It takes a lot of time and money to become an auto dealer, but it can yield high profits.Running a used car lot, buying/selling wholesale cars on an as-needed basis or investing in a franchise branch of an already-established auto dealership are some of the ways a car dealer can make money.It doesn't require a formal education to deal cars.The steps it takes to become an automobile dealer are described in this list.
Step 1: Save money.
It will cost you a lot to become a car dealer.Depending on the type of business you want to run, your costs can range from $30,000 to $1,000,000.
Step 2: You need a dealer's license.
Each state has its own requirements for auto dealer licensure, which can include completing a course and sitting for a certification exam.
Step 3: You should brush up on your business knowledge.
As with running any business, being an automobile dealer requires a certain amount of knowledge.You don't need a degree to operate a business at the library or online.
Step 4: Decide what you want to do with your business.
There are many questions you need to ask yourself before moving on to the next step of being a car dealer.Do you want to be a one-man show and operate through a company website?Are you interested in selling new or used cars?Would you rather own a lot and hire people?How many employees do you need?Do you want your customers to get their own financing or do you only offer in-house financing?How will you market your business?How much money do you need to make a living?
Step 5: A formal business plan can be created.
Once you know what kind of auto dealer you want to be, you should put your business plan down on paper.You will be able to stay on track with budget projections.
Step 6: Pick a location.
It could be as simple as keeping a few cars in your backyard and building a website to serve as your business location, or as complex as scouting for commercial lots and office space.You will need a verification letter in order to move on to the next step.
Step 7: You need a surety bond.
To get a surety bond, you must verify that your business location is appropriate for an automobile dealership.The auto dealer bond is a guarantee of compliance with state regulations.You will have to pay a percentage of the bond amount that varies between 0,75% and 10% depending on the state.
Step 8: You need to register your business at the Division of Motor Vehicles.
Step 9: You should build an inventory.
If you are a car dealer, you can attend private wholesale dealer auctions and purchase vehicles at lower than market-rate prices.You can buy wholesale at new-car dealerships.