Anyone ever worked for or owned a used car dealership?

[problemaddict]

I'm talking about a Mom-n-Pop, small business dealership w/ no affiliation w/ an automaker.

I ask because I'm looking into starting up a business. My idea is to mainly work w/ online sales of used vehicles using eBay, CL, Cars.com, Edmunds, and the like. This way I wouldn't need to focus on walk-in sales. I wouldn't need a showroom and my lot could be located wherever I can find cheap space, instead of finding a lot on a main thoroughfare.

I'd just like to hear from someone who has been involved with the industry. I'm learning about the licensing and insurance needed and about inventory loans and the like, but its a tedious process to sift through this stuff from scratch. My main questions at this point center around feasibility. What profit margins can I expect from buying at wholesale auctions and selling at retail prices? This will help me to understand the volume of cars needed to sell in order to make the money I need to pay the mortgage and buy food and gas up my motorcycle. These statistics are hard to come by (NADA and the like don't list wholesale, and Manheim and other auctions make you pay for this info).

Anyway, any help would be appreciated!

Mike

[Mean Chuck]

I would check on PA dealer license laws, my friend is getting one soon and there is certain criteria you need to meet like having an office and a certain amount of space for the car lot. He currently is listed as a salesman at a neighboring car lot a friend of his has to get the hang of things and to do all of his title work even though he doesn't buy or sell anything there. At he moment he does everything on ebay and craigslist but he just bought an old factory and is turning it into a very nice bike shop.

http://www.dmv.state.pa.us/pdotforms/pa ... ub_459.pdf" onclick="window.open(this.href);return false;

[xtian]

Have you kill your mom and dad already because I think that it is mandatory to sell used cars. Based on my own experience.

[DerGolgo]

Before jumping into such a business, I'd suggest trying to find a job at a bricks and mortar establishment in that industry, like chuck's friend seems to be doing.
I understand car salesmen often work exclusively on commission, so if you're presentable, finding employment shouldn't be as much of a problem as finding other jobs.
You'd get the chance of learning the best way, by doing. The proprietors and other employees there will probably have their own, quite definite opinions about and useful insights into the online variant of their business, they may even have experience there. The business might even have it's own online arm, where you might be able to volunteer for some overtime or just pick the brains of whoever is handling that. Be mean and let them train you to become their competition.
Best result would be invaluable experience and insights, some valuable contacts, networking and all that, and perhaps some actual cash from commissions on actual sales.
Worst result is you find you don't learn much and wasted your time - but only at a fraction of the expense of starting a business without some potentially required knowledge.
As a bonus, you might actually find that, no, selling used cars isn't for you, you'd rather eat dog food for the rest of your life than do that. Without having made the big expenses, you can then walk away from that life and do something else, no need to first liquidate your stock and satisfy your creditors and all that. And you'll still have another notch for real-world work experience to put on your resume (or maybe not, depending on how long you stick around, putting a two-week gig on there often looks worse than a blank spot, doesn't it).

[problemaddict]

Very sober advice DG, but I don't think I'll be getting a job at a dealership. you're right that I'd learn allot, but I have no interest in working at a dealership. I'm interested in working for myself, running a business the way I'd like to run it.

Chuck, I'm aware of some of the laws including the one where I need property/office in order to qualify for the dealer's license. That's why I'm most interested in the sales margins & expenses type information. Then I can do some hypothetical numbers crunching and see if this is worth pursuing.

I did spy a few Manheim Market Reports posted online. you usually have to pay to subscribe to these reports. The ones I found show a bit higher of a margin than I was expecting, so there's a bit of encouragement to continue digging...

And xtian, no, I haven't killed any family members yet, but I would to make a sale!

Thanks guys.

[thack]

Talk about a relevant username. I have no real advice.

[Bo_9]

I've entertained that idea several times. Here in middle America the licensing/bond requirements are not really that daunting, but they require an office with a working phone number and specific signage. I was only wanting to maybe move a car a month as a modest goal while maintaining a day job, buying auction cars and tarting them up a bit with relatively low markup. My banker liked the numbers, but i had too much life happening at the time to mess with it. The real goal was the opportunity to snatch up select toys for myself along the way, a plan that is working out really well for one of our established used car lot owners.
It's definitely something i would not want to try making a living at from the start.