How to Start a Used Car Sales Business in Nigeria
Start a Used Car Sales Business in Nigeria – It’s no longer news that Nigeria is officially into recession based on the statistics that in Quarter 1 of 2016, the country’s GDP declined by 0.36% year – on – year and this was again followed by a further decline of 2.06% year -on- year in Quarter 2 of 2016. We believe the government is working hard to get this nation out of recession soonest but while we are waiting and hoping that things will gets better;
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I present to you a business idea that will exempt you from financial recession. It is called used car sales business. It is local distribution business that sells used cars at the retail level based on a dealership contract with either an automaker or its sale subsidiaries.
This business is very lucrative especially in Nigeria where we have just few car manufacturing company. Most cars used in Nigeria are manufactured in Western countries and then imported to Nigeria.
So below are steps an individual needs to take in order to set up a small scale used car sales business in Nigeria and flourish in it. Nearly everyone uses a car for business or personal use.
If you use a car, you also need repair and maintenance on your vehicle. As a result, consumers need to seek out car dealers to buy cars and Get them serviced. The cost of opening and operating a dealership, however, can require millions of Hair’s. Before you open a car dealership, think carefully through the entire process.
Perform market research.
- Feasibility Study: This is to determine the level of demand for your product and services in that particular location. Once this is done then next is to know the particular model of car that is highly needed in that area. Example: some state governments in Nigeria recommend the use of Peugeot 504 as official taxi cab for the state. In such states Peugeot 504 will definitely be in high demand.
- Get a strategic site: you will need a spacious parking area for displaying your cars for your customers to view. Make sure the site is located in a strategic view point.
Select a name for your business: The name should be distinctive and memorable.
Register your business name: This will make your business legit and thereby placing you at a safer side.
Obtain a dealer’s license: each state in Nigeria has its own requirement for auto dealers license, therefore make research on your state requirement.
Build an inventory with automakers. To make it big in this business you will need to visit some well recognized wholesale dealer auctions to buy used vehicles at lower rate than retail-rate prices.
Create a website to advertise your business: this will attract you so many customers, you can also join social Media such as Facebook, tweeter, google+ to show off your business.
Consult a professional: As a beginner, you are expected to consult some experts in auto dealership field for more insights, these experts can review secrets than will be very useful to the business.
Employ auto mobile repairer: It is a well known fact that most cars sold as second-hand or damaged vehicles bought from either insurance companies or custom auctions at giveaway prices. After purchasing the vehicles the smart dealers then refurbishes them and present them as used vehicles for resale. So when you employ these auto mobile repairs, they will help you recondition damaged cars for resale.
Note: When you sell used cars, you will attract customers who want to spend less money on a vehicle. Instead of buying the N750,000 new car, for example, they may buy a N250,000 used car.
Know the market- rate price of used cars: Majority of your Nigerian customers are internet users who can shop for cars online. When a customer enters your shop, they may have checked 4 or 5 dealerships to price a particular car.
Build relationship with your customers: Every car user needs repair and maintenance on his/her vehicle. As a result of this, most customers needs to seek out car dealers who can also service them.
Used cars typically require more service and maintenance. As you sell more used cars, you may be able to grow your service business, if you do a great job on their car, they may buy their next car from you.
Rent out cars: It can be very boring for a car owner to stay without a car because his or her car broke down, you can help relieve them of such anxiety by renting out cars to them while their car is undergoing services. By doing so you also make huge amount of money for yourself. This is a smart idea, don’t play with it cause only few dealers in Nigeria renders such services.
After you service someone’s car, stay in touch with the customer. Promote your car sales and service through emails and bulk sms. Your efforts will increase your chances of selling the customer a car in the future.
Get the vehicle’s History Report: To make sure that the vehicles you are to buy does not have hidden fault and may not require serious repairs, its required of the dealer to use services like AutoCheck or maybe CarFax to cross-check the vehicle’s history.
The Vehicle History Report is a service that shows if the car has engaged in accidents or if it was totaled and salvaged. This service is not really free anyways cause you will pay a little amount of money to use this service, but I bet you will never regret it!
Know the transportation cost: As a good business man who wants to make profit from his business, you must not forget to consider the cost of transporting your cars to your market location. This is to know if the car you want to buy at a particular price will attract you profit or loss.
Why must I choose used car sales business: Nigeria is in no doubt the most populated African nation.. This population keeps growing by day; as more people migrate from other countries to settle in Nigerian cities for greener pasture, this makes the demand for suitable means of transportation high.
The fact that road is the major means of transportation in Nigeria makes the demand for transportation to focus heavily on cars, buses and motorcycles; thereby making the sales of cars a lucrative business.
Take a step today, start that car dealers business; you might be the next millionaire Nigerians are waiting for. Good luck.
How to Start a Used Car Sales Business in Nigeria © www.businessplan.com.ng
macaulay mercy says
Thanks for the share
Thank you very much sir, i want to go into the business as a part time business with my job. Please i want to start with 1 car and i intend buying it and packing it in the front of my house for sale. Am a first timer in the business and i need ur advice on all i need to do to excel from scratch.
First of all buy a car that is commonly used in Nigeria (so that you don’t have challenges sell in it). Let your asking price be competitive with other car dealers. Don’t just park the car in front of your house. Put a “for sale” tag on it and drive it around sometimes so that you can get more “eyes” to see it. Take pictures of the car and advertise on olx,jiji and other free classified in Nigeria. I hope this helps.See you at the top!
I like the idea but how can I start it with a
Ajosanmi George says
I want to start the car sales business. I will like to sale toyota and honda model.and how to buy used car cheaper.
Sir , how much do one need as capital to start the business of used cars
Kolawole Anijesuloba says
I’ve been in the car dealership business for years now, how do get interested partners that also want to go into into it either as a part time or full time