Starting a Car Dealership Business

Are you thinking of going into the business of selling new or used cars? Then this guide is for you. Learn the ways you can start and operate a car dealership business, what licenses to secure so you can operate legally, how much potential yearly earnings to expect and more.

You can start a car dealership business by selling new cars, getting a franchise to sell some manufacturer’s new and used cars, selling used cars bought wholesale or brokering the sale of cars.

Car dealership here means selling or trading of cars for profit. It is different from being a salesman or an employee of a particular company and working by commission.

You can become a car dealer by owning a local franchise to sell cars in your area. As a franchiser you are protected by franchise laws regarding competition with the franchiser and against abuses such as abrupt closure when a car manufacturer decides to phase out some models. New car dealers don’t get as much cut for the sales they make and so they often extend their income generating potential by repairing and maintaining old cars. The industry touts an average of close to $200,000 yearly in profits for selling less than five cars a week.

Getting a Car Dealer License

If you go the other way, you can enter into this trade by selling or brokering the sale of used cars. Usually, independent car dealers start as sales people for a car dealer. Then they rent a lot to display used cars for sale. The most discussed subject in this area is obtaining a car dealer license. A dealer license allows the holder to buy used cars in wholesale or new cars with closed bids. You can find plenty of resources in the Internet to help you get a car dealer license. To ensure you are getting the right information, go to the Web site of your state Department of Motor Vehicles.

Among the requirements for getting a car dealership license is attendance in a dealer education program by your state DMV, passing their exam and their background investigation for possible convictions or crime related to vehicle dealership. Accurate disclosure in your application, therefore, is extremely important when applying for a license. Your place of business will also be inspected to see whether it is established and not temporary, and used regularly for the business. Your books and records will also be inspected as well as the signage advertising the business. The signage is required to be permanent and in compliance with local zoning or licensing requirements.

Brokering Used Cars

The requirements for obtaining a license as a used car broker is the same as that of somebody operating with an open lot. The established place of business in this sense could still be a lot or a broker's office. This is the same for someone wanting to operate an online car dealership.

161 Comments

  • Ishmael said on February 22, 2010
    Bloemfontein in Free State Province South Africa. I want to be a used car license holder. May you advice me how to apply and what are the requirements as within weeks I will be hosting a website aimed especially to advitizes and market car for sale. How can I buy a car franchise
  • Daniel yol madol said on July 24, 2010
    Am hoping to becoming a car dealer for a major car manufacturer in my country sudan. how do i do that with regards to car manufacturer? thanks
  • Sipho said on March 4, 2011
    I want to become a car dealer. I'm staying in Queenstown Eastern Cape.
  • Naadiya Muhammad said on April 2, 2011
    I want to start a car dealership here in south africa. I would like to import cars from japan. How do I do about it? With regard to the lot etc.. Plz help
  • kushal said on April 8, 2011
    i want to become a car dealer in my country mauritius. i want to import cars. how do i do.plz help me...
  • constance said on April 12, 2011
    Want to start a used car dealership in the eastern free state in sa. Please send me more information
  • Jayesh Deepnarain said on April 28, 2011
    Durban, Kwa-Zulu Natal, South Africa. I'm interested in becoming a used car dealer. What are the requirements in South Africa.
  • Piko Namba said on May 9, 2011
    I am in the Eastern Cape and I want to be an Executive Auto Dealer. What should I have in place?
  • senzy manda said on June 14, 2011
    have a very established marketing company.. Want to venture used auto brokering. How do i obtain the license? How do i write the dmv test?.. Jhb
  • Msawakhe Msimang said on June 20, 2011
    I am in South Africa, kZN, Pietermaritzburg. Would like to open a car dealership. What are the requirements and how to obtain a license.
  • ernest said on July 30, 2011
    i'm interested in opening a car dealership i have saved up about R200.000 AND I HAVE BEEN BUYING AND SELLING CARS FOR 4 YEARS NOW. HOW DO I GET HOLD OF A LICENSING DEPARTMENT /OR HOW DO I GET REGISTERED
  • Edgar Tlali said on August 9, 2011
    I have capital to start with 1 vehicle. Please advice where to source cars and how to market. Welkom, free state, south africa
  • Fergie said on September 15, 2011
    I am selling 3 to 5 cars a year privately. Where and how can I buy more cars due to the fact, it's so difficult to get cars for reasonable a prices to resell and to make a profit. NC South Africa
  • kash said on September 30, 2011
    hi, i m a car dealer and exporter in sanfrancisco, california .i am looking for car dealers who want to buy vehicles from usa.
  • brenda said on November 1, 2011
    I'm interested in starting a non-franchised car dealership. How do I get a license to operate legally.
  • Kavita said on November 8, 2011
    Hi, i am interested in opening a franchise car dealership in Johannesburg, South Africa. Where do i start and what are the requirements? Regards, Kavita
  • SBT said on December 21, 2011
    WE export used car from japan to durban. kindly contact on this email I.D ather9316@sbtjapan.com
  • Zac Green said on January 3, 2012
    Hi I am starting a dealer/broker service here in Montreal, Canada and I am looking for some dealers in the U.S that can offer me some good cars at some good deals. Anyone interested?
  • ajay from mauritius said on February 2, 2012
    how can i start a business in Mauritius for importing cars.plz do give me an advice...
  • Nolan said on February 3, 2012
    Hi, I am interested in opening a car dealership in whole sale and used cars, what is the minimum requirements and cost of this kind of license.
  • medicine said on February 13, 2012
    Hi. I'm on a process of starting the a car dealership and everything seem to be complicated. Can u pls assist. South Africa, pretoria
  • Tumelo said on February 22, 2012
    Hi please assist me I need info I want to start a used car dealership in kimberley south africa. Please include price and costs involved
  • Riana said on February 24, 2012
    Hi, i want to obtain a dealership license for trucks and trailers in South Africa. I will be operating out of Durban, Kwa-Zulu Natal, how do i go about this? I require the procedure to be followed from start to finish please. Regards, Ria
  • jabulani said on March 16, 2012
    want to start a used car dealership in my town barberton mpumalanga south africa what are the legal requirements.
  • Fuzeka said on April 19, 2012
    I'm interested in car dealership business, to sell used cars. I'm in durban kzn, what do I need to register and what steps to follow to get started?
  • ANDRIES MOLEKO MOLALE said on May 17, 2012
    I AM IN NEED OF TIPS ON HOW TO OBTAIN A USED CAR DEALERSHIP LICENSE IN THE R.S.A. PLEASE, EMAIL ME INFORMATION CONCERNING THAT. THANK U IN ADVANCE.
  • Mxolisi said on May 17, 2012
    HI, I want to own an Auto Dealership. My plan is importing classic (Muscle) cars from US and sell them here in RSA. Which steps should i take regarding licenses, funding, landlords. I'm also concerned about legal requirements if it's possible to import a car to RSA from US. My location is Durban RSA
  • charlie brown said on July 12, 2012
    I am looking to acquire and operate a dealership in kzn. I would like information as to how i go about achieving this.
  • Comfort Baloyi said on August 5, 2012
    I hereby request assistance in obtaining a car dealer license in the Polokwane area in Limpopo province, South Africa. Kind regards Comfort Baloyi
  • Mervin Pillay said on August 6, 2012
    I am interested in becoming a used car dealer. Can i get detailed information on how to go about doing this. I am in RSA - Durban.
  • George said on August 6, 2012
    I am interested in becoming a dealer for used cars. How and where do I apply. I'm in Rustenburg, South Africa.
  • sam said on August 8, 2012
    TO SOUTH AFRICA i can send you cars from canada to south africa send me a email if you are interested . good prices sasan4242@yahoo.com
  • ray said on August 17, 2012
    I want to sell cars and how can I get dealers license? Am in Jhb,south africa.
  • Andreas said on August 27, 2012
    Hi, I'm from around the Wes Rand - Randfontein area and would like to start a second hand car dealership. Can you assist me with information on how to register a company and what the requirements are. andreastk@webmail.co.za Thanks.
  • Rose Mashaba said on August 29, 2012
    I am staying in South Africa, Gauteng, Pretoria and would like to open a car dealer for used cars. Can you assist me on how to obtain a license.
  • Thandi Mashishi said on September 3, 2012
    I'm staying in South Africa, Mpumalanga, Secunda and I would like to open a car dealer for used cars. Can you please assist me on how to apply for license
  • moeketsi maseola said on September 5, 2012
    I'm from Bloemfontein in South Africa and I would like to open a car dealership, please advice me
  • Asif Rajput said on September 8, 2012
    Please write an e-mail if anyone is interested to import cars from japan assif9492@sbtjapan.com and skype id is sbt.9492.asif
  • Deenoo said on September 16, 2012
    i want to start a car rental business in Mauritius, what are the procedures ? let me know please. Thanks
  • Jm said on September 28, 2012
    Hi i am currently running parking services business in Pretoria CBD with floor capacity of 150 cars and I would like to convert it into a used car dealership. My focus will be on under R70000.00. Where do I START with license to trade and what are the relevant bodies that i have to register with. Regards
  • Mounzer hankir said on October 4, 2012
    Hello everybody.. I am lebanese who is currently living in canada and would like to start a business line to africa. i can buy cars and ship them but i need a dealer who can buy from me. anyone who is interested plz get back to me at mizo711@hogmail.com
  • Unathi Nicholas Mabulu said on October 4, 2012
    Hi I want to open a car dealership business in Port Elizabeth selling used cars. Where should i apply for license and what are the requirements and documentation that is needed.
  • lebo said on October 16, 2012
    i would like to start car dealer business in south africa to buy and sell and to import cars from uk to south africa. please help
  • Mothusi Masibi said on October 22, 2012
    I stay in Orney, Klerksdorp and intend selling cars in the KOSH area including Mafikeng region
  • namhla said on October 27, 2012
    I want to start a car dealership business, i stay in Mtata, Eastern Cape, South Africa
  • Gordhan Narigara said on October 31, 2012
    i have start new business and i want a dealership and so please help as how to type a letter. please send as soon as possible.
  • Khathu said on November 5, 2012
    Hi. I want to know about the minimum amount that can be needed to start the business of the used car. Starting to buy two cars a year. And also where I can go to find a license dealer. From Sa , Tembisa
  • Bronson said on November 21, 2012
    have recently been dealing in used toyota locally and extremely import from beforward jp but how best can i grow up my business since i started with 1 unit and as i say am now in 4 units please advice.? Bronson, UGANDA KAMPALA
  • Thabile said on November 27, 2012
    I want to start a car dealership for used cars . I live in Vosloorus , Boksburg in South Africa. Which department do i approach for the license and how do i become recognized by bank for customer financing. Please . i need this information as i want to start soon. My job is at stake.
  • Sindile B Mfundisi said on December 10, 2012
    Cape Town, South Africa. I would really like to register for car dealership license. How do I register?
  • tia said on December 12, 2012
    hi. am tia from mauritius. i want to open a business as car dealer. i have an open space to display cars but need a license. please advise
  • Willie Mahe said on December 18, 2012
    Hi i would like to open a car dealership in Gautend region speecialising in used cars. I called Department of transport and i was advised there is no regulation regarding car dealership. But on the internet i see you talking about car dealers license, where can i obtain it around Pta region. Thank you
  • Joana Ndlovu said on December 18, 2012
    i want to start used car dealer shop i need the advise a have start to buy two cars. the way of marketing it
  • Howard Mokoena said on December 23, 2012
    Hi! I want to start a car dealership in Johannesburg East Rand. I want to start by buying two used cars. Clean and fix them and then put my mark up and sell them. What papers do i need to be a legal seller or even broker. Tx; Hwd
  • olusegun said on January 1, 2013
    I am in Nigeria, Lagos to be precise and interested in starting selling used cars and need to know the requirements in getting a license to operate legally in the country.
  • Clinton said on January 18, 2013
    For all those potential car dealers in south africa, contact me on 9jahfinest@gmail.com on how to get cheap and affordable cars.
  • Paul said on January 23, 2013
    Hi, I'm representing the biggest car dealer in central europe. We're licensed dealer of Toyota, Hyundai, Chevrolet, Mitsubishi, Honda, BMW, Mercedes, Volkswagen, Škoda and Lexus. We're also selling used cars of all marks. We're interested to sell cars to africa and we're able to ship the cars to your country. In the beginning we want to start with single imports on the order. We're looking for people who can help us with selling the cars in your country and who can help with the registration. Please if you are interested write me at pavel.skubnik@gmail.com.
  • CMitchell said on January 23, 2013
    @ZAC GREEN, @JM I am in the USA and can get cheap cars. contact me if interested atlwrapwifee@gmail.com
  • @CMitchell said on January 29, 2013
    I am not looking for cheap cars, I am looking for luxury cars at great deals. I am looking for new and slightly used
  • KEDIBONE said on February 27, 2013
    I AM STAYING IN MAHIKENG, NORTH WEST PROVINCE OF SOUTH AFRICA. I'M INTERESTED IN BUYING AND SELLING CARS, PLEASE ADVICE ME ON WHAT REQUIREMENTS ARE NEEDED AS WELL AS HOW I CAN GET THE APPROPRIATE LICENSING FOR THAT.
  • Denis Meh Zion said on March 7, 2013
    Cameroon has a huge market for used LHD cars. I love cars and love selling cars too. I do not have the capital to start a car dealership but i can represent you in Cameroon and making your dreams of owning a foreign branch of your company in Cameroon come true or maybe i can just help you in importing and selling single cars and i want to assure you that u will always receive the required benefits and fulfillment. please contact me at denismehzion@yahoo.ca for more details.
  • Abhijit M. Katela said on March 13, 2013
    Hi, I am interested in opening a New car dealership and used cars, what is the minimum requirements and cost of this kind of license. Please tell me the whole procedure and Minimum Amount. I am planning to open this in Dahanu road or Thane-Kalwa.
  • nathi said on April 2, 2013
    Hello i just want to work for proactive company as their agent in south africa to sell for them what they want to import in SA i'm hard working man with good sales skills, if you need me you can call 0722263804 or email me at nkosinathilucky@ymail.com
  • Molefi said on April 4, 2013
    I am kindly requesting information regarding the Used Car Dealer License, requirements and where to register, I am in Bloemfontein-Free State-South Africa.
  • Ritika said on April 9, 2013
    hi i need a good name for my car business. plzz suggest me some good names as soon as possible...mail me at ritikamanchanda8@gmail.com
  • Ayanda Maliwa said on April 18, 2013
    I am interested to start my own car dealing business but some other time when I want to start business they normally say I can not get it because I am working for South African Police Service. it that possible for me to start my own and how. my location Mt Frere Eastern Cape
  • Don said on April 22, 2013
    Hi i live in cape town, if you can organize me very cheap cars that i can resell let me know thanks. carlhess@hotmail.co.za
  • faaz said on April 30, 2013
    If any one wanted to buy used car from japan kindly contact me over 9000 car available in yard .. going to provide in the best price ..Email Faaz2cool@hotmail.com
  • Patience Dlamini said on May 1, 2013
    hi, I am in the United Kingdom, and all my life in in South africa. my brother who is currently living in pretoria would like to sell cars to autotraders in south africa and i will be supplying him with the cars, if you looking for a car please contact me at mpumiedlamini83@yahoo.co.uk. you not only going to deal with me but you will deal with someone you can see, and you can give proof that you have the payment when the car arrives and be able to pay for something that you see and to a person that is physically there. please if you are interested contact me on my email then i will refer you to him and he will make sure you have the finances and contracts and paper work and you can pay for your car as you receive it. thanks
  • Simphiwe said on May 2, 2013
    i want to know how to start my own car dealership, south africa, free state, Qwaqwq. My idea was to buy cars from overseas and sell them in my country. Thank you
  • Haalbir said on May 6, 2013
    Hi, Any one looking to buy cars from Dubai(UAE). High quality service and fast response time. contact me, haalbir@gmail.com
  • Haalbir said on May 6, 2013
    All south African are welcome to contact me for importing cars form DUbai(UAE). Best price with high quality services Guaranteed. haalbir@gmail.com
  • Venkatesh Naidu said on June 10, 2013
    Hi I want to open a new car dealership. I am living in India, orissa. I am a new entity and I need some useful advice to proceed further in this line. Thank you
  • Kitty Huang said on June 20, 2013
    Hi Guys, we are a main company in China, which produce cars with high quality and very competitive price. Now we are looking for a car distributor in South Africa. Sincerely welcome you potential car dealers to be our representative. Contact with me, if you are interested, then i will provide you the details about our company and products. My mail address; kittyhuang77@yahoo.com
  • Letlhogonolo said on June 22, 2013
    Hi my name is Letlhogonolo, I want open a used car dealer in North West-Mafiken(South Africa) I want to know where do start or go to obtain a dealer license and having a vehicle finance at my dealership. I have already registered a business and have all experience i need to succeed in this field. I am current selling 60 vehicle a year by working.
  • Godfrey said on July 15, 2013
    hi I'm staying in bloemfontein and see a lot of potential in the used car dealership industry. can you please help me in terms of getting the required licenses to become one. your cooperation will be highly appreciation.
  • BEN said on July 17, 2013
    i'm in johannesburg, south africa want to start a car dealership company how do i start. i want a license
  • anita said on August 19, 2013
    Hi, want to start a car rental and second hand car selling business in my country Mauritius. Can you please give some ideas how to set up this business. As am new in this line your advice would be highly appreciated. Thanks
  • Sharon said on August 20, 2013
    I would like to start a business in selling cars,
  • Emmanuel said on August 22, 2013
    good day, i want to start a car dealership where i will be selling brand new vehicles all the types i already have contacts when the business start booming i want to allow trade ins i just get it hard to register a dealership please help i'm based in South Africa, Gauteng in Pretoria central. your response will be highly appreciated. thanks
  • musa said on August 22, 2013
    i am musa from kagiso near krugersdorp i want to open up a used car dealership, can you advise me of the steps to be followed to get my business up running
  • musa said on August 22, 2013
    hi again i am currently based in South Africa i have excellent sales skills, i want 2 start selling used cars and new cars if it is possible for a beginner, I am based in Kagiso near Krugersdop in the westrand area. Can i have a mentor a person who is familiar with the industry. My email add is BonginkosiL@webmail.co.za
  • tex said on September 8, 2013
    hi am from south africa & need to start car dealer business in most african countries, am new for this any body who try to give me tips & guides how to start this business contact me; kaltex551@gmail.com
  • jet singh said on October 14, 2013
    hi i'm from the UK, I am trading cars here and would like to export to east and south Africa, please can you give me the criteria for this along with the legal requirements. thank you
  • bruce said on October 17, 2013
    Hi i would like as many others to start a used car dealership and for the most part to obtain a dealership certificate, where do i go, who do i talk to? i'm in south africa johannesburg please advise.
  • nomawethu mafa said on October 19, 2013
    I would like to start a used car dealership in Kemptonpark Johannesburg, how do i apply for license, please give me tips on how to start
  • Candy said on October 24, 2013
    Hi I want to start a car dealership, my community must travel more than 100km to go and by a car so I want to bring the cars to the community and want to create jobs for those who don't have in my community I have a passion of dealing with cars, how can i get my company registered in the northern cape am living in Olifantshoek a nice place to start a car dealership. I need help urgently can contact me via e mail at candymatlhare@yahoo.com
  • Liston said on October 25, 2013
    Hi, Can you please send more info on becoming a motor dealer in pretoria, how to obtain a dealer license,
  • iyanda Muhibudeen oluwatosin said on October 28, 2013
    I wish to become one of the Nigeria top brand auto dealer, but I don't know how to go about it and the capital that is involve as a young graduate doing nothing...
  • Anthony said on October 28, 2013
    hi, i want to open car showroom in hyderabad, can u give us details and how much commission do we get by selling a car
  • bennie said on November 13, 2013
    I want to find out where i can apply for my car dealer license i'm in Pretoria south Africa if any one knows please let me know as this is urgent.
  • brian said on January 2, 2014
    i want to start car dealership but i'll be selling rebuilds basically cars that have crashed and i fix them and sell them what license do i need i'm in mpumalanga
  • Getachew B. B. said on January 9, 2014
    I want to involve in car dealership business.
  • dumisani said on January 15, 2014
    I am frm ladysmith, i want to start a car dealer business. How to get an operating license? Plz help me
  • RODNEY said on January 29, 2014
    I LIVE IN SECUNDA SOUTH AFRICA ,AND WOULD LIKE TO GET INFO ON HOW TO START THE PROCESS ON OPENING UP MY OWN USED CAR DEALERSHIP.
  • tshelane said on March 7, 2014
    i will love to own a dealership which department can facilitate for me in SA to get the required license
  • Dumisani said on April 27, 2014
    Hi, i would like to start a used car dealership and would like to get some info on where to obtain a license to do so and where do i register?
  • Hamza said on April 29, 2014
    Anyone wants to purchase second hand cars and import to their country of choice, please contact me for full details. we are an import and export company located in Singapore. we have supplies of most leading Japanese cars, if you are keen for continental cars ,we can also supply those to you. contact sales@absolutemotors.sg
  • mike said on May 1, 2014
    Hi I buy and sell rebuilds cars and I wanna operate legally. Wat must I do to get proper papers and what are the requirements? From south Africa Limpopo
  • Gab said on May 28, 2014
    I would like to start a car dealership business in Miami , Florida

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