How to Buy your First 5 Cars as a licensed used car dealer

startup Mar 12, 2022

Hey CEOs!

Are you stuck at purchasing inventory to resale? In this video, I will walk you through how to Buy your first 5 cars.

It starts in the licensing process. After getting licensed, to be able to buy and sell used cars to the public, you need …

  1. Dealer Tags
  2. Register with ETR (Electronic Title Registration)
  3. Capital - enough to buy inventory

Next, you need to determine where are you buying? Most auto dealers purchase inventory from the same places and in the same way. Some places you will most likely acquire inventory are...

  • Auctions - Wholesale dealer or other auctions
  • From people by direct purchase or tradein

Now it's extremely important to identify your Parameters such as...

  • Your Market - Who is your customer and what do they buy?
  • Your Budget for Inventory 

Next, establish an Inspection process to determine what’s up with this car. What needs to be fixed before selling to a customer.

From this inspection process, you will decide on what to pay and still make a profit. Factors that directly impact profit are...

  1. Repairs - Parts & Labor
  2. Cost of Goods Sold (Fixed costs for each car sold)
  3. Retail price (how much to ask your customer for)

To calculate your maximum purchase price, start with Retail price minus repairs minus cost of goods sold = maximum purchase price.

Now you are ready to purchase and transport the vehicle to start the recon process. 

The right DMS or Dealer Management Software can help you find cars at the auction and determine your retail price. Sign up for a free demo of the best DMs at www.autodealerbschool.com/dc.

Be sure to sign up for the free class How to Buy & Sell your first 5 Cars coming up soon. www.autodealerbschool.com/1st5cars.

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