How to Set Up a Used Car Dealership?

22 Aug 2023 Helpful Tips

used car dealership set up 

Becoming a car dealer in Australia is easier than you may think. In this EasyCars blog, we’re going to run you through how you can set up a used car dealership successfully in Australia. This blog should be used as a guide, we want to ensure that you cover all essential aspects from legal requirements to marketing strategies!

Creating your Business Goals

As part of finding out how to open a used car dealership, start by setting up your business goals. Think of what you want from your used car dealership with these questions:

  1. Have you decided on a location for your car dealership?
  2. What are the costs involved, have you spoken with a financial advisor?
  3. Do you want to employ people or sell cars yourself?
  4. What are your marketing strategies?
  5. Have you acquired all the licences you will need?

Choosing the right location

A prime location with high visibility and easy accessibility from major roads or highways will attract more potential leads. A convenient location is going to accommodate a wider range of clientele and more importantly, reduce the time it takes for those customers to get to your dealership. The better your location, the more you’re going to reach a higher number of those customers organically.

Analysing your Financial situation

Before setting up a car dealership, it is extremely important that you put together an in-depth financial analysis that you can use as a foundation to ensure the security of the dealership’s financial health and long-term viability. This analysis should cover points like what you expect to spend financially whilst operating, whether it be advertising, staff costs and everything in-between.

The benefit of having an in-depth financial analysis is it provide you with a clear understanding of your financial obligations, risks, and potential returns. To create the best financial analysis touch on costs like your initial investment to start the dealership, the costs of purchasing vehicles to sell, expected staff labour costs, marketing costs, ongoing maintenance costs, and anything else you can think of.

Once you understand how much you need to spend its time to set some realistic financial goals and positive outcomes. Failure to carefully consider the above considerations and expenses you increase the risk of things like financial challenges and in worst cases insolvency. 

Are you going to employ staff or sole trade?

While you are in the process of opening your dealership, we’re sure you weighed up the options of whether you’re going employ a team of salesman to assist you with everyday tasks or if you’re going to sole trade.

Employing staff brings the advantage of shared responsibilities and specialised roles, allowing you to hire a person with a more diverse skill set to cater to a certain aspect of the dealership's requirements. This releases the burden and pressure of a single individual handling all tasks. This fosters teamwork, promotes efficiency, and will enhance customer service.

However, opting to become a sole trader will offer great advantages for your business. You will be the only individual that has total control over decision-making and operational strategies. In addition to this, as a sole trader, you retain all profits, fostering a direct connection between your efforts and financial rewards.

What are your Marketing Strategies?

As a car dealer new to the automotive industry, marketing is an essential part of promoting your business and attracting new leads and potential customers. However, with the constant increase in cost of advertising, it can be difficult to keep your marketing expenses in check.

Use social media to your advantage! Facebook Automotive Inventory Ads are a great way to boost the visibility of your stock through the one form of social media that people of all ages spend time on- Facebook! The greatest advantage to utilising Facebook AIA; is it will target people who are already actively searching for the stock you’re selling and live within a close radius to your dealership. It’s a win, win!

Utilising a website is ideal for your business’ success because not only will potential customers be able to see your inventory before stepping foot inside your dealership, but you can boost the visibility of all your websites content by implementing keywords on your blog posts by use of SEO. (Search Engine Optimisation)

Have you acquired a motor dealer license?

Ensure that you have acquired a motor dealer license to ensure you are staying legally compliant. Most states in Australia allow you to do this online once you register your business name and apply for your ABN/ACN number. By clicking on these links, you can apply for a motor dealer license, all states in Australia have been listed.

In Conclusion,

It's worth noting that other factors such as customer service, inventory management, pricing, and advertising also play critical roles in your dealership's success.

Utilising a Dealer Management System is going to be key for successful inventory management as it revolutionizes the process of buying and selling cars and automates your stock control while creating all your valuable reporting for you. Your DMS will automatically upload your in-stock vehicles to your professional, tailor-made, responsive website design. Everything can be done by the click of a button.

We hope you enjoyed reading this article. To read more articles like this, please visit the EasyCars latest news page here.

Taylor Mendonca
Written By
Taylor Mendonça
Content Specialist
Taylor is our inhouse content specialist at EasyCars. Taylor specialises in Automotive Industry writing, creating pieces on a vast range of topics like tips, opinion pieces and well researched industry trends. 

About EasyCars,

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.

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