal business plan. Once you know exactly what type of dealership you want to be, you should take the time to put every aspect of your business plan down on paper. This will help you stay on track with budget forecasts and business building priorities.

6. Choose a location. This can be as simple as leaving a few cars in your backyard and creating a website to serve as your business location, or you may have to look for commercial and office space. Regardless of your location, you will need a zone confirmation letter to proceed to the next step.

7. Get your promise. After verifying that your business location is properly identified as a merchant, you will need to complete a surety bond. The car dealer bond is given as a guarantee that your dealership is operating in accordance with government regulations. Depending on the state, the deposit can range from $5,000 to $100,000, but you only have to pay a percentage of that amount, which usually ranges from 0.75% to 10%.

8. Register your company name and obtain a business license with the Division of Motor Vehicles.

9. Create an inventory. As a car dealer, you can take part in auctions run by private wholesalers and purchase vehicles at market prices. You can also go to new dealerships and buy wholesale with closed bids.