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SIMPLE GUIDE ON HOW TO BECOME A CAR DEALER (WITH 1-2 CARS)


When it comes to transportation of humans and goods from one place to other cars are the most widely used all over the globe. In Nigeria alone, Hundreds of thousands of cars are bought either for private or commercial use.

If I should tell you how much car dealers make per car sold you would be amazed. Have you noticed th average Nigerian family has two cars? Even those with just one car often change them within a few years. If you reside in Lagos or Abuja you would know Nigerians love cars, no wonder the most expensive cars in Africa was found in Lagos.

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WHAT DOES IT MEAN TO BE A CAR DEALER
Dealing in cars entails buying automobile vehicles from abroad where they are cheaper to sell in Nigeria where you can make more gains and profit. You can become a car dealer if you have someone overseas sending you cars while you sell them here or you can buy from cars auctioning sites. In Africa, one of the most popular places to purchase your car as a dealer is in Cotonu, Benin republic. A large chunk of cars coming to Africa come in through Cotonu.

In car dealing business both fairly used cars and brand new cars are in high demand but all you need do is a research on which type of car is most sought after (used or new).

WHAT YOU NEED TO KNOW
1. Dealership License: You dont just open a car shop anytime you feel like without following the right channels and procedures, for you to start a car dealing business you must apply and pay for car dealership license. This license makes you a certified car dealer and it is of a very huge benefit to your business. If you want to own a franchise under any car brand you must be a registered car dealer. For instance you want to sell only Toyota products. Besides the benefits, it will save you from landing into Government trouble.

To get registered as a car dealer visit the nearest Federal Road Safety Office.

2. Source For cars: Look for a reliable means to get your cars, go to car bidding/auction sites because that's where you will find crazily cheap cars. If you are not too comfortable with those bidding sites, then contact anybody you have overseas and make a deal with the person to help you buy and send the cars to you or better still you can go to Benin republic yourself.

If you are buying from Benin, buy and drive the car yourself and do not try to evade customs duties. Follow all legal process. But if you are buying online you just have to put in your shipping address (receiving port) and you would be contacted when it arrives.
Then when you own a franchise of a particular brand, the company handles all processing on your behalf. When you sell, you repay back to them and order again.

3. Advertise: Ensure you advertise your cars online, gone are the days you just rent a warehouse and dump your cars there with a sign post. You can take advantage of social media presence and other sites like cheki, olx, jiji and even here on techtimesNg.


When listing your cars for sale online add your price, location, contacts, what kind of cars, new or old?, and other necessary information the buyer may need.

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4. Showcase your cars: You need an open field or garage where you can display your cars to customers. You need a car showroom in an appropriate location that is accessible. Be reminded that your car showroom must e very secured.

WHAT YOU NEED TO START
You can start this business by ordering one or two cars depending on your financial capability. Now take a look at the next information I am about to pass to you carefully.


Item Description Price (Naira)
Dealer’s license Price is according to Lagos state government. 100,000
Land rent 200,000
Garage building A steel warehouse. 456,000
Paid/sponsored ad For a week long advert, price range differently for different websites, this is a general quote. 3,000
Hired help Per person. 20,000
Total = 779,000
6. Hire One Or Two Staff

If you are running a big place you might need as much help as a man may need for labours such as driving the cars in and out of the garage and parking them, cleaning the cars, and help with sales. On occasions even repairs of the vehicles. Although if the place is small two of you might be okay for the whole job. When hiring, consider someone with experience with cars as this will serve well.

7. Profit Margin

For normal saloon cars after custom clearance and all the small fees that comes with bringing in a car into the country, you will make up to N500,000. SUV’s attract more as you could make up to 1million Naira or more from selling a single car. By which we could surmise the profit margin at about 30%, but as Nigeria uses the rising and falling of dollar to calculate the import tax, the margin might change dramatically in a heartbeat.

8. Brief Summary

Capital needed to start business: N779,000 -price of cars.

Profit Margin: 17% – 30%

Suitable location: Beside highways and major roads.

Business tools: Having online presence.

Potential customers: Average citizens.

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