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Iceni Magazine | August 18, 2022

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How to Set Up a Car Dealership

car dealership

If you have a keen interest in cars and would love to be your own boss, then setting up a car dealership may be the best career choice you will ever make.

While a bit of knowledge on cars can come in handy when running your own dealership, you don’t have to be an expert to make your car dealership a success. Even though you will likely need to make some kind of financial investment to help you get up and running, if you are a trusted and reliable car dealer, then you could make your money back ten-fold.

However, you may feel overwhelmed with everything that is involved in starting up your own car dealership and have no idea where to start. So, we have put together this step-by-step guide that will tell you everything you need to know about how to set up your own car dealership both successfully and without too many risks.

Do Some Market Research

Before starting a business it is crucial that you do some research into the market that you intend to enter and identify if there is any demand for the service in your area. This involves selecting a location in which you aim to set up your car dealership and assess whether there is need for used cars in that area.

Start by doing some research into how many used cars were sold in that area over the last 12 months, and then refine your search further by finding out what types of cars are sold most frequently. Establishing early on whether there is a demand for a car dealership in a chosen area will help you make better business decisions and lower any investment risks.

Work Out Who Your Target Clients Are

When running your own business, it is essential that you spend every penny wisely, so you should take some time to work out who your target clientele is so that you can always have them in mind when making business choices. Your target clients will largely be determined by the type of cars that are most popular in your area. For example, if your market research indicates that estate cars sell most frequently, then this may tell you that families are your target client. Be sure to work off real data instead of making your own assumptions, otherwise you may find yourself with cars that you struggle to sell.

Have a Business Plan

No matter the industry, every business needs a business plan, so it is crucial that you take the time to create a detailed and informative plan that will help guide you throughout the first 12 months of business. While a business plan may be mandatory if you are applying for an investment loan to help you with your start-up costs, you should create one anyway as it will help you work out whether a car dealership is a viable business. Your business plan should include a budget for every single penny of the costs associated with owning a car dealership, from insurance to car repairs, marketing, and any legal requirements.

Decide What You Will Offer

It is common for many car dealerships to offer additional services to their customers alongside selling them a car. This can be a great opportunity to boost how much money you can make on each sale, and also offer your customers a more convenient service which will keep them coming back to you, instead of your competitors. So, we suggest that you take some time to think about what services you would like to offer. These services can include car services, repairs, car valeting, and MOT testing. While these are great extras that could add to your business, be sure to think about the facilities you have, and how much it will impact your start-up costs. Making up your mind and defining what you will offer is a lot easier when you’ve gathered all the possible options and foresight of the potential outcomes. That said, you would like to include options like those shown sites like

Get Motor Trade Insurance

You may be required to get in touch with your local council or authority before setting up your own car dealership, especially if you plan to do it from your own home address. However, you will also be required to take out a motor trade insurance policy. This will insure and protect you when driving vehicles as part of your dealership, without you having to get individual insurance for each car.

Motor trade insurance policies are designed especially for people who work within the automotive industry, and so are flexible on the numbers of vehicles that you can add and remove to the policy. Motor trade insurance policies, such as those at i4mt, are designed especially for people who work within the automotive industry, and so are flexible on the numbers of vehicles that you can add and remove to the policy. However, it is important to consider motor trade insurance as part of your start-up costs, and it is crucial that you shop around for the best deal.

Sites like can help you compare motor trade insurance from a range of different insurance providers within the UK, to make finding the right policy for you a whole lot easier. You simply input your requirements, and it will do all the hard work for you by finding you the best deal but, most importantly, the best policy to protect you and your business.

By following our simple how-to guide and spending the time doing your research before investing any money, you can start up a successful and lucrative car dealership without any added stress or anxiety.  

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