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What It Takes To Open Your Own Car Dealership

Heather Gribbin

Heather Gribbin

November 14, 2018

Heather loves Land Rovers and spending time in the great outdoors.


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Ever fancied yourself as the owner of a car dealership? Trading cars can be a rewarding job for petrolheads, although it does come with its challenges. Here are some things to think about when setting up your own dealership.

Choose your target market

Many dealerships specialise in one area. Some are franchises owned by a car manufacturer, sticking only to one brand of car. Others may sell a variety of new vehicles, whilst others may focus on used vehicles. There are also luxury car dealerships and at the other end of the scale budget dealerships. By knowing the types of cars you’re selling, you’ll have a better idea of the types of customers you want to attract and you’ll be able to cater your business around these customers. For example, a luxury car dealerships may attract more wealthy clients, and therefore you may need to offer a higher level of service to satisfy these customers’ needs.

Find suitable premises

You’ll need space for storing a displaying your cars. Ideally you want somewhere that’s easy to find (ideally somewhere that cars will drive past on a regular basis). It also needs to be large enough to store the amount of cars you need. Look out for petrol station closures - these spaces are often well suited.

Get licensed and insured

Certain licensing and insurance may be legally compulsory if you’re setting up a dealership. UK dealers don’t need to apply for a license, but if you’re setting up a dealership elsewhere licensing laws may apply. The likes of One Sure Insurance offer motor trader insurance, which all dealers must have. Such insurance can protect your vehicles against various forms of damage. It’s worth shopping around so that you get the best deal.

Create a financial plan

Setting up a dealership can be expensive – your inventory could cost you hundreds of thousands. Create a clear financial plan for funding your business. Having this detailed plan will be important when contacting creditors for the option of a loan or investment. There are companies such as Dealer Plus that specialise in providing financing for car dealerships. Make sure to factor in all the hidden costs such as licensing and insurance.

Start marketing

Investing in some marketing will help to put your dealership on the map. Almost all dealerships now sell online too – make sure that you’ve built yourself a website and consider making use of social media too. On top of this you’ll want to buy some signage for your premises that gets people turning their heads. Check out these tips from Simply Cast for more marketing ideas.

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