The demand for cars has remained steady over the years. Most locations are designed for car travel, not public transport, so people always need to drive.

That makes becoming an auto dealer a great option. You almost always have demand for your inventory. And when the number of people expected to buy new cars in 2023 is expected to rise to 15.47 million, a dealership is an even more attractive choice.

Are you starting a car dealership and want to maximize your chances of success? Read the guide below to learn how to become an auto dealer.

Plan Your Business

The first step to starting any business is to plan how your operation will run. This step means defining who you’ll sell cars to, the types of cars you sell, and what kind of service you want to provide customers.

There are a few routes you can go when doing this.

Focus on New Cars

Many dealers focus on new cars. They get deals with car manufacturers and import new cars to the lot. They may also sell used cars, but they aren’t the dealership’s focus.

This is an excellent option if you want to work on the higher end and become a franchise of another company.

Sell Used Cars

If you want to work independently and not run a franchise, a used car lot is an excellent choice for new business owners. You don’t pay any fees to manufacturers and can buy used cars reasonably priced to sell them for a profit.

But you won’t get as much support from manufacturers or parent companies if you go this route, so you’ll have more to plan.

Get Financing

It won’t be cheap to start a car dealership. You need the correct type of property, inventory to sell, and staff available to help customers. You may not have the cash on hand to cover those costs.

That leads many new dealership owners to get financing for their businesses. You can get bank loads, seed investors, and other financing options.

Before you look for financing, determine how much startup costs you need. This includes the initial cost of opening the business and ongoing monthly costs. Try to get more than you believe you need to account for unforeseen problems and expenses.

File the Business Paperwork

You can’t start a new car business without telling the government what you’re doing. You need to form a business, set up a business bank account, get tax ID numbers, find insurance, get licensed, and many other things.

Determine everything you need to do to start your company correctly.

This can be complex if you’re new and don’t know what to do, so don’t hesitate to seek help. Many business lawyers specialize in helping new businesses get up and running. Reach out to one to get a partner willing to walk you through the process and give you the tools you need to set up your business correctly.

Purchase Your Business Necessities

Once you have the business paperwork filled out, it’s time to start buying everything you need to start your business.

To start, you’ll need a car lot to sell cars. You can get by with a smaller building and parking lot when you start. You may not have a ton of inventory, so you can utilize these spaces well.

Once you have a place to bring customers, you can focus on getting inventory. Get your inventory from the manufacturer or parent company if you’re a new car seller. If you sell used, you’ll need to find used cars to sell.

After you get an inventory, focus on purchasing software and physical supplies that allow you to service customers well.

Build a Team

There are many businesses you can start on your own without hiring employees. Unfortunately, a car dealership is probably one where this won’t work well.

You can only serve so many people at a time, so you’ll need multiple salespeople to help customers when you aren’t available.

On top of that, you’ll need people to manage financing, customer support, administrative tasks, and countless other things.

Be sure not to skimp on quality when doing this. It’s tempting to try and save money on labor costs when starting to increase your profit margin. But when you don’t hire quality employees, customers won’t be happy and recommend your dealership to friends and family.

Hire the right people to begin with and focus on running a lean operation offering great customer service.

Create a Marketing Plan

You’re ready to begin getting new car buyers once you have a team in place and cars to sell. However, being in a great location isn’t enough to get the customers you need. You’ll need to let potential customers know you’re in business.

One of the best ways to do this today is to create a website. Tell people where you’re located, what you offer, and why they should buy from your dealership. Once your website is up, you can sign up for Google My Business and show up on map results.

Jingles are another popular option for dealers looking for new customers. These jingles go on local radio in between songs and will attract the right people. Learn more about jingle production for car dealership to learn how to do this right.

Plan On Starting A Car Dealership Carefully

Starting a car dealership isn’t a decision you should take lightly. You must invest in inventory, employees to help customers, and marketing to find people to sell to. You may waste a lot of money if you don’t do things right.

But now that you know what it takes to become an auto dealer, you should be better prepared to take on the task. Follow the guide above when starting to start up successfully and get your first customer.

Check out the blog if you want to find more advice that will help you grow your new dealership.