How to Buy a Car Dealership

by Gregory Gambone; Updated September 26, 2017

Owning a used-car dealership can be a profitable way to earn a living. With the right licenses and a little luck, you can find a car dealership for sale that you can turn into a highly successful business.

Items you will need

  • Used-car dealer license
  • Financing
Step 1

Acquire your used-car dealer’s license. Most states require automobile dealers to obtain a license or permit to conduct business. Obtaining this license usually entails participation in some kind of class, followed by an exam to ensure complete comprehension of industry regulations.

Step 2

Find a used-car dealership that is for sale. Visit prospective dealerships and evaluate the potential for success in their locations.

Step 3

Obtain financing. Purchasing a car dealership will likely require substantial funding, and the involvement of some type of lender is almost inevitable. Depending on your existing financial resources, you will need financing to complete the purchase of the dealership and sustain the business until you are able to run it smoothly.

Step 4

Negotiate the finer details. Once you find a car dealership for sale that you intend to purchase, it will become necessary to discuss and negotiate every tiny detail of the sale. Consider and discuss things like the existing inventory, the dealership’s name and other aspects of transferring the business.

Step 5

Close the deal. After the final stages of negotiation have been completed and the details worked out, a settlement date should be set. It is on this date that payment for the purchase of the dealership will be completed, title to the business transferred and all miscellaneous outstanding details will be finalized.

Tips

  • Enlisting the services of a professional business broker will make your search for a used-car dealership much more efficient and effective. The broker will have resources that can locate a dealership for sale, and assist with negotiating the sale contract.

About the Author

Gregory Gambone is senior vice president of a small New Jersey insurance brokerage. His expertise is insurance and employee benefits. He has been writing since 1997. Gambone released his first book, "Financial Planning Basics," in 2007 and continues to work on his next industry publication. He earned a Bachelor of Science in psychology from Fairleigh Dickinson University.