Happy New Year Everyone! I wanted to introduce myself and ask a few questions.
I recently took half ownership of a small dealership that my father-in-law has been running more or less like a hobby for the past 2-3 years. The lot has been mostly empty with a car or 2 here and there over the past 6 months. He got kind of burnt out on doing it by himself and doesn't really have the financial motivation to get it going since he's retired. He has kept it up mostly for tax right off and the ability to go to auction and drive whatever he wants, switching cars every 6 months or so, haha. I bought into it about a month ago because I think this business has a lot of potential. We are in a small rural area in Louisiana halfway between Monroe and Shreveport, but we're the only dealership in our parish (county), our town is the parish seat, we're on the main hwy, and the lot and building are paid for free and clear. Essentially we're running with our electric bill and insurance as the only overhead. We both have our dealer/salesperson licenses and the used car commission came out to inspect, so everything is legal. His strategy so far has been essentially: pick up a cheap car or 2 at auction, sell for cash (significantly under blue book value). There's no advertising, no office hours (there's a "by appointment" sign and phone number on the building), no negotiating, no financing, etc. Sometimes his wife puts the cars in the local fb groups, but that's about it.
Right now he has 4 cars (2 of which are on the lot), and I have 6 (3 of which are on the lot). His other 2 are ready to go, but he's unmotivated. My other 3, one needs a radiator, one needs are catalytic convertor, and one has a weird electronic issue with the back hatch. All are actively being worked on by us as we go. He's handy and knowledgeable, and I don't mind learning a thing or 2 about engines. It seems like he enjoys the working on cars much more than the buying and selling, so I'd be more than happy for him to take this role in the long run. I want to work up towards more inventory, but we're operating on a cash only basis right now, and neither of us are interested in a floor plan. My husband's income pays the bills and my FIL is retired, so we should be able to roll most of our profits back into more cars and build pretty quick.
Because of our rural area, it's also a somewhat impoverished area. We've been trying to stick to things with a sale price under $5k, but I think financing needs to be high on our priority list. We need to find a financing partner that works with poor credit, low income, and older cars. Anyone here that can afford better, is more than likely going to go to one of the big car dealerships in the neighboring cities, so I'm not sure that prime options are even necessary for us right now, just sub-prime. I have a small list to look into that I've pulled from posts here:
lobel financial
united auto credit corp
westlake
western funding
Gold Acceptance
Nationwide Auto Finance
Are any of these lest strict about the type of vehicles we sell? Pretty much all our vehicles are 2000-2010, which is too old for a credit union or other prime financing. We want to keep our cars on the lower range of affordable because of the clientele we're supporting here. Mt father in law wants me to go around to all the title loan/cash advance places and ask them if they'll finance for us. Anyone have experience with this?
Second topic is advertising. I'm in the process of setting up a website for us, and I also have all the cars on facebook marketplace. Anything else that's affordable that would be good? Craigslist is paid ads only now. Are they worth it? Car Gurus? Auto trader? What's the best way to bring in customers starting out?
The last thing I need opinions on is a vin scanner app. Laser Appraiser, Autoniq, Vincue, Vin scanner... what do you use and why? We're spending WAY too much time going through the pricing on the consumer KBB website for each car we look at when at the auction.
I've read through a ton of posts and I really appreciate all the info I've gotten so far. Thanks for being so helpful, and I look forward to interacting with you all in the future!
