Today, the number of cars throughout the world is rapidly increasing. The number of cars is far greater than the number of car owners. This is because some car owners own more than one car. So if you are thinking of a business to have, a Car Dealership would be one of the best ideas.

What is a car dealership? It is a business where the dealer buys wholesale cars from different sources and sell them to buyers for a higher price. This is one way to earn money without doing extreme work. The first thing you should know is how much does car Dealership startup costs?

Average Cost to Start a Car Dealership

Every business will need a startup money. It may cost you a lot, but for sure, you will earn more than twice of your investment if you successfully run the business. A car dealership is a good business opportunity in areas where used cars have high demand. Revenues of car dealership have increased to more than $700 billion. So how much does car dealership startup costs?

The investment you will make for your car dealership business will be broken down into a few important parts. And each of these parts will depend on a lot of factors. Here are some of the important parts that you will need to consider before starting your car dealership business:

• The location will be the biggest expense that you will have to consider first. You will not have to worry about this if you already own a land. However, if you don’t own a land, prices for buying one depends on the type of the property and the area where the land is. The place where you are living can also affect the price of land. Renting one can cost you around $8,000 up to $20,000 or more per month.

There will be some states in the U.S. where you are required to have an office in your car dealership, some states don’t require this one. An office for your car dealership will require a lot of space. This means that you will have to buy or rent a larger land, which costs more. However, having an extra space in your land is recommended by the professionals even if the state doesn’t require you to have an office.

• Business Registration. Registering your business is another part of the total car dealership startup cost. There are many ways to register your car dealership, whether it is a general partnership or limited partnership (The cost for registration certificates vary from one place to another, usually around $70 up to $750), limited liability (registration can cost you around $50 up to $630 depending on your location), company, corporation, or simply as a sole proprietorship.
• This is another part of the total cost to start a car dealership. This part greatly depends on the types of cars you will sell, and the size of your initial startup inventory. A lot of professionals recommend that you should start up small first and gradually increase your inventory, as what is mentioned in Jobs.net.
• This is another part of your total startup cost. You will be required to have an Auto Dealer License. Just like any parts, this also depends on your location. An auto dealer license usually costs around $100 up to $200. Getting a license also has some extra costs along the way. Some of these extra costs include an Auto dealer bond ($25,000 up to $50,000 depending on the type of license and your location) and liability insurance ($25,000 up to $10,000 depending on your location).

Totaling all the parts that you will make, the average total cost to start a car dealership runs around $100 thousand per dealership. The price given is only for an area with around 40,000 population. On the other hand, the average startup cost in an area with more than 240 thousand population runs around $1 million per dealership.

Expenses during the Operation          

The next thing you should know after the startup cost is the expenses you will make during the operation of your car dealership. Many entrepreneurs recommend that you should always calculate the operational expenses your business will make. This is the best way to gather information about your losses and earnings to make sure that you can manage your business properly. Expenses during the operation should include the expenses of your staffs, expenses related to your sales, services, and inventory. The largest part that adds up to your operational expenses is the personnel expenses.

Tips

Now that you have an idea about the cost you will make before and during your business operation, the next thing you should really know is how to become a very successful car dealership owner and how to become a successful car salesman.

Typically, the first way to become a successful car salesman is to have a pleasant personality. You should know how to socialize and have high social skills. This means that you will need to meet and converse with a lot of possible customers as much as you can. You should release a positive aura upon talking to them. Make them feel that they are very important to you, which really is true. You smile and your clothes can also have an impact on your customers.

Another tip is that you don’t force your customers to buy your car. You should only give the customers reasons why they should purchase one at your dealership.

You can visit Axle Addict to get more tips on how to become a good car dealership owner and how to make your business successful.

Saving Money

Starting up your own car dealership is really very expensive. Especially the cost of maintaining your own Auto Dealer License. However, there is a way to save money on this part. And that is to join a cooperative of a used car dealership. Joining a cooperative means you will only share the costs of an auto dealer license with other car dealers. This is one of the best ways to lessen your expenses.

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