What to Know Before Opening a Used Car Dealership


Opening a used car dealership can help you make money each time that you sell a car to a buyer, but working as a dealer isn’t always as easy as it looks on paper. You need to contend with issues like customers returning cars because they weren’t happy and the cost of sourcing cars to sell on your lot. Depending on where you decide to set up shop, you may also need to find new parts and accessories for customers who drive other types of vehicles too.

Finding Cars to Sell

Before your dealership opens, you need to have enough cars and other vehicles on hand to meet the needs of prospective buyers. While some buyers might want luxury cars and larger SUVs, others might prefer small economy cars and vehicles that get good gas mileage. As the owner of a used car dealership, you need to know where to get those cars. Most dealers buy from wholesale auctions, which are not open to the general public. The less you pay for those vehicles, the more profit you can make.

Selling Other Things

People do not always need new vehicles, but they do always need parts and accessories. Selling more parts from your dealership helps you make more money and appeal to all those shoppers. If you live in a rural area, you might offer some UTV parts. These parts are perfect for those who drive a UTV while camping or living on a farm. You can sell skis for using on winter days, lights that help them see more clearly and even accessories that make those vehicles street legal. Offering a range of parts from different manufacturers ensures that you have everything your customers might need.

Dealing with Customers

Lemon laws offer protection for customers buying used vehicles. These laws prevent manufacturers from selling vehicles that customers returned in the past and keep dealers from selling vehicles that do not work as described. If you sell a car that you know needs significant repairs without telling that customer, you may be responsible for taking that car back and doing the repairs yourself. As a dealership owner, you also need to know how to deal with customers who are unhappy and those not satisfied with their purchases. Having good customer service skills will keep those customers coming back.

Used car dealerships cater to customers who cannot afford new cars and those who like buying used. These dealerships can offer in-house financing or accept full payments from buyers. Before opening your own dealership, make sure you know how to handle customers, where to buy the vehicles you sell and whether you want to sell other items.