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Discussion Starter #1
Been thinking' about getting into the used car biz.
Anyone on here ever start there own car lot? Sick of working for others and making them money, time to make mine! ;)
I've already looked into the licensing, insurance, bonding, etc. of whats legally required by my state, think I can handle that easy enough. I'm more looking for any tips on what to do and what not to do as far as picking a location, big and showie or small and cheep, cheap low buck cars or higher end used cars, in-house financing or no?

Looking for opinions and suggestions from those in the business, thanks.
 

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I would think the cheap cars at first to get your feet wet and if it goes good for ya move up to the mid to high end cars. Just my two pennies worth.
 

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Cheap cars no credit tote the note,Get a good wrecker and driver and Tell them the best way to get back on youre feet is to miss a payment,Dont listen to all there bullshit about how they will pay next week Blah Blah Blah.Install GPS on each vehicle with starter Disable,...... one day late Hook em and Book em.Remember They will steal food from your kids mouth if they get a chance.So you have to be pretty cold hearted in this game.Oh and you can also get a lot of pussy trading a little for a car note.Make them pay every 2 weeks that way you are never behind more that that at a time.also get atleast 80% of the total Vehicle cost that you paid as down payment.
 

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Speak to whudson
 

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3000 to 7000 dollar vehicles , cash only . less headaches and drama than bhph and unless you have really good cash flow your money will be in the street and not in your control in bhph . you can run it as a one man operation in a small location and do well with 10 cars in inventory . some of the obvious challenges are finding vehicles that can be purchased at a price you can profit from . you better have a good working knowledge of mechanical aspects and some diagnostic capabilities . ive done it for 5 plus years by myself and retail 150 a year and do ok and enjoy myself.
 

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Cheap cars no credit tote the note,Get a good wrecker and driver and Tell them the best way to get back on youre feet is to miss a payment,Dont listen to all there bullshit about how they will pay next week Blah Blah Blah.Install GPS on each vehicle with starter Disable,...... one day late Hook em and Book em.Remember They will steal food from your kids mouth if they get a chance.So you have to be pretty cold hearted in this game.Oh and you can also get a lot of pussy trading a little for a car note.Make them pay every 2 weeks that way you are never behind more that that at a time.also get atleast 80% of the total Vehicle cost that you paid as down payment.

This guy knows, GPS in all sold vehicles, you get them back when you tell them to come in for a free oil change which they will always do. Downside is there used to be lots of deals for your used cars to sell with Dealer connections from their trade-ins, that is all but gone now as the Dealers take their trade-ins to their own used car lot or take them to the auctions themselves.

Also the auction landscape has changed, now the best prices (highest) are at the auctions and getting a deal there for yourself is very hard. Here at the Miami and Palm Beach Auction I cannot even buy a Honda (highest price used Jap car out there and the best at holding their value) the Central and South Americans come up here and pay more for Hondas then I can sell them for.

Used cars are a whole different game now then it was for the last 40 years. Dave
 

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e85 & injection guru
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Been thinking' about getting into the used car biz.
Anyone on here ever start there own car lot? Sick of working for others and making them money, time to make mine! ;)
I've already looked into the licensing, insurance, bonding, etc. of whats legally required by my state, think I can handle that easy enough. I'm more looking for any tips on what to do and what not to do as far as picking a location, big and showie or small and cheep, cheap low buck cars or higher end used cars, in-house financing or no?

Looking for opinions and suggestions from those in the business, thanks.
model your self like carsense .....any level of car with everything right .
start small and cheap and roll it up to better cars .
a good point location and sell to the demografic . if you get into pos car in a pos area you will be the repo king .put in pay as you go code boxes to protect the investment
buying cars to future markets and election are tough .
but think of it this way .economy is good rich by new cars. poor buy better used cars . middle class buys econo used cars for kids with low miles in waranty . economy is stagnate the rich will buy a high end used car to keep the image and lux. at a discount to stem the tide . middle class buy down or fix old car and poor people get bumped to buy here pay here hope it get to work pos .
 

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e85 & injection guru
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Cheap cars no credit tote the note,Get a good wrecker and driver and Tell them the best way to get back on youre feet is to miss a payment,Dont listen to all there bullshit about how they will pay next week Blah Blah Blah.Install GPS on each vehicle with starter Disable,...... one day late Hook em and Book em.Remember They will steal food from your kids mouth if they get a chance.So you have to be pretty cold hearted in this game.Oh and you can also get a lot of pussy trading a little for a car note.Make them pay every 2 weeks that way you are never behind more that that at a time.also get atleast 80% of the total Vehicle cost that you paid as down payment.
^^^^^
classic bottom feeder market statigy .
also hire the smartest b- c+kid to fix em up and the best korean/hispanic detailer to polish turds and clean out dog hair
 

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I have my own 1 man show repair shop. Best advice, always be honest and don't try and over sell a car the customer won't be able to afford to drive or pay for. They will be a repeat customer. Also, start with 2 million to make 1! :)
 

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I've had several over the last 35 years ........ I got started with buying and selling a car at a time till I was making more on peddling cars then I made on my job ......... An old man kept telling me to "RUN A BOOK" (buy here pay here) and I finally did in the late 90's ........ made a shitload of money but needed a huge staff to do it (14 people) ....... we were putting 60-100 cars a month out with only a 9% bad paper rate (rule of thumb is 17% suburb 21% city) but it was a huge hassle

IMHO if you can do yourself 3-4 cars a month its easy to make $60-$75k a year ....... because you are hand picking the cars ....... once you swing over to a bigger operation you'll need to do 25-30 cars a month to make a decent living
 

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Speak to whudson
All of the given advise here is good. I'll give this is no random order but first, Become a Credit Acceptance Corporation dealer. It is worth the investment. They have several programs available. I do the 80/20 split. I get money now and money later. It great for cash flow. PM me for the market area manger's info. You will not regret it. You can finance anybody. Sub prime people is where it is at. Everything is done in your dealership. CAC does the collections.

Your inventory needs to be paid for three ways. You need to out right own some paid for with cash, you need a line of credit to pay for some and you need a floor planning company to float some with. I can give the info on that too. Be careful some floor plan companies have out of sight fees and interest, they will eat up every penny that you can make.

Inventory is a fickle beast. Everything is a gamble. Credit Acceptance Corp has information on what works in your area. That will save you time and money. Most cars bought at auction need work. That is why they are there. 2 out of 100 people get rid of a perfect running car. Every car has problems. You have to surround yourself with people who are your team. From the car wash guy to your body guy. Make sure that they will do whatever needed to prep a car for the front line. You reward them greatly for their effort. If a guy sticks it to me, I will never deal with him again.
My inventory is a mixture. I have $1500 cars to $15000 cars. Usually have something eye catching to get people on the lot. Like a big fancy 4X4 or a red Mustang GT, Corvette you know some thing like that.

Buy here Pay here is an option but it a 7 day 24 hour a day deal. Install GPS starter interruption devices. Every body has the same excuses and stories, just the names are different. This takes a full time crew for collections and repo's. Hire the meanest bitchest woman that you can find for collections and pay her a percentage to keep her motivated.

Start with 2 tons of money.
I will think of something else and come back to your thread.
Good luck
 

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Your cars financed through CAC will have an extended warranty. I say " If it ain't running, they ain't paying ! "

Do not put a car on the sale line if it isn't ready. Fix everything within reason. If there a light on it the instrument cluster, fix it. If the key fob doesn't work, fix it. My biggest expense is batteries, tires, windshields and gas.

One reason that Credit Acceptance is so important is that customers are for the most part are lazy. If they come in for a truck and have to leave to get financed, chances are they won't come back. Get them in the office and don't let them leave. Make a contact with a local insurance provider. I let customers use my computer to buy insurance coverage online in my office. Print proof of insurance on the spot. Like I said, if they leave, chances are they might not come back. You have to make it easy for them.

Good luck
 

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As a Credit Acceptance dealer everyone is approved. I have made bets with people when they say that I can't get them financed. I tell them that I will give you $500 cash if I can't get them financed. Show them the cash and they come right inside and sit down. I have even offered a free car or truck of their choice if I could not get them financed. It works. It is a great marketing tool. I say all the time to customers, I don't care if you have bad credit.
I am a low pressure dealer. My sales people put very low pressure on customers. We make sure that they have all of the info on our cars and our financing program. In the end we really are selling financing. When the customer realizes that they can purchase on their own, the sale becomes super easy.

Good luck
 

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DamCoonass
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If you just want to get your feet wet find a dealer you can trust & wholesale through him. They will charge you a couple hundred a car for each one you sell.

Use your own money, pay cash for a couple of cars & see how good you are at it.


If you cannot flip 3-4 a month at this level you do not need to be in the business.
 

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Discussion Starter #15
Thanks for all the responses y'all.
I may PM a few of ya here shortly.
 

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Cheap cars no credit tote the note,Get a good wrecker and driver and Tell them the best way to get back on youre feet is to miss a payment,Dont listen to all there bullshit about how they will pay next week Blah Blah Blah.Install GPS on each vehicle with starter Disable,...... one day late Hook em and Book em.Remember They will steal food from your kids mouth if they get a chance.So you have to be pretty cold hearted in this game.Oh and you can also get a lot of pussy trading a little for a car note.Make them pay every 2 weeks that way you are never behind more that that at a time.also get atleast 80% of the total Vehicle cost that you paid as down payment.



he said it all
 

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i don,t think you will see many bhph customers paying 80% of your cost as a downpayment .
^^^^This

It sounds great in theory, but very impractical to depend on in reality. The market might have worked this way 15-20 years ago, but now a sub prime customer can get financing on a new car, with a minimal down payment.
 
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