Are You Looking For Starting A Used Car Business?
The automobile, or the car as we know it saw its origin in Germany and France in the late 1800s, when the German inventor Karl Benz patented his Benz Patent-Motorwagen. Gradually America took over the automobile industry with Henry Ford's brainchild mass producing cars of various models, which each served a purpose. Vehicles of personal use then became largely available in the early 20th century and forward, when innumerable vehicle manufacturers started mushrooming all around the globe, eager to be part of the revolution.
The invention of the car was thought to be one of the most important ones in history, although there are more than a few differences in cars of the early times and the ones we see now. Everything from the materials used to build a vehicle, its safety features and comfort, to engine performance and capacity. The entire science of automobiles has transformed more than we could imagine. With the incorporation of modern technology, cars have not only become faster but also safer, more comfortable and reliable.
Owning your very own:
Buying the perfect car for yourself is indeed extremely tricky, with major calculations required to know that you can not only afford to buy one but will also be able to maintain it. This process becomes much more complicated, sentimental and confusing when it comes to buying your very first car.
With new models of car brands coming out each day, you are often put in a rather oppressing dilemma. This is one of the reasons many people prefer to invest in a pre-owned or second-hand car. Not only are the rates lower, but the vehicle is also toned yet maintained or refurbished to mint condition, with loopholes and issues clearly familiarized, people feel more comfortable is buying what the know about, rather than being an experimental investment.
Another reason for the widespread demand for used cars is the fact that with the constant change in trend, people tend to get bored of what they own when they see newer models being released with irresistible features in them. Buying second-hand cars satisfy that rush for change, as they come along with fantastic deals and low rates.
Market size and statistics:
According to the statistics from the IndianBluebook on pre-owned cars, the market size for used cars is 1.2 times the market for brand new cars. The used car market is currently pinned at a high 96,000 crore rupees and is steadily growing at a CAGR of around 15%, on its way to reaching a staggering Rs.2,50,000 crore milestone by the year 2021, with the year window 2012-2015 considered as historic years for this sector.
There are various reasons for this rapid growth of the used car market in India, which might include enhanced quality, better maintenance because of latest technological services, and a few vehicles being sparsely used because many urban families have more than one car per household, due to which the second car is less driven and comparatively well maintained.
Running a used car dealership:
As a result of this rapidly increasing need for pre-owned cars, the number of used car dealerships and franchises have also increased in number. This sector is widely divided into two major sales models, the C2C model where a car is sold to a buyer directly through a middle party, often online services such as Quikr and Olx and the B2C model where a business sells a car which it has bought from the first uses, to customers after refurbishing the vehicle.
Here are five major attributes you will need to pay attention to:
If the question in your mind is how to start second-hand car business in India these points will help you get a grip on what you are dealing with.
1.Location: Location plays a major role in a business. Find the right location that will draw your type of target audiences so you can have a greater number of sales. Your decision will determine the kind of financing you’ll get in the end. You will mainly require a parking lot where you can park the cars and display them, as well as an indoor office space where all the administration is done.
2.Finance: To gauge how much financing you need, consider the cost of leasing or buying your location, the inventory costs of the cars you plan to sell, and the operating costs including staff for at least the next 6 months.
3.Official formalities: Paperwork, legal documents, and licence to sell from the government and affiliations with the local RTO are necessary deeds that have to sort so that your dealership will be registered with the revenue department so that they can collect sales tax on the cars you sell.
4.Staff: You will require staff to maintain and refurbish sell your vehicles, as well as staff to handle the administration of your dealership. It is important that the salespersons are well versed with cars so they can explain, and answer queries related to the vehicles. The right kind of staff can do wonders for a business.
5.Advertising: Lastly, know how to promote your business well. Put your best cars for display so you can attract more buyers. Make sure that you have social media accounts and a website at the very least. Marketing is a huge aspect that will determine the fate of your business.
Starting a dealership such as one of the used cars isn't as easy as imagined. We at FranchiseBazar can help you tag along with standing used car franchises or even help franchise your very own business. Get in touch with us for used car business tips and start your engines very soon.
Written By: Divisha Pandey
Written By: Nitika Jindal
Written By: Shruti Agrawal
Written By: Nitika Jindal