{"id":5284,"date":"2024-09-12T19:44:57","date_gmt":"2024-09-13T00:44:57","guid":{"rendered":"https:\/\/content.findlaw-admin.com\/ability-law\/smallbusiness\/starting-a-business\/how-to-open-a-car-dealership.html"},"modified":"2025-06-24T12:43:00","modified_gmt":"2025-06-24T17:43:00","slug":"how-to-open-a-car-dealership","status":"publish","type":"page","link":"https:\/\/www.findlaw.com\/smallbusiness\/starting-a-business\/how-to-open-a-car-dealership.html","title":{"rendered":"How To Open a Car Dealership"},"content":{"rendered":"\n<section data-testid=\"fl-simple-hero\"  class=\"fl-simple-hero\">\n    <div class=\"fl-simple-hero-container fl-container fl-flex fl-items-center\">\n                <div class=\"fl-simple-hero-title\" data-testid=\"fl-simple-hero-title\">How To Open a Car Dealership<\/div>\n            <\/div>\n<\/section>\n    <div class=\"fl-container\">\n        <div class=\"updated-breadcrumb-list\">\n            <ol>\n                        <li>\n                <a href=\"https:\/\/www.findlaw.com\">FindLaw <\/a>\n                <span class=\"breadcrumb-separator\" aria-hidden=\"true\">\/<\/span>\n            <\/li>\n                                <li aria-current=\"page\">How To Open a Car Dealership<\/li>\n            <\/ol>\n\n        <\/div>\n    <\/div>\n\n\n\n<div class=\"fl-sectionWithSidebar fl-container fl-flex fl-flex-wrap fl-gap30  wp-container-core-columns-is-layout-9d6595d7 fl-sectionWithSidebar fl-container fl-flex fl-flex-wrap fl-gap30\">\n<div class=\"fl-section-main fl-page-articles fl-section-main fl-section-main-full-width\"><h1 class=\"fl-no-margin-top\">How To Open a Car Dealership<\/h1>\n\n\n<figure class=\"wp-block-image fl-no-margin\"><img decoding=\"async\" src=\"https://www.findlaw.com/static/c/images\/image\/upload\/ability-law\/wp-prod\/content-original-images-contract_car_dealership_TS.jpg\" alt=\"\"\/><\/figure>\n\n\n<section class=\"fl-gutenberg-byline\">\n    <div class=\"fl-gutenberg-byline-content\">\n                    By <a href=\"https:\/\/www.findlaw.com\/company\/our-team\/richard-weiner-esq\/\">Richard Weiner, Esq.<\/a> | Legally reviewed by <a\n                href=\"https:\/\/www.findlaw.com\/company\/our-team\/tim-kelly-j-d\/\">Tim Kelly, J.D.<\/a>\n                | Last updated\n        <time>\n                            June 24, 2025\n                    <\/time>\n    <\/div>\n\n            <div class=\"fl-gutenberg-byline-editorial-note fl-text-sm\">\n            <p>Editorial Note: We earn a commission from affiliate partner links on FindLaw. Commissions do not affect the editorial integrity of our legal content.<\/p>\n\n        <\/div>\n    \n    <details class=\"fl-gutenberg-byline-toggle fl-gutenberg-byline-legally-reviewed\">\n        <summary>\n            <i class=\"fl-gutenberg-byline-icon\" aria-hidden=\"true\"><\/i>\n            Legally Reviewed\n        <\/summary>\n\n        <div class=\"fl-gutenberg-byline-toggle-content\">\n            <p><em>This article has been written and reviewed for legal accuracy, clarity, and style by <a href=\"https:\/\/www.findlaw.com\/company\/our-team.html\">FindLaw\u2019s team of legal writers and attorneys<\/a> and in accordance with <a href=\"https:\/\/www.findlaw.com\/company\/company-history\/editorial-policy.html\">our editorial standards<\/a>.<\/em><\/p>\n\n        <\/div>\n    <\/details>\n\n    <details class=\"fl-gutenberg-byline-toggle fl-gutenberg-byline-fast-checked\">\n        <summary>\n            <i class=\"fl-gutenberg-byline-icon\" aria-hidden=\"true\"><\/i>\n            Fact-Checked\n        <\/summary>\n\n        <div class=\"fl-gutenberg-byline-toggle-content\">\n            <p><em>The last updated date refers to the last time this article was reviewed by FindLaw or one of our <a href=\"https:\/\/www.findlaw.com\/company\/our-team\/contributing-authors.html\">contributing authors<\/a>. We make every effort to keep our articles updated. For information regarding a specific legal issue affecting you, please <a href=\"https:\/\/lawyers.findlaw.com\/?fli=bylinelink\" target=\"_blank\" rel=\"noopener\">contact an attorney in your area<\/a>.<\/em><\/p>\n\n        <\/div>\n    <\/details>\n<\/section>\n\n\n    <div class=\"fl-callout-text article-blockquote\">\n        <p>Opening a car dealership requires a business plan, knowledge of the industry, and an agreement with a manufacturer. FindLaw gives you a step by step guide to the legal and business aspects of a car dealership.<\/p>\n\n    <\/div>\n\n\n\n<p><b><i>Form your LLC with confidence.\u202f<a href=\"https:\/\/legalzoomcominc.pxf.io\/c\/4851649\/2115288\/26746?subId1=how-to-open-a-car-dealership-in-content\" target=\"_blank\" rel=\"noopener\">Our trusted partner LegalZoom has packages starting at $0 + filing fees.<\/a><\/i><\/b><\/p>\n\n\n<div class=\"tableOfContent\">\n    <div class=\"table-of-contents\">\n        <span role=\"heading\" aria-level=\"2\" class=\"table-of-contents__title\">7 Steps To Open a Car Dealership<\/span>\n                <ul class=\"table-of-contents__list\">\n                        <li><a href=\"#Understand\" title=\"1. Understand the Automobile Industry\">1. Understand the Automobile Industry<\/a><\/li>\n                        <li><a href=\"#Determine\" title=\"2. Determine the Type of Car Dealership\">2. Determine the Type of Car Dealership<\/a><\/li>\n                        <li><a href=\"#Write\" title=\"3. Write a Business Plan\">3. Write a Business Plan<\/a><\/li>\n                        <li><a href=\"#Create\" title=\"4. Create a Business Entity\">4. Create a Business Entity<\/a><\/li>\n                        <li><a href=\"#Obtain\" title=\"5. Obtain Business Licenses and Permits\">5. Obtain Business Licenses and Permits<\/a><\/li>\n                        <li><a href=\"#Set\" title=\"6. Set up Employment and Tax Accounts\">6. Set up Employment and Tax Accounts<\/a><\/li>\n                        <li><a href=\"#Insurance\" title=\"7. Get Business Insurance\">7. Get Business Insurance<\/a><\/li>\n                    <\/ul>\n            <\/div>\n<\/div>\n\n\n<p>A sparkling showroom full of shiny new cars and trucks is exciting and full of possibilities. People drive for many reasons. Whether you&#8217;re a newly licensed driver just beginning your journey or an experienced owner who enjoys all the new bells and whistles, you&#8217;ll have to visit a car dealer. Being a dealership owner can be a very satisfying and profitable business.<\/p>\n<p>In 2023, supply issues from the previous year reduced, boosting total passenger vehicle sales. The&nbsp;<a href=\"https:\/\/www.nada.org\/media\/4694\/download?inline\" target=\"_blank\" rel=\"noopener\">National Automobile Dealers Association (NADA) reports<\/a>&nbsp;that motor vehicle sales reached over $614 million for the first six months of 2023. Total&nbsp;<a href=\"https:\/\/www.nada.org\/nada\/market-beat\" target=\"_blank\" rel=\"noopener\">sales increased 12.4% from 2022<\/a>.<\/p>\n<p>Opening an automotive dealership takes a lot of work and money. You can find success in this industry if you do it right.&nbsp;<\/p>\n<p>Note that this article only discusses brick-and-mortar car dealerships. Creating an online car dealership, like Carvana, is highly complex and outside the scope of this article.<\/p>\n\n\n<div class=\"general-step-component\">\n    <div class=\"steps-container\">\n                    <div class=\"steps-container-item\">\n                <div class=\"category-overview category-overview-item-steps\">\n                    <div class=\"category-overview-heading category-overview-heading-steps\">\n                        <div class=\"category-overview-steps\">\n                            1\n                        <\/div>\n                        <h2 class=\"category-overview-steps-title\" id=\"Understand\">Understand the Automobile Industry<\/h2>\n                    <\/div>\n                    <div class=\"category-overview-content-steps\">\n                        <h3>Understand the Automobile Industry<\/h3>\n<p>First, you need some experience working in the automobile industry. The car business has its own rhythm, vocabulary, and business stylings. It&#8217;s impossible to understand them from the outside. Appropriate background in this industry can include:<\/p>\n<ul>\n<li>Car repair experience in a service department or repair shop<\/li>\n<li>Auto sales experience<\/li>\n<li>Customer service experience<\/li>\n<li>Auto lot management<\/li>\n<li>Vehicle financing experience<\/li>\n<\/ul>\n<p>Your car business experience can be in any aspect of the industry, but the closer your expertise is to running a dealership, the better off you will be.<\/p>\n<p>This means that salesperson experience might be even more important than financing or mechanics experience. Sales are the center of a car dealer business. This is true even if you plan to buy out someone else&#8217;s dealership.<\/p>\n<h3>Understand Business Financing<\/h3>\n<p>Second, you will need a lot of startup money and great credit to get into this business. While a small used car dealer might have a small lot and a small inventory of vehicles, starting a new car dealership will require millions. Your personal assets also come into play. The day-to-day costs of running a dealership will always be more money than you expect.<\/p>\n<h3>Start With NADA<\/h3>\n<p>The\u00a0<a title=\"NADA Homepage\" href=\"https:\/\/www.nada.org\/\" target=\"_blank\" rel=\"noopener\">National Association of Automobile Dealers (NADA)<\/a>\u00a0has over 16,000 dealer members. NADA presents numerous classes and educational materials that give you the base information to decide whether to enter this business. The NADA has statistics, market forecasts, and sales reports to help you build your business idea.<\/p>\n<h3>Conduct Location Research<\/h3>\n<p>The NADA can aid in market research to help you decide what type of car you want to sell. Do you want to apply for a franchise with a major car company like Honda or Ford? Or is a focus on hybrid and electric vehicles the best option in your area?<\/p>\n<p>Look at every car lot in town and determine what kind of automobile sales you want for your business. Talk to new and used car lot owners to learn about laws, property costs, and the local business atmosphere. You will also be checking out the competition at the same time. Decide if you want to be a part of a \u201cstrip&#8221; of car lots or on your own. Get comfortable with the idea of having a business in the neighborhood.<\/p>\n<p>Look for the best place to locate your dealership based on traffic, availability of land, and the types of potential customers you want to attract. Your business location will help determine who your customers are and how successful you will be.<\/p>\n<h3><\/h3>\n\n                    <\/div>\n                <\/div>\n            <\/div>\n                    <div class=\"steps-container-item\">\n                <div class=\"category-overview category-overview-item-steps\">\n                    <div class=\"category-overview-heading category-overview-heading-steps\">\n                        <div class=\"category-overview-steps\">\n                            2\n                        <\/div>\n                        <h2 class=\"category-overview-steps-title\" id=\"Determine\">Determine the Type of Car Dealership<\/h2>\n                    <\/div>\n                    <div class=\"category-overview-content-steps\">\n                        <h3>Type of Dealership: New or Used?<\/h3>\n<p>The first and most obvious decision you must make is whether you will be selling used cars or new cars. They are very different businesses.<\/p>\n<h3>Opening a New Car Dealership<\/h3>\n<p>No matter your experience, it&#8217;s not easy to become a new car dealer.<\/p>\n<p>If you want to own a new car dealership, you will have no choice but to become a&nbsp;<a href=\"https:\/\/corporate.findlaw.com\/business-operations\/what-is-franchising.html\" title=\"What Is Franchising?\" target=\"_blank\" rel=\"noopener\">franchisee<\/a>. No individual person can buy a new car directly from an automobile manufacturer. To buy or sell new cars, you must have a franchise agreement with a manufacturer. You buy your automobiles from the manufacturer and resell them at a profit under a dealership franchise agreement.<\/p>\n<p>A franchise is a business arrangement between a franchisor (in this case, the manufacturer) and a franchisee (the local business owner or dealer). According to the franchise agreement terms, the franchisor will control virtually every aspect of the dealership. This includes whether to have a repair shop or to sell used cars, the location, advertising, and signage.<\/p>\n<p>Automobile franchise agreements are notoriously complex and difficult to get. Seriously consider<a href=\"https:\/\/lawyers.findlaw.com\/business-commercial-law\/?fli=dcta\" title=\"Find a Local Business &amp; Commercial Attorney\" target=\"_blank\" rel=\"noopener\">&nbsp;hiring a lawyer<\/a>&nbsp;to help guide you through the process.<\/p>\n<p>The first obstacle that you will run up against in trying to open a new car franchise business is startup costs. These costs include:<\/p>\n<ul>\n<li>Franchise fee<\/li>\n<li>Purchasing automobiles<\/li>\n<li>Building the facility<\/li>\n<li>Licensing requirements<\/li>\n<li>Other fees and expenses for the employment process<\/li>\n<\/ul>\n<p>Note that franchise fees can be in the hundreds of thousands of dollars.<\/p>\n<p>The second barrier will be the cost of running the business. Estimates of the amount of money it takes to run a new car sales business are&nbsp;<a href=\"https:\/\/blog.carvana.com\/2021\/12\/breaking-down-the-car-dealership-cost-structure\/\" title=\"Breaking Down the Car Dealership Cost Structure\" target=\"_blank\" rel=\"noopener\">$4 million a year<\/a>&nbsp;or more.<\/p>\n<p>You will have liquidity requirements within your franchise agreement before you open your new shop. You will need millions of dollars in cash or a set amount of money on hand, in addition to a&nbsp;<a href=\"https:\/\/www.findlaw.com\/smallbusiness\/starting-a-business\/sources-of-small-business-financing.html\" title=\"Sources of Small Business Financing\">line of credit and the ability to borrow millions<\/a>. Your banker will be your best friend in these efforts. The franchisor will also determine your dealership location.<\/p>\n<h3>Opening a Used Car Dealership<\/h3>\n<p>Used car and truck sales can be more profitable than a new car dealership. The gross profit margin for selling used cars is&nbsp;<a href=\"https:\/\/www.acvauctions.com\/blog\/car-dealership-profit-margin\" title=\"Car Dealership Profit Amounts\" target=\"_blank\" rel=\"noopener\">about twice that of selling new vehicles<\/a>.<\/p>\n<p>Your highest cost of opening this business will be vehicle acquisition. A used car dealer can obtain vehicles from multiple sources, such as trade-ins, auto auctions, and other marketplaces, making their vehicles less expensive to obtain.<\/p>\n<p>A used car dealership will not have the number of requirements of a new car franchise. But it&#8217;s a complex business with its own rules.<\/p>\n<p>The startup costs of a used car dealership can be much lower than a new car franchise. You could start with a few cars on a lot in a cheap rent district.<\/p>\n<p>But even if you only have a few cars, you&#8217;re subject to many federal, state, and local laws and regulations.<\/p>\n<h3>Valuing Used Automobiles<\/h3>\n<p>One of the fundamental skills in running a successful used car business is the ability to&nbsp;<a href=\"https:\/\/www.consumerreports.org\/cro\/2012\/12\/how-much-is-the-used-car-really-worth\/index.htm\" title=\"Understanding Used Car Values\" target=\"_blank\" rel=\"noopener\">value the cars<\/a>, both for how much you will pay for and sell them. Don&#8217;t go into this business, especially on the used side, unless you&#8217;re very familiar with this process.<\/p>\n<h3>Do You Want a Shop?<\/h3>\n<p>Decide early on if you want to hire mechanics and open a car&nbsp;<a href=\"https:\/\/www.findlaw.com\/consumer\/lemon-law\/car-repairs-and-the-law.html\" title=\"Car Repairs and the Law\">repair facility.<\/a><\/p>\n<p>If you franchise, the franchisor will make that determination. If you&#8217;re opening a used car lot, a shop is a good source of income. But it also has numerous risks, environmental considerations, regulatory requirements, and licensing and&nbsp;insurance requirements.<\/p>\n\n                    <\/div>\n                <\/div>\n            <\/div>\n                    <div class=\"steps-container-item\">\n                <div class=\"category-overview category-overview-item-steps\">\n                    <div class=\"category-overview-heading category-overview-heading-steps\">\n                        <div class=\"category-overview-steps\">\n                            3\n                        <\/div>\n                        <h2 class=\"category-overview-steps-title\" id=\"Write\">Write a Business Plan<\/h2>\n                    <\/div>\n                    <div class=\"category-overview-content-steps\">\n                        <p>Every new business needs a\u00a0<a title=\"Business Plan Outline\" href=\"https:\/\/www.findlaw.com\/smallbusiness\/starting-a-business\/business-plan-outline.html\">business plan<\/a><span style=\"background-color: transparent; font-weight: normal;\">. This is particularly true of dealerships, which can cost millions to start up. You must present a sophisticated business plan to any lender to obtain financing. You also need one if you&#8217;re starting a franchise.<\/span><\/p>\n<p>A good business plan will include the following sections:<\/p>\n<ul>\n<li>Executive summary<\/li>\n<li>Objectives and mission statement<\/li>\n<li>Keys to success<\/li>\n<li>Company summary<\/li>\n<li>Inventory needed<\/li>\n<li>Market and competition analysis<\/li>\n<li>Web plan<\/li>\n<li>Management summary<\/li>\n<li>Financial plan<\/li>\n<\/ul>\n<h3>Startup Expenses<\/h3>\n<p>There is no way around the fact that starting a car dealership is expensive. A franchise agreement will have certain minimum expenses and other financial restrictions. A used car lot will be substantially less costly, but it still will not be cheap.<\/p>\n<p>Examples of startup expenses that you will need to meet before you open are:<\/p>\n<ul>\n<li>Inventory<\/li>\n<li>Lawyers and accountants<\/li>\n<li>Dealer license fee fees<\/li>\n<li>Auto dealer surety bond<\/li>\n<li>Marketing and branding (fliers, TV ads, web, social media presence)<\/li>\n<li>Location: rent, build, acquire property, and business sign<\/li>\n<li>Business office supplies<\/li>\n<li>Hiring costs and startup employee salaries<\/li>\n<\/ul>\n<h3>Marketing Plan<\/h3>\n<p>A significant part of your business plan and ongoing budget will be a\u00a0<a title=\"Your Marketing Plan\" href=\"https:\/\/www.findlaw.com\/smallbusiness\/business-operations\/your-marketing-plan.html\">marketing plan<\/a>. If you think half the mailers and television ads you see are for automobile dealerships, you&#8217;re not far off. You must set yourself apart as \u201cbest in class&#8221; in a highly competitive market. You should strongly consider hiring a marketing company for this all-important task.<\/p>\n\n                    <\/div>\n                <\/div>\n            <\/div>\n                    <div class=\"steps-container-item\">\n                <div class=\"category-overview category-overview-item-steps\">\n                    <div class=\"category-overview-heading category-overview-heading-steps\">\n                        <div class=\"category-overview-steps\">\n                            4\n                        <\/div>\n                        <h2 class=\"category-overview-steps-title\" id=\"Create\">Create a Business Entity<\/h2>\n                    <\/div>\n                    <div class=\"category-overview-content-steps\">\n                        <p>As an automobile dealer, you will need to create a business entity. This requires two decisions:<\/p>\n<ul>\n<li>What to name the business<\/li>\n<li>What business structure will you utilize<\/li>\n<\/ul>\n<p>Take time to consider your answers to these questions before finalizing your decision.<\/p>\n<h3>Business Name<\/h3>\n<p>First, you must create a great name. Ensure that no one else can use it in business or on the internet.<\/p>\n<p>For the internet, make sure the&nbsp;<a href=\"https:\/\/www.findlaw.com\/smallbusiness\/intellectual-property\/registering-for-a-domain-name-trademark-what-you-should-know.html\" title=\"Registering for a Domain Name Trademark\">internet domain name<\/a>&nbsp;is available. Then, secure it. Costs can depend on who you use as a host, but often only involve a few dollars per year.<\/p>\n<p>Also, visit your state&#8217;s secretary of state website and ensure the name is available there. Then, register that name on their site.<\/p>\n<p>Next, trademark that name with the&nbsp;<a href=\"https:\/\/www.findlaw.com\/smallbusiness\/intellectual-property\/trademarks.html\" title=\"Information About Trademarks\">United States Patent and Trademark Office<\/a>&nbsp;(USPTO). Then,&nbsp;<a href=\"https:\/\/www.findlaw.com\/smallbusiness\/intellectual-property\/state-trademark-information.html\" title=\"A Guide to State Trademark Information\">register that trademark<\/a>&nbsp;back with your state. If anyone else tries to use that name without your permission, you can take legal action to enforce your right to that name.<\/p>\n<h3>Business Type<\/h3>\n<p>You will have to <a href=\"https:\/\/legalzoomcominc.pxf.io\/c\/4851649\/2115291\/26746?subId1=how-to-open-a-car-dealership&#038;auto-aff-c-corp\" class=\"diy-biz-affiliate\" rel=\"sponsored noopener\" data-cta=\"Biz Auto LZ - LATL Txt\" data-cta-url=\"legalzoom.com\" target=\"_blank\">incorporate<\/a> your business. The&nbsp;<a href=\"https:\/\/www.findlaw.com\/smallbusiness\/incorporation-and-legal-structures\/business-structures-which-one-is-best-for-your-business.html\" title=\"Which Structure Is Best for Your Business\">type of business<\/a>&nbsp;you create will be a joint decision among you, your partners, your attorney, and your financial people.<\/p>\n<p>Most car dealerships are&nbsp;<a href=\"https:\/\/www.findlaw.com\/smallbusiness\/incorporation-and-legal-structures\/limited-liability-corporation-faq.html\" title=\"Limited Liability Company FAQ\">limited liability corporations<\/a>&nbsp;(LLCs). But a tiny, one-person lot could be a&nbsp;<a href=\"https:\/\/www.findlaw.com\/smallbusiness\/incorporation-and-legal-structures\/how-to-set-up-a-sole-proprietorship.html\" title=\"How To Set Up a Sole Proprietorship\">sole proprietorship<\/a>. Your business could also be a&nbsp;<a href=\"https:\/\/www.findlaw.com\/smallbusiness\/incorporation-and-legal-structures\/types-of-partnerships.html\" title=\"Types of Partnerships\">partnership<\/a>&nbsp;or a limited liability partnership.<\/p>\n\n                    <\/div>\n                <\/div>\n            <\/div>\n                    <div class=\"steps-container-item\">\n                <div class=\"category-overview category-overview-item-steps\">\n                    <div class=\"category-overview-heading category-overview-heading-steps\">\n                        <div class=\"category-overview-steps\">\n                            5\n                        <\/div>\n                        <h2 class=\"category-overview-steps-title\" id=\"Obtain\">Obtain Business Licenses and Permits<\/h2>\n                    <\/div>\n                    <div class=\"category-overview-content-steps\">\n                        <p>Every business is subject to federal, state, and local laws, rules, and regulations. The automobile industry also has particular and complex rules for sales and other regulations. There are federal rules for selling used cars. These start with the Federal Trade Commission&#8217;s&nbsp;<a href=\"https:\/\/www.ftc.gov\/enforcement\/rules\/rulemaking-regulatory-reform-proceedings\/used-car-rule\" title=\"Used Car Rule\" target=\"_blank\" rel=\"noopener\">Used Car Rule.<\/a><\/p>\n<p>Here are links to&nbsp;<a href=\"https:\/\/www.dmv.org\/buy-sell\/state-regulations.php\" title=\"State Regulations (DMV.org)\" target=\"_blank\" rel=\"noopener\">every state law<\/a>&nbsp;on selling cars. You will need state and local business licenses\u2014many states have specific licenses for automobile sales.&nbsp;<a href=\"https:\/\/dmv.nv.gov\/50_state_dmv_list.html\" title=\"50 State DMV Links\" target=\"_blank\" rel=\"noopener\">The state department of motor vehicles<\/a>&nbsp;(DMV) will inspect before you can open. They will regulate your business in an ongoing fashion.<\/p>\n<p>Every jurisdiction also will require a&nbsp;<a href=\"https:\/\/www.dmv.org\/buy-sell\/car-dealers\/surety-bonds.php\" title=\"Information on Surety Bonds\" target=\"_blank\" rel=\"noopener\">surety bond<\/a>&nbsp;to sell cars.<\/p>\n<p>Then, you&#8217;ll need all the standard business permits and a car dealer license. Depending on your state and local laws, you may need a local&nbsp;<a href=\"https:\/\/www.findlaw.com\/smallbusiness\/starting-a-business\/business-licenses-and-permits.html\" title=\"Business Licenses and Permits\">business license<\/a>&nbsp;and an auto dealer bond. You&#8217;ll need construction permits, pass fire inspections, and receive a certificate of occupancy.<\/p>\n<p>Depending on the jurisdiction or county, you may need a&nbsp;<a href=\"https:\/\/www.findlaw.com\/smallbusiness\/business-taxes\/sales-and-use-tax.html\" title=\"Sales and Use Tax\">sales\/use tax license<\/a>&nbsp;or a sign permit.<\/p>\n\n                    <\/div>\n                <\/div>\n            <\/div>\n                    <div class=\"steps-container-item\">\n                <div class=\"category-overview category-overview-item-steps\">\n                    <div class=\"category-overview-heading category-overview-heading-steps\">\n                        <div class=\"category-overview-steps\">\n                            6\n                        <\/div>\n                        <h2 class=\"category-overview-steps-title\" id=\"Set\">Set up Employment and Tax Accounts<\/h2>\n                    <\/div>\n                    <div class=\"category-overview-content-steps\">\n                        <p>Eventually, you will be hiring employees. You will be paying taxes.<\/p>\n<p>It would be best to have precise criteria for hiring personnel\u2014particularly in sales, mechanics, and finance. Do not go cheap in this area. The best employees bring the best dividends.<\/p>\n<p>Your first step in this process will be to obtain a federal\u00a0<a href=\"https:\/\/www.findlaw.com\/smallbusiness\/business-taxes\/employer-identification-number-ein-faq.html\" title=\" EIN FAQ\">Employer Identification Number<\/a>\u00a0(EIN).<\/p>\n<p>As you hire employees, you must make sure they can\u00a0<a href=\"https:\/\/www.findlaw.com\/immigration\/visas\/working-in-the-u-s-.html\" title=\"Working in the U.S.\">legally work<\/a>\u00a0in the United States and fill out the\u00a0<a href=\"https:\/\/www.uscis.gov\/i-9\" title=\"I-9, Employment Eligibility Verification (USCIS)\" target=\"_blank\" rel=\"noopener\">proper paperwork (I-9)<\/a>\u00a0for proof.<\/p>\n<p>It would help if you also run\u00a0<a href=\"https:\/\/www.findlaw.com\/smallbusiness\/employment-law-and-human-resources\/performing-an-employee-background-check.html\" title=\"Performing an Employee Background Check\">background checks<\/a>\u00a0on your new hires. This can ensure you&#8217;re employing trustworthy people and protect your business investment.<\/p>\n<p>You will be responsible for doing your\u00a0<a href=\"https:\/\/www.findlaw.com\/employment\/wages-and-benefits\/employment-and-taxes.html\" title=\"Employment and Taxes\">employment taxes<\/a>\u00a0adequately. This is a job for your accountant.<\/p>\n<p>You will be responsible for conforming to all\u00a0<a href=\"https:\/\/www.findlaw.com\/state\/employment-laws.html\" title=\"State Employment Law\">state<\/a>\u00a0and federal employment laws. You&#8217;ll also need to hire a lawyer for this.<\/p>\n\n                    <\/div>\n                <\/div>\n            <\/div>\n                    <div class=\"steps-container-item\">\n                <div class=\"category-overview category-overview-item-steps\">\n                    <div class=\"category-overview-heading category-overview-heading-steps\">\n                        <div class=\"category-overview-steps\">\n                            7\n                        <\/div>\n                        <h2 class=\"category-overview-steps-title\" id=\"Insurance\">Get Business Insurance<\/h2>\n                    <\/div>\n                    <div class=\"category-overview-content-steps\">\n                        <p>Business insurance is critical in this industry. You will need several kinds of insurance for your car dealership:<\/p>\n<ul>\n<li><a href=\"https:\/\/www.findlaw.com\/smallbusiness\/liability-and-insurance.html\" title=\"Business Liability and Insurance\">Business liability insurance<\/a>&nbsp;(your financiers or franchisor may set minimum policy limits)<\/li>\n<li><a href=\"https:\/\/www.findlaw.com\/injury\/workers-compensation\/workers-compensation-basics.html#:~:text=The%20Purpose%20of%20Workers%27%20Compensation&amp;text=The%20system%20involves%20a%20trade,employer%20wasn%27t%20at%20fault.\" title=\"The Purpose of Workers&#039; Compensation\">Worker&#8217;s compensation insurance<\/a><\/li>\n<li>Major automobile insurance policy<\/li>\n<li>Consider a&nbsp;<a href=\"https:\/\/www.findlaw.com\/consumer\/insurance\/umbrella-insurance-policies.html\" title=\"Umbrella Insurance Policies\">commercial umbrella insurance<\/a><\/li>\n<\/ul>\n<p>Find out <a href=\"https:\/\/www.findlaw.com\/smallbusiness\/starting-a-business\/what-is-business-insurance-.html?fli=latl_biz_howto:diy_biz_ins:txt\">what business insurance you need<\/a>. An insurance broker can help you compare quotes and coverage.<\/p>\n\n                    <\/div>\n                <\/div>\n            <\/div>\n            <\/div>\n<\/div>\n\n\n\n<h2>Get Help With Opening a Car Dealership<\/h2>\n<p>This article is just a brief overview of what to consider when opening an automobile dealership. But it should give you a good handle on getting started.<\/p>\n<p>For more detailed work, you must talk with dealers, bankers, accountants, marketing agencies, and business attorneys before spending money.<\/p>\n<p>Meeting with a small business lawyer can help you understand your options and determine how to best protect your interests. Visit our <a href=\"https:\/\/lawyers.findlaw.com\/business-commercial-law\/?fli=dcta\" target=\"_blank\" rel=\"noopener\">attorney directory<\/a>\u00a0to find a lawyer near you who can help. Or if you are ready to set up your business entity, you can let our\u00a0<a href=\"https:\/\/legalzoomcominc.pxf.io\/c\/4851649\/2115288\/26746?subId1=how-to-open-a-car-dealership-custom-content\" target=\"_blank\" rel=\"noopener\">trusted partner LegalZoom<\/a>\u00a0handle your business formation filing for $99 plus filing fees.<\/p>\n\n\n<div class=\"was-this-helpful\">\n    <div\n            class=\"was-this-helpful__question-container\"\n            aria-labelledby=\"was-this-helpful__question\"\n            role=\"group\"\n    >\n        <span\n                id=\"was-this-helpful__question\"\n                class=\"was-this-helpful__question fl-text-lg-bold\"\n        >Was this helpful?<\/span>\n        <button\n                class=\"was-this-helpful__button fl-text-sm\"\n                aria-label=\"Yes\"\n                value=\"yes\"\n        >\n            <span class=\"was-this-helpful__button-text fl-text-bold\">Yes<\/span>\n            <i class=\"was-this-helpful__button-icon\">\n                <svg width=\"22\" height=\"22\" viewBox=\"0 0 22 22\" fill=\"none\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\">\n                    <g id=\"thumbs-up\" clip-path=\"url(#clip0_604_3418)\">\n                        <path id=\"Vector\"\n                              d=\"M6 21H3C2.46957 21 1.96086 20.7893 1.58579 20.4142C1.21071 20.0391 1 19.5304 1 19V12C1 11.4696 1.21071 10.9609 1.58579 10.5858C1.96086 10.2107 2.46957 10 3 10H6M13 8V4C13 3.20435 12.6839 2.44129 12.1213 1.87868C11.5587 1.31607 10.7956 1 10 1L6 10V21H17.28C17.7623 21.0055 18.2304 20.8364 18.5979 20.524C18.9654 20.2116 19.2077 19.7769 19.28 19.3L20.66 10.3C20.7035 10.0134 20.6842 9.72068 20.6033 9.44225C20.5225 9.16382 20.3821 8.90629 20.1919 8.68751C20.0016 8.46873 19.7661 8.29393 19.5016 8.17522C19.2371 8.0565 18.9499 7.99672 18.66 8H13Z\"\n                              stroke=\"#666666\" stroke-width=\"2\" stroke-linecap=\"round\"\n                              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<\/button>\n    <\/div>\n    <span class=\"was-this-helpful__taken-action fl-text-sm-bold\"><\/span>\n    <div class=\"was-this-helpful__feedback-container\">\n        <div class=\"was-this-helpful__choose-option-message\" role=\"status\">\n            <p class=\"was-this-helpful__choose-option-message-text\"><\/p>\n        <\/div>\n        <form class=\"was-this-helpful__feedback-form\">\n            <div class=\"was-this-helpful__feedback was-this-helpful__feedback--positive\">\n                <fieldset>\n                    <legend class=\"was-this-helpful__feedback-form-title\" tabindex=\"0\">Why was this helpful?<\/legend>\n                    <div class=\"fl-radio-button-field fl-flex was-this-helpful__feedback-form-title\">\n                        <input\n                                id=\"was-this-helpful__radio-button--understandable\"\n                                class=\"fl-radio-button-field-input\"\n                                type=\"radio\"\n                                name=\"positive-feedback\"\n                                value=\"Easy to understand\"\n                        >\n                        <label\n                                class=\"fl-radio-button-field-label fl-text-sm was-this-helpful__radio-label\"\n                                for=\"was-this-helpful__radio-button--understandable\"\n                        >Easy to understand<\/label>\n                    <\/div>\n                    <div class=\"fl-radio-button-field fl-flex was-this-helpful__feedback-form-title\">\n                        <input\n                                id=\"was-this-helpful__radio-button--solved-problem\"\n                                class=\"fl-radio-button-field-input\"\n                                type=\"radio\"\n                                name=\"positive-feedback\"\n                                value=\"Solved my problem\"\n                        >\n                        <label\n                                class=\"fl-radio-button-field-label fl-text-sm was-this-helpful__radio-label\"\n                                for=\"was-this-helpful__radio-button--solved-problem\"\n                        >Solved my problem<\/label>\n                    <\/div>\n                    <div class=\"fl-radio-button-field fl-flex was-this-helpful__feedback-form-title\">\n                        <input\n                                id=\"was-this-helpful__radio-button--other\"\n                                class=\"fl-radio-button-field-input\"\n                                type=\"radio\"\n                                name=\"positive-feedback\"\n                                value=\"Other\"\n                        >\n                        <label\n                                class=\"fl-radio-button-field-label fl-text-sm was-this-helpful__radio-label\"\n                                for=\"was-this-helpful__radio-button--other\"\n                        >Other<\/label>\n                    <\/div>\n                <\/fieldset>\n            <\/div>\n            <div class=\"was-this-helpful__feedback was-this-helpful__feedback--negative\">\n                <fieldset>\n                    <legend class=\"was-this-helpful__feedback-form-title\" tabindex=\"0\">Why was this not helpful?<\/legend>\n                    <div class=\"was-this-helpful__choose-option-message\" role=\"status\">\n                        <p class=\"was-this-helpful__choose-option-message-text\"><\/p>\n                    <\/div>\n                    <div class=\"fl-radio-button-field fl-flex was-this-helpful__feedback-form-title\">\n                        <input\n                                id=\"was-this-helpful__radio-button--missing-info\"\n                                class=\"fl-radio-button-field-input\"\n                                type=\"radio\"\n                                name=\"negative-feedback\"\n                                value=\"Missing Information\"\n                        >\n                        <label\n                                class=\"fl-radio-button-field-label fl-text-sm was-this-helpful__radio-label\"\n                                for=\"was-this-helpful__radio-button--missing-info\"\n                        >Missing the information I need<\/label>\n                    <\/div>\n                    <div class=\"fl-radio-button-field fl-flex was-this-helpful__feedback-form-title\">\n                        <input\n                                id=\"was-this-helpful__radio-button--complicated\"\n                                class=\"fl-radio-button-field-input\"\n                                type=\"radio\"\n                                name=\"negative-feedback\"\n                                value=\"Too complicated\"\n                        >\n                        <label\n                                class=\"fl-radio-button-field-label fl-text-sm was-this-helpful__radio-label\"\n                                for=\"was-this-helpful__radio-button--complicated\"\n                        >Too complicated \/ too many steps<\/label>\n                    <\/div>\n                    <div class=\"fl-radio-button-field fl-flex was-this-helpful__feedback-form-title\">\n                        <input\n                                id=\"was-this-helpful__radio-button--dated\"\n                                class=\"fl-radio-button-field-input\"\n                                type=\"radio\"\n                                name=\"negative-feedback\"\n                                value=\"Out of date\"\n                        >\n                        <label\n                                class=\"fl-radio-button-field-label fl-text-sm was-this-helpful__radio-label\"\n                                for=\"was-this-helpful__radio-button--dated\"\n                        >Out of date<\/label>\n                    <\/div>\n                    <div class=\"fl-radio-button-field fl-flex was-this-helpful__feedback-form-title\">\n                        <input\n                                id=\"was-this-helpful__radio-button--negative-other\"\n                                class=\"fl-radio-button-field-input\"\n                                type=\"radio\"\n                                name=\"negative-feedback\"\n                                value=\"Other\"\n                        >\n                        <label\n                                class=\"fl-radio-button-field-label fl-text-sm was-this-helpful__radio-label\"\n                                for=\"was-this-helpful__radio-button--negative-other\"\n                        >Other<\/label>\n                    <\/div>\n                <\/fieldset>\n            <\/div>\n            <div class=\"was-this-helpful__form-buttons-container\">\n                <button\n                    class=\"was-this-helpful__feedback-button was-this-helpful__feedback-button--positive at-feedback-submit fl-button secondary\"\n                    type=\"submit\"\n                >\n                    <span class=\"fl-button-content\">Submit<\/span>\n                    <i\n                        class=\"fa fa-angle-right medium\"\n                        aria-hidden=\"true\"\n                    ><\/i>\n                <\/button>\n                <button\n                    class=\"was-this-helpful__feedback-button was-this-helpful__feedback-button--cancel fl-button primary disabled\"\n                    type=\"reset\"\n                >\n                    <span class=\"fl-button-content\">Cancel<\/span>\n                    <i\n                        class=\"fa fa-times-circle medium\"\n                        aria-hidden=\"true\"\n                    ><\/i>\n                <\/button>\n            <\/div>\n        <\/form>\n    <\/div>\n    <div class=\"was-this-helpful__thank-you-message\" role=\"status\">\n        <i class=\"was-this-helpful__thank-you-message-icon fa fa-check\"><\/i>\n        <p class=\"was-this-helpful__thank-you-message-text\" aria-live=\"polite\"><\/p>\n    <\/div>\n<\/div>\n<\/div>\n\n\n\n<div class=\" fl-section-sidebar  \"><div class=\"generalCard\">\n            <div class=\"disclaimer--newLegalZoom general-card--newLegalZoom__disclaimer fl-text-sm\">\n            <p>FindLaw will earn a commission if you purchase business formation products through these affiliate links.<\/p>\n        <\/div>\n        <div class=\"general-card general-card--newLegalZoom\">\n        <div class=\"general-card__header\">\n            <div class=\"general-card__header-image-container\">\n                <img decoding=\"async\" loading=\"lazy\" class=\"general-card__header-image--newLegalZoomText\"\n                     src=\"\/wp-content\/themes\/ability-law\/resources\/images\/legal-zoom\/legal_zoom_text.png\"\n                     alt=\"\">\n                <img decoding=\"async\" loading=\"lazy\" class=\"general-card__header-image--newLegalZoom\"\n                     src=\"\/wp-content\/themes\/ability-law\/resources\/images\/legal-zoom\/legal_zoom.png\"\n                     alt=\"\">\n            <\/div>\n            <span class=\"general-card__header-title fl-text\"><p>Meet FindLaw&#8217;s <b>trusted partner LegalZoom<\/b>, an industry leader in online business formations<\/p>\n<\/span>\n        <\/div>\n        <div class=\"general-card__body\">\n            <div class=\"text section\">\n                <div class=\"cmp-text\">\n                    <h2 class=\"general-card__h2--newLegalZoom fl-h3-landing\">Let&#8217;s start your free LLC!<\/h2>\n                    <div>\n                        <\/p>\n<p>Join the millions who launched their businesses with LegalZoom.<\/p>\n<p><b>LLC plans start at $0 + state fees.<\/b><\/p><\/p>\n\n                    <\/div>\n                <\/div>\n            <\/div>\n        <\/div>\n        <div class=\"general-card__footer\">\n            <a class=\"general-card__footer-link fl-text-lg diy-biz-affiliate\" data-cta-url=\"legalzoom.com\" data-cta=\"Biz LZ - StateLaws ESum\" target=\"_blank\" rel=\"sponsored noopener\" href=\"https:\/\/legalzoomcominc.pxf.io\/c\/4851649\/2115288\/26746?subId1=how-to-open-a-car-dealership-esum\">\n                <p class=\"general-card__footer-link-text fl-no-margin fl-text-lg-medium\">SELECT AND START LLC<\/p>\n                <i class=\"general-card__footer-link-icon fa fa-angle-right\" aria-hidden=\"true\"><\/i>\n            <\/a>\n        <\/div>\n    <\/div>\n    <div class=\"general-card--newLegalZoom__bottom\">\n        <p>Prefer to work with a lawyer?<\/p>\n<p><a>Find one right now.<\/a><\/p>\n\n    <\/div>\n<\/div>\n\n<div class=\"general-list\">\n    <h3>Helpful Links<\/h3>\n    <ul class=\"fl-list fl-no-margin\">\n                                    <li class=\"fl-list-item fl-flex\">\n                    <i class=\"fa fa-angle-right medium\" aria-hidden=\"true\"><\/i>\n                    <a class=\"fl-list-item-link\" href=\"https:\/\/www.findlaw.com\/smallbusiness\/starting-a-business.html\">\n                        Starting a Business\n                    <\/a>\n                <\/li>\n                                                <li class=\"fl-list-item fl-flex\">\n                    <i class=\"fa fa-angle-right medium\" aria-hidden=\"true\"><\/i>\n                    <a class=\"fl-list-item-link\" href=\"https:\/\/www.findlaw.com\/smallbusiness\/business-taxes.html\">\n                        Business Tax Law\n                    <\/a>\n                <\/li>\n                                                <li class=\"fl-list-item fl-flex\">\n                    <i class=\"fa fa-angle-right medium\" aria-hidden=\"true\"><\/i>\n                    <a class=\"fl-list-item-link\" href=\"https:\/\/www.findlaw.com\/smallbusiness\/closing-a-business.html\">\n                        Closing a Business\n                    <\/a>\n                <\/li>\n                        <\/ul>\n<\/div>\n\n\n    <div class=\"popularDirectory\">\n        <div class=\"general-popular-directory \">\n            <div class=\"general-popular-directory-title\">\n                <h3>Attorney Directory<\/h3>\n            <\/div>\n            <ul>\n                                    <li><a href=\"https:\/\/lawyers.findlaw.com\/business-organizations\/\" target=\"_blank\" rel=\"noopener\">Business Organization Attorneys<\/a><\/li>\n                                    <li><a href=\"https:\/\/lawyers.findlaw.com\/mergers-acquisitions\/\" target=\"_blank\" rel=\"noopener\"> Mergers &#038; Acquisitions Attorneys<\/a><\/li>\n                                    <li><a href=\"https:\/\/lawyers.findlaw.com\/antitrust-trade-regulation\/\" target=\"_blank\" rel=\"noopener\">Antitrust Lawyers<\/a><\/li>\n                                    <li><a href=\"https:\/\/lawyers.findlaw.com\/banking-finance-law\/\" target=\"_blank\" rel=\"noopener\">Banking &#038; Finance Lawyers<\/a><\/li>\n                                    <li><a href=\"https:\/\/lawyers.findlaw.com\/franchising\/\" target=\"_blank\" rel=\"noopener\">Franchising Lawyers<\/a><\/li>\n                                    <li><a href=\"https:\/\/lawyers.findlaw.com\/business-commercial-law\/\" target=\"_blank\" rel=\"noopener\">Business &#038; Commercial Lawyers<\/a><\/li>\n                                    <li><a href=\"https:\/\/lawyers.findlaw.com\/employment-law-employer\/\" target=\"_blank\" rel=\"noopener\">Employment Lawyers<\/a><\/li>\n                            <\/ul>\n        <\/div>\n    <\/div>\n<\/div>\n<\/div>\n","protected":false},"excerpt":{"rendered":"<p>Opening a car dealership can be complex and expensive, but it is a great business to get into. FindLaw reviews what steps to take and issues to consider.<\/p>\n","protected":false},"author":41135,"featured_media":0,"parent":5123,"menu_order":0,"comment_status":"closed","ping_status":"closed","template":"app\/Http\/Controllers\/Templates\/ArticleDIYConversionController.php","meta":{"_acf_changed":false,"_stopmodifiedupdate":true,"_modified_date":"","_autodraft_ids":[],"_cloudinary_featured_overwrite":false,"_sb_is_suggestion_mode":false,"_sb_show_suggestion_boards":false,"_sb_show_comment_boards":false,"_sb_suggestion_history":"","_sb_update_block_changes":"","_is_real_time_mode":false,"_realtime_collaborators":"","footnotes":"","cf_checklist_status":[]},"categories":[2],"tags":[],"state_laws_tags":[],"flmsa":[],"class_list":["post-5284","page","type-page","status-publish","hentry","category-smallbusiness"],"acf":[],"_links":{"self":[{"href":"https:\/\/www.findlaw.com\/law-api\/wp-json\/wp\/v2\/pages\/5284","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.findlaw.com\/law-api\/wp-json\/wp\/v2\/pages"}],"about":[{"href":"https:\/\/www.findlaw.com\/law-api\/wp-json\/wp\/v2\/types\/page"}],"author":[{"embeddable":true,"href":"https:\/\/www.findlaw.com\/law-api\/wp-json\/wp\/v2\/users\/41135"}],"replies":[{"embeddable":true,"href":"https:\/\/www.findlaw.com\/law-api\/wp-json\/wp\/v2\/comments?post=5284"}],"version-history":[{"count":0,"href":"https:\/\/www.findlaw.com\/law-api\/wp-json\/wp\/v2\/pages\/5284\/revisions"}],"up":[{"embeddable":true,"href":"https:\/\/www.findlaw.com\/law-api\/wp-json\/wp\/v2\/pages\/5123"}],"wp:attachment":[{"href":"https:\/\/www.findlaw.com\/law-api\/wp-json\/wp\/v2\/media?parent=5284"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.findlaw.com\/law-api\/wp-json\/wp\/v2\/categories?post=5284"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.findlaw.com\/law-api\/wp-json\/wp\/v2\/tags?post=5284"},{"taxonomy":"state_laws_tags","embeddable":true,"href":"https:\/\/www.findlaw.com\/law-api\/wp-json\/wp\/v2\/state_laws_tags?post=5284"},{"taxonomy":"flmsa","embeddable":true,"href":"https:\/\/www.findlaw.com\/law-api\/wp-json\/wp\/v2\/flmsa?post=5284"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}