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How to Become a Small Car Dealer

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If you enjoy selling cars and have been looking for a business to start, you might want to think about opening a small car dealership. A car dealership can be a rewarding and profitable business. According to data from The Wall Street Journal, year-to-date auto sales in August 2010 topped more than 12 million autos in the United States. These numbers demonstrate that there are still eager car buyers ready to patronize car dealerships.

Develop a business and marketing plan for your small car dealership. Your plan should include means of acquiring capital, time lines on when you want to have specific tasks accomplished, how much inventory you plan to start with, costs for setting up the business as well as including online and offline marketing strategies and other items specific to your business.

Attain an auto surety bond. The amount of the surety bonds vary for each state. Check with your local department of motor vehicles to find out how much your surety bond needs to be for the state that you live in.

Obtain liability insurance for your inventory. The same company that you obtained the surety bond from should be able to help you get liability insurance to cover your car dealership inventory.

Contact the agency in your area that issues car dealer licenses. This will either be the department of motor vehicles or another state agency. If your local department of motor vehicles doesn’t issue dealer licenses they will have information on what agency does. Follow the procedures for securing a dealer license. Depending on what state you live in, this may include dealer training classes and a criminal background check in addition to submitting the license application. Qualifications vary by state.

Acquire retail space for your small car dealership. The space should be large enough to display the number of cars outlined in your business plan. Get with a commercial real estate agent in the area where you want to obtain space. They will be able to find properties and administer the leasing process.

Register for auto auctions. Locate auto auctions in your local area and sign up as a new dealer. In addition, sign up for online auto auctions. Both online and offline auctions will allow you to take advantage of a large variety of cars for your inventory.

Market your small car dealership using the marketing plan you developed earlier as a guideline.