Starting a used car dealership - questions for a former/current dealer / auctioneer

[Vr4Whore]

I'm seriously considering starting a used car dealership and obviously have a lot of questions for someone that is currently or has formerly worked / owned a used car dealership and does not mind talking for a bit.

I also have some questions for someone that has worked/ is working at a dealer auction.

Thanks !

[dj_rice]

First rule of thumb. Make sure the lot is paved.

[The BMW Guy]

What questions do you have? I used to work at a used car dealership.

[Sorath]

Originally posted by dj_rice
First rule of thumb. Make sure the lot is paved.

:rofl: :rofl: :rofl: :rofl:

[blitz]

If you have any ethics or morals, start practising setting them aside.

[revelations]

You'll make money on high interest loans.

[Mitsu3000gt]

Approve absolutely everyone. And hire some of these guys to lean up against the trailer and smoke while they wait for customers:

http://3bntxw295kc031i6zl2nl2wh.wpengine.netdna-cdn.com/wp-content/uploads/2011/03/used_car_salesman.jpg

[Tik-Tok]

Make sure to include a "z" in your name in place of a "s", it'll make you sound edgy, and legit.

[rx7_turbo2]

Originally posted by revelations
You'll make money on high interest loans.

This. I don't think there's any money made on selling the cars themselves, if there is it's pretty thin.

Pushing people with bad credit into high interest loans for cars they can't afford, not what I'd call my dream job, but hey :dunno:

[carson blocks]

Read and understand everything on the AMVIC site. They will be a big part of your life going forward. Also, a fistful of cash will be required. I personally wouldn't want to start even the shittiest used car lot without $100k cash on hand, and $250k would be a lot more comfortable.

[Mitsu3000gt]

Is there even a single reputable standalone used car dealer in Calgary? I have been to many of them and I can't think of one that isn't shady as f*ck.

[ExtraSlow]

Originally posted by Mitsu3000gt
Approve absolutely everyone. And hire some of these guys to lean up against the trailer and smoke while they wait for customers:

http://3bntxw295kc031i6zl2nl2wh.wpengine.netdna-cdn.com/wp-content/uploads/2011/03/used_car_salesman.jpg
Let your salesbros smoke in the vehicles when they take them home for the weekend.
Be sure to offer a free 15,000 point inspection and a "no-hassle" 30 day warranty. That helps build trust with all the housewives.
Require non-refundable deposits on everything. Those are money in the bank.
Hire a minimum wage teenager to spray armor-all on the inside of the windshield. That way you can advertise your stock as "freshly detailed".

[jwslam]

Originally posted by Mitsu3000gt
Is there even a single reputable standalone used car dealer in Calgary? I have been to many of them and I can't think of one that isn't shady as f*ck.
http://forums.beyond.ca/st/357596/calgary-auto-quest-calgary-auto-connection/

[Mitsu3000gt]

Originally posted by jwslam

http://forums.beyond.ca/st/357596/calgary-auto-quest-calgary-auto-connection/

Nice to read some positive feedback for once :thumbsup:

[HiTempguy1]

Originally posted by rx7_turbo2


This. I don't think there's any money made on selling the cars themselves, if there is it's pretty thin.


I don't think so. The cars that go to "used car dealerships" are the ones that stealerships with high overhead don't/can't get rid of at a price that makes profit.

Used cars earn more money than new ones (its nuts, you see trade-ins for pennies on the dollar and then are advertised for thousands above private resale). New ones earn money getting maintained as everyone fears their "warranty" getting cancelled if they don't go through the dealer for work.

[G]

You need some of these too...

http://globalgoodgroup.com/wp-content/uploads/2013/06/2012-12-13-15-40-498.jpg

[BAB Inc]

Auto Quest, Auto connection, Millenium Motors, Supreme Auto sales, Southview motors.....they are all really close friends since high school, they all buy from the same place and have similar vehicles. These guys have been doing this since they were teens, and know the business in and out. Its not easy to just open a dealership and pray it works. I've seen way too many crash in the last 5 years.

[zipdoa]

Selling cars is a scummy, scammy business. If you want to make money, become familiar with terms like:

- Bait and Switch
- Smoke and Mirrors
- Perception is reality
- Buyers are Liars
- Roaches
- The Box
- Adds
- Shwack
- Ups
- Bumps
- Dancing to the music that being played
- Lead them to the fire
- CarFinco
- 60/96

I never made big money on a deal that I didn't feel a little bit guilty about. I left the business due to stress and morals. You learn a lot about psychology though! I'd highly recommend working a sales floor for a couple years before starting your own lot.

Also, invest in training with Duane Marino if you want to become a talented salesman.

[ExtraSlow]

I know a guy who could sell ice to eskimos. Not a scumbag, so he may not be suited for the used car world, but that fucking guy could sell anything. PM me for details when you get your store up and running.

[Dave P]

19X7auAQW_0

[Vr4Whore]

You guys are hilarious, I love the advice :)

People still call it a scummy business in 2015 ??

Most used car dealerships offer a 30 day warranty and if you try to sell a shitty car without keeping your word on the warranty amvic will eat you up so I'm not sure I'd want to risk selling a shitty car.

Unfortunately not everyone has 10k or even 5k cash for a car so isn't $120-300 bi weekly a good choice when you have shitty or no credit ??

Fun fact:

Around 70% of the cars on the road are financed.

[zipdoa]

Originally posted by Vr4Whore
Unfortunately not everyone has 10k or even 5k cash for a car so isn't $120-300 bi weekly a good choice when you have shitty or no credit ??

Fun fact:

Around 70% of the cars on the road are financed.

Lmao, you're already sounding like the "Drive Canada" ad's on facebook.

Fun Fact:

If you can afford $120-300 bi weekly, you can save up $3000 to buy a used corolla/civic/sentra etc.

Fun Fact:

High interest used car loans are one of the worst ways to build credit

Fun Fact:

You'll save money on insurance if you don't finance, because you can run just liability coverage.

I'm not actually bitter, I just don't like how disingenuous the industry is. You certainly wouldn't fair well with a strong moral compass.

[Jlude]

Originally posted by Tik-Tok
Make sure to include a "z" in your name in place of a "s", it'll make you sound edgy, and legit.

It's the only way to be legit.

[blitz]

Originally posted by Vr4Whore
People still call it a scummy business in 2015 ??

Most used car dealerships offer a 30 day warranty and if you try to sell a shitty car without keeping your word on the warranty amvic will eat you up so I'm not sure I'd want to risk selling a shitty car.

:rofl:

Practicing your sales pitch already, I love it.

[lasimmon]

Originally posted by zipdoa


Lmao, you're already sounding like the "Drive Canada" ad's on facebook.

Fun Fact:

If you can afford $120-300 bi weekly, you can save up $3000 to buy a used corolla/civic/sentra etc.

Fun Fact:

High interest used car loans are one of the worst ways to build credit

Fun Fact:

You'll save money on insurance if you don't finance, because you can run just liability coverage.

I'm not actually bitter, I just don't like how disingenuous the industry is. You certainly wouldn't fair well with a strong moral compass.

To be fair sometimes people need a car NOW not when they can save for it due to life and work obligations, but I digress.

[Mitsu3000gt]

Originally posted by Vr4Whore
You guys are hilarious, I love the advice :)

People still call it a scummy business in 2015 ??

Most used car dealerships offer a 30 day warranty and if you try to sell a shitty car without keeping your word on the warranty amvic will eat you up so I'm not sure I'd want to risk selling a shitty car.

Unfortunately not everyone has 10k or even 5k cash for a car so isn't $120-300 bi weekly a good choice when you have shitty or no credit ??

Fun fact:

Around 70% of the cars on the road are financed.

I'd like to know the % of people successful with warranty claims through a 30 day used car dealer warranty haha, I'm guessing somewhere around 0%.

[blownz]

Related to the financing, I have been looking for a car and I always ask what the cash rebate vs financing is and more than one dealership looked at me confused and said "Cash? No one pays cash". lol

Also a buddy of mine bought a GLK350 for his wife last year and the financing rate was 0.9% with the same discount as paying cash so he did it even though he was good for it and when they filled out paperwork and he said he made $200K/yr the guy dropped the pen and asked if that was actually his base. He said yes and then the finance guy said most guys that lease S-Classes don't even make that much. lol

So many people are overextended and the problem is they actually go to car dealerships to "see how much they can afford" :facepalm:

[Redlyne_mr2]

Originally posted by Mitsu3000gt


I'd like to know the % of people successful with warranty claims through a 30 day used car dealer warranty haha, I'm guessing somewhere around 0%.

I offer a 3 month 5000km in house comprehensive warranty on my cars on the lot. It's cost me a few bucks in the past. Sold a Chevrolet Equinox that needed a headgasket, cost me $3200 but it earned me a loyal and happy customer. I could drop $15000 a month on radio ads and annoying pop up banners but I'd rather put the money into servicing my new customers, they're the best advertising.

[FraserB]

Originally posted by zipdoa

Fun Fact:

You'll save money on insurance if you don't finance, because you can run just liability coverage.


FWIW, I wasn't required to carry full coverage when I financed my truck.


Originally posted by Vr4Whore
Fun fact:

Around 70% of the cars on the road are financed.

Any actual stats backing this up? There is no way it is this high.

[Redlyne_mr2]

Originally posted by FraserB





Any actual stats backing this up? There is no way it is this high.

I'd believe this, I see it every day. People want features and they want warranty. Where do you find a $5000 kijiji vehicle like this? Most car buyers don't think like us on beyond.ca and it's not easy for most people to come up with 5 figure numbers to buy a vehicle cash. They finance it, pull equity out of their house, lease it etc.. To be frank, if I wanted a brand new car I would lease it, cheap rates, depreciation isn't my problem, full warranty.

An old saying " you always have a car payment" is so true, whether it's a payment on a newer car with warranty or your like me and own your vehicles outright but spend a lot on maintenance.

[zipdoa]

Originally posted by FraserB


FWIW, I wasn't required to carry full coverage when I financed my truck.



Paging Masked Bandit - I thought the only way this was possible was if you had an unsecured line of credit.

[spikerS]

Originally posted by zipdoa


Paging Masked Bandit - I thought the only way this was possible was if you had an unsecured line of credit.

+1

Any time I have financed a vehicle, it had to be listed as collateral, and the financing company had to be listed on the insurance papers.

The only time I did not have to do that, was when I bought my old truck on my LOC.

[FraserB]

Originally posted by zipdoa


Paging Masked Bandit - I thought the only way this was possible was if you had an unsecured line of credit.

If it makes a difference, my financing is through a credit union that my friend works at. They also show up on the insurance papers.

I do have full coverage on it though, I'm not that cheap haha.

[Tik-Tok]

Originally posted by zipdoa


Paging Masked Bandit - I thought the only way this was possible was if you had an unsecured line of credit.



Originally posted by spikerS


+1

Any time I have financed a vehicle, it had to be listed as collateral, and the financing company had to be listed on the insurance papers.


The only time I've financed a car (asides from LOC) was my brand new '05 Mustang, through Scotia, and on the loan documentation under "Insurance required" it was blank. Meaning I didn't require any insurance.

Probably an oversight, but I still had full coverage because I'm not an idiot, lol.

[Masked Bandit]

Originally posted by zipdoa


Paging Masked Bandit - I thought the only way this was possible was if you had an unsecured line of credit.

There is nothing on the insurance side of things that states what you must have one way or the other. It's a condition / clause of the FINANCE / LEASE AGREEMENT that dictates coverage minimums. 99.999% of vehicles financed or leased through a dealership will have a clause that says you must carry full coverage until the loan is paid. If you source your financing from your own bank, they tend to be a lot more relaxed on these requirements. As far as I'm concerned though, running anything short of full coverage on something you owe money on is a bit silly.

[max_boost]

Originally posted by Redlyne_mr2


I'd believe this, I see it every day. People want features and they want warranty. Where do you find a $5000 kijiji vehicle like this? Most car buyers don't think like us on beyond.ca and it's not easy for most people to come up with 5 figure numbers to buy a vehicle cash. They finance it, pull equity out of their house, lease it etc.. To be frank, if I wanted a brand new car I would lease it, cheap rates, depreciation isn't my problem, full warranty.

An old saying " you always have a car payment" is so true, whether it's a payment on a newer car with warranty or your like me and own your vehicles outright but spend a lot on maintenance.

It's just like your house. It might be paid off but your taxes, utilities, maintenance is forever. haha

Not surprised at all by the 70% number given that we aren't a cash society. Everything is on credit of some sort. Sugarphreak pays cash for $50K car, well that $50k can also go towards his unpaid off house, same shit diff pile really haha

[SKR]

Originally posted by Tik-Tok
Make sure to include a "z" in your name in place of a "s", it'll make you sound edgy, and legit.

I don't know if it's still there but outside of Medicine Hat a few years ago there was a place called "2 Fast 4 U Salez". That's badass.

[Graham_A_M]

Originally posted by Masked Bandit


There is nothing on the insurance side of things that states what you must have one way or the other. It's a condition / clause of the FINANCE / LEASE AGREEMENT that dictates coverage minimums. 99.999% of vehicles financed or leased through a dealership will have a clause that says you must carry full coverage until the loan is paid. If you source your financing from your own bank, they tend to be a lot more relaxed on these requirements. As far as I'm concerned though, running anything short of full coverage on something you owe money on is a bit silly.
Frick if I would have known, I would have obtained financing straight through my bank when I bought my regal GS, and by passed the dealer entirely. That was a costly mistake:cry:

[Masked Bandit]

Originally posted by Graham_A_M

Frick if I would have known, I would have obtained financing straight through my bank when I bought my regal GS, and by passed the dealer entirely. That was a costly mistake:cry:

But would you have honestly driven something you owed money on with just PLPD?

[Tik-Tok]

Originally posted by Graham_A_M

Frick if I would have known, I would have obtained financing straight through my bank when I bought my regal GS, and by passed the dealer entirely. That was a costly mistake:cry:

Probably would have cost you more. Most times direct bank rates are typically higher than the rates you get through the dealership (even if it's with the same bank)

[Vr4Whore]

Thanks for all the input guys, I could argue with you but the only benefit I'd get is my e-penis growing.

Can we get back on topic, if you're just going to be a shithead please don't post here I really don't care.

On the other note thanks for the 2 people that offered me actual advice, I would still like to gather more info though.

Cheers!

[carson blocks]

Originally posted by Vr4Whore
Thanks for all the input guys, I could argue with you but the only benefit I'd get is my e-penis growing.

Can we get back on topic, if you're just going to be a shithead please don't post here I really don't care.

On the other note thanks for the 2 people that offered me actual advice, I would still like to gather more info though.

Cheers!

My advice was legit. Do you know AMVIC regs inside and out?

[Vr4Whore]

Originally posted by carson blocks


My advice was legit. Do you know AMVIC regs inside and out?
Yes your advice was very important, I'm still reading up on it.

Thanks

[zipdoa]

Originally posted by Vr4Whore
Thanks for all the input guys, I could argue with you but the only benefit I'd get is my e-penis growing.

Can we get back on topic, if you're just going to be a shithead please don't post here I really don't care.

On the other note thanks for the 2 people that offered me actual advice, I would still like to gather more info though.

Cheers!


Originally posted by zipdoa

I'd highly recommend working a sales floor for a couple years before starting your own lot.

Also, invest in training with Duane Marino if you want to become a talented salesman.

I highly suggest you take this advice, unless you've already worked the sales floor at a dealership.

The rest of my posts were harsh, but honest, and if you had a customers best interest at heart, is advice you'd readily give them. Unfortunately the best advice is not usually profitable, which is why dealers have a reputation.

[Vr4Whore]

Bump,

Got some great advice through pms, still would like to get more.