subject: Becoming a Used Car Dealer in Chicago [print this page] Becoming a Used Car Dealer in Chicago Becoming a Used Car Dealer in Chicago
Although this economic recession has had a devastating effect on the new car industry, the used car industry has shown itself to be one of the strongest and sustainable retail sectors in the country. In fact, used car dealerships currently outnumber new car dealerships four to one and the difference is growing rapidly.
Chicago is neighbors with Detroit, known as Motor City, and consequently the used car industry is prospering there. Many residents of Chicago take advantage of their close proximately to Motor City and make a great deal of money buying and selling used cars. However, Chicago laws limit the number of automobiles one is allowed to sell without a car dealer's license. Therefore, to make any real money in Chicago's used car market, one should get a license and make a business out of it.
The first step to opening and running a successful used car dealership is to write up a business plan. This plan should go into detail about geographic considerations, budget restraints, future goals, and competitive tactics. It should also tell if the business will be a run as a sole proprietorship or as a partnership and whether it will be incorporated or one of the limited liability corporation options.
After the business plan is written, the prospective Chicago used car dealer needs to get their dealer license from the Illinois Department of Motor Vehicles and their business license from the Illinois Department of Commerce. An application and a written test are required for the dealer license, and for the business license the state requires that a prospective Chicago business owner undergoes training or education, takes exams, shows proof of zoning, undergoes inspections, and attains a surety bond.
The surety bond should have at least $30,000 of coverage for a small used car dealership but more depending on lot size and number of cars for sale. This surety bond is required when opening a used car dealership in Chicago to protect customers from auto scams, but also to protect the car dealer from unwarranted lawsuits. The city of Chicago also requires dealers to attain surety bonds that expire and renew at various times throughout the year, but each situation differs so it's important for the dealer to request more detailed information from the city concerning their particular business.
In addition to the surety bond, the prospective used car dealer in Chicago, or anywhere else for that matter, needs enough initial funds to run the dealership for about one year. The used car dealer should take into account inventory, rent, bills, salaries, and personal expenses when determining the exact amount of funds needed. Then, after determining the needed funds to open and run the dealership, the car dealer should determine how he/she will obtain the funds. Whether it's through a bank or one's own savings, the business plan should describe in detail where the start-up capital is coming from.
Because there are so many used car dealerships in Chicago, it is especially important for a new dealership to find a great location. This location should not only be in a commercially zoned area on a high-traffic street, but it should also be flat. If it is not a flat location, construction and pavement costs will increase dramatically.
The last steps involved for the used car dealer in Chicago is to attain cars to sell, salesman to sell them, and a mechanic to fix them. There are a lot of wholesale car and police auctions in the Chicago area, as well as experienced salesmen, and qualified mechanics populate both the Chicago and, of course, the Detroit area.
