How To Open a Car Dealership

How To Open a Car Dealership 

You may have a little experience with selling vehicles or a lot. Regardless, the love for cars runs rampant in your veins, and you want to delve into opening your car dealership. The idea is there, but you need it to come to fruition. What are the steps that you should take to be successful? The following article will try and address that and much more. 

Where Do You Start?

It would help if you asked yourself many questions when building a business like a car dealership. What type of dealership do you want to open? Will you be selling used or new cars? Both kinds? Opening a used car dealership is cheaper to set up than a new car one. If you have a small budget, you can always have just a few cars on the lot. Once you sell that inventory, you can reinvest and expand your selection of vehicles. Build when you can and grow your dealership over time. 

Next, it takes a lot of research. Things to investigate include what kinds of vehicles people are purchasing. What brands? What are competing dealerships in your vicinity primarily selling on their lot? If you discover that the market is flooded with cars you want to sell, it might be a good idea to find another location and begin your probing once again. 


Once you settle on a location that suits your needs, you will have to figure out the start-up costs and things you need to do before inviting consumers to your dealership. Your budget should cover the following:

Physical Location

Your dealership space is going to cost you, whether you buy or rent it. It won’t matter if there is an actual building or just a lot; the point is, either option can prove to be quite expensive. Figure out which one works better for you. 

Registration and Fees 

Your business registration will vary from state to state, but you have options in which you can register your dealership. They include:

  • Corporation
  • Sole Owner
  • Limited Liability Co
  • General Partnership
  • Limited Partnership 

The price of your company registration will also vary depending on what state you will run your dealership in and, of course, what kind of company you will be running. On average, you can expect to pay under three hundred dollars to register a corporation in the United States.

Other costs and fees to consider:

  • Dealer license fee
  • Inventory costs 
  • Surety bond cost 
  • Liability Insurance

Many people who open a dealership look outside their money and resources to secure funding. Looking for money from investors and financial institutions will go much smoother if you have an excellent business plan. That’s where your previous research will help you. Once you have your money in place, you will have to learn how to spend it wisely and not haphazardly on your business. 

Hiring Excellent Staff

You’ll have to realize you can’t do everything yourself (even if you want to). Hiring people who will be the face of your company is vital. Teaching your staff to be open and honest while interacting with customers will create a pleasant client service experience. It will dispel the negative car salesman stereotype. The salespeople are essential for your dealership but having a professional mechanic on hand will be highly beneficial even if your business won’t have a service area. This trained professional can help you decide how good a trade-in situation is and fine-tune the cars you wish to sell. We live in a technological and digital age, and whether we want to embrace it or not, it’s here to stay. Having a talented employee handle your online and social media platforms will get your name out there and shoppers inside your dealership. 

Advertisements and Promotions

A phenomenal advertising and promotions strategy is key to any successful business venture. You will already have a social media guru to help you with your online presence, but you will also need to go beyond that. Think about placing ads in newspapers, newsletters, radio, bus posters, and feather flags.

Feather flags are a fantastic way to attract new customers’ attention and reinforce your car dealership’s brand image. Flagdom has a vast selection of automotive-themed feather flags printed with the logos of many auto franchises like Ford, Kia, Honda, Mazda, and more. Flagdom also has feather flags with messages including “Hot Buys,” “Stop, Save Here,” and “Look,” to name just a few. Custom Printed Feather Flags are also an option and can be personalized with your dealership name, colors, logo, and branding message. Get your Feather Flags now from Flagdom at:

It’s generally easier to advertise your dealership when you need to get a message out to your customers about upcoming sales and promotions, new vehicle arrivals, or anything else involving your business. Always keep your target audience in mind and create a marketing strategy that includes them.

Be Reliable and Trustworthy

Being dishonest and selling your vehicles at outrageous prices isn’t just deceptive; it can also have legal ramifications. Even if the law doesn’t get involved, you can get a bad reputation, and people won’t trust you, which means they won’t buy from you. Sell your vehicles with integrity and at fair prices. 

Remember to keep learning, researching, being on trend, and growing your car dealership, because consumers nowadays tend to be more informed than in previous years. People tend to research more because of all the online information and reviews. 

Customers are your livelihood, treat them accordingly, and you will get repeat business. Happy customers tend to share their good experiences with those in their life. This goes for negative encounters as well. Just one bad review can have a significant impact on your business. 

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Adam Oakley
Events Reporter

Adam has covered the likes of Sundown Music Festival for us on 3 occassions.

He is now a tiktok star.


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