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September 10th, 2015

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Opening Your Used Car Lot

Mark Young, Knowledge Level: Novice, Keywords: opening, car, lot, opening car lot, used car lot

With the auto industry in such a decline, gas prices on the rise and the overall price of new automobiles costing nearly as much as the average American makes annually, used car lots are continuing to flourish.

One benefit of opening a used car lot it's a "must have" market, buyers are there. There are 5  reasons for this:

Can't afford a new car at present.

  1. They need to trade current auto hoping to lower their monthly payment due to either personal or economic issues.
  2. Need to trade in larger vehicle for a smaller/compact to offset rising fuel prices.
  3. Present vehicle is paid for but gas, maintenance, ins. etc. is too expensive. Paying cash for less expensive vehicle to drive is cost effective.
  4. Their credit may only enable them to purchase cheaper pre-owned vehicles.

2 ways to open a used car lot:

The first, have the needed amount of assets and go find the "right location" that either already has the necessary facilities, or to have the assets to move or construct them. To have enough cash on hand to go to an auction or through private parties and purchase enough vehicles to display/ fill your lot. Usually around $250,000 to $350,000 in inventory to start.

The second is to repeat the first for location/facilities,but to rent/lease instead of buying your property and buildings. Inventory. If you have good credit with some substantial amounts borrowed and paid (like a 15 yr mortgage on a $300,000 home) getting lenders to grant you what's called "floor planning" isn't hard.  Just set up your account and credit line (that's secured with the vehicles) and with your issued business checking acct. you go to the auction and buy vehicles for inventory. The vehicles titles go to the floor planner and once one is sold, the title is released.

Mark is an veteran expert in the automobile industry. Article on opening, car, lot, opening car lot, used car lot by Mark Young