How to open a used auto dealership?

Question

I live in Toronto Ontario, and very interested of opening my own used car dealership. What do i have to do to to get started? How much money do i need to have? When i purchase vehicles do i have to pay full amount? or how does it work? Is there anyone who own's a car dealership that can give me more info?

Answer 1

I had a used car dealership in New Jersey, USA. I will answer your question based on my experience. You will have to research Canada laws and licensing. First you need a properly zoned facility. Then you need a dealer's license. Insurance. Tax ID number. Notary license or access to a Notary Public. A supply of temporary tags. Dealer tags. Don't try to appeal to the masses. Decide what price range you will stock in inventory. Decide on which type of vehicle you will favor. You will need to pay for your purchases until you are in business for a year and have become 'established'. Some auctions will award a line of credit to you. The floor plan interest is higher initially. Once you become successful banks will compete for your business. You should have at least 15 cars for sale. Less than that will make you look like a risky business. If you have no experience buying wholesale you must hire an experienced buyer. Find one you can trust. Good luck with that. I had experience as an appraiser at major new car dealerships. When I opened my own with about $125,000 I thought I knew what I was doing. When you buy with your own money the game changes. If you tie your cash up with inventory and business slacks you have no operating cash. You need a cast iron stomach. With my experience I lasted just two years and lost nearly everything. It is a rewarding business. If your luck holds you can make lots of money. Or not.