Register a Company
- Register your company with Lawpath in just 10 minutes.
- Simple step-by-step process with instructions
- On-demand phone, email and chat support
We’re reader-supported and may be paid when you visit links to partner sites. We don’t compare all products in the market, but we’re working on it!
Fancy a future of cutting profitable deals, providing stellar customer service and stocking the very best cars for your showroom? Running your own car dealership can be more than just a dream.
Read on for a step-by-step guide that'll take you through how to make your car business a profitable reality.
Like many retail businesses, a car dealership requires stock, a physical space – such as a showroom or car yard to display your vehicles – and a savvy salesperson or two to sell them.
To thrive in this fast-paced industry, you'll also need fantastic business acumen, stellar customer service skills and a high amount of capital to buy into the market.
To start a car dealership, you'll first need to apply for a motor dealer licence in your state. While the majority of states In Australia don't require any educational prerequisites, in Queensland (QLD) and Western Australia (WA) there's a legal requirement to pass specific courses through a recognised trainer.
These courses are:
Additionally, you could hone your sales skills and gain credibility by completing one of the following optional courses:
These courses typically cost from $5,000 to $8,870. However, the Certificate III in Automotive Sales is subsidised, so it's free for eligible students. Course durations are between six months to three years to complete as full-time courses and these may include the option of studying online.
There are three main business structures applicable to a car dealership. These are:
It can be difficult to choose the right structure when starting a new business, but you are able to change the structure as your car dealership business grows.
You'll need to line up the right licences for your business. By law, you will require a state-issued motor dealer licence, which you can apply for after registering your business and completing any prerequisites required by your state.
The links for each state's online application forms are:
You may also wish to consider some of the below legal documents, which can usually be obtained online from reliable sites such as LegalVision, Lawpath or Sprintlaw.
The primary equipment you will need to establish a car dealership is, of course, the cars you'll be selling. You can choose to source these in a few ways. These include as follows:
Purchasing cars outright requires a lot of capital, sometimes in the millions of dollars, so most people seek financial backing through a business loan or by finding investors.
Franchising through a manufacturer may be an option for some. However, it can be a challenge to secure a franchise with a reputable dealer in Australia. If you choose to attempt this route, ensure you have a sturdy business plan to back up your application.
It's likely you'll need some additional equipment and software, including as follows:
Factors that influence how you price your stock include whether you're a new or second-hand dealer and whether you are under a manufacturer franchise. A franchise would usually have set recommended retail prices, as would wholesale-purchased vehicles.
For second-hand dealerships, you will have to take into account the condition of the cars, market availability and popularity, extra features, trade-in prices and warranties you'll offer. You can use RedBook as a guide to help you to evaluate your stock.
How much money will I need to set up a car dealership?
Unfortunately, the initial capital required to set up a car dealership is quite high. Second-hand car dealerships would be the cheapest to set up. Generally speaking, you may expect these to start in the low $200,000 range for a very small dealership.
New car dealerships are priced in the high hundred-thousands to millions. Even franchising manufacturers require you to have enough capital to last a couple of years of slow sales. Having said that, there are anecdotal stories online of people starting with just a couple of cheap second-hand cars and growing their business from there. For everyone else, a good business loan may be the most workable option.
Is a car dealership profitable?
People are constantly buying and selling new and used cars, so a car dealership is always a profitable business. Just how profitable depends on the type of dealership, with used-car dealerships making more of a margin, but brand name dealerships profiting from brand recognition, manufacturer support and ongoing after-sales mechanical care.
How should I advertise to customers?
Franchise dealerships will always have support from their manufacturer and brand recognition to advertise, but other dealers should build a strong online presence. You can do this by advertising on social media, along with car sales websites and other online marketplaces. Adding your used cars to auction sales, online and off, allows the auction company to do the advertising for you.
finder.com.au is one of Australia's leading comparison websites. We compare from a wide set of banks, insurers and product issuers. We value our editorial independence and follow editorial guidelines.
finder.com.au has access to track details from the product issuers listed on our sites. Although we provide information on the products offered by a wide range of issuers, we don't cover every available product or service.
Please note that the information published on our site should not be construed as personal advice and does not consider your personal needs and circumstances. While our site will provide you with factual information and general advice to help you make better decisions, it isn't a substitute for professional advice. You should consider whether the products or services featured on our site are appropriate for your needs. If you're unsure about anything, seek professional advice before you apply for any product or commit to any plan.
Products marked as 'Promoted' or 'Advertisement' are prominently displayed either as a result of a commercial advertising arrangement or to highlight a particular product, provider or feature. Finder may receive remuneration from the Provider if you click on the related link, purchase or enquire about the product. Finder's decision to show a 'promoted' product is neither a recommendation that the product is appropriate for you nor an indication that the product is the best in its category. We encourage you to use the tools and information we provide to compare your options.
Where our site links to particular products or displays 'Go to site' buttons, we may receive a commission, referral fee or payment when you click on those buttons or apply for a product. You can learn more about how we make money here.
When products are grouped in a table or list, the order in which they are initially sorted may be influenced by a range of factors including price, fees and discounts; commercial partnerships; product features; and brand popularity. We provide tools so you can sort and filter these lists to highlight features that matter to you.
We try to take an open and transparent approach and provide a broad-based comparison service. However, you should be aware that while we are an independently owned service, our comparison service does not include all providers or all products available in the market.
Some product issuers may provide products or offer services through multiple brands, associated companies or different labelling arrangements. This can make it difficult for consumers to compare alternatives or identify the companies behind the products. However, we aim to provide information to enable consumers to understand these issues.
Providing or obtaining an estimated insurance quote through us does not guarantee you can get the insurance. Acceptance by insurance companies is based on things like occupation, health and lifestyle. By providing you with the ability to apply for a credit card or loan, we are not guaranteeing that your application will be approved. Your application for credit products is subject to the Provider's terms and conditions as well as their application and lending criteria.