How to Start a Used Car Sales Business?

car sale

Sale or consignment of used cars?

You can start a sales business or a used car consignment business . In the first case, you acquire the property from an individual and then resell it. In the second case, you perform the job of intermediary by earning a commission on the transaction carried out between the seller and the buyer.

Investments: space for cars and market research

In either case, you will need to find a place to store the cars. Remember to do a market study in the geographical area where you want to set up, to identify the number of competitors already present, analyze demand and validate the relevance of your activity in these places.

Do not neglect the investments to fit out the premises: repair equipment, various furniture to accommodate buyers, etc.

Next, you will need to attract car sellers and buyers. Think about communication costs: flyers, business cards, website…

No diploma is required, but the competition being fierce in this sector, you will have to differentiate yourself by your professionalism and an adequate price positioning. The mechanics should have no secrets for you!

In addition, a good salesperson must be able to advise his client in his choices, or even offer him additional services (financing, warranty extension, maintenance contract). Being comfortable in sales and knowing how to negotiate prices with complementary partners (insurance, banks, etc.) is a plus for attracting customers.

The most appropriate legal status will depend on your business model and your needs. It is essential to ask yourself whether or not you want to separate your assets from those of the company, or even about the rights and duties incumbent on the partners and the manager (s) depending on the legal form . Other factors may be taken into account such as your current expenses, but also the amount of your start-up investments and the financial risk you incur.

A company is theoretically subject to corporation tax (IS). However, there is an income tax option for the family LLC We recommend that you turn to a chartered accountant to help you define an economic model by drawing up a business plan and to help you choose the appropriate legal form and tax regime.

Registration formalities for a used car sales business

To set up a used car sales or consignment business , you must register with the Center de Formalité des Entreprises (CFE) of the Chamber of Commerce and Industry ( CCI ) or at the registry of the commercial court whose raises your activity.

The cost of registration will depend on the legal status chosen. It varies from €0 ( self-employed ) to around €250 for a company. In the latter case, consider drafting your articles of association and publishing a legal notice . These procedures entail an additional cost.

Note that the release of the share capital is generally done within a maximum period of 5 years.

Regulations specific to the sale of used cars

Whether you are a reseller or operator of a second-hand car consignment store , your activity is subject to specific regulations related to the sale of used furniture. You will indeed have to make a request for registration in the register of resellers of movable objects (cerfa 11733*01), sent to the prefecture of the place of installation of your company.

You will also have to keep a police register, called “flea market register “, initialed before the start of the activity by the police commissioner or the mayor of the municipality where you are located.

The register must contain:

The description and origin of the cars offered for sale . They must be able to be clearly identified,

The names, contact details of the original owners of the cars offered for sale as well as the date of issue of their identity document and the authority which issued the document to them,

The classic mandatory information found on your sales invoices (in the event of consignment-sale, the market value of the property must appear).



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