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I Want a Used Car Dealership; What do I need to do?
Posted by GaryMyMan on 8/15/14 at 10:14 am00
Talk me through the process of opening a used car dealership. What licensing do I need? What pitfalls do I need to be aware of? What are the big risks?
Initially I'd like to start very small flipping cars bought from Craigslist after fixing them up/cleaning them. I think I have a pretty good handle on that aspect but I would like a lot eventually.
Initially I'd like to start very small flipping cars bought from Craigslist after fixing them up/cleaning them. I think I have a pretty good handle on that aspect but I would like a lot eventually.
re: I Want a Used Car Dealership; What do I need to do?Posted by I Love Bama on 8/15/14 at 10:28 am to GaryMyMan
All your money will be made in the financing.
re: I Want a Used Car Dealership; What do I need to do?Posted by I Love Bama on 8/15/14 at 10:59 am to GaryMyMan
All your money will be made in the financing.
re: I Want a Used Car Dealership; What do I need to do?Posted by LSUFanHouston on 8/15/14 at 11:19 am to GaryMyMan
Where do I make the jokes about acquiring a scummy personality and removing all sense of guilt, shame, and ethics from your body? =)
re: I Want a Used Car Dealership; What do I need to do?Posted by GaryMyMan on 8/15/14 at 11:26 am to LSUFanHouston
Already a lawyer so it shouldn't be too much of a change. Just need to buy cheaper suits.
This post was edited on 8/15 at 11:27 am
re: I Want a Used Car Dealership; What do I need to do?Posted by Rantavious on 8/15/14 at 12:19 pm to I Love Bama
quote:
All your money will be made in the financing
yes.yes.
re: I Want a Used Car Dealership; What do I need to do?Posted by TigerSaints318 on 8/15/14 at 12:25 pm to GaryMyMan
Get your license from the Louisiana Motor Vehicle Commission.
You'll need a bank roll and or a line of credit. Presumable either would be small starting out so you want to keep your average cost down to buy more cars and get a higher ROI. Cheaper cars are a bit risky though because they can have mechanical issues, although it looks like you might know how to do that. Also I assume you won't have access to lender to be able to make money on the back end.
Get in with an auction to buy cars or sell the ones that you don't want to invest the reconditioning money into. Some cars can become a money pit, know when to say enough is enough, Your first loss is your best loss. Learn from mistakes and listen to people that know what they are talking about. Contrary to popular belief a book value is not necessarily the actual value of a vehicle. Get black book and access to MMR.
You'll need a bank roll and or a line of credit. Presumable either would be small starting out so you want to keep your average cost down to buy more cars and get a higher ROI. Cheaper cars are a bit risky though because they can have mechanical issues, although it looks like you might know how to do that. Also I assume you won't have access to lender to be able to make money on the back end.
Get in with an auction to buy cars or sell the ones that you don't want to invest the reconditioning money into. Some cars can become a money pit, know when to say enough is enough, Your first loss is your best loss. Learn from mistakes and listen to people that know what they are talking about. Contrary to popular belief a book value is not necessarily the actual value of a vehicle. Get black book and access to MMR.
re: I Want a Used Car Dealership; What do I need to do?Posted by Rantavious on 8/15/14 at 12:26 pm to GaryMyMan
For the licensing you attend a class in BR.
Basically all you need is a TIN, a physical location, insurance and the license.
Look into Louisiana's Rent to Own option. I think it is a lot easier to recover the vehicle for non-payment if it is RTO.
Basically all you need is a TIN, a physical location, insurance and the license.
Look into Louisiana's Rent to Own option. I think it is a lot easier to recover the vehicle for non-payment if it is RTO.
re: I Want a Used Car Dealership; What do I need to do?Posted by TigerSaints318 on 8/15/14 at 12:33 pm to Rantavious
You need an even bigger bank roll for RTO. If you do traditional sales you get all your money back at the time of sale. RTO you got a lot of money out on the road.
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re: I Want a Used Car Dealership; What do I need to do?Posted by carlsoda on 8/15/14 at 3:08 pm to I Love Bama
quote:
All your money will be made in the financing.
Not true although the buy here pay here model works but it is a hassle always repoing cars.
If you buy cars on CL make sure you go in person and walk around the cars and then low ball them. Don't try to do it via email/text.
You need to apply for a license and pay some fees, and talk to your insurance agent about coverage for the cars till you buy them.
Unfortunately dealers now are scouring CL too so there is competition to buy cars. Many dealers have found it is cheaper to buy from consumers than auctions ie carmax model.
It is just harder to do now but can be done. Good luck
ETA: I know there are some already established used dealers that will let you use their badge for auctions and floor plan but they will generally want 50% of the profits and you will have to eat the losses.
This post was edited on 8/15 at 3:10 pm
re: I Want a Used Car Dealership; What do I need to do?Posted by Mr.Perfect on 8/15/14 at 3:48 pm to carlsoda
quote:
make sure you go in person and walk around the cars and then low ball them.
Pillars of the community in this business.
No wonder car salesman deserve the bad rap they have
re: I Want a Used Car Dealership; What do I need to do?Posted by Coach Guidry on 8/15/14 at 4:01 pm to Mr.Perfect
Get 4.5 million and the best Manager you can buy.
re: I Want a Used Car Dealership; What do I need to do?Posted by TigerSaints318 on 8/15/14 at 4:49 pm to Mr.Perfect
what are you talking about jack arse?
re: I Want a Used Car Dealership; What do I need to do?Posted by Napoleon on 8/16/14 at 12:24 am to Mr.Perfect
quote:
Pillars of the community in this business.
No wonder car salesman deserve the bad rap they have
That's capitalism.
Buy low and sell high.
re: I Want a Used Car Dealership; What do I need to do?Posted by Libertariantiger on 8/16/14 at 8:42 am to GaryMyMan
You need a location separate from your residence and a phone line. Licensing is not difficult.
I have a friend that manages one of the bigger auction houses around. The used car business is a tough biz.
I have a friend that manages one of the bigger auction houses around. The used car business is a tough biz.
re: I Want a Used Car Dealership; What do I need to do?Posted by Teauxler on 8/16/14 at 10:28 am to Libertariantiger
Floor plan
financing
add ons
good cars
financing
add ons
good cars
re: I Want a Used Car Dealership; What do I need to do?Posted by Al Dante on 8/17/14 at 9:42 am to TigerSaints318
quote:
Contrary to popular belief a book value is not necessarily the actual value of a vehicle. Get black book and access to MMR.
I am in the car financing business. I cannot stress this enough. MMR is Manheim Market Research. Manheim is an auction house operating nationally. With MMR you can see every Manheim auction transaction for a specific vehicle. They also give you a summary of average prices according to mileage. Invaluable tool if you're in the car business, and t free.
Also, if you're financing, consider putting GPS in the vehicles.
re: I Want a Used Car Dealership; What do I need to do?Posted by Reubaltaich on 8/17/14 at 11:46 am to GaryMyMan
Do you have any experience in U/Car sales?
If not, its going to be a steep learning curve, most likely very costly.
If you don't have any experience with u/car sales, go to work for a lot that is succesful(if all possible) for a couple of months. Of course don't let the owner/manager know your intent.
Its a shark tank so know your business.
If not, its going to be a steep learning curve, most likely very costly.
If you don't have any experience with u/car sales, go to work for a lot that is succesful(if all possible) for a couple of months. Of course don't let the owner/manager know your intent.
Its a shark tank so know your business.
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