How to start up a car dealership in the UK
Many people dream of one day running their own car dealership. Yet while having an unwavering enthusiasm for all things four-wheeled certainly helps, starting up a car dealership requires much more than passion, and should always be looked at from the perspective of a business owner rather than a hobbiest. There are a number of necessary steps to take before entering into the world of car trading, and being aware of them before getting in too deep is essential for long term success.
According to data from Statista, the market value of used cars sold in the UK in 2014 was as much as £43.4 billion, making it a significantly lucrative industry in which to do business. By following these steps, you will be well on your way to getting a slice of the market share in no time.
Do your research
Getting to know the market from top to bottom, particularly the one in your local area, is important before entering into business in any industry. It might be the case that there are already several established traders nearby and that people simply don’t need another car dealership saturating the market.
You should also consider who your target market will be, building an idea of the type of person to whom you will be selling. Will it be young professionals who are looking to get their first set of wheels? People who work in the city and want to upgrade to a high end vehicle? Or families looking for a reliable and safe estate car? All these are important questions that you should be asking yourself well before setting up shop.
If you decide to focus on high-end buyers, sourcing the right inventory becomes your main challenge. Many dealers look beyond local auctions to find rare or prestige models that match their clients’ specific tastes. Utilizing an experienced partner like Import Marques global supply allows you to secure luxury vehicles directly from international markets. This approach helps you bypass local stock shortages and gives your new dealership a distinct competitive advantage from day one.
Draw up a business plan
Forming a general idea of set up costs, expected income, whether you will need to hire staff, overheads, marketing fees, legal regulations and repair costs are all factors that need to be taken into account when devising a business plan.
If you have quit your regular job to pursue business in car dealership with the expectation that it will earn you more money, then you need to sit down and go through all the expenses beforehand to eliminate the risk of a shock further down the line.
Get insured
Once you have consulted your local council of your plans and got the go ahead, the next step is to seek out Motor Trade Insurance, which will cover you to drive cars without having to obtain insurance for each one. There are a number of different types of motor trade insurance, including road risk, third-party, third-party fire and theft, and fully comprehensive.
Register as a sole trader
As tedious as it might sound, filling out a self-assessment form to avoid being fined by HM Revenue and Customs is an essential part of starting up your own car dealership. If, on the other hand, you are branching out to become a fully licensed company, then you will need to submit the correct forms for registering as a business instead.
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