Starting a used car dealership (vehicles, sedans, trucks, buying)

[Zuko775]

Hopefully I can find Sunsprit to answer this questions for me. Everyone else is welcome to wiegh in as wellI could really use some advice. I probably a bit more serious than some of the others wanting info on a car dealership. I just received my Broker/dealers license in the state of georgia. I am backing a very old friend who has been in the car business for about 12 years and makes a damn good living wholesaling cars. Gaining access to the vehicles will not be a problem. I can put my hands on 40-60 good wholesale vehicles a month with out ever seeing an auction. My concerns are Location of the lot, demographics, profit margins, expected expenses, etc. Basically I need a business plan. I have recently sold another business in another industry. What scares me about this one is what I dont know. Any advice? I would be very grateful.

Thanks

[yo vanilla]

i was in the car business for around 5 years, working at new highline dealerships. so i'm not an expert at running/starting a used store but here's my thoughts:

location is the most important thing by far. even the crummiest dealers out there will get traffic with a good location.

you should consider more than just the sales of the cars - are you going to only sell and not offer service? if so will you have a garage bay to at least prep your cars.

also consider detailing - clean cars sell. you should recruit a respectable detailing service or two to handle your cars, and look for a good paint guy (possibly the same as the detailer) to touch up your cars. a good detail service should cost you $75-100ish per car (or that was our costs).

you've got a dealer's license; do you also need a sales license? in WI anyone who sells needs one; a dealer license might cover it.

ask your friend what his expenses are setting up the cars, what his current profit margin is. keep in mind that an actual dealer might need to spend more to make a car saleable than a guy selling it privately.

what kind of cars / price ranges are you expecting to sell?

hmm, what else...

[Zuko775]

Im with you. It looks like location will be key. As long as we match the inventory to the surrounding demographic. We would like to stay in the 5-15k range and stay with the sexy import, small trucks, sedans. etc... We already have our service vendors in place (i.e. Detailers, body, etc...) I've never done this before. So you think if we stick 40-60 nice cars/trucks on a nice visable lot in the 5-20k range, post everything in cars.com/autotrader people will just show up and start buying cars? That would be great. Keep the advice coming everyone. Thanks in advance.

Zuko775

[square peg]

You will quickly establish a reputation - hopefully a good one. Cars are a big investment for everyday people, and used car dealers get slammed so often. Customer loyalty still exists; it may be fickle, but that's what will make you successful in the long run. I bought a used Audi from a dealership that must not have been well run. They were up-front about an electrical problem and it was something that was quickly resolved by a shop that knew the car. I loved that car! But when I went to look for another they were gone.

Also worth noting: You won't be all things to all people. Find your niche and stay right there.