Thinking of setting up your own car dealership? The auto industry can be a lucrative one to get into. However, there are also a lot of challenges you’ll face along the way.
If you’re wanting to start up a car dealership, below you’ll discover 5 things you’ll need to consider.
1. The legal requirements
Before setting up a car dealership business, you need to familiarise yourself with the legalities. In some cases, you may need a license to operate. You’ll also have to register the business and read up on the Motor Ombudsman Codes which are specifically set out for the motor industry.
Failing to meet the legal requirements could see your business shut down, or at least facing significant fines.
2. Your competition
Another thing you’ll want to do is research the competition. There are a lot of car dealerships already in operation. So, what’s going to make yours stand out? How many competitors do you have in the local area?
By looking into your competition, you’ll get to learn more about current demand for services. You’ll also be able to see what type of services are offered and whether you could provide something different to set your dealership apart.
Setting up a car dealership isn’t cheap. You’re going to need to pay for premises, vehicles, cleaning and maintenance equipment, and additional staff if needed. Then there’s the cost of marketing to consider.
The full costs can be quite high for setting up a car dealership, so you need to look into your options. If you choose the finance route, make sure you’re getting a competitive deal. You’ll also need to ensure you can pay back the funds that you borrow.
4. What services will you be offering?
There are a lot of different services you can offer at your car dealership. First you need to decide whether you’ll be selling new or used vehicles. The latter would be the cheaper option, though it also presents a lot more risk. Some additional services you could offer include:
- Car valeting
- Forecourt services such as car cleaning
- Car hire
- Motor part sales
The more services you offer, the more profits you could potentially earn. However, you would need to hire additional staff and pay additional start up costs for each service you choose to add on. So, consider your options carefully before deciding which services to offer.
To protect your new business, you’re going to need to take out insurance. Car dealership insurance from Gallagher offers flexible packages to match your needs. They protect against liability, road risks, property and legal expenses. It’s important to compare your different options so you can determine which one is right for you.
These are just 5 of the top things to consider when starting a car dealership in the UK. You’re going to face a lot of competition so it’s important to do your research and plan ahead to ensure your dealership stands out from the rest.