Starting a car dealership...
 

So I'm going to get in touch with my inner used-car salesman. I'm going through the process to start a car dealership. Working on acquiring the occupational license right now. Going to look at small retail locations soon...

Seeing all the available resources kinda reminds me of how adult was back in 2002. Lots of training materials, lots of consultants that seem to be able to help you build just about anything. I'm pretty excited to put my photography and video production skills back to use to produce some killer walk-around and test-drive videos.

And on the other hand, I feel like a fish out of water! It's a bit overwhelming when I'm looking at software solutions and I'm seeing 15 different acronyms for products I'm completely unfamiliar with... but I'm excited about getting involved in an industry that's so incredibly large.

I did some research on domain names and was surprised to learn how competitive the domain market is in the auto industry... holy crap! Any combination of even completely lame names is taken... quite a contrast to adult where I can sit down for 15 minutes and end up with a very brand-able domain. Looks like I might just have to buy from a 3rd party...

Do any of you have experience running this type of operation? Any words of wisdom you can share?

In a round about way I do. Many years ago I worked for a company that did car valuations on total loss cars for insurance companies. To do this they had a huge database with classified ads for cars from all the areas they worked in. The analyst would call these ads and find out info on the car even when it sold and they used this info to put a market value on the customer's car.

The classified reports would show ads as old as 180 days. Most people never called on those old ads, but a friend of mine that worked there and I found out that in some cases those cars were still for sale and they would let them go cheap. The first car we bought was a VW Rabbit. We got it for $400. We put about $200 into it doing a tune up and cleaning it up and we sold it a week later for $1300. Within a couple of months we were buying at least one car per week. We worked only in older, cheaper cars. We would buy them tune them up and fix them up a little and flip them for fast cash.

Eventually we got a car we couldn't move quickly so we had to register it. It was then that we found out if you sold more than a certain number of cars per year in this state you had to register to become a dealer (this was in the 1990's so things may be different now). We didn't want to do that. I ended up leaving the job to write full time for a music magazine and he moved out of state so it came to an end, but over several months we probably bought and sold 30-35 cars. Since then I have done this on my own probably 10 more times.

So I don't know much about running the actual retail business, but I did learn a lot about how to write good ads, how and where to buy cars and good sales techniques. If I can help you out at all just let me know.

Fantastic! I'm interested in chatting with you more regarding buying. The old ad technique sounds like a good place to start. I'll also have access to wholesale auctions, which I'm looking forward to trying out.

My primary motive for having a retail location is just to fulfill the requirements of the retail license... not to actually attract street traffic with "JOE'S AUTO BLOWOUT!" signs all over the place. The plan is to generate the traffic online... via Ebay and CL, and similar auto listing sites.

In California, the DMV limit without a license is 1 car per year... they want to regulate anything done "for profit".

If you don't know much about the mechanics of a car make sure to take a mechanic or someone who knows engines well with you to the auctions. If you haven't already been you will see that most of them are as is type sales. You have a short preview period then you have to buy so you have to make your decision on the spot and you don't want to over pay for something that has some serious motor issues.

If you want I can share some of the tips I learned about when to buy in the classified and how to word ads to get people interested in the car. I can post here if you want or hit me jeff.rust AT gmail.com and I would happy to give you any tips I might have.

Good luck on the business.

Are you talking a full fledged car dealership or selling a few cars here or there?

One of my first businesses was a used car dealership. If you have never been in the business before, I'd suggest starting small. I dunno how the regulations are in your area but in most places you can pull your dealers license out of a warehouse somewhere.

Don't go crazy renting some high end car lot somewhere until you know you can run the business properly. I started out just buying cars on the side and selling one at a time from my house then rented a small 2 bay warehouse that had a few parking spots assigned.

I later worked a partnership deal with a guy that owned a very nice high traffic lot but didn't have the license and we both sold from the same lot.

Something else to think about when you start out.. A friend of mine that I let work off my license when he first started out did a pretty smart thing when he finally got his license.

He rented a warehouse much like I started in but, only sold specific cars. He sold Mustangs, Jeep Cherokees & Saturns. Seemed to work pretty well for him as he eventually learned what to look for and what those customers wanted. Another guy I knew specialized in just commercial panel vans & light commercial trucks.

There are a ton of scum bags in that industry just like adult.. so just be for warned. Just start small, don't blow a bunch of money just because you have it. Learn the biz then move up if you do well.

generating the traffic online isn't so much a 'plan' as it is a 'reality'. If you have no newspaper/radio/etc ads, almost all your traffic will be CL/kijiji/autotrader etc, as well as any referral traffic

with all honesty, get your license and just curb to start off. you'll be able to slowly get the hang of it without exposing yourself too much

I had to find out about your new business aspirations through GFY?
I thought we were homies!
:helpme

Anyway, good luck on your new venture. I know you'll do well. :thumbsup

Specialization is a good piece of advice. When I was buying and selling cars there were a few types of cars I looked for because I knew about them, how to work on them and how to sell them. I also knew a guy that sold only Range Rovers. He did pretty well for himself because those cars have a following and he knew what buyers of those cars look for.

I didn't see this part of your post. I can tell you straight up, that the trick to selling via Auto Trader is to be the "cheapest". (was no ebay & CL when I was doing it)

It doesn't matter if your car is nicer has less miles or what ever, because what ever car you try to sell, gets compared to the cheapest one just like it. Every car I listed via auto trader sold the 1st day or two it got publish because I never listed a car in AT that I couldn't be the cheapest one listed.

Auto Trader is like a wish book for people trying to sell cars.. They "wish" it would really sell for that much. :1orglaugh

Also auctions aren't all they are cracked up to be.. Sure you can get deals on stuff but remember every car you buy there, you are buying from another dealer and in most cases he's making a profit selling it there.

I used to buy cars out of the paper or just random ones I happen to see around town and actually in some cases sell them to other dealers. I bought a Toyota 4x4 one time out of a dude's yard for 400 bucks.. I sold it to another dealer for $1200 the same day.

One time I bought a Suzuki Samurai from right around the corner from my shop for $200. It had been sitting under a tree for 2 years, it looked like shit but started right up. I cleaned the thing up and it actually looked pretty good after I cleaned it and sold it the next day to a guy that lived across from my shop for 1,300 or 1,400 I forget which.

You don't make your profit selling the car you make it when you buy it and it's not always the nicer more expensive cars that make the most profit. It's also usually easier to sell a nice looking car that is shit vs a shitty looking car the runs great.

As long as your not in a competitive area, you'll probably do fine.

I work with 100's of dealerships, one of our main products is an advertising product dedicated to automotive dealers that creates ads for each individual car and places those on Google, Yahoo/Bing through PPC. Works great and dealers love it... however, I do hear some of the bad news from time to time.

Just had a dealership we've been working with for about 7 months tell us he will be shutting down shop in December. He can't compete with the larger dealerships who are able to buy cars at better prices and spend tons of money on ads. Plus, with sites like AutoTrader, Cars.com, Vehix, etc., its a game to see who can list their car for the lowest price.

If your going to use those sites and don't plan on competing for the lowest price possible, it's going to be tough, but good luck.

Once you get up and running, hit me up and we'll hook you up with some ad dollars to try out our product to help get you going :thumbsup

When you are up and running, give me a shout. I'm looking for reliable dealers to import US NSX's into Canada for me. Looking at importing 4-10 a month. I just don't have the time to go hunting for them any longer so I need reliable dealers who can track them and ship them to me door to door :)

You know we're homies, bro! I've pretty much kept this to myself until now.

You really should contact me about this. Since leaving adult in 2006, I've been making a good living doing marketing for auto dealers. I've got some really good friends who own large dealerships, and I do a lot of work on their computer systems for them.

Hit me up mang :) I can help on the traffic side.

I have netsauto.com for sale has a good back end script ...needs traffic ...$400

Also have about 12 other car sites

What do you think would be a good price point for shooting and indexing a new or used car? Like 20 pics and a 30 field form.

contact chin motorsports in S. Florida they used to be called florida NSX club, they host track events. mostly NSXs and S2000s... used to run miatas with them. good folks always have cars for sale/trade etc in the club

http://s9.postimage.org/6e24ybe99/22...11214569_n.jpg

Good luck on your new venture/adventure! :thumbsup

On the photography side, $10-$12 per car is the popular rate I've seen discussed on the dealer resource forums. Not sure about the listing part...

Thanks for the lead Shimmy, I'll definitely hit them up. They have some nice NSX's up in Florida. Saw one which had to be the best looking NSX to date a few weeks ago in Florida but a previous accident history had me rethinking acquiring it. But I'll check out the folks at Chin Motorsports :thumbsup