If you want to become a car dealer, then this post is for you. Starting a car dealership in New York involves knowing the start-up cost, your target market, and how to handle day-to-day operations, like sales and marketing. You also have to consider the permits, licenses, and other legal considerations to ensure you’re complying with industry standards and the law. 

To learn more about the step-by-step process of starting a car dealership, continue reading below.

Step 1: Determine the Type of Car Dealership for You 

You can sell new or used cars, or a combination of both. A car dealership relies on the availability, car brand, and your target market. For instance, you can sell multiple brands or just one brand of car, like Nissan. For more details, check https://www.visionnissanwebster.com/.

Here are the good-to-know things about a car dealership: 

  • Small dealerships are mostly used car dealers. Buy-and-sell of used cars is one way to obtain cars to sell. 
  • A car dealership business is suitable for those who are interested in automobile or auto enthusiasts. Pursuing one’s dream becomes a passion, and you’re more likely to succeed if you love what you do.
  • Of course, you need to have managerial or sales experience, such as a sales manager or car salesman. It’s because a part of your daily business operations includes checking invoices, communicating to customers, negotiating, and sales. 

Step 2: Find Out the Costs of Starting a Car Dealership 

A large car dealership usually secures a contract with a major car manufacturer, like Nissan, to sell certified used or new vehicles. While it requires higher upfront costs because it includes franchise fees, you’ll benefit from the established and effective marketing strategies and support of a good company. This type of car dealership may also need high volume sales, thus keeping the manufacturer’s contract. 

Step 3: Know Where to Obtain Cars for Sale

It’s essential to determine how you’ll keep a good flow of car stock for sale. It’s a good thing that digital technology makes finding and communicating with car manufacturers easier and smoother as compared in the past.

Here are some ways to obtain cars for your inventory or as stock: 

  • You can contract a car manufacturer directly or obtain your stock from major online marketplaces. 
  • Since it doesn’t require a lot of inventory or overhead, a small car dealership can be highly profitable. Used vehicles purchased from auction sites can be marked for sale to consumers. 
  • You can run a physical car dealership or online, marketing your business using traditional and digital methods. While you can exclusively operate online, keeping a physical showroom is still recommended to showcase the best vehicles you have on stock.

Step 4: Get Proper Licensing and Permits

Aside from business experience, you’ll need proper licensing as well as surety bonds to be successful in the automobile industry. A surety bond is a type of insurance designed to protect the state and consumers from fraud. In order to sell vehicles in your state, you must have an auto dealer license, which you can obtain by filing a surety bond in your state’s Department of Motor Vehicles (DMV).

Here are the general bonds available for an auto dealership business:

  • Used car dealer bonds
  • Motorcycle dealer bonds
  • DMV bonds
  • Wholesale car dealer bonds
  • RV bonds

Here are the categories of dealer licenses:

  • Used car dealer (retailers)
  • New car dealer
  • Wholesaler licensing
  • Reconditioner licensing
  • Rebuilder licensing

Step 5: Follow the Process of Getting Into a Car Dealership Business 

A successful business owner knows the process of how a business works. By doing so, you can easily comply with the rules and regulations or the law governing a car dealership business. It’s also easier for you to penetrate your target market and establish connections. 

Here’s the process of starting a car dealership business:

  • Fill out the needed application form and attach the required documentation or paperwork.
  • Obtain a surety bond (the minimum amount of which would be specified by your state based on the nature of your business).
  • Buy liability insurance for car inventory.
  • Obtain a sales tax number for your car dealership.
  • Establish a permanent business location.
  • Prepare your car dealership photographs and signage.
  • Pay applicable fees.
  • Obtain your dealer’s tags from your local county courthouse.
  • Obtain your sales license to sell cars (if you’re planning to be the salesperson in your car dealership business).


Now it’s time to market your car dealership business. You can promote your business by creating a website, through social media, review sites, major marketplaces, and via traditional means, like local radio ads. Hire the right people, establish a good reputation, and take good care of your customers.