How To Open a Used Car Lot

A used car lot is becoming more common as a side income or full time income.  There are several types of car dealerships and specific laws vary from state to state. A used car dealership doesn't need to be a large operation. There are many ways to achieve a successful used car lot. The first is to get legal and to choose the best location.

Opening a used car dealership has been a lucerative business venture for over 100 years.  Success depends on location, fulfilling state licensing requirements and financing.

To find a good location to open a used car lot, check with city or county planning for previous locations of used car lots.  Many dealerships are located near highways, near other businesses.

Financing can be obtained through SBA.  You must have a good business plan in place with realistic projections.

Car dealer auctions are where most dealers purchase their inventory.  Other sources include GSA auctions, police impounds or county auctions are also good sources to find used vehicles.

DMV used car dealership laws differ from state to state.  Most DMV's will require the following:

1.  Obtain your business legal registrations

• Fictitious name statement.


• Local city or county business license.


• Incorporation, LLC or other corporate documentation.


• State Board Of Equilization resell number.
  
  

2.  Information to be submitted

• Names, addresses and identifying information of all partners.


• Business documentation.


• Financial and banking information.


• Types of vehicles to be sold and type of plates.


• How many cars will be stored and projected sales volume.


• Lease, rental or morgage of business location.


• Proof of minimum coverge $50,000 surety bond.
  
  

3.  Photographs

• The general business location


• Office and suboffices


• Location of books and records


• Signage


• Display areas
  
  

4.  Additional requirements for approval

• The State of California requires all car dealer license applicants must take a State approved class and pass a test.


• All new car dealerships must pass an inspection by a State authorized inspector.


• All applicants are subjected to a background check.