Introduction

[twofatguys]

Hi. Looking to start a small used car lot near me. Will have Texas-specific questions about how to get bonded, insured, etc...

Pretty much set on the name and the type of cars I'll sell, just hope the other fat guy doesn't quit and make me change the name or look for a new fat guy and then have ACLU get involved if I don't hire a skinny person.

[mchastek]

Great introduction! I'm not from Texas and can't help much, but I wish you the best of luck with your new venture!

Will your new company really be called "Two Fat Guys"? Hilarious!

Welcome to the forum,
Mark

[twofatguys]

It's just one of the names we're considering. It's also the one I like best since I shouldn't use profanity in the business name (wanted to be Cheapass Car Company, or Cash F&*$ing Money Auto Sales).

I think the most expensive part of the whole ordeal will be securing the surety bond, since we both have serious credit issues and it's a $25,000 bond. May end up putting a $25,000 deposit with the state, and it'll take years to save that up. But maybe I'll get lucky and be able to use a bond company and put up some car titles and cash and not have to wait forever.

[elawless]

I'm from Texas. I worked at a small dealership. 25,000 bond and at least a five car showroom. It's extremely competitive, especially depending on what city you are in.

Do you have an idea on where you want to open the dealership?

[twofatguys]

Want to be as close to home as possible. Land values and rents are high in North Richland Hills but the next two cities south of me are cheap, Haltom City and Fort Worth. There are car lots on every block on Belknap and NE 28th Street, and that's where I'd like to start out. An Austin dealer told me his $25K bond cost him all of $300 a year to acquire, but I think mine will be substantially higher since I haven't got any credit. And the lots I've been looking at can fit 15-20 cars on pavement and a little more in the back on gravel or grass.

I don't plan on having more than 10-15 cars at any one time unless there's a few extras in the back I haven't worked on or detailed yet. Plan on selling anything I can buy for $500-$1500 and reselling it for $1000-$3000. Mostly 80s-90s cars, trucks, and vans. Will grab any older 60s-70s cars I can get my hands on, plus weird stuff like Beetles, Microbuses, Yugos, Chevettes, Pintos, Vegas, anything people loved to hate back in the day. Won't be financing, and probably not even after I'm eligible after that first year.

I think my biggest hurdle will be coming up with enough cash for whatever my bond will cost, and then acquiring insurance. I suppose if everything I buy has a current inspection then I don't really need it but I think it'd be better just to get it right from the start, one of those "owned vehicles" policies that covers anything on the lot. Everything else I have a pretty set price for (paperwork, register name with the state, sales tax permit, utility deposits, lot lease and deposit, furniture, marketing garbage, signs and numbers for the cars, key rings, all that stuff) but the bond and insurance are kinda up in the air.

[elawless]

Definitely good luck. The dealer I worked for had been in the business twenty years, but still had issues running a profitable business. Don't bring on more help than you need, and make sure to control how much money you sink into a car, don't lose track of it. Finally turn over is important - I'd say under 45 is a definite must.