business plan used car dealership

Used Car Dealership Business Plan [Sample Template]

By: Author Tony Martins Ajaero

Home » Business ideas » Automotive Industry » Car Dealership

Are you about starting a used car dealership business online? If YES, here is a complete sample used car dealership business plan template & FREE feasibility report for starting a used car dealership business .

Used car dealership business as the name implies is all about selling used cars to willing buyers. Aside from the fact that the owners of used car dealership shops are known for selling used cars, they also go out of their way to source for people who want to sell their cars.

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They buy used cars at favorable prices and then resell at a good price that guarantees profits for them. In a nutshell, they are in the business of buying and selling used cars.

If you are sure this type of business is what you want to do after you must have conducted your feasibility studies and market research, then the next step to follow is to write a good business plan; a detailed blue print of how you intend raising your seed capital, setting up the business, managing the flow of the business, sorting out tax and marketing your services etc.

The truth is that it is one thing to have a fantastic idea cum business plan but entirely another thing for the business plan to translate to money, which is why it is important to assemble a team of dedicated workers if you want to be successful with your used car dealership business .

Note that you can hardly run this type of business without the right network of other used car dealers. Below is a sample used car dealership business plan template that will help you successfully write yours without much stress;

A Sample Used Car Dealership Business Plan Template

1. Industry Overview

Players in the used car dealership industry sell used cars and they may fall into any of the following niche areas; brick and mortar used cars dealership shop, online used cars dealership shop, used luxury cars dealership business and multi – brand and multi – maker used car dealers.

Recent statistics have it that the total annual revenue for used car dealership in the united states of America is US0 billion with an annual growth of 2.4 percent.

With massive annual sales of nearly US$370 billion, one can confidently say that the used vehicle dealership industry represents almost half of the United States’ auto retail market and it is of course the largest retail segment of the U.S. economy.

For instance, in 2005, approximately 44 million used cars were sold in the United States, which is more than double that of the nearly 17 million new cars sold. The average price of used cars in the United States is $8,786. The industry has 127,940 registered car dealership businesses that employ a total of 237,788 people.

In the United States used car dealership market, the top four major players account for less than 20.0 percent of industry revenue in 2015, with the biggest used car dealer, CarMax dealership, generating about 12.6 percent of revenue. Recent findings also indicate that the industry concentration has increased over the last five years prior to 2015.

The automotive industry with reference to used car dealership is indeed flourishing because more and more consumers are becoming aware of the need to cut unnecessary spending as it relates to purchasing cars, insurance policies and also the need to sell used cars as fast as possible.

Some of the factors that encourage aspiring entrepreneurs to venture into opening a used car dealership shop is the fact that the amount needed to start the business especially when you choose to start a small shop is not on the high side compared to other small – scale businesses.

That makes it easier for entrepreneurs who are interested in the business to come into the industry at any time; the entry barriers are quite affordable and any serious-minded entrepreneur can comfortably raise the startup capital without collecting loans from the bank especially if they can convince owners of used cars who are willing to sell their cars to drop the cars with them while they source for buyers.

Lastly, a used car dealership business might not be entirely easy to start, but one thing is certain, it is a straightforward business that can generate huge and steady profits if well positioned and properly managed.

People often think that starting this type of business does not require any professional skills; in as much as it is true, you would still need a good knowledge of automobiles, good business and bargaining skills and of course customer services skills if indeed you want to build a profitable business.

2. Executive Summary

Jason Hyacinth® Used Car Dealership, Inc. is a registered used car dealership shop that will be located in one of the busiest streets in Spruce, Chestnut and Walnut Streets – Philadelphia.

We have been able to lease a facility that is big enough (a 5 thousand square foot facility) to fit into the design of the kind of standard used car dealership shop that we intend launching and the facility is located in a corner piece along a major road close to the city center.

Jason Hyacinth® Used Car Dealership, Inc. sell and buy used cars from different manufacturers in the United States and abroad. We are set to service a wide range of clientele in and around Philadelphia.

We are aware that there are several large and small online and offline car dealership shops all around Spruce – Philadelphia, which is why we spent time and resources to conduct a thorough feasibility studies and market survey so as to be well positioned to favorably compete with all our competitors. We have an online service option for our customers, and our garage is well secured.

Jason Hyacinth® Used Car Dealership, Inc. will ensure that all our customers are given first class treatment whenever they visit our garage. We have a CRM software that will enable us manage a one on one relationship with our customers no matter how large they may be.

Jason Hyacinth® Used Car Dealership, Inc. will at all times demonstrate her commitment to sustainability, both individually and as a firm, by actively participating in our communities and integrating sustainable business practices wherever possible.

We will ensure that we hold ourselves accountable to the highest standards by meeting our customers’ needs precisely and completely whenever they patronize our used cars.

Jason Hyacinth® Used Car Dealership, Inc. is a family business that is owned by Jason Hyacinth and his immediate family members. Jason Hyacinth has a Diploma in Automotive Technology, over 5 years’ experience in the retailing industry, working for some of the leading brands in the United States.

Although the business is launching out with just one outlet in Spruce, Chestnut and Walnut Streets – Philadelphia, but there is a plan to open other outlets all around major cities in the United States.

3. Our Products and Services

Jason Hyacinth® Used Car Dealership, Inc. is in the used car dealership industry to service a wide range of clients and of course to make profit, which is why we will ensure we go all the way to make available a wide range of used cars from top manufacturing brands in the United States and other countries of the world.

We will ensure that we do all that is permitted by the law of the United States to achieve our aim and objectives of starting the business.

4. Our Mission and Vision Statement

• Our vision is to run a car dealership garage that deals in used cars from all the brands in the United States of America.
• Our mission is to establish a world – class used car dealership garage business that will make available a wide range of used cars from top manufacturing brands at affordable prices to the residence of Philadelphia and other key cities in the United States of America and Canada where we intend opening of chains of used cars dealership garages.

Our Business Structure

Our intention of starting a used car dealership business is to build a standard used car dealership garage in Philadelphia. Although our business might not be as big as CarMax dealership, and AutoNation Inc.et al, but will ensure that we put the right structures in place that will support the kind of growth that we have in mind while setting up the business.

We will ensure that we hire people that are qualified, honest, customer centric and are ready to work to help us build a prosperous business that will benefit all the stakeholders. As a matter of fact, profit-sharing arrangement will be made available to all our senior management staff and it will be based on their performance for a period of ten years or more.

In view of that, we have decided to hire qualified and competent hands to occupy the following positions;

• Chief Executive Officer (Owner)
• Garage Manager
• Human Resources and Admin Manager

Sales and Marketing Manager

Information Technologist

• Accountants/Cashiers
• Sales Agents/Customer Services Executive

5. Job Roles and Responsibilities

Chief Executive Officer – CEO:

• Increases management’s effectiveness by recruiting, selecting, orienting, training, coaching, counseling, and disciplining managers; communicating values, strategies, and objectives; assigning accountabilities; planning, monitoring, and appraising job results; developing incentives; developing a climate for offering information and opinions; providing educational opportunities.
• Responsible for fixing prices and signing business deals
• Responsible for providing direction for the business
• Creates, communicates, and implements the organization’s vision, mission, and overall direction – i.e. leading the development and implementation of the overall organization’s strategy.
• Responsible for signing checks and documents on behalf of the company
• Evaluates the success of the organization

Admin and HR Manager

• Responsible for overseeing the smooth running of HR and administrative tasks for the organization
• Maintains office supplies by checking stocks; placing and expediting orders; evaluating new products.
• Ensures operation of equipment by completing preventive maintenance requirements; calling for repairs.
• Enhances department and organization reputation by accepting ownership for accomplishing new and different requests; exploring opportunities to add value to job accomplishments.
• Defining job positions for recruitment and managing interviewing process
• Carrying out staff induction for new team members
• Responsible for training, evaluation and assessment of employees
• Responsible for arranging travel, meetings and appointments
• Oversee the smooth running of the daily office cum business activities.

Garage Manager:

• Responsible for managing the daily activities in the used car garage
• Ensures that proper records of cars are kept and the garage does not run out of cars
• Ensures that the garage facility is in tip top shape and cars are properly arranged and easy to locate
• Interfaces with third – party suppliers (vendors)
• Controls distribution and supply chain inventory
• Supervise the workforce in the used car garage sales floor
• Manages external research and coordinate all the internal sources of information to retain the organizations’ best customers and attract new ones
• Models demographic information and analyze the volumes of transactional data generated by customer purchases
• Identifies, prioritizes, and reaches out to new partners, and business opportunities et al
• Identifies development opportunities; follows up on development leads and contacts; participates in the structuring and financing of projects; assures the completion of development projects.
• Responsible for supervising implementation, advocate for the customer’s needs, and communicate with clients
• Develops, executes and evaluates new plans for expanding sales
• Documents all customer contact and information
• Represents the company in strategic meetings
• Helps to increase sales and growth for the company
• Manages the organization website
• Handles ecommerce aspect of the business
• Responsible for installing and maintenance of computer software and hardware for the organization
• Manages logistics and supply chain software, Web servers, e-commerce software and POS (point of sale) systems
• Manages the organization’s CCTV
• Handles any other technological and IT related duties

Accountant/Cashier:

• Responsible for preparing financial reports, budgets, and financial statements for the organization
• Provides managements with financial analyses, development budgets, and accounting reports
• Responsible for financial forecasting and risks analysis
• Performs cash management, general ledger accounting, and financial reporting
• Responsible for developing and managing financial systems and policies
• Responsible for administering payrolls
• Ensuring compliance with taxation legislation
• Handles all financial transactions for the organization
• Serves as internal auditor for the organization

Client Service Executive

• Ensures that all contacts with clients (e-mail, walk-In center, SMS or phone) provides the client with a personalized customer service experience of the highest level
• Through interaction with customers on the phone, uses every opportunity to build client’s interest in the company’s products and services
• Manages administrative duties assigned by the human resources and admin manager in an effective and timely manner
• Consistently stays abreast of any new information on the organizations’ products, promotional campaigns etc. to ensure accurate and helpful information is supplied to customers when they make enquiries
• Provides information about warranties, manufacturing specifications, care and maintenance of merchandise and delivery options
• Responsible for cleaning and washing all the cars in the garage at all times
• Ensures that toiletries and supplies don’t run out of stock
• Cleans both the interior and exterior of the garage facility
• Handles any other duty as assigned by the garage manager

6. SWOT Analysis

Our intention of opening just one outlet of our used car dealership in Spruce, Chestnut and Walnut Streets – Philadelphia is to test run the business for a period of 2 to 5 years to know if we will invest more money, expand the business and then open other outlets in other cities in the United States.

We are quite aware that there are several used car dealership garages all over Philadelphia and even in the same location where we intend locating ours, which is why we are following the due process of establishing a business. We know that if a proper SWOT analysis is conducted for our business, we will be able to position our business to maximize our strength, leverage on the opportunities that will be available to us, mitigate our risks and be welled equipped to confront our threats.

Jason Hyacinth® Used Car Dealership, Inc. employed the services of an expert HR and Business Analyst with bias in car dealership business to help us conduct a thorough SWOT analysis and to help us create a Business model that will help us achieve our business goals and objectives. This is a summary of the SWOT analysis that was conducted for Jason Hyacinth® Used Car Dealership, Inc.;

Our location, business model (we will operate both a physical garage and online store), varieties of payment options, wide range of used cars from different manufacturing brands and models and our excellent customer service culture will definitely count as a strong strength for Jason Hyacinth® Used Car Dealership, Inc. So also, our team of highly qualify staff is also a plus for us.

A major weakness that may count against us is the fact that we are a new used car dealership garage in Philadelphia and we don’t have the financial capacity to compete with multi – million dollars used car garages when it comes to retailing at a rock bottom prices.

• Opportunities:

The fact that we are going to be operating our used car garage in a corner piece property along a major road close to one of the largest residential estates in Spruce, Chestnut and Walnut Streets – Philadelphia provides us with unlimited opportunities to sell our used cars to a large number of individuals and corporate organizations.

We have been able to conduct thorough feasibility studies and market survey and we know what our potential clients will be looking for when they visit our used car garage.

Just like any other business, one of the major threats that we are likely going to face is economic downturn. It is a fact that economic downturn affects purchasing/spending power. Another threat that may likely confront us is the arrival of a new used car dealership outlet in the same location where ours is located and even online. So also, unfavorable government policies may also pose a threat to businesses such as ours.

7. MARKET ANALYSIS

• Market Trends

Experts projected that in 2017, the used car dealership shops industry is expected to profit from growing global economic conditions. Per capita income levels have scaled across the globe and the growing middle class in emerging economies have looked to purchase their own cars. As the demand for used cars increase, used car dealership garages will make more sales. A decline in demand for new automobiles has stimulated an increase in the sale of used cars.

One notable trend in the used car dealership industry is that most used car dealers are leveraging on online store to sell their cars to a larger market. As a matter of fact, it is easier to sell and export used cars from the United States and Canada to countries in Africa.

Lastly, in recent time, the used car dealership garage landscape has seen tremendous changes in the last 20 years; it has grown from the smaller outlets to a more organized and far reaching venture. The introduction of franchise and online car dealership garage makes it easier for a used car dealership garage to reach out to a larger market far beyond the areas where his physical store is located.

8. Our Target Market

Those who patronize used cars cut across all genders who are above 18 years and with the financial means; hence the target market for used car dealership garage business is all encompassing. Your target market can’t be restricted to just a group of people, but all those who desire to own a car.

In view of that, we have positioned our used car dealership garage to service the residents of Spruce, Chestnut and Walnut Streets – Philadelphia and every other location where our franchise cum outlets will be located all over key cities in the United States of America and Canada. We have conducted our market research and feasibility studies and we have ideas of what our target market would be expecting from us.

We are in business to retail a wide range of used cars to the following groups of people;

• Middle Class Families
• Low Earners

Our Competitive Advantage

A close study of the used car dealership garage industry reveals that the market has become much more intensely competitive over the last decade. As a matter of fact, you have to be highly creative, customer centric and proactive if you must survive in this industry. We are aware of the stiff competition and we are well prepared to compete favorably with other leading used car dealership garages in Philadelphia and throughout the United States and Canada.

Jason Hyacinth® Used Car Dealership, Inc. is launching a standard dealership garage that will indeed become the preferred choice of residents of Spruce, Chestnut and Walnut Streets – Philadelphia and every other location where our outlets will be opened.

One thing is certain; we will ensure that we have a wide range of used cars brands and models from leading manufacturers available in our garage at all times. It will be difficult for customers to visit our garage and not see the type of used car they are looking for.

One of our business goals is to make Jason Hyacinth® Used Car Dealership, Inc. a one stop used car dealership shop. Our excellent customer service culture, online store, various payment options and highly secured facility will serve as a competitive advantage for us.

Lastly, our employees will be well taken care of, and their welfare package will be among the best within our category in the industry meaning that they will be more than willing to build the business with us and help deliver our set goals and achieve all our aims and objectives. We will also give good working conditions and commissions to freelance sales agents that we will recruit from time to time.

9. SALES AND MARKETING STRATEGY

• Sources of Income

Jason Hyacinth® Used Car Dealership, Inc. is in business to retail a wide range of used cars to the residents of Spruce, Chestnut and Walnut Streets – Philadelphia. In essence, our source of income will be the retailing of a wide range of used cars from different car manufacturing brands.

10. Sales Forecast

When it comes to used car dealership business, if your garage is well stocked with various types of used cars from different manufacturing brands and models and centrally positioned, you will always attract customers and that will sure translate to increase in revenue generation for the business.

We are well positioned to take on the available market in Philadelphia and we are quite optimistic that we will meet our set target of generating enough profits from the first six months of operation and grow the business and our clientele base.

We have been able to critically examine the used car dealership industry, we have analyzed our chances in the industry and we have been able to come up with the following sales forecast. The sales projections are based on information gathered on the field and some assumptions that are peculiar to startups in Spruce, Chestnut and Walnut Streets – Philadelphia.

Below are the sales projections for Jason Hyacinth® Used Car Dealership, Inc. it is based on the location of our business and other factors as it relates to used car dealership garage startups in the United States;

• First Fiscal Year: $450,000
• Second Fiscal Year: $750,000
• Third Fiscal Year: $1.2 Million

N.B : This projection was done based on what is obtainable in the industry and with the assumption that there won’t be any major economic meltdown and any major competitor within our market space. Please note that the above projection might be lower and at the same time it might be higher.

• Marketing Strategy and Sales Strategy

Before choosing a location for Jason Hyacinth® Used Car Dealership, Inc. we conduct a thorough market survey and feasibility studies in order for us to penetrate the available market and become the preferred choice for residents of Spruce – Philadelphia. We have detailed information and data that we were able to utilize to structure our business to attract the number of customers we want to attract per time.

We hired experts who have good understanding of the used car dealership industry to help us develop marketing strategies that will help us achieve our business goal of winning a larger percentage of the available market in Spruce – Philadelphia.

In summary, Jason Hyacinth® Used Car Dealership, Inc. will adopt the following sales and marketing approach to win customers over;

• Open our used car dealership garage in a grand style with a party for all
• Introduce our used car dealership garage by sending introductory letters alongside our brochure to households, offices and other key stakeholders in and around Spruce -Philadelphia
• Ensure that we have a wide range of used cars from different brands at all times.
• Make use of attractive hand bills to create awareness and also to give direction to our garage
• Position our signage/flexi banners at strategic places around Spruce, Chestnut and Walnut Streets – Philadelphia
• Position our greeters to welcome and direct potential customers
• Create a loyalty plan that will enable us reward our regular customers
• Engage on roadshows within our neighborhood to create awareness for our used car garage
• List our business and products on yellow pages ads (local directories)
• Leverage on the internet to promote our business
• Engage in direct marketing and sales
• Encourage the use of Word of mouth marketing (referrals)

11. Publicity and Advertising Strategy

Despite the fact that our used car dealership garage is well located, we will still go ahead to intensify publicity for the business.

Jason Hyacinth® Used Car Dealership, Inc. has a long-term plan of opening outlets in various locations all around key cities in the United States and Canada which is why we will deliberately build our brand to be well accepted in Philadelphia before venturing out.

As a matter of fact, our publicity and advertising strategy is not solely for winning customers over but to effectively communicate our brand. Here are the platforms we intend leveraging on to promote and advertise Jason Hyacinth® Used Car Dealership, Inc.;

• Place adverts on community based newspapers, radio and TV stations
• Encourage the use of word of mouth publicity from our loyal customers
• Leverage on the internet and social media platforms like YouTube, Instagram, Facebook, Twitter, LinkedIn, Snapchat, Google+ and other platforms to promote our business.
• Ensure that our we position our banners and billboards in strategic positions all around Spruce, Chestnut and Walnut Streets – Philadelphia
• Distribute our fliers and handbills in target areas in and around our neighborhood
• Advertise our used cars dealership business in our official website and employ strategies that will help us pull traffic to the site
• Brand all our official cars and trucks and ensure that all our staff members and management staff wear our branded shirt or cap at regular intervals

12. Our Pricing Strategy

Aside from quality, pricing is one of the key factors that gives leverage to used car dealership garages, it is normal for consumers to go to places where they can get used cars at cheaper prices which is why big players in the industry will attract loads of clients.

We know we don’t have the capacity to compete with big players in the used car dealership industry but we will ensure that the prices and quality of all the used cars that are available in our garage are competitive with what is obtainable amongst used car garages within our level.

• Payment Options

The payment policy adopted by Jason Hyacinth® Used Car Dealership, Inc. is all inclusive because we are quite aware that different customers prefer different payment options as it suits them but at the same time, we will ensure that we abide by the financial rules and regulation of the United States of America.

Here are the payment options that Jason Hyacinth® Used Car Dealership, Inc. will make available to her clients;

• Payment via bank transfer
• Payment with cash
• Payment via credit cards / Point of Sale Machines
• Payment via online bank transfer
• Payment via check
• Payment via mobile money transfer
• Payment via bank draft

In view of the above, we have chosen banking platforms that will enable our client make payment for purchasing our used cars without any stress on their part. Our bank account numbers will be made available on our website and promotional materials to clients who may want to deposit cash or make online transfers for our used cars.

13. Startup Expenditure (Budget)

In setting up any business, the amount or cost will depend on the approach and scale you want to undertake. If you intend to go big by renting/leasing a big facility, then you would need a good amount of capital as you would need to ensure that your employees are well taken care of, and that your facility is conducive enough for workers to be productive.

The materials and equipment that will be used are nearly the same cost everywhere, and any difference in prices would be minimal and can be overlooked. As for the detailed cost analysis for starting a used car dealership business; it might differ in other countries due to the value of their money.

These are the key areas where we will spend our startup capital;

• The total fee for registering the business in the Unites States of America – $750
• Legal expenses for obtaining licenses and permits as well as the accounting services (software, P.O.S machines and other software) – $3,300
• Marketing promotion expenses for the grand opening of Jason Hyacinth® Used Car Dealership, Inc. in the amount of $3,500 and as well as flyer printing (2,000 flyers at $0.04 per copy) for the total amount of $3,580
• The cost for hiring business consultant – $2,500
• Insurance (general liability, workers’ compensation and property casualty) coverage at a total premium – $2,400
• The cost for payment of rent for 12 months at $1.76 per square feet in the total amount of $105,600
• The cost for garage remodeling – $20,000
• Other start-up expenses including stationery ($500) and phone and utility deposits ( $2,500 )
• Operational cost for the first 3 months (salaries of employees, payments of bills et al) – $60,000
• The cost for start-up inventory (stocking with a wide range of used cars from different manufacturing brands) – $350,000
• The cost for counter area equipment – $9,500
• The cost for store equipment (cash register, security, ventilation, signage) – $13,750
• The cost of purchase and installation of CCTVs: $10,000
• The cost for the purchase of office furniture and gadgets (Computers, Printers, Telephone, TVs, Sound System, tables and chairs et al): $4,000
• The cost of launching a website: $600
• The cost for our opening party: $7,000
• Miscellaneous: $10,000

We would need an estimate of $750,000 to successfully set up our standard used car dealership garage in Spruce – Philadelphia.

Generating Startup Capital for Jason Hyacinth® Used Car Dealership, Inc.

Jason Hyacinth® Used Car Dealership, Inc. is a private registered business that is solely owned and financed by Jason Hyacinth and his immediate family members. They do not intend to welcome any external business partner which is why he has decided to restrict the sourcing of the startup capital to 3 major sources.

These are the areas we intend generating our startup capital;

• Generate part of the startup capital from personal savings
• Source for soft loans from family members and friends
• Apply for loan from my Bank

N.B: We have been able to generate about $250,000 ( Personal savings $200,000 and soft loan from family members $50,000 ) and we are at the final stages of obtaining a loan facility of $500,000 from our bank. All the papers and documents have been signed and submitted, the loan has been approved and any moment from now our account will be credited with the amount.

14. Sustainability and Expansion Strategy

The future of a business lies in the number of loyal customers that they have, the capacity and competence of their employees, their investment strategy and the business structure. If all of these factors are missing from a business, then it won’t be too long before the business close shop.

One of our major goals of starting Jason Hyacinth® Used Car Dealership, Inc. is to build a business that will survive off its own cash flow without injecting finance from external sources once the business is officially running. We know that one of the ways of gaining approval and winning customers over is to retail our wide range of used cars a little bit cheaper than what is obtainable in the market and we are well prepared to survive on lower profit margin for a while.

Jason Hyacinth® Used Car Dealership, Inc. will make sure that the right foundation, structures and processes are put in place to ensure that our staff welfare are well taken of. Our company’s corporate culture is designed to drive our business to greater heights and training and retraining of our workforce is at the top burner.

We know that if that is put in place, we will be able to successfully hire and retain the best hands we can get in the industry; they will be more committed to help us build the business of our dreams.

Check List/Milestone

• Business Name Availability Check: Completed
• Business Registration: Completed
• Opening of Corporate Bank Accounts: Completed
• Securing Point of Sales (POS) Machines: Completed
• Opening Mobile Money Accounts: Completed
• Opening Online Payment Platforms: Completed
• Application and Obtaining Tax Payer’s ID: In Progress
• Application for business license and permit: Completed
• Purchase of Insurance for the Business: Completed
• Leasing of facility and remodeling the garage: In Progress
• Conducting Feasibility Studies: Completed
• Generating capital from family members: Completed
• Applications for Loan from the bank: In Progress
• Writing of Business Plan: Completed
• Drafting of Employee’s Handbook: Completed
• Drafting of Contract Documents and other relevant Legal Documents: In Progress
• Design of The Company’s Logo: Completed
• Graphic Designs and Printing of Promotional Materials: In Progress
• Recruitment of employees: In Progress
• Purchase of the needed furniture, computers, electronic appliances, office appliances and CCTV: In progress
• Creating Official Website for the Company: In Progress
• Creating Awareness for the business both online and around the community: In Progress
• Health and Safety and Fire Safety Arrangement (License): Secured
• Opening party planning: In Progress
• Compilation of list of used cars available in our garage: Completed
• Establishing business relationship with vendors – used cars auction houses and other used cars dealership garages: In Progress

Used Car Dealership Business Plan Template

Written by Dave Lavinsky

Used Car Dealership Business Plan

You’ve come to the right place to create your Used Car Dealership business plan.

We have helped over 1,000 entrepreneurs and business owners create business plans and many have used them to start or grow their Used Car Dealerships.

Below is a template to help you create each section of your Used Car Dealership business plan.

Executive Summary

Business overview.

Reliable Motors is a used car dealership located in Portland, Oregon. We specialize in offering a wide selection of high-quality used vehicles to customers in our local area. With a focus on exceptional customer service and competitive pricing, we aim to become the preferred choice for individuals looking to purchase reliable pre-owned vehicles.

Reliable Motors is run by Otto Masterson. Otto has 12 years of experience in vehicle sales and dealership operations. His customer-centric approach, and strong understanding of the local market will ensure that our firm is successful.

Product Offering

Reliable Motors offers a diverse inventory of used cars, trucks, SUVs, and vans from various makes and models. Our selection includes vehicles that are carefully inspected, tested, and certified to meet our stringent quality standards. We also provide vehicle history reports and offer extended warranties for added peace of mind. Our knowledgeable sales team is committed to assisting customers in finding the right vehicle that suits their needs and budget.

Customer Focus

Our primary target market includes individuals and families in Portland, Oregon who are looking to purchase a reliable used vehicle. We will cater to customers with various budgets, offering a range of price points to accommodate different financial situations. Additionally, we will also establish partnerships with local businesses, such as car rental companies and auto repair shops, to provide them with fleet vehicles and maintenance services.

Management Team

Reliable Motors’ most valuable asset is the expertise and experience of its founder, Otto Masterson. Otto has been in automotive sales for the past 20 years. Throughout his career, he has developed a strong base of repeat customers, many of whom have stated that they will buy their next car from Reliable Motors once the company is established and running. Otto’s customer-centric approach, and strong understanding of the local market will ensure that our firm is successful.

Success Factors

Reliable Motors will achieve success by offering the following competitive advantages:

• Quality Inventory: We will ensure our inventory consists of well-maintained and reliable used vehicles that meet our strict quality standards.
• Competitive Pricing: We will offer competitive prices to attract customers and provide value for their money. Our pricing strategy will consider market trends, vehicle condition, and fair market value.
• Exceptional Customer Service: We will prioritize customer satisfaction by providing a personalized and hassle-free buying experience. Our knowledgeable and friendly sales team will assist customers in finding the right vehicle that meets their needs and budget.
• Transparent Processes: We will establish trust by providing accurate vehicle information, pricing details, and facilitating open communication.
• Strong Industry Partnerships: We will collaborate with reputable suppliers, finance institutions, and service providers to enhance our offerings and provide additional benefits to customers.

Financial Highlights

Reliable Motors is seeking $1,000,000 in funding to establish and grow the business. The funds will be allocated as follows:

• Inventory acquisition: $800,000
• Renovation and setup of the dealership facility: $100,000
• Marketing and advertising expenses: $50,000
• Working capital: $50,000

The projected financials indicate steady revenue growth and profitability within the first three years of operation

Company Overview

Who is reliable motors.

  Reliable Motors is run by Otto Masterson, a 12 year veteran in vehicle sales and dealership operations. After working for several dealerships around town, he surveyed his most loyal customers to see if they would be willing to switch to his new dealership once it is established. Most of his customers responded enthusiastically, which motivated Otto to finally launch his business.

Reliable Motors History

Once he canvassed his loyal customer base and located a potential location, Otto Masterson incorporated Reliable Motors as an S-Corporation in April 2023.

The business is currently being run out of Otto’s home office, but once the purchase of the dealership location is finalized, all operations will be run from there.

Since incorporation, Reliable Motors has achieved the following milestones:

• Found a location and made an offer of purchase
• Developed the company’s name, logo, and website
• Hired an architect to design the lot, the service area, and the office building
• Determined equipment and fixture requirements
• Began recruiting key employees

Reliable Motors Services

Reliable Motors will provide the following services to its customers:

• Vehicle Sales: offer an inventory of used cars, trucks, SUVs, and vans, catering to various customer preferences and budgets.
• Financing Assistance: assistance with financing options through partnerships with local banks and financial institutions.
• Trade-ins: Customers will have the option to trade in their current vehicles, allowing them to apply the value toward their purchase at Reliable Motors.

Industry Analysis

The used car industry is experiencing steady growth, driven by factors such as rising new car prices, improved vehicle reliability, and a growing preference for cost-effective transportation options.

The used car industry is expected to grow over the next several years. According to a recent report by IBISWorld, the used car dealerships industry is expected to grow at a CAGR of 1.2% from now until 2028. This growth is due to increasing environmental consciousness, which has caused many consumers to avoid purchasing new automobiles. This increase in demand and industry growth ensures that Reliable Motors will achieve success.

This industry presents a significant opportunity for Reliable Motors to cater to customers seeking quality used cars at competitive prices.

Customer Analysis

Demographic profile of target market.

Reliable Motors primarily targets individuals in the Portland area who are in the market for a reliable and affordable pre-owned vehicle. By understanding our customers’ needs and providing a personalized buying experience, we aim to build long-lasting customer relationships.

Customer Segmentation

Reliable Motors will primarily target the following customer profiles:

• First-time car buyers
• Professionals
• Individuals

Competitive Analysis

Direct and indirect competitors.

Reliable Motors faces competition from both direct and indirect competitors in the used car dealership industry. Direct competitors include other local dealerships offering similar vehicle options. Indirect competitors include online marketplaces and private sellers.

AutoWheels is a used car dealership that carries a large variety of used cars, trucks, SUVs, and vans. Their line of car brands include Chevrolet, Dodge, Ford, Jeep, and Toyota. AutoWheels’ focus is offering clean, newer model used cars with affordable monthly payments. The dealership offers flexible financing approval for buyers with any credit score or financial situation.

AutoWheels partners with Portland Precision Auto Care for its automotive maintenance and repair needs. This partnership enables AutoWheels to offer services that include Car and Truck care, Electronic Services, Electrical Services, General Services, Heating and Cooling Services, Engine & Transmission, Miscellaneous Services, Transmission Services, Undercar Services, and Brakes.

James Rivers Automotive Outlet

Located in Portland’s Sellwood-Moreland neighborhood, James Rivers Automotive Outlet is a member of the James Rivers Family-Owned and Operated group of dealers in Portland. The dealership carries a large inventory of new, certified pre-owned, and pre-owned line of cars, trucks, SUVs, and vans. Their line of vehicles are in all price ranges and body types. James Rivers Automotive Outlet also offers trade-in evaluations at their other franchised stores – James Rivers Honda, Acura, and Toyota. The dealership also offers affordable financing options.

Eastside Used Cars

Established in 2011, Eastside Used Cars is a family-owned used car dealership. The dealership is fully internet based and all sales are by appointment only, in one of two locations: Sandy and Gresham. The dealership claims to have the best prices in the market, offering wholesale prices to the public. Customers may also expect to receive top dollar for their trade-ins.

The dealership currently offers an inventory of 175 vehicles, ranging in price from $6,990 to $60,800. It offers a variety of finance options for consumers with all levels of credit, but outside financing is welcomed.

Competitive Advantage

Reliable Motors holds the following advantages over the competition:

• Rigorous Vehicle Inspection : Each vehicle in our inventory undergoes a thorough inspection to ensure its mechanical and cosmetic condition, providing customers with peace of mind.
• Customer-Centric Approach : We prioritize customer satisfaction by offering personalized assistance, transparent pricing, and a hassle-free buying experience.
• Extensive Inventory : Our diverse inventory caters to various customer preferences and budgets, ensuring a wide range of options to choose from.

Marketing Plan

Brand & value proposition.

Reliable Motors will offer a unique value proposition to its clientele:

• Client-focused automotive sales, where the customer is treated fairly, with transparent pricing and a variety of financing options
• Service built on long-term relationships
• Top-quality automotive repair and maintenance, at competitive prices

Promotions Strategy

The promotions strategy for Reliable Motors is as follows:

Reliable Motors understands that the best promotion comes from satisfied customers. The Company will encourage its customers to refer other businesses by providing economic or financial incentives for every new customer produced. This strategy will increase in effectiveness after the business has already been established.

Social Media

Reliable Motors will invest heavily in a social media advertising campaign. The company will create social media accounts and invest in ads on all social media platforms. It will use targeted marketing to appeal to the target demographics.

Website/SEO Marketing

Reliable Motors will invest heavily in developing a professional website that showcases current inventory, and provides valuation tools for potential trade-ins. It will also invest heavily in SEO so that the firm’s website will appear at the top of search engine results.

Operations Plan

The following will be the operations plan for Reliable Motors. Operation Functions:

• Otto Masterson is the Owner of Reliable Motors. In addition to providing inventory management and sales, he will also manage the general operations of the business.
• Otto Masterson is joined by a full-time administrative assistant, Mandy Bobo, who will take charge of the administrative tasks for the company. She will also be available to answer incoming calls and make service appointments.
• As the company builds its customer base, Otto will hire more sales professionals to grow our business further.

Milestones:

Reliable Motors will have the following milestones completed in the next six months.

• 6/2023 Finalize location purchase
• 7/2023 Design and build out Reliable Motors
• 8/2023 Hire and train initial staff
• 9/2023 Kickoff of promotional campaign
• 10/2023 Launch Reliable Motors
• 11/2023 Reach break-even

Reliable Motors’s most valuable asset is the expertise and experience of its founder, Otto Masterson. Otto has been in automotive sales for the past 20 years. Throughout his career, he has developed a loyal customer base, many of whom have stated that they will switch to Reliable Motors when it comes time to purchase a new vehicle. Otto’s customer-centric approach, and strong understanding of the local market will ensure that our dealership is successful.

Though he has never run his own business, Otto Masterson worked his way up from automotive sales associate to sales manager, where he gained an in-depth knowledge of the operations (e.g., running day-to-day operations) and the business (e.g., staffing, marketing, etc.) sides of the industry. He also already has a starting customer base that he served while working for other auto dealerships. He will hire several other employees who can help him run the aspects of the business that he is unfamiliar with.

Financial Plan

Key revenue & costs.

Reliable Motors’s revenues will from vehicle sales, with additional income generated through financing options and after-sales services. Key costs include

The notable cost drivers for the company will include inventory acquisition, overhead expenses, marketing expenses, personnel costs, and facility maintenance.

Funding Requirements and Use of Funds

Key assumptions.

The following outlines the key assumptions required in order to achieve the revenue and cost numbers in the financials and pay off the startup business loan.

• Number of clients:
• Year 1: 400
• Year 2: 500
• Year 3: 750
• Year 4: 1000
• Year 5: 1250

Financial Projections

Income statement, balance sheet, cash flow statement, used car dealership business plan faqs, what is a used car dealership business plan.

A used car dealership business plan is a plan to start and/or grow your used car dealership business. Among other things, it outlines your business concept, identifies your target customers, presents your marketing plan and details your financial projections.

You can easily complete your Used Car Dealership business plan using our Used Car Dealership Business Plan Template here .

What are the Main Types of Used Car Dealership Businesses? 

There are a number of different kinds of used car dealership businesses , some examples include: Franchised dealership, Independent dealerships, and “Bad Credit” dealerships.

How Do You Get Funding for Your Used Car Dealership Business Plan?

Used Car Dealership businesses are often funded through small business loans. Personal savings, credit card financing and angel investors are also popular forms of funding.

What are the Steps To Start a Used Car Dealership Business?

Starting a used car dealership business can be an exciting endeavor. Having a clear roadmap of the steps to start a business will help you stay focused on your goals and get started faster.

1. Develop A Used Car Dealership Business Plan - The first step in starting a business is to create a detailed used car dealership business plan that outlines all aspects of the venture. This should include potential market size and target customers, the services or products you will offer, pricing strategies and a detailed financial forecast. 

2. Choose Your Legal Structure - It's important to select an appropriate legal entity for your used car dealership business. This could be a limited liability company (LLC), corporation, partnership, or sole proprietorship. Each type has its own benefits and drawbacks so it’s important to do research and choose wisely so that your used car dealership business is in compliance with local laws.

3. Register Your Used Car Dealership Business - Once you have chosen a legal structure, the next step is to register your used car dealership business with the government or state where you’re operating from. This includes obtaining licenses and permits as required by federal, state, and local laws.

4. Identify Financing Options - It’s likely that you’ll need some capital to start your used car dealership business, so take some time to identify what financing options are available such as bank loans, investor funding, grants, or crowdfunding platforms.

5. Choose a Location - Whether you plan on operating out of a physical location or not, you should always have an idea of where you’ll be based should it become necessary in the future as well as what kind of space would be suitable for your operations.

6. Hire Employees - There are several ways to find qualified employees including job boards like LinkedIn or Indeed as well as hiring agencies if needed – depending on what type of employees you need it might also be more effective to reach out directly through networking events.

7. Acquire Necessary Used Car Dealership Equipment & Supplies - In order to start your used car dealership business, you'll need to purchase all of the necessary equipment and supplies to run a successful operation.

8. Market & Promote Your Business - Once you have all the necessary pieces in place, it’s time to start promoting and marketing your used car dealership business. This includes creating a website, utilizing social media platforms like Facebook or Twitter, and having an effective Search Engine Optimization (SEO) strategy. You should also consider traditional marketing techniques such as radio or print advertising. 

Learn more about how to start a successful used car dealership business:

• How to Start a Used Car Business

Where Can I Get a Used Car Dealership Business Plan PDF?

You can download our free used car dealership business plan template PDF here . This is a sample used car dealership business plan template you can use in PDF format.