How to Start a Used Car Dealership in Ohio

Selling used cars can be a lucrative business, especially because dealers tend to make more money selling used cars than new ones. This trend is likely because of the high price of new cars and more financially conscious buyers. If you are looking for a business that is quite lucrative and growing, then you may be interested in becoming a used car dealer. Here’s how to start a used car dealership in Ohio.

How to Start a Used Car Dealership in Ohio

Plan your business. The first step to opening a used car dealership is to plan your business. It’s important to know how much capital you will need, what available locations there are to lease or purchase for a showroom, and a plan to apply for a loan or produce the capital funding independently. You must also define your target market, determine how much you can charge customers, and come up with a name for your company. Aside from that, because the entire world is going digital, it doesn’t matter where you plan to open your car dealership; it is critical that you go completely digital if you want the sale of your cars to be much more productive.

File a surety bond to get your dealer license. Most places in the United States require a used car dealership to have a surety bond, and Ohio is no different. Before you can get licensed in Ohio, you must prepare your business location, complete a training course, register your business, pass a background check, and purchase $25,000 of a motor vehicle dealer bond. The final two steps are completing the application and purchasing dealer plates.

Get business insurance. Business insurance for a used car dealership differs from typical business insurance. Auto dealer insurance is insurance that is tailored specifically to the needs of dealerships. This insurance will cover commercial general liability, employment practices liability, errors and omissions insurance, Business income insurance, garage keepers liability, garage liability, dealer plate insurance, and workers compensation insurance. Yes, they’re all necessary to operate a used car dealership safely.

Build an inventory. If you’re excited about starting a used car dealership, this is the fun part. Most dealerships start rather small with only a few cars and gradually grow as their income increases, but this is the step where you purchase your initial vehicles. You can buy them in different ways, including through an auction, but most importantly, you should decide what vehicles you’re going to have. You can have all vehicles, or you can specialize and a specific make of vehicles, such as exclusively selling Toyotas, Hondas, or Fords.

Before even getting the cars (most important part), you should also zero in on a dealership location and have it all set up as you go. You will need to see what kind of equipment you will need to run the shop. For example, if you’re going to take cash payments, then you’ll need lockers and Cash Drawers, POS systems for credit/debit card payments, customer service desks, computers, and a whole lot more to get the shop up and running.
Get the word out! Finally, once you open the doors of your business, it’s time to bring customers to you. There are many different ways to advertise. For instance, you can opt for specialized digital marketing for car dealerships (you can have a look at Ballantine’s guide to get an idea about such marketing techniques) that can help potential customers find you online. That said, though many new dealers accomplish this by developing an online presence through social media outlets and digital marketing plans, but old-fashioned networking should still be a fundamental part of your strategy. Also, make sure to invest in a good sign so your customers know where you are!

Starting a used car dealership can be a rewarding business because the profit from used cars is steadily going up. With more price-conscious shoppers and plenty of used vehicles on the market, you can profit by over $2000 per car sold. However, starting a used car dealership is slightly different from other businesses, so it’s important to follow all the necessary steps to ensure your success.

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