Q&A for How to Open a Car Dealership

To add an auto parts business to a car dealership, focus on managing inventory effectively. Monitor aged inventory closely to prevent parts from accumulating dust and becoming obsolete. Key profit indicators (KPIs), such as inventory turnover, should be regularly assessed to ensure optimal performance. Keeping inventory turnover high and maintaining the right balance of stock is crucial for success in the parts business. Treat inventory management as managing cash, as it directly impacts profitability. By prioritizing inventory management, you can successfully integrate an auto parts business into your dealership.

A business background would be helpful. You also have to know your math for taxes.

Yes it will. You will need proper ventilation due to the vehicle exhaust in an enclosed building.

No, I think that's a bad idea. By picking a franchise, you're forced to let them make most of the profit. For example, if you sell new Fords, Ford manufactures a vehicle for maybe $10,000 and sells the vehicle to the dealership for about $49,500. The dealership then sells the car for $500 over cost. If you open an independent dealership and sell used cars, you can buy a car for 140% of the book value if you're securing financing for the customer, and as much as you want if the customer pays cash. Most used car dealers make about $3000-$5000 per vehicle, and most new car dealerships make $200 to $500 in profit. Sales staff usually work on commission, receiving 12-25% of the gross profit in the front end.

Auctions are a great place to start.

A well-made showroom would be in the range of about 150k-300k. It all depends on what you want to portray to your customers, quality or flash.

You will need around a million dollars to open a dealership, depending on where the dealership will be.

If you are of legal age, the answer is yes. Otherwise the car will need to be under the name of a parent or guardian.

In most cases, no. Agreements for the franchise boards state that the manufacturer will not sell directly to customers. Some subscription services, e.g. Book by Cadillac or Care by Volvo, do go directly through financial subsidiaries of the MFG. However, you still have to go to the dealer to pick up (no middle fee).