Question by QuestionAsker0013: Car Dealers?
I was wondering, if I became a car dealer, how do I get money to pay for the cars at an auction to try and sell? In other words, when a car dealer purchases the car they want to sell, where does the money for that car come from? Do they pay for it out of their pockets, or take out loans? Another thing, how good does your credit have to be in order to become a car dealer?

Best answer:

Answer by Daryl C
I tell you coming from a family of car dealers. Most car dealers have about a $ 200,000.00 line of credit at the least that they have to work from. The main reason is being the can’t have leins on the cars that they are trying to sell it would make things too difficult. So all in all you would have to have excellent credit to start a good car lot. If you wanted to buy 2 or 300 dollar cars fix them and sell them on buy here pay here terms well you could do that with little effort if you have the mechanic ability to repair them yourself. That is what I do in my spare time and I make a pretty good profit from it. Not enough to do it full time, but I have never tried either. Go for it, if you have the will there is a way.

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Dealers definitely know their business and in order to make a good deal for a new car, you must be very well informed. The key to purchasing the car that you desire is doing the research on the vehicle before talking to a dealer. Although it is hard to keep in mind all the information you have gathered, the essential thing is to remember what is most important.

New car dealers have a profit margin somewhere between ten and twenty percent and this margin represents the difference between the price they want you to pay and the invoice price. New cars are quite appealing but they will definitely cost you a little bit more and in case you don’t find something you like in a car lot, you can always order it but this will take time.

New car dealers can be quite intimidating and they can talk you into purchasing something different than your desire or even something far more expensive than what you had in mind, so make sure you stick to your established budget, regardless of what they tell you.  Your emotions will definitely cost you money, so it is better not to reveal how excited you are about new cars.

New cars must be chosen taking into account the following things: your lifestyle, the place you live in, your hobbies and last but not least, your income. The most essential thing is to purchase a vehicle that suits your lifestyle and the weather and road conditions. Furthermore, think about what you like doing when you are not home or at work. Don’t forget about remaining within the limits of the budget you have established.

New car dealers will do their best tom help you but they are also going to try to make you pay more. Thus, if the car seems to have a cost-effective price, if you are not paying attention you might end up paying more for the warranty or the other charges. Customers don’t know how much mark up there is on a particular warranty and dealers are aware of that, thus making as much profit as they can.  A solution would be purchasing reliable extended warranties from other sources which offer a better price.

New cars alarms can also be over priced, being a great opportunity to make profit, especially when the clients are not familiar with the price of an alarm. New car dealers should be selected carefully, because there is no point in paying more for an alarm whose value is acceptable. Don’t rely on what you are told as your only source of information because doing a little homework before closing a deal will save you some money.

Buyers with information will get the best deals and not researching loans and lease rates before visiting the dealer will cost you precious money. Learn how to calculate your payments and how to be able to tell a good price from a bad one. New cars will have a reasonable price, once you don’t pay for the things you don’t have too such as delivery, promotion, handling, sales charges, etc. however, you’ll have to pay for taxes, registration, licenses and destination charges.

If you are not satisfied with the offer presented by the dealer, you are always free to walk away and look for more convenient deals. You don’t need to feel ashamed of trying to make a good acquisition. This being said, you can go ahead and shop around for the car of your dreams.