How to Start Your Own Car Dealership
- September 9, 2017
- Business Insurance
- by Chris
Many people dream of owning their own business. What better way of owning a business then building it around an existing passion. Many people who start out in the motor trade have a love for all things cars and who wouldn’t want to have a showroom full of stunning vehicles. However, keep in mind, starting and running a business is far from easy and there is a lot to learn. You need to do your research and understand all the related issues, challenges and requirements that are involved in starting out as a car trader.
There are a few things you should be aware of when you chose to become part of the motor trade industry. Many traders start out by buying a small number of cars in their spare time and build it into a highly profitable business.
You are permitted to buy between three and seven cars a year under your name, many smaller traders choose to buy under the name of their partners, children, relatives and even friends making them the short-term owners of the vehicle before they take the next step to apply for a wholesale car trader license. A big benefit of having a wholesale dealer license is that you will be able to attend various car auctions which are not open to the public however, as with all things in life there is a negative which is that you will not have the power to sell the car legally unless a dealer is prepared to buy the vehicle for a fix price.
Location is important. Once you have your license it is now a good time to start looking for a place to display your cars and other vehicles. As you can imagine the prime real estate costs a significant amount of money, so many traders decide to get a small office in a prime spot and display their vehicles in another location nearby.
Insurance is key. There are a several insurance policies you will need but one of the first we would suggest you get whether you’re a part time or full-time trade is Public Liability Insurance.
As with many businesses it takes money to make money. If you are looking to borrow money from a third party such as the bank, you will need to have a detailed business plan, with cash-flow projections etc. As a new business owner, the maximum you are likely to be loaned without significant security is around £25,000.
It is also an absolute necessity to have in place the correct motor trade insurance cover. This insurance will cover you when you, your staff or customers are driving or working on vehicles that are in your custody or control.
As a final thought, we would encourage anyone to go out there and start a business, it is both incredibly rewarding and difficult at the same time. However, by having a plan and the necessary insurance in place from day one will certainly increase your chases of success.
If you are looking for motor trade insurance for your new business, even if you are a trader under the age of 25, Utility Saving Expert can help. We have an industry leading trade insurance quotation tool available for you to use completely free of charge. In just a few clicks, you can get yourself a number of quotations to compare and ultimately chose which is the right one for your new business.