what do i need to open a car lot?

[Crox]

Jap imports realy took off here a couple of years ago and you could get into it for practically nothing. Here there are no dealer only auctions so you can turn up and pick up cars for the same price as dealers and then sell them off as a private sale, not ideal but a good place to start out to gain some experence.

 

[trader869]

Beefybull.......most of the services i know charge by the car to hal them,most are 25 a car...some charge by miles though,with .40 per mile common for long trips.
When i go to the sale and buy 3 cars it typically cost me 75-85 for them to be delivered. I only live 35 minutes away, but i have 2004 Ford rollback with a 20 ft Jerr Dan bed,only one at a time on the bed, and one attatched to the wheel lift on the back of the truck. so i would have to make 2 trips. cost of fuel would be about 25 dollars for me to run both trips. and i figure my time for those trips is worth probably 100 dollars,BUT....if i have them haul them i can be at my lot,which means i "may" be able to sell a car at that time,couldnt if i was haulin. and what i typically make on a vehicle is 10-20 times what my time was figured at. dont get me wrong,i used my rollback,in my case i have it for emergencies, or when the hauling service i use is too busy ,as i need to get the vehicles in my hands as soon as possible.

 

[gotmilk]

i hear u need at least 30k...no?

Add a few zero's unless you plan on hocking used vehicles parked on your front lawn.

 

[trader869]

Add a few zero's unless you plan on hocking used vehicles parked on your front lawn.

obviously has no clue about the car business,dont listen to this one. like i said, this business is one of the lowest cost to start.

 

[gotmilk]

dont listen to this one. like i said, this business is one of the lowest cost to start.

If one can start a car business for $30,000 and obtain financing plus insurance and a way to finance one's future inventory, please let me know where to start.

For $30,000, he might be able to start selling used vehicles acquired thru auctions but that's about it.

Plus, if he ever tries to obtain capital to expand, I would hope he would be able to specifically address a question as opposed to asking about

legal stuff and shit

 

[trader869]

If one can start a car business for $30,000 and obtain financing plus insurance and a way to finance one's future inventory, please let me know where to start.

For $30,000, he might be able to start selling used vehicles acquired thru auctions but that's about it.

Plus, if he ever tries to obtain capital to expand, I would hope he would be able to specifically address a question as opposed to asking about

Where to start...DMV,get your paperwork for dealers and salesmens license.
Auctions are THE place to buy vehicles....dealer trade ins are another. If you read what i wrote about floorplanning u dont need anywhere close to 30,000.
Getting financing is easy,if u got good credit,and a good idea of how your business is going to go....remember,your selling cars for sure,but your selling yourself too then u go to the bank. the most expensive thing is getting a lot if you dont have one,but they can be leased quite easily and cheaply. remember, we're not Donald Trump here...we arent buying anything expensive,and we dont need 50 cars to start. Most people only keep 5-6 cars at a time(including me). As for trying to obtain capital for future expansion...well if you do it right,you can take most of expansion money right out of your pocket. Most dealers (like i said done right) make enough in 3 years to do expansion out of pocket. Really, you need to go to a dealer auction and see four yourself. This isnt rocket science. But it is great money to be obtained. Do you know that most dealer auctions have what they call an absolute sale? This is where the American Heart Ass., Boy scouts of America, Kidney Foundation, among others , sell cars that were donated. Most of those cars are in excellent shape . And these cars are sold absolute,which means whatever they brinbg they bring. I just bought last week a 98 Ford Taurus for $350, the only thing it needs is the front facia repainted. That is being done right now and will cost me $250, so i have about$600, plus delivery was another $25. So, for under $700 i have a vehicle(which i think is already sold ) that im asking $4500 for. And it wont be here long. It has all the options,and has 77,000 mile on it. Look at what im making on this car. and total time had should end up being 2 weeks. Good QUICK money. Money that i can put BACK INTO the business. Used cars fom 97-2002 are HOT right now,they sell quick.

 

[pinoydarv]

I'm assuming the laws varies on different states. In florida you will have to acquire a building and let the DMV aprove of the location first. Then from there you shoul be good to go. 50K would prolly get you started.

 

[trader869]

I'm assuming the laws varies on different states. In florida you will have to acquire a building and let the DMV aprove of the location first. Then from there you shoul be good to go. 50K would prolly get you started.

Im glad everyone thinks you need this much money to get started. You guys want in? give me your 30,000-50,000 and ill get you started,TOMORROW!

Look,lease a lot . Helll when i started i leased a 6 car lot for 500/month which included an office(was old office trailer). So, you got 500 rent,plus 500 sec. deposit. just say you pay for a year up front.....6500 w/sec. dep. Now take another 2000 and buy a 94-97 jeep cherokee(example of good seller) . Put 1000 in it ( high estimate) and sell for 4500. You made 1500 and it will go quick. do this over and over and your started. Simplified a little but you can see its nowhere near 30,000.

Hope in the end you take advise from someone who is ACTUALLY in the business.......good luck

 

[pitbullstl]

You'll need all the massive amounts of paperwork your state requires. In most states, this stuff will be available online in .pdf format. You need Adobe Acrobat or Reader to open/print these. You'll have to print these up and make copies of some.

-Business registration (if required in your state)

- Apply for a Dealers License. In many states this requires you be bonded for $10000-30000 and have a fixed address to receive mail/paperwork.

- You need equipment for bookkeeping, a good computer, backup stuff, file cabinets, and appropriate papers/log books.

- Find out all the local/regional dealer-only auctions. Once you have your license you can buy at these, the deals are outrageous but you may have to compete with bigger dealers who have more capital than you.

- Equipment for moving vehicles (tow truck, car mover, flatbed, etc.)

- Some repair/maintenance/protection equipment
(air compressor for airing up tires, tire changing/removal equipment, tarps/car covers, etc.) this makes it so you dont have to take cars to tire/wheel shops all the time

- A mechanic on staff would be good or just make deals with local auto shops. Find someone who will tint windows cheap b/c you're a dealer and get your cars painted right.

Theres tons more I'm not thinking of, pitbullstl could answer some things.

Don't know how I missed this thread.......

But you covered just about everything. The only thing missing, is most states require you have a physical lot, not just a mailing address. Some states like Missouri, allow you to just have signage on a lot...ie: you could literally have 5 dealers with signs on one dinky ass lot. The Highway Patrol comes out checks to see if the sign is visible from the road, and signs off so you can get your D tags. I used to allow two other dealers to host their sign on my lot, but a lot of bullshit, and two many headaches later, and they are history. The biggest thing you have to remember, is it's not a get rich quick scheme. The market (mine) is saturated with newbie car dealers, and obviously fracnchise dealers who are trying everything they can to be competitive, even if that means lowering margins. The best advice I can give is to research the market, network your ass off, and be funded (liquid if possible for the first year, because deals come and go in the blink of an eye.

Good Luck!!!!

and stay the hell out of St. Louis.....

 

[pitbullstl]

Hello.im new and i realize this is an older post. My father is in the business,so i have some experience. I grew up around cars, and it is one of the easiest businesses to get into.
First you need to go to your states DMV and get the required paperwork, which is free. My suggestion is to have a lot to display your vehicles, it doesnt have to be big,but it does have to have some sort of traffic...you need to be seen if your going to sell to the public. You need a dealers license,and anyone that works for you should have a salesmens license. You need not have a mechanic on site, i prefer not to have the overhead. There are plenty of qualified mechanics in any area thats willing to do repairs cheap. This is the cheapest way,UNLESS you are a mechanic yourself. Another suggestion is to become a notory at the same time,this way you can transfer all titles on the spot. If you have to go somewhere else to get the titles transfered it gives the buyer time to rethink his purchase,which we dont want,we want their money...lol. Another person to talk to and aquire is a good body and paint shop....most cars are mechanically sound,they just need a facelift,and this is where you can make fast money. Buy one for a couple hundred dollars, and give it a facelift and resell for 2500-3500 and your on your way to making big bucks quick.
Another option for this business is wholesaling. This is great because you dont have to deal with the public at all,which is where im heading right now. One more option that is a great money maker......."buy here pay here". The biggest bucks and quickest bucks are made on lower income people or people who dont want a car payment. Most people buy cars in the 1500-6500 price range the quickest, most people can get that money or have that money fast,which is what its all about,quick money.
One more thing to look at....Dealer Financing. GREAT money maker. This is where you finance the vehicles yourself,but the catch is you dont use your money....you use the banks....your goin to make some great cash on this if done right. You go to your bank and negotiate some loans at some unreal interest rates,try for 4 or 5 %. Then when you sell a car a finance it,you sell the loan out at 11 or 12 %. This is all negotiated at the time you talk with the bank. Only thing they are concerned with is what interest rate they get,not you.But when you finance cars with the banks loans, have them put the interest rate you made in an account that you will only access in 12 -24 months(which was negotiated with the bank too so they are making money with your money...lol hope im explaining right) just think of the money made just off the interest of these loans...which can be substancial. Oh....as far as needing 30,000.......most dealer auctions have whats called Floor Plan options if you have good credit,which means you use their money to buy the cars and at say 30-60-90 day intervals you pay this money back,which is plenty of time . If you havent sold that car in that time you held on to it tooooo long...lol. OK i talked enough......any questions you can email me at [email protected]. hope ive helped a little an not rambled too much..lol....thanx!

oh...beefybull had some good suggestions,but remember overhead is something you dont want....so alot of the equipment he said is needed really isnt needed or wanted. example..rollback?tow truck...why pay 20,000-50,000 on a good one ,then spend money on tiltle,tax,tags,insurance when this service can be bought way cheaper from someone else. most small dealers might buy 2-5 cars a week,but with a tow truck or roll back,any more than 3 has to make more than one trip....this is where a car carrier service comes in,they can haul those cars in one trip and most likely for the same price as one of your trips.and while they are being hauled, you can be making money somewhere else. like isaid,remember business is all about making money,not spending it. the less you have to buy and have sitting around not making you money the better...ok thanx.

All fantastic suggestions, but you won't get a floorplan right off the bat, it has nothing to do with your personal credit ( I was in business for a solid year before Manheim gave me my 90 plan), and you will be hard pressed to find financial institutions willing to help you set up finance shop right away either. The first year is the hardest, I was lucky and bought a turnkey operation. Buy a dually and a carhauler...as a newbie this not only allows you the freedom to have cars back faster (most transports take 1-2 weeks) but it will give you a grassroots feeling for the business..ie: travelling to auctions, seeing for yourself what markets bear what....when you grow the business you will have buyers ( I have 5-6 ) Good Luck!!