Essential Steps To Starting Your Own Car Dealership

  • Develop a business plan to serve as a roadmap for success.
  • Choose a specific niche that makes the dealership unique, secure funding from various sources to cover operational costs, and obtain permits and licenses to operate legally in the state. 
  • Build a strong team of salespeople, mechanics, and administrative staff. 
  • Invest in GPS tracking systems to protect your investment and track vehicles in real-time. 

If you’re a car fanatic who’s always dreamed of starting your own car dealership, you’ve landed on the right page. Creating a car dealership isn’t as easy as it sounds. However, you can turn your dream into a reality with the right tools, knowledge, and support. Here are some simple but essential steps to starting your own car dealership that can help you navigate the road ahead.

Develop a Business Plan:

Like any other business, starting a car dealership requires a solid business plan. This plan will serve as a roadmap that directs you on what to expect, the resources needed, and how to generate revenue. A business plan captures all aspects of your dealership, including finances, legal requirements, competition, marketing, and staffing, among others, and helps you stay focused on your goals. Here are a few areas to focus on:

Choose Your Niche:

The automotive industry offers a wide range of vehicles ranging from sports cars to luxury cars, trucks, motorcycles, and even classic cars. However, it would be best to choose a specific niche that you’re passionate about and that will make your dealership unique. For instance, you could focus on electric cars or classic cars, which could help you stand out from the competition.

Secure Funding:

Starting a car dealership can be capital-intensive, as you’ll need to invest in inventory, infrastructure, marketing, staffing, and other operational costs. Therefore, you should explore various sources of funding, including loans, grants, and investors, to secure the necessary capital. Be sure to have a detailed financial projection to demonstrate how you intend to generate revenue and pay back the funding.

Obtain Necessary Permits and Licenses:

Depending on your state’s regulations, starting a car dealership requires various permits and licenses to operate legally. You’ll need to apply for a dealer’s license, sales tax permit, insurance, zoning permits, and other necessary regulatory requirements to start selling cars legally. It’s crucial to secure these documents before opening your dealership to avoid any legal issues.

business people discussing relevant charts and data for a business plan

Build a Strong Team:

Your dealership’s success isn’t only dependent on the vehicles you sell; it also depends on the people you have on your team. You’ll need to hire a skilled and experienced team who can help you run your dealership efficiently. Invest in quality training and development programs to retain your team and grow your dealership’s success. Here are some people to look for:


Salespeople are the backbone of a successful car dealership. They must be knowledgeable, experienced, and passionate about cars to provide customers with the best advice and service.

A great salesperson should be able to build relationships with potential customers, identify their needs, and guide them to the right vehicle. It’s also crucial for salespeople to have excellent customer service skills.


Having a reliable and experienced mechanic is essential to the success of your dealership. They must be skilled in all aspects of car repairs and maintenance, from oil changes to engine repair or even diagnostics.

Your mechanic will play an essential role in ensuring that each vehicle on your lot meets industry safety standards before being sold. It’s also vital for them to be able to respond quickly to customer service inquiries and ensure that each customer is satisfied before leaving your dealership.

Administrative Staff

Administrative staff will help you manage operations, from accounting to customer service. They should be familiar with the automotive industry and have experience in managing multiple tasks at once. A great administrative staff member should also be able to support your team as needed and ensure that all transactions are recorded accurately.

male admin staff handing keys to a smiling couple in a car dealership

Invest in GPS Tracking Systems:

GPS tracking systems can help your dealership run more efficiently and safely. An efficient battery-powered GPS tracker will give you real-time updates on your vehicles, such as their location, speed, and route taken.

It also offers access control to ensure that only authorized personnel are operating the vehicles. Investing in this system is a great way to protect your dealership’s principal investment.

If possible, partner with a GPS solutions provider that’s experienced in handling commercial vehicle fleets. This will ensure that your vehicles are adequately tracked and monitored at all times.

Starting a car dealership can be a challenging but rewarding journey. Following these simple but essential steps can help you get started on the right foot and navigate the road ahead. Be sure to have a solid business plan, choose your niche, secure funding, obtain necessary permits and licenses, and build a solid team to achieve success. Remember, starting a car dealership requires patience, resilience, and dedication, but with the right tools and support, you can turn your dream into a thriving reality.

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