Are you looking to start a Car Dealership in Australia and not sure how much it costs?
EasyCars has put together the 6 most common expenses associated with starting a Car Dealership in Australia.
Let’s get into it!
1. Location Setup
One of the largest upfront expenses that you would need to be aware of before starting a Car Dealership is Location costs. To open a Car Dealership in Australia you will need to choose an appropriate location that will allow you to display cars and provides strong organic foot traffic.
Prices of location will vary depending on the state and suburb in which you are looking to trade from and the square meter size. Most real estates will charge you based on the number of square meters a location has.
Before choosing a location, it is important to think of your future plans. You need to ensure that the location that you choose will allow you to grow into the future. Moving locations at a future date will require more significant investment.
Research has found the average location rent for a Car Dealership in Australia is between $1,300 and $15,000 per month depending on location and square footage size.
2. Dealer Licence
To buy and sell cars in Australia you will need to apply for and hold a valid Motor Dealer Licence. Motor Dealer Licences are issues by each individual Australian State.
Fees differ between states and licence length.
Click on the links below to learn more about Dealer Licence Price and Information in your residing state –
- New South Wales Motor Dealer Licence
- Victoria Motor Dealer Licence
- Queensland Motor Dealer Licence
- Northern Territory Motor Dealer Licence
- South Australia Motor Dealer Licence
- Tasmania Motor Dealer Licence
- Western Australia Motor Dealer Licence
- Australian Capital Territory Motor Dealer Licence
3. Vehicle Inventory
To open a Car Dealership in Australia you will need to have vehicle inventory to sell. In saying that, you will need to consider what types of cars you are looking to sell and more importantly how many cars you are looking to stock initially and on an on-going basis.
The average used car dealership in Australia will stock between 10 – 20 vehicles at any one time. The average used car price in Australia in 2023 is just under $40,000 depending on the model type. So, if you are going to stock the average 10 cars you will need to have access to at least $400,000.
Staff play a pivotal role in operating a successful Motor Dealership. Let’s face it, staff are not cheap. Before you consider opening a car dealership it is important that you know how many staff you need to employ and what you are going to pay them.
Research has found the average used car salesman salary in Australia in 2023 is $53,750 annually. If you are looking to hire multiple salesmen, it will cost you $107,500 excluding super contributions annually.
Marketing is another important essential cost that you will need to factor in prior to starting a Car Dealership. Marketing will help your dealership gain leads to sell your vehicles to. Unfortunately, marketing is not cheap, prices do vary depending on the marketing strategy that you choose to use.
It is important that your dealership plans what type of marketing strategy you are going to use prior to launch. Are you going to use car classifieds? Are you going to use Facebook or Google?
Research has found the average marketing costs for a business in Australia in 2023 is between 5 – 10% of revenue.
All businesses will need to implement technology in order to trade. A Car Dealership is no different. Some of the essential technology that your dealership will need includes a computer, payment system, a dealer management system and an accounting system.
Technology costs do vary depending on each individual setup and quantity of systems that you require. The average upfront technology costs in Australia in 2023 is between $5,000 and $10,000 depending on your setup.
If you are looking to start a Car Dealership you will need to have access to at least $500,000 to get setup and running. Costs will vary from dealership to dealership and will depend on each individual situation. The 6 expenses presented are common costs associated with starting a Car Dealership in Australia in 2023.
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DISCLAIMER – The content within this blog does not constitute professional advice and is intended to be general in nature. Please consult with all relevant parties prior to making any decision.
EasyCars by Jeal is an Australian, web-based, dealer management system that automates the buying and selling of motor vehicles. Using the latest technologies, EasyCars removes frustrations experienced at the dealership and opens your doors for greater growth.
EasyCars features include Simple Stock Management, Automated Advertising, Integrated Accounting, Government Compliance, Business Reporting, Facebook Automotive Inventory Ads, Reviews Management, Dealership Websites and more.
To learn more about EasyCars Dealer Management System or to arrange a no-obligation free demo, contact us today on 1300 473 744 or submit the form below.