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    odinn7's Avatar
    odinn7 Posts: 7,691, Reputation: 1547
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    #1

    Apr 2, 2012, 04:25 PM
    Opinions On Location Needed
    I'm trying to open a used car dealership but obviously I need a location first. By law (and common sense on some things) I am required certain things in a place that I do find. Because of this, and because I want a good location, I have to wait for something that will suit me and the legal requirements. I'm looking to sell lower priced cars that people don't need to get a second mortgage to own. There is a market in this area for cars between $3,000 and $7,000... that is my target market.

    Anyway, today a place went up for lease that will not only fit the legal end of it all but seems like a good location for me as well. The problem is, my business partner (my wife!) doesn't think it's a good choice.

    It's on a busy road, and it has a large parking area to display inventory. It's fairly cheap and it's also close to home. What could possibly be bad about it, right?

    Across the street, directly across the street, is a new car dealership... Ford dealer. They obviously sell new cars but also sell used cars that usually start at around $12,000. My business partner doesn't like this location because of the dealer across the road. She has no real reason that she can convey to me as to why the location isn't good. I assume she is just intimidated by having an established dealership so close. I, on the other hand, think the dealer is a bonus. My reasoning is that we won't be in competition with them as the prices are so far apart. I also consider the fact that if people are looking for used cars and they go to the Ford dealer and see $12,000 and up... and that is more than they are looking to spend, they have an option right across the road. To me, it's a win-win situation.

    What does everyone else think about this? Am I looking at this incorrectly?
    Wondergirl's Avatar
    Wondergirl Posts: 39,354, Reputation: 5431
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    #2

    Apr 2, 2012, 04:29 PM
    Check with the village to find out if there's a non-competition space required between dealerships.

    What is or was on the desired space?
    odinn7's Avatar
    odinn7 Posts: 7,691, Reputation: 1547
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    #3

    Apr 2, 2012, 04:34 PM
    Nope, no space required as long as I am not selling the same thing. As long as I am not trying to put another Ford dealership there, I'm OK.

    There is a consignment shop in there right now and a small pool place in the building behind. The consignment shop is closing up. As a side note, I'm surprised she lasted there so long. She was there 4 years and I hardly ever saw the place open.
    Wondergirl's Avatar
    Wondergirl Posts: 39,354, Reputation: 5431
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    #4

    Apr 2, 2012, 04:39 PM
    Have you visited the Ford dealership to talk about cars and your plans?
    odinn7's Avatar
    odinn7 Posts: 7,691, Reputation: 1547
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    #5

    Apr 2, 2012, 04:46 PM
    No... do you think that would be something I should do? I mean, obviously I am not required to talk to them but I had considered maybe doing something like that. Maybe talking to the owner and seeing if he has a problem with it.



    ... Then, if he does have a problem, say in my best Clint Eastwood voice, "Go ahead, make my day" and then slap him around until I get tired.
    Wondergirl's Avatar
    Wondergirl Posts: 39,354, Reputation: 5431
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    #6

    Apr 2, 2012, 04:49 PM
    If I were thinking of buying the property across the road, the first thing I would do would be to make nice with the Ford salesmen and managers and franchise owners. I'd take them doughnuts and other yummy treats and become their best friend.

    Spiders are hatching. You could always sneak in some nests and let the eggs hatch in the dealership staff room.

    ***ADDED*** You and the Ford guys could be symbiotic and send customers to each other.
    odinn7's Avatar
    odinn7 Posts: 7,691, Reputation: 1547
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    #7

    Apr 2, 2012, 05:00 PM
    I would only be leasing the property and building.

    But... that was my thought too. Unless the Ford guys already have a wholesaler for their unwanted trade ins, I could fill that area for them. Many dealers will take lower end cars in as a trade but not want to sell them as they are not the quality and price of used cars that they sell.
    Wondergirl's Avatar
    Wondergirl Posts: 39,354, Reputation: 5431
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    #8

    Apr 2, 2012, 05:03 PM
    I'll meet you for breakfast and then we can go over to the dealer and meet the guys. I am hoping for a cut as your consultant.

    What does your partner think of getting to know the Ford guys?
    Fr_Chuck's Avatar
    Fr_Chuck Posts: 81,301, Reputation: 7692
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    #9

    Apr 2, 2012, 06:32 PM
    The only one issue is that they could afford to sell many cars dirt cheat to put you out of business if they really wanted to, But doubt they will.

    In the area where I live, the best place for a new car dealership is right next door to another dealer ship, we often have 7 or 8 new car dealers in a row.
    I was used car shopping today, on one road, going less than 3 miles there are 10 used car dealers. There will always be people selling the same thing as you, The issue is to find a place and have big enough signs, to have people
    1. know you are there.
    2. know what you do
    3. and come in.

    With the used cars, have you set up special loan agreements with some banks and finance companies for loans on the cars. ( or will you be carrying your own loans?)
    Do you already know the market for buying the cars, been to the local auctions.
    Do you have a mechanic that will be on staff to prep cars and do repairs on the cars.
    Wondergirl's Avatar
    Wondergirl Posts: 39,354, Reputation: 5431
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    #10

    Apr 2, 2012, 06:41 PM
    And customer service is everything!
    odinn7's Avatar
    odinn7 Posts: 7,691, Reputation: 1547
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    #11

    Apr 2, 2012, 06:47 PM
    Wondergirl... My partner is still unsure about the whole Ford thing. Meeting them, for her, would probably be out of the question. Thank you for your help... if I go with that place, I may just get up the nerve to go over there.

    Fr_Chuck... You bring up some good points and I thank you for that. My father was a car salesman for about 30 years so I have some inside help from him with his guidance.
    The market I would be using for the majority of my cars would be the dealer auctions around here. There a 3 within 2 hours of me, one of them is fairly close. I have not been to them as I am required to have a dealer license before I can do so. I can't get the dealer license until I have a place picked out and set up.
    As far as the mechanic part of it... I have 2 ways to handle it. I was a mechanic for 15 years. I also was a detailer in a business for 2 years and did it as a side business for about 5 years. So, I can handle much of that stuff. The main thing I will do though for mechanical situations, I have numerous contacts in shops around here. I would probably try to set up an account with a shop to handle oil changes and safety inspections on all cars that I take in. I figure that this is a selling point as many used dealers around here don't offer that. One dealer here (who would be my main competition) gets his cars from the auction and puts them right on the lot... no inspections, no repairs, no detailing... And it looks like you're in a tattoo parlor when you walk into his office. Very unprofessional.
    odinn7's Avatar
    odinn7 Posts: 7,691, Reputation: 1547
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    #12

    Apr 2, 2012, 06:48 PM
    Quote Originally Posted by Wondergirl View Post
    And customer service is everything!
    It sure is. See the last part of my previous comment. The part about the other used dealer in my area... doesn't know what customer service is!
    Fr_Chuck's Avatar
    Fr_Chuck Posts: 81,301, Reputation: 7692
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    #13

    Apr 2, 2012, 07:22 PM
    Talk to a dealer perhaps in a town close to you and see if they will take you, or put you on a list to go to several of the sales. Of course there are always some issues with auction cars you find when you get them back ( or the ones that break down on the way back) Do you have a small auto transport to haul them back from the auction if you go and buy two or three ?

    What we did in the past of course was a dealer finance, and the down payment was the price we paid for the car. If we bought it at auction for 1000 and the Kelly price was 3500 we might price it at 4000 and carry the loan with 1000 dollar down. That way we never really lost money. And of course often made the extra money on the car if they could not pay and we took the car back and sold it two or even three times. Then we had some "cash only" cars, the very bottom end cars that we may have bought for 500 to 1000 we sold out for 2000 to 2500. ** was a some years ago, guess that would be a high price now.

    Latter we sold some of our papers to ( I think General Financeor one of the local companies) for about 70 percent of value but we got all the money up front.

    But honestly, across from another car dealer sounds just perfect to me, people looking for cars will be driving past there, but the main thing is, the traffic flow of the road, how many 1000 people travel that road a day Busy road and big sign the best advertising you can get.
    odinn7's Avatar
    odinn7 Posts: 7,691, Reputation: 1547
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    #14

    Apr 4, 2012, 03:45 PM
    Thanks for the information Fr_Chuck.

    I don't have a transport to get cars from the auction... it is going to be done the old fashioned way, with hired part time drivers.

    This whole thread might have been a waste,, I keep calling the number on the place and keep getting voicemail. I've left messages to call me back but I'm not getting anywhere.

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