business plan for car dealers

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Building a Profitable Car Dealership Business from Scratch: A Step-by-Step Guide

• November 16, 2023
• Automotive Lead Generation

If you are passionate about cars and have a strong entrepreneurial spirit, starting your own car dealership business can be an exciting and lucrative venture. However, building a profitable car dealership business from scratch requires careful planning, market understanding , and a solid financial foundation. In this step-by-step guide, we will explore the key aspects of starting a car dealership business and provide valuable insights to help you succeed.

Understanding the Car Dealership Business

Starting a car dealership business requires a comprehensive understanding of the industry and its dynamics. The car dealership industry involves the buying and selling of new and used vehicles to consumers or other businesses. It encompasses various segments, such as passenger cars, commercial vehicles, and luxury automobiles.

As a car dealer, your primary goal is to acquire vehicles at wholesale prices and sell them at a profit. However, this is just the tip of the iceberg. To succeed in this competitive market, you will need to establish strong relationships with suppliers, manage your inventory effectively, negotiate prices, and provide exceptional customer service .

Let’s delve deeper into the key aspects of the car dealership business.

The Basics of the Car Dealership Industry

The car dealership industry is a complex and multifaceted sector that requires a deep understanding of market trends and consumer preferences. It is essential to keep up with the latest developments and technological advancements in the automotive industry to stay ahead of the competition.

When it comes to the types of vehicles you can sell, the possibilities are vast. From compact cars to SUVs, from electric vehicles to hybrid models, the choices are endless. Understanding the different vehicle segments and their unique characteristics will help you cater to a wide range of customer preferences.

Moreover, the car dealership business is not limited to just selling vehicles. Many dealerships offer additional services such as maintenance and repairs, financing options, and extended warranties. These value-added services can significantly enhance customer satisfaction and loyalty.

Key Players in the Car Dealership Market

To navigate the car dealership market successfully, it is crucial to be aware of the key players in the industry. Understanding their roles and characteristics will help you identify opportunities and develop a competitive edge.

Franchise Dealerships are one of the major players in the market. These dealerships have exclusive rights to sell new vehicles from a specific brand or manufacturer. They often offer additional services like maintenance and repairs, making them a one-stop-shop for customers.

Independent Dealerships, on the other hand, are not affiliated with any particular brand. They typically specialize in selling used vehicles and have more flexibility in terms of inventory selection and pricing. This flexibility allows them to cater to a broader range of customer budgets and preferences.

In recent years, online car marketplaces have gained significant popularity. These platforms connect buyers and sellers, facilitating transactions and providing extensive vehicle listings. Online car marketplaces offer convenience and a vast selection of vehicles, making them a preferred choice for many customers.

By understanding the strengths and weaknesses of these key players, you can position your dealership strategically and differentiate yourself from the competition.

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Profitability Factors in the Car Dealership Business

While the car dealership business can be profitable, several factors contribute to your success. It is essential to consider these factors and implement effective strategies to maximize profitability .

Market Demand plays a crucial role in determining the success of your dealership. Assess the demand for vehicles in your target market. Are there specific vehicle types or brands that are highly sought after? Understanding market trends and consumer preferences will help you make informed decisions regarding your inventory selection.

Location is another critical factor. Choose a strategic location that ensures visibility, accessibility, and proximity to potential customers. A well-chosen location can significantly impact foot traffic and customer reach.

Pricing Strategy is a delicate balance. Set competitive prices that attract buyers while still allowing for a reasonable profit margin. Conduct market research and analyze your competitors’ pricing strategies to determine the optimal pricing for your vehicles.

Effective Inventory Management is essential to minimize holding costs and maximize turnover rate. Keep track of your inventory, analyze sales data, and adjust your purchasing decisions accordingly. Maintaining a diverse inventory that caters to different customer preferences can also help attract a wider customer base.

Customer Experience is a key differentiator in the car dealership business. Provide exceptional customer service and build long-term relationships with buyers. A satisfied customer is more likely to become a repeat customer and refer your dealership to others.

By considering these factors and implementing effective strategies, you can increase the profitability of your car dealership business. Remember, success in this industry requires continuous adaptation to changing market dynamics and a relentless focus on customer satisfaction.

Planning Your Car Dealership Business

Identifying your target market.

It is essential to identify your target market before launching your car dealership business. Consider factors such as demographics, income levels, preferences, and local competition. By understanding your target market’s needs and preferences, you can tailor your inventory and marketing efforts to attract the right customers.

Moreover, conducting market research will help you identify trends, predict demand, and adjust your business strategy accordingly.

Choosing the Right Location

The location of your car dealership can significantly impact your success. Look for areas with high foot traffic, easy access, and visibility. Consider the proximity to major roads, commercial hubs, and residential neighborhoods.

Additionally, check local zoning laws and regulations to ensure that your chosen location allows for car dealership activities. Consult with a real estate professional to find the best-fit location for your business.

Deciding on New or Used Cars

Another critical decision is whether to focus on selling new or used cars . Both options have their advantages, and your choice will depend on factors like market demand, available resources, and competition in your area.

Selling new cars might require establishing partnerships with specific manufacturers, meeting certain sales quotas, and complying with brand guidelines. On the other hand, selling used cars allows for more flexibility in terms of pricing, selection, and sourcing.

Legal Considerations for Car Dealerships

Necessary licenses and permits.

Before opening your car dealership, you must obtain the necessary licenses and permits to operate legally. Consult with your local licensing agency or business regulatory authority to identify the specific requirements for your area.

Common licenses and permits typically include a dealer license, salesperson license, and potentially additional permits for vehicle storage, display, and vehicle registration.

Understanding Zoning Laws

Car dealerships are subject to zoning laws, which regulate the types of activities that can take place in specific areas. Ensure that your chosen location is zoned for car dealership activities or obtain the necessary permits or variances.

Consult with a legal professional or local zoning authorities to navigate the zoning regulations and avoid any potential issues.

Insurance Requirements for Car Dealerships

Obtaining comprehensive insurance coverage is crucial to protect your car dealership business from potential risks and liabilities. Insurance requirements may vary depending on your location and the type of vehicles you sell.

Common insurance policies for car dealerships include general liability insurance, inventory insurance, garage liability insurance, and workers’ compensation insurance. Consult with an insurance professional to design an insurance package that suits your specific needs.

Financing Your Car Dealership Business

Startup costs for a car dealership.

Starting a car dealership requires a significant upfront investment to cover various expenses. These may include:

• Property or lease costs for your dealership location.
• Initial inventory purchase.
• Licensing and permit fees.
• Office equipment, furniture, and signage.
• Marketing and advertising expenses.
• Insurance premiums.

Ensure you have a detailed business plan and secure adequate funding to cover these startup costs and sustain your business until it becomes profitable.

Securing Financing for Your Business

If you don’t have the necessary capital to finance your car dealership business, securing financing options can be a viable solution. Explore traditional banking options, government-backed loans, or private investors who specialize in financing car dealership startups.

Prepare a comprehensive business plan, financial projections, and supporting documents to increase your chances of obtaining financing. Demonstrate your knowledge of the industry, market analysis, and strategies for profitability to instill confidence in potential lenders or investors.

Managing Cash Flow in the Car Dealership Business

Effective cash flow management is vital in the car dealership business to ensure ongoing operations and sustained growth. Some key practices include:

• Implementing a robust accounting system to track revenue, expenses, and inventory.
• Regularly reviewing financial statements to identify trends, bottlenecks, and areas for improvement.
• Establishing relationships with reliable suppliers and negotiating favorable terms.
• Minimizing holding costs by optimizing inventory turnover.
• Being diligent with expenses and prioritizing cost control measures.

By continuously monitoring and managing your cash flow, you can navigate potential challenges and position your car dealership for long-term profitability.

Starting a profitable car dealership business from scratch requires careful planning, market understanding, and financial preparedness. By following this step-by-step guide, you can make informed decisions, overcome challenges, and build a successful car dealership enterprise. Remember to continuously adapt to market trends, provide exceptional customer service, and prioritize profitability to thrive in the competitive car dealership industry.

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Business Plan Template for Car Dealerships

• Great for beginners
• Ready-to-use, fully customizable Subcategory
• Get started in seconds

Thinking of starting or expanding your car dealership business? You're going to need a solid plan to drive your success. Luckily, ClickUp has the perfect solution for you - our Business Plan Template for Car Dealerships!

With this template, you can:

• Craft a comprehensive business strategy that covers all aspects of your dealership, from marketing to operations.
• Create accurate financial projections to impress investors and secure the funding you need to grow.
• Conduct in-depth market analysis to identify your target audience and stay ahead of the competition.
• Develop operational plans to streamline your processes and maximize efficiency.

Don't let your dreams of running a successful car dealership stay parked. Get started with ClickUp's Business Plan Template for Car Dealerships today and accelerate your path to success!

Business Plan Template for Car Dealerships Benefits

When using the Business Plan Template for Car Dealerships, you can expect the following benefits:

• Streamline the process of creating a comprehensive business plan for your car dealership
• Clearly outline your mission, vision, and goals to attract investors and secure funding
• Conduct a thorough analysis of your target market and competition to identify opportunities for growth
• Develop detailed financial projections and budgets to ensure the financial viability of your dealership
• Create a roadmap for the operational aspects of your business, including sales strategies, inventory management, and customer service protocols
• Stay organized and focused on your dealership's growth and success with a structured and professional business plan.

Main Elements of Car Dealerships Business Plan Template

ClickUp's Business Plan Template for Car Dealerships provides a comprehensive framework to help car dealership owners and entrepreneurs create a winning business plan. Here are the main elements of this template:

• Custom Statuses: Track the progress of different sections of your business plan with statuses like Complete, In Progress, Needs Revision, and To Do.
• Custom Fields: Add important details to your plan using custom fields like Reference, Approved, and Section, allowing you to organize and categorize your information.
• Custom Views: Access different perspectives of your business plan, including Topics, Status, Timeline, Business Plan, and Getting Started Guide, to ensure that every aspect of your dealership's strategy is thoroughly covered.
• Financial Projections: Utilize ClickUp's built-in reporting and analytics features to create and analyze financial projections, providing a clear picture of your dealership's financial performance and potential.
• Collaboration Tools: Collaborate with your team, assign tasks, and set due dates to ensure everyone is working together towards your dealership's success.
• Integration: Seamlessly integrate with other tools and software, such as accounting software, CRM systems, and marketing platforms, to streamline your dealership's operations and improve efficiency.

With ClickUp's Business Plan Template for Car Dealerships, you'll have all the tools you need to create a comprehensive and effective business plan that will set your dealership up for success.

How To Use Business Plan Template for Car Dealerships

If you're a car dealership owner looking to create a comprehensive business plan, the Business Plan Template in ClickUp can help you get started. Follow these steps to ensure you cover all the essential elements for a successful car dealership business plan:

1. Analyze the market and competition

Begin by conducting thorough market research to understand the current trends and customer preferences in the automotive industry. Identify the target market segment for your dealership and analyze your competitors to determine your unique selling proposition (USP).

Use the Goals feature in ClickUp to set objectives for market research and competitor analysis.

2. Define your business goals and objectives

Clearly define your short-term and long-term business goals. These may include sales targets, customer satisfaction goals, expansion plans, or specific objectives related to inventory management or customer retention. Establishing clear goals will help guide your decision-making and keep your dealership on track.

Utilize the Board view in ClickUp to visualize and track your business goals and objectives.

3. Develop a marketing and sales strategy

Create a comprehensive marketing and sales strategy that outlines how you will attract customers, promote your dealership, and increase sales. This may include digital marketing tactics, traditional advertising methods, partnerships with local businesses, or special promotions and events.

Use the Automations feature in ClickUp to set up automated marketing campaigns and track their performance.

4. Create a financial plan

Develop a detailed financial plan that includes projected revenue, expenses, and profitability. This should encompass various aspects such as inventory costs, employee salaries, marketing expenses, and overhead costs. Additionally, consider incorporating financial projections for the next 3-5 years to demonstrate the long-term sustainability of your dealership.

Use the Table view in ClickUp to organize and analyze financial data, including revenue projections, expense tracking, and profitability calculations.

By following these steps and utilizing the Business Plan Template in ClickUp, you can create a comprehensive and well-structured business plan for your car dealership. Remember to regularly review and update your plan to adapt to changes in the market and ensure the continued success of your dealership.

Get Started with ClickUp’s Business Plan Template for Car Dealerships

Car dealership owners and entrepreneurs can use the Business Plan Template for Car Dealerships to create a comprehensive plan that outlines their strategies and financial projections.

To get started, hit “Add Template” to sign up for ClickUp and add the template to your Workspace. Make sure you designate which Space or location in your Workspace you’d like this template applied.

Next, invite relevant members or guests to your Workspace to start collaborating.

Now you can take advantage of the full potential of this template to create a successful business plan:

• Use the Topics View to organize your plan into different sections such as Executive Summary, Market Analysis, Financial Projections, and more
• The Status View will help you track the progress of each section, with statuses like Complete, In Progress, Needs Revision, and To Do
• The Timeline View will allow you to set deadlines and milestones for each section of your business plan
• Use the Business Plan View to get a bird's-eye view of your entire plan and easily navigate between sections
• The Getting Started Guide View will provide you with step-by-step instructions on how to use the template and create a compelling business plan
• Customize the template by adding custom fields like Reference, Approved, and Section to provide additional information and track important details
• Update statuses and custom fields as you work on your plan to keep team members informed of progress
• Monitor and analyze your business plan to ensure it aligns with your goals and objectives
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Car Dealership Business Plan Template & Guidebook

If you are looking to start a car dealership, you have come to the right place. With the #1 Car Dealership Business Plan Template & Guidebook, you will have all the resources necessary to create a successful business plan that will help you launch your car dealership with confidence. This comprehensive guidebook provides an extensive template for developing the perfect car dealership business plan that will help you with everything from setting up your organization to finding the best financing options for your dealership. Read on for more details about this incredible resource.

Get worry-free services and support to launch your business starting at $0 plus state fees.

• How to Start a Profitable Car Dealership Business [11 Steps]
• List of the Best Marketing Ideas For Your Car Dealership Business:

How to Write a Car Dealership Business Plan in 7 Steps:

1. describe the purpose of your car dealership business..

The first step to writing your business plan is to describe the purpose of your car dealership business. This includes describing why you are starting this type of business, and what problems it will solve for customers. This is a quick way to get your mind thinking about the customers’ problems. It also helps you identify what makes your business different from others in its industry.

It also helps to include a vision statement so that readers can understand what type of company you want to build.

Here is an example of a purpose mission statement for a car dealership business:

Our mission at ABC Car Dealership is to provide quality vehicles and a superior customer experience by becoming the dealership clients turn to for their automotive needs. We strive to create a warm and welcoming environment, personalized service, and one-stop convenience from sales to service. Our team of highly trained professionals will work hard to ensure our clients receive the highest quality product as well as the best car buying experience possible.

2. Products & Services Offered by Your Car Dealership Business.

The next step is to outline your products and services for your car dealership business. 

When you think about the products and services that you offer, it's helpful to ask yourself the following questions:

• What is my business?
• What are the products and/or services that I offer?
• Why am I offering these particular products and/or services?
• How do I differentiate myself from competitors with similar offerings?
• How will I market my products and services?

You may want to do a comparison of your business plan against those of other competitors in the area, or even with online reviews. This way, you can find out what people like about them and what they don’t like, so that you can either improve upon their offerings or avoid doing so altogether.

3. Build a Creative Marketing Stratgey.

If you don't have a marketing plan for your car dealership business, it's time to write one. Your marketing plan should be part of your business plan and be a roadmap to your goals. 

A good marketing plan for your car dealership business includes the following elements:

Target market

• Who is your target market?
• What do these customers have in common?
• How many of them are there?
• How can you best reach them with your message or product?

Customer base 

• Who are your current customers? 
• Where did they come from (i.e., referrals)?
• How can their experience with your car dealership business help make them repeat customers, consumers, visitors, subscribers, or advocates for other people in their network or industry who might also benefit from using this service, product, or brand?

Product or service description

• How does it work, what features does it have, and what are its benefits?
• Can anyone use this product or service regardless of age or gender?
• Can anyone visually see themselves using this product or service?
• How will they feel when they do so? If so, how long will the feeling last after purchasing (or trying) the product/service for the first time?

Competitive analysis

• Which companies are competing with yours today (and why)? 
• Which ones may enter into competition with yours tomorrow if they find out about it now through word-of-mouth advertising; social media networks; friends' recommendations; etc.)
• What specific advantages does each competitor offer over yours currently?

Marketing channels

• Which marketing channel do you intend to leverage to attract new customers?
• What is your estimated marketing budget needed?
• What is the projected cost to acquire a new customer?
• How many of your customers do you instead will return?

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4. Write Your Operational Plan.

Next, you'll need to build your operational plan. This section describes the type of business you'll be running, and includes the steps involved in your operations. 

In it, you should list:

• The equipment and facilities needed
• Who will be involved in the business (employees, contractors)
• Financial requirements for each step
• Milestones & KPIs
• Location of your business
• Zoning & permits required for the business

What equipment, supplies, or permits are needed to run a car dealership business?

• Car sales license
• Business permit/registration
• Financial documents and records
• Computer software programs for tracking inventory, sales, and customer data
• A display area and other fixtures for displaying vehicles
• Desks, phones, printers, and other office equipment for customers and sales people
• A website or online presence to market and sell cars across the internet
• Automotive lifts, tools, and other equipment for servicing vehicles
• Advertising materials such as flyers, posters, banners, and television commercials

5. Management & Organization of Your Car Dealership Business.

The second part of your car dealership business plan is to develop a management and organization section.

This section will cover all of the following:

• How many employees you need in order to run your car dealership business. This should include the roles they will play (for example, one person may be responsible for managing administrative duties while another might be in charge of customer service).
• The structure of your management team. The higher-ups like yourself should be able to delegate tasks through lower-level managers who are directly responsible for their given department (inventory and sales, etc.).
• How you’re going to make sure that everyone on board is doing their job well. You’ll want check-ins with employees regularly so they have time to ask questions or voice concerns if needed; this also gives you time to offer support where necessary while staying informed on how things are going within individual departments too!

6. Car Dealership Business Startup Expenses & Captial Needed.

This section should be broken down by month and year. If you are still in the planning stage of your business, it may be helpful to estimate how much money will be needed each month until you reach profitability.

Typically, expenses for your business can be broken into a few basic categories:

Startup Costs

Startup costs are typically the first expenses you will incur when beginning an enterprise. These include legal fees, accounting expenses, and other costs associated with getting your business off the ground. The amount of money needed to start a car dealership business varies based on many different variables, but below are a few different types of startup costs for a car dealership business.

Running & Operating Costs

Running costs refer to ongoing expenses related directly with operating your business over time like electricity bills or salaries paid out each month. These types of expenses will vary greatly depending on multiple variables such as location, team size, utility costs, etc.

Marketing & Sales Expenses

You should include any costs associated with marketing and sales, such as advertising and promotions, website design or maintenance. Also, consider any additional expenses that may be incurred if you decide to launch a new product or service line. For example, if your car dealership business has an existing website that needs an upgrade in order to sell more products or services, then this should be listed here.

7. Financial Plan & Projections

A financial plan is an important part of any business plan, as it outlines how the business will generate revenue and profit, and how it will use that profit to grow and sustain itself. To devise a financial plan for your car dealership business, you will need to consider a number of factors, including your start-up costs, operating costs, projected revenue, and expenses. 

Here are some steps you can follow to devise a financial plan for your car dealership business plan:

• Determine your start-up costs: This will include the cost of purchasing or leasing the space where you will operate your business, as well as the cost of buying or leasing any equipment or supplies that you need to start the business.
• Estimate your operating costs: Operating costs will include utilities, such as electricity, gas, and water, as well as labor costs for employees, if any, and the cost of purchasing any materials or supplies that you will need to run your business.
• Project your revenue: To project your revenue, you will need to consider the number of customers you expect to have and the average amount they will spend on each visit. You can use this information to estimate how much money you will make from selling your products or services.
• Estimate your expenses: In addition to your operating costs, you will need to consider other expenses, such as insurance, marketing, and maintenance. You will also need to set aside money for taxes and other fees.
• Create a budget: Once you have estimated your start-up costs, operating costs, revenue, and expenses, you can use this information to create a budget for your business. This will help you to see how much money you will need to start the business, and how much profit you can expect to make.
• Develop a plan for using your profit: Finally, you will need to decide how you will use your profit to grow and sustain your business. This might include investing in new equipment, expanding the business, or saving for a rainy day.

Frequently Asked Questions About Car Dealership Business Plans:

Why do you need a business plan for a car dealership business.

A business plan for a car dealership business is important in order to set goals and objectives, define strategies, develop an operational plan, identify your target market, and determine the financial resources needed to get started. It also serves as a roadmap for the direction of the business and helps you stay on track with your long-term vision.

Who should you ask for help with your car dealership business plan?

You should ask an experienced financial planner or accountant for help with your car dealership business plan. Additionally, you could consult with a business coach, business consultant, or mentor who has experience in the automotive industry. It is also a good idea to speak to entrepreneurial experts or other successful car dealerships owners who can provide valuable insights on the business.

Can you write a car dealership business plan yourself?

Yes, you can write your own car dealership business plan. Writing a business plan for a car dealership is like writing any other business plan. It should include your mission, market analysis, financial projections, competitive analysis and marketing strategy. Additionally, researching the car dealership industry in your area can help you tailor your plan and make it more specific to the local market. With a bit of research and preparation, you can develop a comprehensive business plan for your car dealership.

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I'm Nick, co-founder of newfoundr.com, dedicated to helping aspiring entrepreneurs succeed. As a small business owner with over five years of experience, I have garnered valuable knowledge and insights across a diverse range of industries. My passion for entrepreneurship drives me to share my expertise with aspiring entrepreneurs, empowering them to turn their business dreams into reality.

Through meticulous research and firsthand experience, I uncover the essential steps, software, tools, and costs associated with launching and maintaining a successful business. By demystifying the complexities of entrepreneurship, I provide the guidance and support needed for others to embark on their journey with confidence.

From assessing market viability and formulating business plans to selecting the right technology and navigating the financial landscape, I am dedicated to helping fellow entrepreneurs overcome challenges and unlock their full potential. As a steadfast advocate for small business success, my mission is to pave the way for a new generation of innovative and driven entrepreneurs who are ready to make their mark on the world.

Car Dealership Business Plan Template [Updated 2024]

Car Dealership Business Plan

If you want to start a new car dealership or expand your current dealership, you need a business plan.

The following car dealership business plan template gives you the key elements to include in a winning business plan. In addition to this template, a successful business plan will include market research to support your business concept, help you better understand the car dealership industry, market trends, car prices and your target customers. It will also help you craft a smart marketing plan and a strong financial plan.

You can download our Car Dealership Business Plan Template (including a full, customizable financial model) to your computer here.

Sample Business Plan For New Car Dealerships

Below are links to each of the key sections of a sample business plan that can be used for all types of car dealerships including a luxury car dealership, an online car dealership, new car dealers, and used car dealerships.

• Executive Summary – The executive summary provides an overview of your business opportunity and summarizes the business plan.
• Company Overview – The company analysis includes information about your business concept, the types of vehicles you plan to sell, car repair and maintenance services and legal structure.
• Industry Analysis – The industry analysis includes market research that supports your business and provides insights into market trends and the automotive industry.
• Customer Analysis – The customer analysis provides an overview of your target market and the purchasing habits of these potential customers.
• Competitive Analysis – The competitive analysis should identify your direct and indirect competitors and highlight your competitive advantage.
• Marketing Plan – The marketing plan includes your marketing strategy, pricing strategy and how you will build brand awareness utilizing social media platforms and other forms of digital marketing.
• Operations Plan – The Operations Plan includes information on your dealership’s day-to-day operations including inventory management and auto sales, and processes in the service department to maintain customer satisfaction.
• Management Team – The management team section includes a profile of the business owner and business management, their experience and company responsibilities.
• Financial Plan – The financial plan includes financial projections, a cash flow statement, profit and loss statement, and balance sheet.

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Car Dealership Business Plan Home I. Executive Summary II. Company Overview III. Industry Analysis IV. Customer Analysis V. Competitive Analysis VI. Marketing Plan VII. Operations Plan VIII. Management Team IX. Financial Plan

Used Car Dealership Business Plan Template

Written by Dave Lavinsky

Used Car Dealership Business Plan

You’ve come to the right place to create your Used Car Dealership business plan.

We have helped over 1,000 entrepreneurs and business owners create business plans and many have used them to start or grow their Used Car Dealerships.

Below is a template to help you create each section of your Used Car Dealership business plan.

Executive Summary

Business overview.

Reliable Motors is a used car dealership located in Portland, Oregon. We specialize in offering a wide selection of high-quality used vehicles to customers in our local area. With a focus on exceptional customer service and competitive pricing, we aim to become the preferred choice for individuals looking to purchase reliable pre-owned vehicles.

Reliable Motors is run by Otto Masterson. Otto has 12 years of experience in vehicle sales and dealership operations. His customer-centric approach, and strong understanding of the local market will ensure that our firm is successful.

Product Offering

Reliable Motors offers a diverse inventory of used cars, trucks, SUVs, and vans from various makes and models. Our selection includes vehicles that are carefully inspected, tested, and certified to meet our stringent quality standards. We also provide vehicle history reports and offer extended warranties for added peace of mind. Our knowledgeable sales team is committed to assisting customers in finding the right vehicle that suits their needs and budget.

Customer Focus

Our primary target market includes individuals and families in Portland, Oregon who are looking to purchase a reliable used vehicle. We will cater to customers with various budgets, offering a range of price points to accommodate different financial situations. Additionally, we will also establish partnerships with local businesses, such as car rental companies and auto repair shops, to provide them with fleet vehicles and maintenance services.

Management Team

Reliable Motors’ most valuable asset is the expertise and experience of its founder, Otto Masterson. Otto has been in automotive sales for the past 20 years. Throughout his career, he has developed a strong base of repeat customers, many of whom have stated that they will buy their next car from Reliable Motors once the company is established and running. Otto’s customer-centric approach, and strong understanding of the local market will ensure that our firm is successful.

Success Factors

Reliable Motors will achieve success by offering the following competitive advantages:

• Quality Inventory: We will ensure our inventory consists of well-maintained and reliable used vehicles that meet our strict quality standards.
• Competitive Pricing: We will offer competitive prices to attract customers and provide value for their money. Our pricing strategy will consider market trends, vehicle condition, and fair market value.
• Exceptional Customer Service: We will prioritize customer satisfaction by providing a personalized and hassle-free buying experience. Our knowledgeable and friendly sales team will assist customers in finding the right vehicle that meets their needs and budget.
• Transparent Processes: We will establish trust by providing accurate vehicle information, pricing details, and facilitating open communication.
• Strong Industry Partnerships: We will collaborate with reputable suppliers, finance institutions, and service providers to enhance our offerings and provide additional benefits to customers.

Financial Highlights

Reliable Motors is seeking $1,000,000 in funding to establish and grow the business. The funds will be allocated as follows:

• Inventory acquisition: $800,000
• Renovation and setup of the dealership facility: $100,000
• Marketing and advertising expenses: $50,000
• Working capital: $50,000

The projected financials indicate steady revenue growth and profitability within the first three years of operation

Company Overview

Who is reliable motors.

  Reliable Motors is run by Otto Masterson, a 12 year veteran in vehicle sales and dealership operations. After working for several dealerships around town, he surveyed his most loyal customers to see if they would be willing to switch to his new dealership once it is established. Most of his customers responded enthusiastically, which motivated Otto to finally launch his business.

Reliable Motors History

Once he canvassed his loyal customer base and located a potential location, Otto Masterson incorporated Reliable Motors as an S-Corporation in April 2023.

The business is currently being run out of Otto’s home office, but once the purchase of the dealership location is finalized, all operations will be run from there.

Since incorporation, Reliable Motors has achieved the following milestones:

• Found a location and made an offer of purchase
• Developed the company’s name, logo, and website
• Hired an architect to design the lot, the service area, and the office building
• Determined equipment and fixture requirements
• Began recruiting key employees

Reliable Motors Services

Reliable Motors will provide the following services to its customers:

• Vehicle Sales: offer an inventory of used cars, trucks, SUVs, and vans, catering to various customer preferences and budgets.
• Financing Assistance: assistance with financing options through partnerships with local banks and financial institutions.
• Trade-ins: Customers will have the option to trade in their current vehicles, allowing them to apply the value toward their purchase at Reliable Motors.

Industry Analysis

The used car industry is experiencing steady growth, driven by factors such as rising new car prices, improved vehicle reliability, and a growing preference for cost-effective transportation options.

The used car industry is expected to grow over the next several years. According to a recent report by IBISWorld, the used car dealerships industry is expected to grow at a CAGR of 1.2% from now until 2028. This growth is due to increasing environmental consciousness, which has caused many consumers to avoid purchasing new automobiles. This increase in demand and industry growth ensures that Reliable Motors will achieve success.

This industry presents a significant opportunity for Reliable Motors to cater to customers seeking quality used cars at competitive prices.

Customer Analysis

Demographic profile of target market.

Reliable Motors primarily targets individuals in the Portland area who are in the market for a reliable and affordable pre-owned vehicle. By understanding our customers’ needs and providing a personalized buying experience, we aim to build long-lasting customer relationships.

Customer Segmentation

Reliable Motors will primarily target the following customer profiles:

• First-time car buyers
• Professionals
• Individuals

Competitive Analysis

Direct and indirect competitors.

Reliable Motors faces competition from both direct and indirect competitors in the used car dealership industry. Direct competitors include other local dealerships offering similar vehicle options. Indirect competitors include online marketplaces and private sellers.

AutoWheels is a used car dealership that carries a large variety of used cars, trucks, SUVs, and vans. Their line of car brands include Chevrolet, Dodge, Ford, Jeep, and Toyota. AutoWheels’ focus is offering clean, newer model used cars with affordable monthly payments. The dealership offers flexible financing approval for buyers with any credit score or financial situation.

AutoWheels partners with Portland Precision Auto Care for its automotive maintenance and repair needs. This partnership enables AutoWheels to offer services that include Car and Truck care, Electronic Services, Electrical Services, General Services, Heating and Cooling Services, Engine & Transmission, Miscellaneous Services, Transmission Services, Undercar Services, and Brakes.

James Rivers Automotive Outlet

Located in Portland’s Sellwood-Moreland neighborhood, James Rivers Automotive Outlet is a member of the James Rivers Family-Owned and Operated group of dealers in Portland. The dealership carries a large inventory of new, certified pre-owned, and pre-owned line of cars, trucks, SUVs, and vans. Their line of vehicles are in all price ranges and body types. James Rivers Automotive Outlet also offers trade-in evaluations at their other franchised stores – James Rivers Honda, Acura, and Toyota. The dealership also offers affordable financing options.

Eastside Used Cars

Established in 2011, Eastside Used Cars is a family-owned used car dealership. The dealership is fully internet based and all sales are by appointment only, in one of two locations: Sandy and Gresham. The dealership claims to have the best prices in the market, offering wholesale prices to the public. Customers may also expect to receive top dollar for their trade-ins.

The dealership currently offers an inventory of 175 vehicles, ranging in price from $6,990 to $60,800. It offers a variety of finance options for consumers with all levels of credit, but outside financing is welcomed.

Competitive Advantage

Reliable Motors holds the following advantages over the competition:

• Rigorous Vehicle Inspection : Each vehicle in our inventory undergoes a thorough inspection to ensure its mechanical and cosmetic condition, providing customers with peace of mind.
• Customer-Centric Approach : We prioritize customer satisfaction by offering personalized assistance, transparent pricing, and a hassle-free buying experience.
• Extensive Inventory : Our diverse inventory caters to various customer preferences and budgets, ensuring a wide range of options to choose from.

Marketing Plan

Brand & value proposition.

Reliable Motors will offer a unique value proposition to its clientele:

• Client-focused automotive sales, where the customer is treated fairly, with transparent pricing and a variety of financing options
• Service built on long-term relationships
• Top-quality automotive repair and maintenance, at competitive prices

Promotions Strategy

The promotions strategy for Reliable Motors is as follows:

Reliable Motors understands that the best promotion comes from satisfied customers. The Company will encourage its customers to refer other businesses by providing economic or financial incentives for every new customer produced. This strategy will increase in effectiveness after the business has already been established.

Social Media

Reliable Motors will invest heavily in a social media advertising campaign. The company will create social media accounts and invest in ads on all social media platforms. It will use targeted marketing to appeal to the target demographics.

Website/SEO Marketing

Reliable Motors will invest heavily in developing a professional website that showcases current inventory, and provides valuation tools for potential trade-ins. It will also invest heavily in SEO so that the firm’s website will appear at the top of search engine results.

Operations Plan

The following will be the operations plan for Reliable Motors. Operation Functions:

• Otto Masterson is the Owner of Reliable Motors. In addition to providing inventory management and sales, he will also manage the general operations of the business.
• Otto Masterson is joined by a full-time administrative assistant, Mandy Bobo, who will take charge of the administrative tasks for the company. She will also be available to answer incoming calls and make service appointments.
• As the company builds its customer base, Otto will hire more sales professionals to grow our business further.

Milestones:

Reliable Motors will have the following milestones completed in the next six months.

• 6/2023 Finalize location purchase
• 7/2023 Design and build out Reliable Motors
• 8/2023 Hire and train initial staff
• 9/2023 Kickoff of promotional campaign
• 10/2023 Launch Reliable Motors
• 11/2023 Reach break-even

Reliable Motors’s most valuable asset is the expertise and experience of its founder, Otto Masterson. Otto has been in automotive sales for the past 20 years. Throughout his career, he has developed a loyal customer base, many of whom have stated that they will switch to Reliable Motors when it comes time to purchase a new vehicle. Otto’s customer-centric approach, and strong understanding of the local market will ensure that our dealership is successful.

Though he has never run his own business, Otto Masterson worked his way up from automotive sales associate to sales manager, where he gained an in-depth knowledge of the operations (e.g., running day-to-day operations) and the business (e.g., staffing, marketing, etc.) sides of the industry. He also already has a starting customer base that he served while working for other auto dealerships. He will hire several other employees who can help him run the aspects of the business that he is unfamiliar with.

Financial Plan

Key revenue & costs.

Reliable Motors’s revenues will from vehicle sales, with additional income generated through financing options and after-sales services. Key costs include

The notable cost drivers for the company will include inventory acquisition, overhead expenses, marketing expenses, personnel costs, and facility maintenance.

Funding Requirements and Use of Funds

Key assumptions.

The following outlines the key assumptions required in order to achieve the revenue and cost numbers in the financials and pay off the startup business loan.

• Number of clients:
• Year 1: 400
• Year 2: 500
• Year 3: 750
• Year 4: 1000
• Year 5: 1250

Financial Projections

Income statement, balance sheet, cash flow statement, used car dealership business plan faqs, what is a used car dealership business plan.

A used car dealership business plan is a plan to start and/or grow your used car dealership business. Among other things, it outlines your business concept, identifies your target customers, presents your marketing plan and details your financial projections.

You can easily complete your Used Car Dealership business plan using our Used Car Dealership Business Plan Template here .

What are the Main Types of Used Car Dealership Businesses? 

There are a number of different kinds of used car dealership businesses , some examples include: Franchised dealership, Independent dealerships, and “Bad Credit” dealerships.

How Do You Get Funding for Your Used Car Dealership Business Plan?

Used Car Dealership businesses are often funded through small business loans. Personal savings, credit card financing and angel investors are also popular forms of funding.

What are the Steps To Start a Used Car Dealership Business?

Starting a used car dealership business can be an exciting endeavor. Having a clear roadmap of the steps to start a business will help you stay focused on your goals and get started faster.

1. Develop A Used Car Dealership Business Plan - The first step in starting a business is to create a detailed used car dealership business plan that outlines all aspects of the venture. This should include potential market size and target customers, the services or products you will offer, pricing strategies and a detailed financial forecast. 

2. Choose Your Legal Structure - It's important to select an appropriate legal entity for your used car dealership business. This could be a limited liability company (LLC), corporation, partnership, or sole proprietorship. Each type has its own benefits and drawbacks so it’s important to do research and choose wisely so that your used car dealership business is in compliance with local laws.

3. Register Your Used Car Dealership Business - Once you have chosen a legal structure, the next step is to register your used car dealership business with the government or state where you’re operating from. This includes obtaining licenses and permits as required by federal, state, and local laws.

4. Identify Financing Options - It’s likely that you’ll need some capital to start your used car dealership business, so take some time to identify what financing options are available such as bank loans, investor funding, grants, or crowdfunding platforms.

5. Choose a Location - Whether you plan on operating out of a physical location or not, you should always have an idea of where you’ll be based should it become necessary in the future as well as what kind of space would be suitable for your operations.

6. Hire Employees - There are several ways to find qualified employees including job boards like LinkedIn or Indeed as well as hiring agencies if needed – depending on what type of employees you need it might also be more effective to reach out directly through networking events.

7. Acquire Necessary Used Car Dealership Equipment & Supplies - In order to start your used car dealership business, you'll need to purchase all of the necessary equipment and supplies to run a successful operation.

8. Market & Promote Your Business - Once you have all the necessary pieces in place, it’s time to start promoting and marketing your used car dealership business. This includes creating a website, utilizing social media platforms like Facebook or Twitter, and having an effective Search Engine Optimization (SEO) strategy. You should also consider traditional marketing techniques such as radio or print advertising. 

Learn more about how to start a successful used car dealership business:

• How to Start a Used Car Business

Where Can I Get a Used Car Dealership Business Plan PDF?

You can download our free used car dealership business plan template PDF here . This is a sample used car dealership business plan template you can use in PDF format.

Don't bother with copy and paste.

Get this complete sample business plan as a free text document.

Used Auto Sales Business Plan

Start your own used auto sales business plan

Integrity Auto Sales

Executive summary executive summary is a brief introduction to your business plan. it describes your business, the problem that it solves, your target market, and financial highlights.">, auto sales & parts.

There is a need in Lane County for a large selection of quality used cars, and Integrity Auto Sales will sell these top-quality used vehicles at a competitive price. The owner and sales manager have over 30 years of combined experience in new and used auto sales. We will continue to develop our excellent working relationship with local dealers and auctions to bring the savings to the customer.

We will create a purchasing environment that caters to the customer’s needs. We are selling a professional service and an experience in car buying that will bring customers back again, as well as referring friends and family. We estimate an optimistic gross margin over the industry average. We will be successful because of the excellent team we have assembled and the drive and determination of the owners.

Almost everyone needs a car to get from point A to B. Many families have two or more cars. Due to the recent success of the new car market, there is a large inventory of used cars available for re-sale. New car sales have enjoyed the largest single month gain in October up 24%.

Competition

Used car dealers are notorious for unethical sales practices. Customers are inherently cautious and untrusting as a result. The more we can provide a high-quality sales experience, the more successful we will be. Our salesmen will provide a friendly and personal experience for the buyer. We will follow up and ensure customer satisfaction. We will rely on these customers for an excellent reference to other car buyers. This company will build an excellent working relationship with our suppliers and customers.

Integrity Auto Sales provides a unique car buying experience to the customers in the Willamette Valley. One that focuses on customer satisfaction first. We understand that vehicle purchasing is a necessary, but sometimes unpleasant experience. Our goal is to provide the customer with an enjoyable, honest service by satisfying individual customers practical transportation needs with a quality product.

We also believe it is important to have quality vehicles at a low cost, and will back each vehicle with a 30 day limited warranty. Our company will make a profit by generating sales. It will provide job satisfaction and fair compensation to its employees, and a fair return to its owners. Hard work and performance is rewarded through bonuses and commissions. Job satisfaction is very important for employees and owners, we will create a work environment that is enjoyable and profitable for all.

Expectations

• Growth will be moderate to good, cash flows steady with several months of loss in the beginning
• Marketing will remain below 10% of sales. 
• The company will invest residual profits (10%) into financial markets and approximately 50% into company expansion for the first year.

Financial Highlights by Year

Financing needed.

We need $130,000 funding to start. That includes a $100,000 loan. Jonathan will invest $20,000 and Don will invest $10,000. 

Opportunity

Problem & solution, problem worth solving, our solution, target market, market size & segments.

Almost everyone needs a car to get from point A to B. Many families have two or more cars. Due to the recent success of the new car market, there is a large inventory of used cars available for re-sale. New car sales have enjoyed the largest single month gain in October 2001, up 24%.

4.1 Market Segmentation

Our market segmentation will consist of four basic segments; students, retired, families, and singles.

Current Alternatives

Our closest, similar competitors are AA Auto Sales, Big Apple Car Sales, Frank’s Auto Place, Guaranty, R & L Motors, and Sierra Truck, all on Hwy 99 between Eugene and Junction City.

• The primary competitors will be those in and around Junction City. Guaranty is a large, well-established dealer, with approximately 75% of the local market share. Guaranty has a large operation with a well-trained sales staff. Our sales manager is a former Guaranty sales manager, who understands the competition’s operations very well.
• Frank’s Auto Place offers a limited selection, and appears to be unorganized. Frank’s does not offer any competitive marketing and primarily focuses on the $1-2,000 vehicle.

Our Advantages

Keys to success.

To succeed in this business we must:

• Put together a team of experienced professionals.
• Secure an excellent high-traffic location.
• Establish a network of suppliers, in order to buy and sell products that are of the highest reliability and quality, at a competitive price.
• Ensure customer satisfaction by encouraging the two most important values, honor and integrity.
• Create high morale by rewarding employee success with monetary compensation.

Marketing & Sales

Marketing plan.

Our marketing strategy will focus on four segments. Those segments are described in the following subtopics. We will implement a strategy that treats customers as a community. This means our marketing resources will be centered around advertising both sales promotions (events) and personal sales (customer service, friendly atmosphere).

• The marketing budget will not exceed $6,000 per year.
• 100% customer satisfaction, measured through repeat customers, referrals and surveys.
• To achieve a respectable profit margin within the first three-years.
• To achieve a healthy net profit by year two.

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The  retired  group will focus on practicality. Cost may be less important than quality and features. This group wants comfortable, nicely equipped vehicles at a reasonable price. They will want a vehicle that will last for years.

Families  will focus on safe, practical vehicles. Something that will last for years, can fetch groceries, carry the kids, and perform long trips. Many will be on a budget, and price may be a big factor. They will shop around and educate themselves on vehicles, shopping for a specific make or model.

The last group is the  singles . They are similar to the students in that they want flashly cool cars, but may be a working professional who can afford to pay more for a higher-quality vehicle.

Sales compensation is based on a percent of profits. We will invest adequate time and resources into training each member of the sales team and into good customer relations. Salesmen will be paid a portion of their salary based on commission. Good performance is rewarded with increased commission and bonuses. However integrity will not be sacrificed for sales. Customer satisfaction will continue to be a top priority. All potential sales will be attended to in a timely fashion and long-term salesperson-customer relationships will take precedence over sales closure.

Locations & Facilities

• The company office is located at 12345 HWY 99, Junction City, OR 97666.
• The office is approximately 1,000 square feet and has ample space for the first three years of growth.
• The 20,000 square foot lot and building is leased from the principal owner.

Integrity Auto Sales sells top-quality used vehicles at a competitive price. Integrity buys pre-inspected vehicles wholesale from well known local car dealers, and auto auctions. Integrity continually maintains a diverse stock of vehicles, providing the widest selection for individual needs.

Vehicles are purchased weekly, to add to the current stock on hand. Each vehicle is thoroughly inspected by an ASE mechanic with over 25 years of experience. Only vehicles that pass this critical 26 point inspection are sold on-site.

Integrity Auto Sales sells all types of used vehicles, from sports cars to RVs. We cater to each customer individually, to satisfy their own practical needs.  We buy only the best used vehicles at or below wholesale in order to bring the savings to the customers. Each vehicle is thoroughly inspected by an ASE mechanic with over 25 years of experience. We also offer an auto finding service to customers. If we do not have the vehicle they want in stock, we will find one for them.

Milestones & Metrics

Milestones table, key metrics.

Our key metrics are: 

• # of facebook posts and pageviews 
• # of tweets and retweets
• # of reps that meet and excel their quotas. 
• cogs of our most popular cars
• website page views and shares 
• Follow our customers figure out their favorite cars and features 

Ownership & Structure

Integrity Auto Sales is a privately held corporation. It will be registered as a Subchapter S, with ownership 60%-Jonathan Dinsmore, 40%-Don Mazzioti.

Management Team

Integrity will start with four initial employees. The owner will manage over all operations and the sales manager will manage all buying and selling of inventory. A records clerk and lot attendant will also be hired initially.

Once the gross margin and cash flow will support it, we will hire an additional salesman and lot attendants (tentatively four to six months).

Personnel Table

Financial plan investor-ready personnel plan .">, key assumptions.

We will accept credit cards and trade-ins of any value. Credit cards will have a negative affect on cash flow in that we may not be paid for several days. Trade-ins will also impact cash flow in that they are an asset and have no real value until sold. We will have to limit the number of credit transactions, and only take in quality trades at a wholesale price to facilitate turning a quick profit. The personnel burden is very low because benefits are not paid to part-timers. And the short-term interest rate is extraordinarily low because of current market rates.

We also assume conservative earnings from selling loans and extended warranties will be made.

The other assumption is that current market conditions will remain for the next two to three years. Low rates will have a positive impact on sales and lending for the short term.

Our cash forecast is extremely unrealistic at the far end of the forecast. We leave it like that knowing that we will revise over time. We call it a cushion, and reassurance, not an accurate forecast. 

Revenue by Month

Expenses by month, net profit (or loss) by year, use of funds.

Almost 90% of start-up costs will go to assets. Start-up costs will be financed through a combination of owner’s investment, short-term loans (VA business loan), and long-term borrowing. The start-up chart shows the distribution of financing.

Other miscellaneous expenses include:

• Legal fees for business establishment (ownership, and no sell agreement).
• Stationary, office supplies.
• Marketing/advertising fees.
• Initial consultation to establish records with an accountant.
• Rent for lot and office.
• Establish a Web page for advertising.
• Expensed equipment (two computers, two desk, Fax/copier, phone lines, and office furniture).
• One month initial start-up investment in vehicles.

Sources of Funds

We will be needing $130,000 to start. $100,000 will be a long term business loan. Jonathan will give $20,000 and Don will give $10,000. 

Projected Profit & Loss

Projected balance sheet, projected cash flow statement.

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Used Car Frequently Asked Questions

To purchase a car from Enterprise Car Sales, you will need a valid driver’s license, proof of insurance and an accepted form of payment. If you’d like to expedite the process, bring the following:

• Down payment in the form of debit or credit card, money order or check
• Proof of income if you’ve switched jobs in the last year (if you plan to finance the purchased vehicle)
• Proof of residence if you’ve moved in the last year (if you plan to finance the purchased vehicle)

If you have a vehicle to trade in, also bring the following:

• Vehicle you want to trade in
• Trade title
• Trade-in appraisal   estimate , if available (Final appraisal at dealership)

If you still owe money on the vehicle you’re trading in, also bring the following:

• Payoff quote
• Payoff lender

A lot of factors come into your car budget, like rent/mortgage, bills, groceries, savings and other household expenses. Visit our  Car Payment Calculator  to help you estimate your monthly car payments and make an informed decision about how much car you can afford.

We make trading in or selling a vehicle easy. Stop by your local dealership or get a head start by estimating the value of your vehicle on our website. Learn more here .

We offer no-haggle pricing on all vehicles for sale, which makes it easy to compare car prices. Our transparent pricing, combined with exceptional customer service, puts the customer first and has been the cornerstone of our business for 60 years.

Though they may seem like the same thing, there is a  difference between car loans and car financing . Car loans are set up directly between you and a bank, finance company or credit union. Conversely, you may apply for financing through a dealership. The dealer will sell your financing contract to a bank, finance company, or credit union, which will service your account. When you meet with one of our trusted Sales Consultants, they will walk you through each  factor , so you can make informed and confident choices.

With Enterprise Car Sales, you get quality Enterprise Certified™ vehicles coupled with a convenient and transparent shopping experience. We have access to over half million vehicles of over 250 makes and models of cars, SUVS, trucks and vans, all hand-picked for Car Sales dealerships. Every vehicle sold goes through a rigorous inspection performed by an ASE-certified technician and comes with a 12-month/12,000-mile limited powertrain warranty and 7-Day Buyback so you have a confident, worry-free buying experience. That’s the Enterprise Difference.

Yes. Enterprise offers 7-Day Buyback . For a period of seven days or 1,000 miles beyond the odometer reading at purchase, whichever comes first, you can return your car for the price you paid, minus a $200 restocking fee (as allowed by law).  Restrictions apply.  See a Sales Consultant for details.

Coronavirus (COVID-19) Frequently Asked Questions

Yes. We’re open and able to help you with your next vehicle purchase. We have modified service offerings to help you, our employees and our community stay safer during COVID-19. This includes the addition of vehicle delivery (at some locations) to help promote social distancing.

We are ready to help, simply  contact or stop by your nearest Enterprise Car Sales dealership

Our team members are following best practices recommended by the Centers for Disease Control and Prevention (CDC) and other leading health authorities during this Coronavirus outbreak. Additionally, each of our vehicles is thoroughly cleaned between every test drive and backed with our Complete Clean Pledge. This includes vacuuming, general wipe down, and sanitizing with a disinfectant that meets leading health authority requirements, with particular attention to more than 20-plus high-touch points including:

• Key and key fob
• Steering wheel
• Steering column
• Center console
• Accessory panel/ touchscreen
• Compartments
• Door interior
• Door pockets
• Seat surfaces
• Seat pockets
• Interior Door handles
• Exterior Door handles
• Areas between seat/console
• Areas between seat/doorjambs
• Instrument panel and touchscreen
• Rearview mirror/side mirrors
• Visors/visor mirrors
• Gear stick/ gear shift
• Trunk release
• Among other high-touch areas

Enterprise is also proud to offer a program with Clorox ® , one of the most trusted brands for powerful cleaning, and implement near- and long-term enhancements to our Complete Clean Pledge.

We are providing a one-count Clorox Disinfecting Wipe in every vehicle to give you extra confidence during your test drive. Clorox Disinfecting Wipes are approved by the EPA to kill SARS-CoV-2, the virus that causes COVID-19, when used as directed on hard, non-porous surfaces. Each wipe includes directions for use and is accompanied by instructions to use it on the vehicle’s high-touch, hard non-porous surfaces.

Why Buy a Car from Us?

Certified used cars.

All Enterprise Car Sales vehicles have been checked by an ASE-Certified technician and have passed a rigorous inspection to be offered for sale as certified used cars in Orange.

No-Haggle Prices

Inventory online, used cars for sale san jose, ca.

Our used car dealers in San Jose have a big selection of used autos and trucks , including domestic and import used cars for sale in San Jose. All vehicles are hand selected, most from our fleet of rental cars, trucks, and SUVs with unsurpassed quality and value.

Enterprise car dealers are located nationwide, including San Jose. Used cars for sale are all certified with unbelievably low prices and backed by our limited warranty, plus roadside assistance. Our dealership is located near Santa Clara, Sunnyvale, Milpitas and Fremont, CA

All Enterprise Car Sales vehicles have been checked by an ASE-Certified technician and have passed a rigorous inspection to be offered for sale as certified used cars in San Jose.

You will appreciate our no-haggle car pricing so you can avoid unpleasant negotiations and sales games at our San Jose car dealership.

Search for vehicles online or visit our auto dealer near you for a wide selection of trucks, autos, SUVs and vans .

Used vehicles were previously part of the Enterprise rental fleet and/or an affiliated company’s lease fleet or purchased by Enterprise from sources including auto auctions, customer trade-ins or from other sources, with a possible previous use including rental, lease, transportation network company or other use.

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The “e” logo, Enterprise, “Enterprise Certified®”, “Enterprise Car Sales”  & “Buy. Sell. Trade. Enterprise makes it easy.®” are all trademarks of Enterprise Holdings, Inc. All other trademarks are the property of their respective owners. © 2024 Enterprise Holdings, Inc., 600 Corporate Park Dr., St. Louis, MO 63105, USA

Enterprise Used Cars for Sale

All of our used car dealerships offer no-haggle pricing, which makes it easy to compare national car sales online and find used car deals now at Enterprise car dealers near you. We offer a low-pressure used car sales experience to help you find quality used vehicles and rental cars for sale. Enterprise auto dealerships offer a wide variety of low mileage used cars for sale to fit your budget. Visit our nearby used car dealerships in your area to shop cars for sale. Compare used car prices on sedans , coupes , convertibles , hatchbacks , wagon s, sport utility , crossovers , hybrids , electric , and luxury cars .

When you buy used cars from Enterprise Car Sales, you get our 7-day buyback , so if you change your mind, we’ll buy a car back with no questions asked. Compare used cars for sale by owner to our used car dealerships. Enterprise gives you up to 7 days or 1,000 mile return policy, which can help ensure your satisfaction when buying a used car. Plus, our used vehicles and rental cars for sale come with an Enterprise vehicle certification, 12/12 limited powertrain warranty and 12-month unlimited roadside assistance .

Enterprise Car Sales inventory includes used cars , trucks , vans  and  SUVs that may be selected from the Enterprise Rent-A-Car fleet. Our used car website offers a large selection of used cars for sale near you, including:  Chevy , Honda , Ford , Toyota , Dodge , Ram , Nissan , Hyundai , Kia , Chrysler , Mazda , Mitsubishi , Jeep , Volkswagen , GMC , Buick , BMW , Mercedes-Benz , Cadillac , Lincoln , Volvo , Infiniti , Lexus , Acura , Audi , Subaru , Land Rover , Fiat . Research our best offers on used auto sales to find low price cars for sale nationwide. Learn more about used car sales offers and car trade-in values at Enterprise Car Sales. Search Ecars listings to shop cars online . Find the location of Enterprise car dealerships nearby and hours open today. Email me about upcoming Enterprise offers.

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I’m a Car Salesperson: Here Are 6 Ways To Save Money at the Dealership

A fter a couple years of car dealers being able to successfully sell vehicles on their lots well above sticker price because of low inventory and lack of competition, the tide has turned. As of March 2023, inventory is back up and dealer incentive and savings programs have returned too. That means there are opportunities to get a good deal on a vehicle.

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To get some insider tips, GOBankingRates turned to the advice of a 24-year veteran in the car sales industry, Mike Davenport, owner of Mike’s Car Store . Davenport has been on social media since 2010, teaching people how to negotiate car deals and wade through red tape.

Before you start car shopping, check out these six ways to save money at the dealership , courtesy of Davenport.

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Plan To Buy Local

Davenport said that you should start by finding a vehicle at a local dealership that you’re interested in buying. Next, look at other dealerships up to 100 or so miles from your area and find three to five more vehicles of the same make and model with the same equipment.

He said to save the data you gather on each of those vehicles, so you can use it as a negotiating tool at your local dealership. 

Get the Salesperson Interested in Landing Your Business

Next, according to Davenport, you should have a conversation with a salesperson or the sales manager at the local dealership that has the vehicle you want. He said you should say to the salesperson, “I want to keep my business local — do you want me to keep my business local?” Davenport said the reason for this question is to get a “yes.” 

“They’re always going to say yes,” he said. “That’s when you say ‘awesome,’ and you reiterate that you’re going to do all of your vehicle service needs […] at the dealership.”

Read Next: 4 Sneaky Car Dealership Scams That Will Be Illegal in 2024

Davenport said that’s also the time to bring up the other dealers you researched that have comparable vehicles. He said to say, “Listen, I did look at a couple [of] other vehicles, and I like them just as much as I like yours, but you’re local to me. Do you want me to keep my business local?”

He said that he knows you will be repeating yourself, but it’s very good to get the salesperson or sales manager saying ‘yes’ over and over and over again. He said that dealerships are unwilling to lose potential buyers because they know you’ll probably never come back once you walk away. 

Never Tell a Dealership You’re Paying Cash

Davenport said you should never tell the salesperson that you’re paying cash for the vehicle you want to buy because it will lessen your chances of getting the best deal possible. Dealers might reduce the purchase price of the car if they think they can make up the difference in financing. But if you say you are paying cash — or even going through your bank for financing — that option is unavailable to them.

If you have been pre-approved for financing through your bank, and you want to disclose that fact, you can tell the salesperson that you might be interested in financing through the dealer, Davenport said. That will leave the dealer with the hope that it can make some money through financing, and it might be willing to discount the purchase price of the car to get your business. 

Trade In Your Vehicle

Davenport recommends getting trade-in offers from several different dealerships, which can help you negotiate the best price for your trade-in vehicle. However, he cautioned that you should avoid trading in your car at dealers that have no interest in the make and model. For example, he said,  if you have a Toyota Corolla, don’t expect to get the best value for your trade-in at a Lexus dealership because it will likely give you the lowest amount possible and resell it at an auction to recoup what it paid for it. 

 He also said to consider listing your vehicle on Facebook Marketplace for the highest trade-in value or the lowest private party offer and see if any dealerships contact you to earn your business.

Negotiate Each Part of the Deal Separately

Davenport said to get the best deal, you have to negotiate each thing separately.”You do not interlace them,” he said. “You stay focused like a laser beam […], and when you’re happy with the price of the car, you move on to the trade. When you’re happy with the trade, you move on to financing — and after that is when you know you’ve got a great deal.”

Hire a Car-Buying Advocate

If you don’t feel you’re up to the task of negotiating each part of the deal separately, Davenport said a car-buying advocate will do all the legwork for you, including locating the car you want and negotiating the best deal. The only thing you’ll have to do, he said, is sign the papers. 

You will have to pay a fee to a car-buying advocate. One service, Car Buyer’s Advocate, charges $500 plus $100 for each trade to negotiate the best deal. However, some services charge between $1,000-$2,000 or $100-$200 per hour.

Car Buyer’s Advocate states that people can lose $2,000-$10,000 when buying a car on their own, so a fee of $500 (or even a little more) might be well worth it. The company states that the average savings on a new car when using its service is 18% under MSRP. And the average savings on a used car is 25% under retail.

If you decide to hire a service to help you negotiate the best deal on a vehicle, make sure it’s a car-buying advocate. Car-buying advocates charge a fee and offer services that work in your best interest. Car-buying services, however, are typically in cahoots with car dealerships and receive payments for generating leads. These services are not interested in helping you negotiate the best deal possible.  

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This article originally appeared on GOBankingRates.com : I’m a Car Salesperson: Here Are 6 Ways To Save Money at the Dealership

How to Start a Used Car Business

Written by Dave Lavinsky

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How to start a used car business.

• How To Start a Used Car Business FAQs

Helpful Videos

Additional resources in the used car dealership industry.

Starting a used car business can be very profitable. With proper planning, execution and hard work, you can enjoy great success. Below you will learn how to start a used car dealership successfully.

Importantly, a critical step in starting a used car dealership business is to complete your business plan. To help you out, you should download Growthink’s Ultimate Used Car Dealership Business Plan Template here.

Download our Ultimate Used Car Dealership Business Plan Template here

16 Steps To Start a Used Car Business

• Choose the Name for Your Used Car Business
• Develop Your Used Car Dealership Business Plan
• Choose the Legal Structure for Your Used Car Business
• Secure Startup Funding for Your Used Car Business (If Needed)
• Secure a Location for Your Business
• Register Your Used Car Business With the IRS
• Open a Business Bank Account
• Get a Business Credit Card
• Get the Required Business Licenses and Permits
• Get Business Insurance for Your Used Car Business
• Start Building Your Used Car Inventory
• Buy or Lease the Right Used Car Business Equipment
• Develop Your Used Car Business Marketing Materials
• Purchase and Setup the Software Needed to Run Your Used Car Business
• Start Building Your Team
• Open for Business

1. Choose the Name for Your Used Car Business

The first step to starting a used car business is to choose your business’ name.

This is a very important choice since your company name is your brand and will last for the lifetime of your business. Ideally you choose a name that is meaningful and memorable. Here are some tips for choosing a name for your own dealership:

• Make sure the name is available. Check your desired name against trademark databases and your state’s list of registered business names to see if it’s available. Also check to see if a suitable domain name is available.
• Keep it simple. The best names are usually ones that are easy to remember, pronounce and spell.
• Think about marketing. Come up with a name that reflects the desired brand and/or focus of your used car business.

2. Develop Your Used Car Dealership Business Plan

One of the most important steps in going into business as a used car dealer is to develop your used car dealership business plan . The process of creating your plan ensures that you fully understand your market and your business strategy. The plan also provides you with a roadmap to follow and if needed, to present to funding sources to raise capital for your business.

To enhance your planning process, incorporating insights from a  sample used car dealership business plan  can be beneficial. This can provide you with a clearer perspective on industry standards and effective strategies, helping to solidify your own business approach.

Your business plan should include the following sections:

• Executive Summary – this section should summarize your entire business plan so readers can quickly understand the key details of your used car business.
• Company Overview – this section tells the reader about the history of your used car business and what type of used car business you operate. For example, do you only offer used car sales or do you also have a service department?
• Industry Analysis – here you will document key information about the used car industry. Conduct market research and document how big the industry is and what trends are affecting it.
• Customer Analysis – in this section, you will document who your ideal or target customers are and their demographics. For example, how old are they? What is there income level? What do they find important when purchasing used cars?
• Competitive Analysis – here you will document the key direct and indirect competitors you will face and how you will build competitive advantage.
• Product : Determine and document what products/services you will offer
• Prices : Document the prices of your products/services
• Place : Where will your business be located and how will that location help you increase sales?
• Promotions : What promotional methods will you use to attract customers to your used car business? For example, you might decide to use pay-per-click advertising, public relations, search engine optimization and/or social media marketing.
• Operations Plan – here you will determine the key processes you will need to run your day-to-day operations. You will also determine your staffing needs. Finally, in this section of your plan, you will create a projected growth timeline showing the milestones you hope to achieve in the coming years.
• Management Team – this section details the background of your company’s management team.
• Financial Plan – finally, the financial plan answers questions including the following:
• What startup costs will you incur?
• How will your used car business make money?
• What are your projected sales and expenses for the next five years?
• Do you need to raise funding to launch your business?

Finish Your Business Plan Today!

3. choose the legal structure for your used car business.

Next you need to choose a legal structure for your used car business and register it and your business name with the Secretary of State in each state where you operate your dealership. Below are the five most common legal structures:

1) Sole Proprietorship

A sole proprietorship is a business entity in which the owner of the used car business and the business are the same legal person. The owner of a sole proprietorship is responsible for all debts and obligations of the business. There are no formalities required to establish a sole proprietorship, and it is easy to set up and operate. The main advantage of a sole proprietorship is that it is simple and inexpensive to establish. The main disadvantage is that the owner is liable for all debts and obligations of the business.

2) Partnerships

A partnership is a legal structure that is popular among small businesses. It is an agreement between two or more people who want to start a used car business together. The partners share in the profits and losses of the business.

The advantages of a partnership are that it is easy to set up, and the partners share in the profits and losses of the business. The disadvantages of a partnership are that the partners are jointly liable for the debts of the business, and disagreements between partners can be difficult to resolve.

3) Limited Liability Company (LLC)

A limited liability company, or LLC, is a type of business entity that provides limited liability to its owners. This means that the owners of an LLC are not personally responsible for the debts and liabilities of the business. The advantages of an LLC for a used car business include flexibility in management, pass-through taxation (avoids double taxation as explained below), and limited personal liability. The disadvantages of an LLC include lack of availability in some states and self-employment taxes.

4) C Corporation

A C Corporation is a business entity that is separate from its owners. It has its own tax ID and can have shareholders. The main advantage of a C Corporation for a used car business is that it offers limited liability to its owners. This means that the owners are not personally responsible for the debts and liabilities of the business. The disadvantage is that C Corporations are subject to double taxation. This means that the corporation pays taxes on its profits, and the shareholders also pay taxes on their dividends.

5) S Corporation

An S Corporation is a type of corporation that provides its owners with limited liability protection and allows them to pass their business income through to their personal income tax returns, thus avoiding double taxation. There are several limitations on S Corporations including the number of shareholders they can have among others.

Once you register your used car business, your state will send you your official “Articles of Incorporation.” You will need this among other documentation when establishing your banking account (see below). We recommend that you consult an attorney in determining which legal structure is best suited for your company.

4. Secure Startup Funding for Your Used Car Business (If Needed)

In developing your used car dealership business plan, you might have determined that you need to raise funding to launch your business.

If so, the main sources of funding for a used car business to consider are personal savings, family and friends, credit card financing, bank loans, crowdfunding and angel investors. Angel investors are individuals who provide capital to early-stage businesses. Angel investors typically will invest in a used car business that they believe has high potential for growth.

5. Secure a Location for Your Business

Having the right physical location can be important for your used car business is important. You will need enough lot space to showcase your inventory, as well as office space for your team. Finding a location that will bring in customers is also key.

To find the right space, consider:

• Driving around to find the right areas while looking for “for lease” signs
• Contacting a commercial real estate agent
• Doing commercial real estate searches online
• Telling others about your needs and seeing if someone in your network has a connection that can help you find the right space

6. Register Your Used Car Business With the IRS

Next, you need complete business registration with the Internal Revenue Service (IRS) which will result in the IRS issuing you an Employer Identification Number (EIN).

Most banks will require you to have an EIN in order to open up an account. In addition, in order to hire employees, you will need an EIN since that is how the IRS tracks your payroll tax payments.

Note that if you are a sole proprietor without employees, you generally do not need to get an EIN. Rather, you would use your social security number (instead of your EIN) as your taxpayer identification number.

7. Open a Business Bank Account

It is important to establish a bank account in your business name. This process is fairly simple and involves the following steps:

• Identify and contact the bank you want to use
• Gather and present the required documents (generally include your company’s Articles of Incorporation, driver’s license or passport, and proof of address)
• Complete the bank’s application form and provide all relevant information
• Meet with a banker to discuss your business needs and establish a relationship with them

8. Get a Business Credit Card

You should get a business credit card for your used car business to help you separate personal and business expenses.

You can either apply for a business credit card through your bank or apply for one through a credit card company.

When you’re applying for a business credit card, you’ll need to provide some information about your business. This includes the name of your business, the address of your business, and the type of business you’re running. You’ll also need to provide some information about yourself, including your name, Social Security number, and date of birth.

Once you’ve been approved for a business credit card, you’ll be able to use it to make purchases for your business. You can also use it to build good credit which could be very important in securing loans and getting credit lines for your business in the future.

9. Get the Required Business Licenses and Permits

Every state, county and city has different business license and permit requirements.

Nearly all states, counties and/or cities have license requirements including:

• General Business License – You need a license to operate almost any type of business, including one to sell cars. Check your local guidelines for licensing requirements.
• Seller’s Permit – A seller’s permit is needed to sell vehicles. The requirements for getting a seller’s permit vary from state to state.
• Dealer’s License – Getting a car dealer license is important if you plan on buying or selling more than five cars in a year. These licensing requirements also vary depending on your state.

Depending on where you launch your used car business, you will have to obtain the necessary state, county and/or city licenses.

10. Get Business Insurance for Your Used Car Business

Business insurance policies that you should consider for your used car business include:

• General Liability Insurance – You will need to purchase general liability insurance in order to protect your business from potential lawsuits. This type of insurance will cover damages that may occur as a result of your business operations.
• Business Liability Insurance – In addition to general liability insurance, you will also need to purchase business liability insurance. This type of insurance will protect your business from potential lawsuits that may arise from injuries that occur on your premises.
• Commercial Property Insurance – You will need to purchase commercial property insurance if you own a used car dealership. This type of insurance will protect your business from potential damages that may occur to your property as a result of your business operations.
• Workers’ Compentation Insurance – You will need to purchase workers’ compensation insurance if you have employees working for your used car dealership. This type of insurance will protect your business from potential lawsuits that may arise from injuries that occur to your employees while they are working for your business.
• Product Liability Insurance – You will need to purchase product liability insurance if you sell used cars that are under warranty. This type of insurance will protect your business from potential lawsuits that may arise from damages that occur to a customer’s vehicle as a result of a defect in the vehicle.
• Garage Keeper’s Insurance – This type of insurance will protect your business from potential lawsuits that may arise from damages that occur to a customer’s vehicle while it is in your care.
• Dealer’s Open Lot Insurance – This type of insurance will protect your business if a vehicle is damaged while being driven by an employee or test-driven by a customer.

Find an insurance agent, tell them about your business and its needs, and they will recommend policies that fit those needs.

11. Start Building Your Used Car Inventory

The most common way to build inventory for a used business is to attend auctions where used cars are being sold. Just register with your local auction houses to receive notifications when new auctions are happening.

You can also find used cars for sale through online classifieds and social media. Just be sure to research the vehicles and their value, including how much you could make from selling them, before you buy.

12. Buy or Lease the Right Used Car Business Equipment

A used car business needs a lot of equipment in order to run successfully. Some of the most important pieces of equipment are computers, printers, and a fax machine. It’s also helpful to have a cash register, as well as racks or shelves to store the cars. Be sure to also have a phone system able to handle multiple calls.

Additionally, you might need office furniture and supplies for your team, as well as reception furniture for your customers. Many used car dealers offer vending areas or free refreshments such as coffee to waiting customers.

13. Develop Your Used Car Business Marketing Materials

Marketing materials will be required to attract and retain customers to your used car business.

The key marketing materials you will need are as follows:

• Logo – Spend some time developing a good logo for your used car business. Your logo will be printed on company stationery, business cards, marketing materials and so forth. The right logo can increase customer trust and awareness of your brand.
• Website – Likewise, a professional used car business website provides potential customers with information about the products and/or services you offer, your company’s history, and contact information. Importantly, remember that the look and feel of your website will affect how customers perceive you. Update your website regularly if you plan to showcase your inventory online.
• Social Media Accounts – Establish social media accounts in your company’s name. Accounts on Facebook, Twitter, LinkedIn and/or other social media networks will help customers and others find and interact with your used car business. Social media platforms are also great places to share new inventory and deals, market to past customers, and bring in new customers.
• Ad Materials – Many used car businesses run ads in local newspapers and on TV and radio stations. Be sure to have your ad materials ready to go.

14. Purchase and Setup the Software Needed to Run Your Used Car Business

A used car business needs software that can help them manage their inventory, track sales and purchases, and manage customer information. Some popular software options for used car businesses include Microsoft Dynamics GP, QuickBooks, and CarLotz Manager.

15. Hire and Train Staff

Your used car business will need employees who can sell inventory, help your customers with financing, and service vehicles.

The sales team should be knowledgeable about cars and able to provide excellent customer service. They will be responsible for helping customers find the right car for their needs and negotiating a fair price.

A good finance team should be able to work with different lenders to secure financing options for customers. They will also need to be able to explain the different warranty and protection plans available.

Your service technicians should be Automatic Service Excellence (ASE) certified and able to perform basic maintenance and repairs on the cars in your inventory.

To find the right candidates, consider posting job openings in local newspapers or online. You might also reach out to existing connections.

16. Open for Business

You are now ready to open your used car business. If you followed the steps above, you should be in a great position to build a successful business. Below are answers to frequently asked questions that might further help you.

How to Finish Your Used Car Dealership Business Plan

Don’t you wish there was a faster, easier way to finish your business plan?

With Growthink’s Ultimate Used Car Dealership Business Plan Template you can finish your plan in just 8 hours or less!

Is It Hard To Start a Used Car Business?

The answer is both yes and no. It all depends on how you approach it and what your goals are.

If you're just looking to make a quick buck, then yes, it can be quite difficult. There's a lot of competition out there and you need to be able to stand out from the crowd. However, if you're serious about starting a used car business and you're willing to put in the work, then it can be a very successful venture. Your biggest challenges to begin will most likely be building your inventory and securing a location. Following the steps outlined above will help you get started.

How Can I Start a Used Car Business With No Experience?

The first step is to do industry and market research. Learn about the different aspects of the business, such as the types of cars that are in demand, how other used car dealerships are setting their prices, and how much you will need to spend on inventory, licensing, employee salaries, and other costs before you start making money. Finding an experienced mentor in the used car industry could also help you gain some helpful insights.

What Type of Used Car Business Is Most Profitable?

The most profitable type of used car business will vary depending on your location, target market, and other factors. However, some tips to help you choose a profitable niche include focusing on a specific type of vehicle (such as luxury cars or SUVs), targeting a particular price range, specializing in just one brand, or catering to a specific customer base (such as first-time buyers or experienced collectors).

How Much Does It Cost To Start a Used Car Business?

The cost of starting a used car business will depend on a number of factors, such as the size and location of your dealership, the number of vehicles you plan to stock, and whether you intend to hire any staff. However, you can expect to spend at least several thousand dollars on inventory and several hundred dollars on licensing and permits. Additionally, you'll need to factor in the cost of leasing or purchasing a property for your dealership, as well as any advertising and marketing expenses.

Key costs to keep in mind include:

• Building lease or purchase and renovation
• Equipment and professional installation
• Store fixtures and office equipment and supplies
• Surety bond

What Are the Ongoing Expenses for a Used Car Business?

Ongoing expenses for a used car business include the cost of maintaining inventory, such as paying for storage, repairs, and cleaning; the cost of staffing (if you choose to hire employees); and the cost of marketing and advertising. You will also need to factor in the cost of property taxes and insurance for your dealership.

Key ongoing expenses to keep in mind include:

• Inventory purchases
• Inventory repairs/service
• Leases for building and/or equipment
• Equipment and building maintenance

What Are the Key Costs in the Used Car Dealership Industry?

Purchases are the greatest expense for a car dealership owner and account for over 84% of revenue. In addition to purchasing used cars at auction and from customer trade-ins, used car dealers must also repair and recondition these vehicles.

Wages are also a major expense, but increased automation with regard to inventory management and online cataloging has resulted in minimal wage growth.

Marketing costs can be significant for a successful car dealership. According to the National Independent Auto Dealers Association, car dealers spend 33.6% of their marketing budget on internet advertising.

How Does a Used Car Business Make Money?

A used car business makes money by selling vehicles for more than the cost of acquiring and maintaining the inventory. The profit margin on each sale will vary depending on the make and model of the vehicle, as well as market conditions. Some used car dealerships also make money from offering vehicle services and repairs.

Is Owning a Used Car Business Profitable?

Yes, owning a used car business can be profitable. However, the amount of profit you make will depend on a number of factors, such as your inventory, overhead costs, and selling prices. 

Additionally, the profitability of your business may fluctuate from month to month or year to year depending on changes in the market. Navigating these fluctuations is key to making money for used car dealership owners.

Why Do Used Car Businesses Fail?

There are a number of reasons why used car businesses fail. Some common causes of failure include poor planning, inadequate capital, overspending on inventory, and failing to adapt to changes in the market. Additionally, many used car dealerships are unsuccessful due to competition from larger businesses or because they are unable to generate enough sales to cover their expenses.

How Big Is the Used Car Dealership Industry?

IBISWorld reports the Used Car Dealership industry has had a net decline over the past five years, due to the Coronavirus, at an average annual rate of -1.6%. Next year, the industry’s 129,553 businesses are forecast to see $99.1 billion in collective revenue.

What Are the Key Segments of the Used Car Dealership Industry?

Used cars account for over half of industry revenue. This excludes vans, minivans, and trucks.

The remainder of industry revenue is generated from other used vehicles, parts and repair services, and financing and insurance.

What External Factors Affect the Used Car Dealership Industry?

A number of factors affect the performance of the Used Car Dealership industry. These drivers include:

• Per Capita Disposable Income – When consumers have more money to spend, they become more willing to spend on expensive discretionary items, such as used cars. 
• Price of New Cars – Buying a used car is a more affordable alternative to purchasing a new car. 
• Aggregate Household Debt – Consumers are still less likely to invest in nondiscretionary items such as cars when debt is high. 
• Average Age of Vehicle Fleet – As the average age of vehicle fleets increases, it represents greater pent-up demand for vehicles. 
• World Price of Crude Oil – High gasoline prices tend to decrease new and used vehicle sales.

Who Are The Key Competitors In The Used Car Dealership Industry?

The Used Car Dealers industry is highly fragmented, with nonemploying dealerships representing more than 80.0% of establishments. As a result, the industry exhibits a low level of market share concentration, with the four largest operators accounting for an estimated 19.3% of industry revenue. In fact, just one company holds significant market share in the Used Car Dealership: CarMax, with a 17.9% marketshare leads the industry, while America’s CarMart, Carvana Co., and Enterprise Car Sales each command just a fraction of the market.

What Are the Key Customer Segments in the Used Car Dealership Industry?

The largest customer segment (37.5%) in the used car dealer industry is consumers who have prime credit scores. Other segments include Subprime, Nonprime, Super prime, and Deep subprime customers.

Where Can I Download a Used Car Dealership Business Plan PDF?

You can download our used car dealership business plan PDF template here. This is a business plan template you can use in PDF format.

Facts About Used Cars

Growing a Successful Used Car Dealership

Startup Car Dealership Success Story

Used Car Dealership Merchandising Examples

For additional information on the used car dealership industry, consider these industry resources:

• National Alliance of Buy Here Pay Here Dealers https://niada.com/
• National Automobile Dealers Association www.nada.org
• National Independent Automobile Dealers Association www.niada.com
• Used Car News www.usedcarnews.com

OR, Let Us Develop Your Plan For You

Since 1999, Growthink has developed business plans for thousands of companies who have gone on to achieve tremendous success.

Click here to see how a Growthink professional business planner can create your business plan for you.   You can download a PDF version of our used car dealership business plan template here .

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For a lot of people, buying car insurance is like buying sliced bread. It’s not the most exciting purchase, and the options all seem similar. So thrifty shoppers might simply reach for the cheapest thing on the shelf. But like cheap bread, cheap car insurance may leave you wishing you spent a little more on quality.

“The cheapest is not always the best,” warns Jessica McNally, an agency owner with Goosehead Insurance in Dallas. That’s because there are lots of factors that make up a car insurance company. And while price is one of them, it’s best to look at the bigger picture.

Here’s what to look for when picking the best car insurance company.

1. Choose a financially stable company

The best car insurance companies have plenty of money on hand to pay for customers’ claims. It’s important to check an insurer’s financial stability before buying a policy, especially if it’s a smaller insurer you’ve never heard of.

There are several independent agencies that evaluate the financial strength of insurance companies. One example is A.M. Best. You can use its online search tool to find an insurer’s financial strength rating. Companies with a rating of A or higher are considered to have an excellent ability to pay out customer claims.

2. Check customer satisfaction ratings and reviews

Not every insurer is customer-first. That’s why it’s important to research the customer satisfaction of insurers you’re considering.

You can turn to surveys from companies like J.D. Power to find insurers with the best customer satisfaction scores [0] J.D. Power . Auto Insurance Customer Satisfaction Plummets as Rates Continue to Surge, J.D. Power Finds . Accessed May 21, 2024. View all sources . Or, if you don’t mind doing a little detective work, you can compare customer complaints against insurers by using the National Association of Insurance Commissioners’ website . But take other people’s emotionally charged comments about companies or agents you might read online with a grain of salt, McNally advises.

3. Look for convenience

A great auto insurer should offer multiple ways to manage a policy. For example, some insurers allow customers to use a mobile app to file and track claims. But it’s hard to tell how simple it’ll be to file a claim or perform other essential tasks, like paying your premium, before becoming a customer.

Some telltale signs that an insurer will be easy to work with are high mobile app ratings, flexible customer service hours and an easy-to-use website with helpful content. Consider asking a company representative to walk you through the claims process to learn what you’ll need to do if you have to file a claim. And pay attention to how the company communicates with you. "If they don't properly communicate, well, that's a warning sign," says Michael DeLong, a research and advocacy associate for the nonprofit Consumer Federation of America.

4. Pick an affordable company

Car insurance premiums are stretching to record-breaking heights [0] U.S. BUREAU OF LABOR STATISTICS . Consumer Price Index for All Urban Consumers (CPI-U) . Accessed May 21, 2024. View all sources , and almost half of U.S. consumers shopped for a new car insurance policy in the past year, according to an April 2024 report by J.D. Power [0] J.D. Power . Half of Auto Insurance Customers Currently Shopping for New Policies, J.D. Power Finds . Accessed May 21, 2024. View all sources . The best car insurance companies offer competitive rates and a variety of potential discounts.

It’s not hard to get car insurance quotes online from many companies. Make sure you compare the same coverage options throughout the quote-gathering process. And don’t forget to look for car insurance discounts, like breaks for being a good driver, paying your premium in full or driving a new car.

More tips to find the best car insurance

When shopping for the best car insurance, keep the following tips in mind.

Assess your needs. Before buying car insurance, take a moment to reflect on what’s important to you and your family. For example, maybe you prioritize affordability and a well-polished mobile app, but don’t need accident forgiveness .  

Consider small insurers. There are lots of small insurance companies you’ve probably never heard of. These regional insurers may provide lower rates and better customer service than the big companies you see advertised on TV.

Work with an independent agent. While it may be easy to get quotes yourself, independent car insurance agents and brokers can streamline the process. These experts vet companies and compile quotes from small and large insurers on your behalf. Independent agents and brokers can especially come in handy if you have a less-than-perfect driving record and can’t find insurance on your own.

Do your research. Search online for recent mentions of a company in the news before buying a policy, recommends DeLong. If you find a company has lots of recent lawsuits against it, you may want to think twice about signing on the dotted line. “And if they've had to pay out settlements, that's an even bigger red flag,” DeLong says.

Shop around once a year. Make a practice of shopping for car insurance every year — especially if price is important to you. Insurers adjust car insurance rates regularly, so what might have been the most affordable option last year may no longer be a bargain.

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