With some exceptions in specific urban pockets, America is a car culture. Selling passenger vehicles is a good way to make serious money, even in 2024. It’s never a sure thing, though, so you need to know what’s involved in starting your car dealership.
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The sheer volatility of the current auto market makes it a very interesting time to start a car dealership, so you should know what you’re getting into in advance.
One advantage that modern dealerships have over car sellers of decades past is the ability to do business more than just locally. You can use car shipping companies in New York or other states to have vehicles brought to your dealership and delivered to your customers.
With its high population, there are lots of people selling cars in New York online that you might be able to use to fill the spaces in your dealership lot, particularly if they’re moving to urban areas where they won’t need a car anymore.
Likewise, if your dealership is located in a cheaper part of the country, you might be able to sell your vehicles to New York residents who want a cheaper deal than they might find locally, depending on the shipping costs.
According to TRUiC, one aspect of starting a car dealership that many don’t know about is how they have to get bonded. Regulations vary from state to state, but there can be several different kinds of bonds that might apply based on the kind of dealership you decide to establish.
These surety bonds are designed to make sure that both the state and customers are defrauded by a dealership. A DMV bond is a common starting point, but there might also be specific bonds for dealers who work with used cars, wholesale cars, RVs, and even motorcycles.
The costs and fees of these bonds will vary on several factors. How much you need each bond to be will matter a lot, and your own personal credit score and financial credentials will determine many things. Whether you choose to finance your premiums can also have a considerable impact on your start-up costs.
Some entrepreneurs are thinking about dealerships right now because passenger vehicle values are so high. However, inventory is also really tight. Prices are likely to stabilize as time goes on, but that doesn’t mean there’s less money to be made. It means inventory will be easier to procure and there will be more people buying vehicles as prices come down.
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