21 Apr My Dream to Open an Exotic Car Dealership
Those of you that know me, know I love exotic cars. I have loved them since I was about three years old and always dreamed of having a Lamborghini. I have a Lamborghini now, but that did not satisfy the itch to have more exotics and experience super cars from the past and present. It took me a long time to get to the point where I could afford a Lamborghini. Early in my career I never thought I would be able to buy one. Now that I have one I realize it will take a whole lot more success to be able to buy all the cars I have dreamed of owning, unless I could start a car dealership….
Why would I want to start a car dealership?
I am a huge believer in goals, a positive attitude and getting help to become more successful. I have a personal coach and I told him about my idea to start a car dealership. He was really quiet as he tried to think of a nice way to tell me I am crazy! He said a car dealership does not fit me and what I am currently doing with real estate and my other blog Investfourmore.com. After I told him it would be an exotic car dealership he was a lot more understanding and though it was a great idea.
If I were to start an exotic car dealership I could start small with only a few cars in inventory. They would be awesome cars, but I am located in a town of only about $100,000 people. There are not a lot of high-end exotic car buyers in the area. I think I would have to start with exotic cars that are more affordable, but still easily recognizable as exotics. By buying more affordable cars it would also be an easier entry for me to afford the inventory.
Starting the car dealership would have many perks:
- I would not have to register my cars and pay sales tax on them as a dealer.
- I could write off most of my car expenses on my taxes since I am a dealer and running a business.
- I could buy multiple exotic cars and make money at the same time (hopefully).
- I would have access to car auctions where I could get better deals.
- I would have access to the sales database to see what cars are selling for and worth.
- I would attract a high-end clients who I could cross market with my real estate business.
Starting a dealership has been a dream of mine for years, but I always thought it was something that might happen a long way down the road.
Why did I change my plan and decide to pursue a dealership sooner?
For my birthday I decided to take a trip to Cats Exotics in Seattle. That is the dealership where I bought my 1999 Lamborghini Diablo. I went to the dealership for one day to see and drive in a 1989 Lamborghini Countach. Owning a Countach has been a dream of mine since I was a kid as well. Actually my Lamborghini dreams started with a Countach, not a Diablo.
When I went to Seattle I got to see if I fit in the Countach, which I did barely. I also got to see about 50 other cars that were awesome. The dealership had more Lamborghini’s, Ferrari’s, Maserati’s, McLaren’s, Porsche’s, Bentley’s and muscle cars like a Superbird, convertible Challenger, 67 Corvette, 69 z28 Camaro and more. I was in heaven!
I talked to the owner Roy Cats and he told me his story about how he got started in the car business. He owned a security company that operated in many states. He bought over 40 vans a year for the company and he was audited one year by the state. They told him he could not buy that many vans without a dealers licence, so he got one. He was already a car fanatic so it was natural that he started up a dealership for exotic cars. That got me thinking that maybe I could do the same thing.
Here is a great site that I use to help me find good deals on exotics, as well as financing and other help: Exotic Car Hacks.
What are the challenges of starting a car dealership?
I know it will not be easy to start a dealership. There are many obstacles for me to overcome and I do not even have a timeline for when I would open up shop yet. Here are the things I think I will need to overcome:
- Getting a dealers license. I will have to become a dealer, which takes some work including passing a test, getting a bond, getting insurance, getting a sales tax account and finding a place of business.
- Finding a place of business. I do not want to operate out of my home and my zoning does not allow it anyway. I don’t want to pay for a high visibility location either, but I have a great option. My parents own land that fronts a four lane highway just outside of my town and one mile from house. This could be zoned commercial at one point, but is zoned agriculture now. I would have to put up some sort of building and shop as I would not want to leave cars out in the open after business hours. I could also rent a very cheap shop somewhere in the beginning.
- Repairing and maintaining the cars. I would have to have a shop that could work on exotics. I know of one shop about 30 miles from me that works on them or at some point I could start my own shop for exotic cars. This could be another revenue stream in the future and be a sweet perk to have someone on my payroll who could work on my cars.
- Advertising and marketing. If I wanted to sell cars I would have to be able to get the word out that I had cars for sale. The nice thing about exotic cars is many people search for them, I would not have to be in your face trying to sell one of 100,000 Dodge Caravans. As long as I have a strong internet presence I should have buyers come to me. As far as local buyers having the highway frontage would be an awesome bonus, especially if I put up a large sign.
How much is it going to cost to start a car dealership?
How much all this costs all depends on how far I go with the location. I could probably start everything for less than $50,000 with a small shop and one car in my inventory to begin with. If I wanted to put up a building, install security, pave roads and go the whole nine yards with a dealership on my parents property I could spend hundreds of thousands of dollars. To be honest I have not priced anything yet, as this is still a dream.
What are my next steps towards opening a dealership?
Right now I am in the very beginning stages of having a dealership. I did buy a program to help me learn about car dealerships and getting my license. I have not taken any steps besides that to get my dealers license. Even though this blog is about the owners of exotic cars and how they were able buy them, I think following my dream to buy a dealership will be a nice side story as well. My next plan of action is to create a business plan with the estimated costs of starting the dealership and seeing how many cars I would have to sell to make money.