Auto Dealing 101

What It Takes To Be An Auto Trader


Automobiles are a truly precious commodity.  If you live in the suburbs, a car can offer a convenient mode of transport.  If you're an auto enthusiast, collecting vintage cars should make for an exciting and profitable hobby.  However, if you dream of achieving long-term financial security and having a thriving career at the same time, then you need to consider becoming an auto trader.  Here are a  number of useful tips on how to become a flourishing automobile trader.
What Exactly Does an Auto Trader Do?
An automobile trader, for starters, generally acts as a go-between or matchmaker, between customers and their "dream" vehicles.  Many auto dealers today often make considerable sums of cash by purchasing pre-owned vehicles at much lower prices, after which they spruce-up the vehicle, and then sell it for a considerable profit afterward .

What Steps Do First-Time Auto Traders Need To Take?
In order to be a thriving car trader, here are a number of steps to follow.  First you need to  have the  pre-owned vehicle dealership business registered at city hall.  In some cities and towns, car traders need to  have an approved area from which to display and trade vehicles, as well as obtain the required business permits.  Once you acquire the necessary permits, begin looking for a viable commercial location to set up an office and display the vehicles. The next step would be to learn the expected prices of cars you wish to sell or trade.  You can actually do this by visiting car auctions, as vehicle auctions provide valuable information with regard to determining current second-hand vehicle prices. A visit to the car auction will also give you ideas on which vehicle models or makes are in demand among customers currently.

Build Relationships with Prospective Clients And Partners
To ensure that your auto trader business will flourish, even during tough financial times, you have to build healthy, long-lasting relationships with potential customers, vehicle insurance firms, and even local mechanics. The car mechanics in your town or city should be first in your relationship-enhancing list, because these guys  will certainly be helpful when it comes to doing constant check-ups on your vehicle inventory. By establishing close relationships with mechanics, you can cut on your overhead expenses, and you'll be spared the hassles of calling on a different mechanic each time you need check other motor vehicles. 

It would also be helpful if you could establish a wholesome relationship with at least one automobile auction house, in order for you to quickly obtain pre-owned motor vehicles at discounted prices.  Lastly, marketing used cars would be much easier if you advertise in the local newspapers, participate in car fairs, or be an active member of your neighborhood's automobile club or organization.  Any business entity. such as a used car dealer, would never prosper. if he or she does not touch base or interact with his community or neighborhood. 

 

How To Be A Thriving Second Hand Car Dealer

If you're bored with your current desk job, and you wish to embark on a new business venture, then why not try being a second hand car dealer? Used cars are  quite in demand these days, because they're way cheaper than acquiring a brand-new vehicle.  Here are a number of helpful hints on how to become a flourishing second hand car dealer in your town or city.

Why Selling Pre-Owned Cars Is Great Business
Used cars are often referred to as pre-owned vehicles.  A pre-owned vehicle though would only be able to fetch a higher resale price if it's in good shape, and has incurred lower mileage.  According to used car industry analysts, pre-owned vehicles today are selling at an average of 21% yearly, and many  used car salesmen today are known for providing good customer care, as they look beyond the standard warranties, and see their clients as future sources of extra business, in terms of  after-sales repair and other maintenance work.

What Are The Different Types of Used Car Dealers?
Used car dealers come in different terms and affiliations.  There are franchised new car dealers, independent used car salesmen and private sales men.  Franchised new car dealers are known to offer younger pre-owned vehicles, while independent car dealers and used car lots are noted to offer much lower prices, yet they may not have the required repair facilities.  Private used car lot owners on the other hand, generally offer pre-owned vehicles on an "as-is, where-is" basis, and may not guarantee the car's condition, nor provide provisions for future repairs.

Three Main Points Second Hand Car Dealers Need To Remember 
For a second hand car dealership to succeed, he or she needs to know three main points by heart.  These are mileage, condition and special features. Let's say for example you're prepping up your  vehicle display, you need to constantly ensure that the cars are properly washed and tuned up, and the interiors, carpets and upholstery are clean and shiny too.  The cars on display  also must have lower mileage used, so that buyers won't be questioning the vehicle's long-term interoperability.  To market the cars properly, a dealer must also have a controlled inventory of vehicles,  as well as employ a marketing tactic that perfectly suits their targeted clientele.   

Operating a second hand car dealership requires more than just finding the right display venue.  The owner also needs to lure the right vehicle buyers, instead of simply waiting for them to come to the showroom.  In order to get more clients, one can post ads on the local newspaper or magazine's classified ads section. The dealer though must use the classifieds not only to corner buyers in his town or city, but also to lure clients from other regions as well. The Internet can also be a cool forum for selling cars. On the Worldwide web, car dealers can create their own  used car website, and use specific keywords and  terms for targeting Web clients, since online car buyers usually type the car make and model on the search pages of Google or Yahoo. Sites like Ebay are also a great  for marketing your inventory of pre-owned cars.  


How To Establish An Auto Service Shop


For those who are thinking of setting up a brand new business, an auto repair service could be among the options to consider today.  An auto repair service is a wise choice, especially for people who see  themselves as auto enthusiasts, as well as for those who a lot know a lot about automotive repair and maintenance.  Here are some easy-to-follow steps on how to establish an auto service business.
What Are The Hallmarks of a Good Auto Service Shop?
A number of factors make up a good auto repair service facility.  First, the shop needs to have the right equipment, from the hydraulic jacks, screws and bolts to pliers, and more.  And apart from having all the right equipments, the shop owner also needs to have a sound knowledge on how to operate the equipments , as well as make the right business decisions. A reputable auto service shop also guarantees that it has in its arsenal a wide array of vehicle and parts manuals, so that they'll  be able to serve a wider segment of car owners.

 Auto Service Shop Owners Should Be Customer-Friendly
The auto repair service shop owner must also learn the art of being customer-friendly. As different types of people go in and out of the shop each day, the owner, as well as his mechanics and sales people, should be able to effectively convey  the message that they  truly care about their customers.  As a famous saying goes, "satisfied customers mean repeat business".   

Work Floor Area Setup Basics
In setting up an auto repair facility, you'll require a lot of money for leasing space, or for sprucing up  your own property (painting, signage, work floor, etc.).  In most Western countries, the average cost  for setting up a medium-sized car repair service hovers from US $20,000 to $100,000. The work floor must also have adequate room for at least 6 to 8 cars to comfortably drive in and out. However, if you have a limited work area, you may alleviate this by using rolling jacks to maneuver the cars by hand.  The work area's flooring must also be well-paved, so that the customer's vehicle will easily roll back, forward or sideways with a simple push.  

A Standard Auto Repair Service Should Have 2-4 Hoists
The ideal auto service work floor must also be able to fully accommodate from two to four hoists. The shop owner must configure his work area in a manner wherein the workers can safely back the car off the hoist inside the premises. The facility must also have a well-lit reception area, administrative room, toilet and pantry for the mechanics or sales people to cook or eat their meals.  It would be nice too if the owner installs a water fountain on the reception area and pantry, so that customers and staff will find it easy to get a glass of water. Once all the required equipments and staffing are in place, all the shop owner needs to have is a lot of enthusiasm, patience and positivity, so that his business will thrive, and flourish for years to come.

 

The Joys of Setting Up A Custom Auto Shop


The conventional auto repair shops of today are best known for doing a wide range of simple car repair and servicing tasks, from changing flat tires, wheel balancing or alignment, to minor body repair and more.  However, some auto shops are geared towards serving other highly specialized jobs, which often cost a fortune.  These types of auto repair facilities are great for car owners who are more than willing to pay big bucks for custom auto work or complete restoration tasks.  Here are a number of helpful facts on how to start a custom auto shop.
Opening a Custom Auto Repair Shop Can Be Fun, But A Costly Endeavor
Setting up a custom auto repair service can be an exciting endeavor, however you need to prepare for the costs.  According to estimates,  the equipment needed for a custom auto repair service alone will cost you more than a hundred thousand dollars.  Before you start buying any equipments, you'll need to first  comply with stringent local and state regulations.  And apart from complying with local and state regulations, you'll also require in-depth training and experience in custom car repair and servicing, as well as arm yourself with a detailed business or operations plan.

Gain Experience In Doing Custom Auto Repair Work
Before operating your specialized auto repair venture, you need to  gain enough experience in doing custom auto work.  You can do this by signing up for an apprenticeship, where you'd have a chance to  get your hands dirty working on a motor vehicle.  Through an apprenticeship, you'll learn tasks such as custom vehicle modification, body repair, tail light and head lamp conversion, engine repair, paint jobs, restoration work and more.  After gaining experience, you'll next be required to get a certification or permit to operate from the local/state business regulatory agency.

Find The Right Location For Your Shop
After gaining experience, as well as after obtaining the necessary permits and certifications, the next step would be to find the perfect spot for your custom auto repair service.  Make sure that the area you choose will have enough space for bays or slots that can comfortably accommodate your customer's  vehicles.  Also ensure that you set up shop  in an area that's deemed applicable by the town or city's zoning authority, so that you'll steer clear of getting any complaints from neighboring establishments or houses with regard to noise or air pollution. Once you've found the right location, begin purchasing the necessary equipments.  You'll most likely need a compression air system, oil  storage containers, spray cabinets, wheel balancers, tire changers, washers, spray guns, cleaners, solvents, masks and paint suits.

Lastly, once everything's been set up, it's now time to market your services.  For starters, the local paper or magazine's classified ads section would be a nice place to advertise your services.  If you still got enough cash left, you  could  even opt to have a web site built, so that you'll also be able to attract clients on the Worldwide web.

 

How To Run An Auto Trader Dealership

Setting up any business today requires a lot of research and deep thought.  Before you part ways with your hard-earned money, you need to first determine how much start-up capital  is required, and what are the potential drawbacks of starting a certain type of business venture. By spending time carefully  analyzing a certain business model, you'll be able to determine which business venture is appropriate.  Here are a few helpful facts on how to operate an auto trader dealership.

What Exactly Is An Auto Trader?
What exactly is an auto trader? An auto trader is someone who deals with marketing new or used/pre-owned motor vehicles.  A used car dealership can be a profitable venture,  if the owner employs the right strategies, and knows how to target his customer base.  According to marketing experts, auto trader dealerships employ three tested methods for selling cars. These are selling through Retail, Wholesale, or Brokering new or used vehicles.  For auto dealers who would like to sell on a retail basis, the expected profit margins may reach an average of $500 to $2,000 per unit sold.  For dealers who wish to sell via wholesale, the income estimates could hover between $300 to $700 per car. The act of brokering new or used vehicles could fetch the dealer between $250 to $500 per sale. 

In a retail auto dealer setting, the cars are displayed in an open or roof-covered lot. Here, each prospective car buyer comes in and takes a look at the vehicle, and once the customer likes a certain vehicle, they approach a  sales representative and discuss payment terms. To ensure your retail auto dealership is successful, you need to know which cars are in high demand, and you"ll need a team of expert mechanics to constantly check on the road worthiness of your vehicles. 

Why Some Auto Traders Fail
Like in any business venture, some business owners succeed while others fail.  Now why do some auto trader's fail?   First, they may be offering vehicles that are poor in demand, or the cars that are in their inventory have already been there for a long time.  Second, a car trader may have bought his or her car  inventory at above-wholesale prices, which should explain why they have lesser profit margins. Third, the vehicles sold may already have undergone many repairs, which only helps to make the business owner's overhead expenses soar. Fourth, a car trader may fail simply because the economy is in a recession, for which in these times consumer spending is at its lowest level.

How Profits Are Computed

    1. A combination of factors help to influence how much profit, or loss, an auto trader will incur in his used car business.  According to veteran used car salesmen, an auto dealership's income is computed this way: 
    2.  
    3. RETAIL SALE PRICE – PURCHASE INVENTORY PRICE –TUNE-UP COST  = PROFIT MARGIN
    4.  
    5. To improve a car dealership's profit margins, you can do a couple of things. First, you could slightly   increase the car's posted price, or he could hike up the vehicle's repair cost.  An auto dealership's fortunes may also change if he or she hires the right set of sales representatives. A good sales person can do magic to a car dealership, especially if he or she knows how to deal with customers. With a good marketing plan, and a team of savvy sales reps and top-notch mechanics, a second-hand auto dealership can expect to earn as much as $2,000 to $2,500 per car. 

 

How The Internet Can Help Auto Dealers Increase Profits


In the old days, the best thing an auto dealer had in his marketing arsenal was the local newspaper or magazine's classified ads section.  Before, car dealers also spent thousands of dollars on traditional advertising channels like TV, print and radio.  What's bad was that despite spending large sums of cash on the traditional forums, car dealers still didn't have a precise way for measuring the attention span of their targeted customers.  With the advent of the Internet however, selling new or used cars has been made much easier for the auto dealer. Here's how the Internet can make selling new or used cars a breeze.  
More and More Car Buyers Are Using The Internet Today
According to recent figures from the US National Automobile Dealers Association (NADA), the  offline automobile dealer spent an average of US $450 on traditional advertising per  car sold.  Internet experts though insist that it only averages $200 for Internet advertising per vehicle sold.  Despite the big difference, many automobile dealers continue to spend a small fraction of their advertising budgets on Web promotion and lead generation. A study undertaken by JD Power & Associates also noted that a whopping 62 percent of new and second-hand vehicle buyers today use the Internet when shopping around for motor vehicles.  The report also adds that 88 percent of car buyers  go online  before they visit a car dealership showroom or display lot. 

 Internet-Generated Car Sales Are Likely To  Increase
Auto industry analysts agree that in the coming years, a larger piece of the pie will be eaten up by Internet-generated car sales.  These experts also contend that 1 in 3 car purchases in the United States alone will be made through the Internet.  This represents approximately 5.7 million vehicles, or 32 percent of all new and second-hand car deals.  The forecast supports the view that more car buyers are going to the Worldwide Web whenever they want to buy cars or trucks.  And as increasing numbers of younger people are setting their sights on buying their 1st car, we should expect the online market for automobiles to get very busy.   

Conventional Auto Dealers Need Not Fear Internet-based Sellers
Many auto dealers have already embraced the gospel of Internet marketing.  However, some offline  auto dealers still feel threatened by the Worldwide web, because they fear that web-based auto dealers and companies will eat up their competitors alive.  What traditional car dealers should know is that the Internet only serves as a medium which  enhances, and not degrades, the quality or the way offline auto dealers do their business. Offline car dealers need to look at the Internet as a vast and endless classified ads section, where they can sell vehicles to a wider, global market.  

Traditional car dealers and salesmen should also remember that  even if many use the Internet for car-shopping, the final process still ends in the dealer's showroom or display lot. The best thing about  selling cars online is that dealers would be able to target serious, savvy and intelligent car shoppers.  And unlike advertising via TV, radio or print, the Internet provides precise and updated data  to prospective customers. The auto dealer can use the information available online to generate leads which could offer higher returns in future, in terms of a successful sale.