Have you stopped by your local city hall and chamber of commerce to see what data they've collected. They often collect sales data on various industries in your community. I would suggest you start there.
You can do a search on the SBA site, Bureau for Labor Statistic site and the US Department of Transportation's RITA site for "used car sales" and read up on the various articles they've written to see if they provide insight to your questions. If some of the reports are out-dated, contact them to see if they have updated information. If not, check out the sources they reference in the articles and reports and then follow up with them individually.
Have you researched the competition in the area and compared your plan to their current offering of makes, models and pricing?
What is the median income for the area? Does your planned offering fit within this demographic for popular types of vehicles and price range?
The US Census Bureau site should help your with some demographic data.
Good luck. I hope this helps for a start.
Now days (and especially in the area you have described) you will need to have a "Buy Here - Pay Here" type business. In other words, you (the dealer) must carry the financing. Although more funds are needed in order to operate that way, there is more money to be made in this operation.1 of 1 people found this helpful
Why? - First, you can price the vehicles higher. The primary customer needs transportation, has poor credit, and is mostly concerned about being able to buy a car.
Secondly, you will get a very strong down payment. this not only helps your cash flow; but it also insures that the buyer wants to protect his investment.
Third, if a buyer should default (and, unfortunately, some will), you will reposses the car and sell it again, adding the payments that the original buyer made to your gross income. (sad for the original buyer, but necessary.)
In order for this to work well, with minimum losses by defaulting buyers, you will need to install a GPS tracking device on all cars that are purchased with credit. The cost of these devises must be built into the cost of the vehicle. (I believe these are about $3-400 each. I believe a service that tracks these vehicles charge about $30 / month for the service....a cost that needs to be built into the financing costs.
Also, take his trade-in....even if you don't really want it. By doing so, you've elimated any optional transportation he haw if he defaults; thereby assuring that he NEEDS to keep the vehicle he bought from you.
Once you've become "established" with a successfull operation (probably two years of Tax forms), you should be able to borrow funds to expand your operation.
Well, the guys who had been at the dealership, or in the car business the longest (read: repeat customers) could do 30 cars a month. I’ve seen guys do 40 a month…but unless you’re the fleet sales guy, you’re pushing it there. I’d say 10 cars and some us car part a month would be the absolute minimum you could get by with at a place that doesn’t sell primarily luxury or high end vehicles. For example, the only place that sells Bentleys in Atlanta sells about 15 of them a year, if that many. You should be able to guage if you’re selling enough based on your paychecks, if you’re not happy with your checks, you’re not selling enough. I’m a decent salesperson, but I struggled to get 15-20 out a month…then there were some guys who had never done this thing before and came out of the blocks doing 20 a month. Its not a bad job if you have the skills, and can stand the hours…there are times when you’ll just be sitting for hours without a single customer on the lot, then there will be times when there are so many people out there you can’t keep track of em all.
Hi all ! I'm interested in maybe opening a used car lot...but in doing my numbers I cannot complete my research without knowing how many cars should I expect to sell in this economy per day? week? month? The car lot will be located in a modest but busy part of town in a 250,000 population area. The price range I want to cover is $4000 - $12000. Any help and comment will be greatly appreciated !