Do you want to start a used car sales business? Well, there are a few facts you need to know before you can open your used car sales lot. First, you should make sure that you are well-informed; you can do this by taking some online courses in business law and/or management of small businesses.
Every state has different regulations, and these include laws that affect the sale of used cars. A state has a limit as to the number of cars that can be sold by a person before he is required to get a car dealer’s license. At any rate, if you plan to open a car business you will need to get a car dealer’s license from the Department of Motor Vehicles in your state. You need this license even before you open the car lot. Many states require that you fill out an application and take a test; the state will then process your application, which may take a week or so.
Once you have done that, you will need to look for property you can rent. You can drive by several locations; look for areas that have high drive by traffic. You also want an area which is easy for cars to access. You don’t want to sit by a thoroughfare where the traffic flows at such high speeds that potential customers cannot slow down and drive into your establishment. You are looking for a commercial zone that is viewable and accessible. Preferably you want a used car sales lot that is flat and paved. If you are renting the lot, you want to get a contract and keep these important documents safe. If you are purchasing the lot then you must also keep all the documentation.
Once you have your dealer’s license and have found the right lot then you need to get a surety bond with at least $30,000 in coverage. This is needed to protect your customers, and also because every state requires it. This bond protects buyers from the purchase of vehicles with hidden problems.
When you have the legalities finished, you can then proceed to acquire inventory for your new used car sales business. Go to wholesale car auctions to get your initial inventory. You will find many different types of cars for your used car business at the wholesale car auctions. You can also find cars at police auctions, or at private auctions, garage sales, and estate sales.
You should also decide whether your used car business will take trade-ins. This will certainly give you inventory, but some of these cars may be in very poor condition. You will really need to take these on trade at a very low price and you will need to know the value of these cars. It is virtually impossible to know the value of each and every vehicle; that is why you want to keep a recent copy of the Kelley Blue Book on hand to help you determine the value of a vehicle. And, as in any business, you want to adhere to good business standards; online courses in customer service and in general business policy can help you with this.