Opening a car lot... Any advice...??

I just spoke with the owner of a commercial lot on Co. Hwy D, here in Southern Bayfield County, WI. It was the site of a tavern until 2 years ago when it burned down. The lot has sat empty and the owner has no immediate use for it. I asked him if he'd like to go in on a classic car lot and he's all for it. He told me I could do it there for NOTHING. He's a gearhead, but not into hot rods (yet) and said he intends to open an outdoor/tent bar and just run it during the summer. After we talked, he sounded even more sure of the bar thing and thought it would be cool to go in together and give it a hot rod/junkyard kind of theme. I told him my name here in the H.A.M.B. and he thought "The Junkyard" or "Junkyard Dog's" might make a good name.

The cool thing is, I had zoning give me shit about my cars here at home (back in the woods where nobody could see them) and it's going to be fun to put them all out there in the bright sunshine, in front of everybody...

I'm not out to get rich, and will be starting mostly with my junkyard scores and project vehicles... and I think it will be a great launch pad for sales of my campers, too.

Are there any words of wisdom from other H.A.M.B. members who've had an actual sales lot...?


JOE

 

Sounds like a BIG hassle to me.

 

Joe,
Be sure you talk to Megan. She has been in the business for many years. i.e. Chevygirlrox. PJ

 

Joe, park'em up front, and let everyone see'em. Buy as many as you possibly can and park'em all right up front where everyone has to see them. Shit, buy out an old salvage yard and park the cars in there as tightly as you possibly can.

To hell with the city and county fudge packers! That rocks!

 

Selling cars is probably one of the most regulated and inspected businesses a guy could do. Permits galore to buy, and don't get caught without proper paperwork for every vehicle you have on the property or it's confiscation time and possibly a trip to the hoosegow.
You'll need to change your moral code and forget about your old friends 'casue they'll soon forget about you.

 

you have to weigh the costs of maintaining a dealer license and insurance against what you will actually sell. Ive considered doing the same thing only to have a building in which to work and store vehicles. I used to work with a guy with a small lot and got to use the trailer, in return I'd help him retreive all the cars bought at auction and do some wrenching. I was able to have him buy for me at the auctions.
If youre doing a musclecar/hot rod shop you need good material to work with and keep changing it up to keep traffic flow up. one trick is to work with other lots that do the same kind of business and rotate vehicles on a consignment basis. If they sell you car you kick them a %. could be a good front if youre mainly fabbing cars up. you didnt really state if youre trying to turn a lot of cars or only sell one ocasionally and get most of your cash flow from building/repairing.
an old gas station may be a better starter, it doesnt sound like theres a building on the current property so thats a large investment on someone elses land.
Oh yeah, partnerships rarely end on good terms and someone always gets screwed.

 

Maybe... but it might be fun too.

He'll run the bar part of it, and I'll be the car guy. He lives just up the road from the lot and will be able to watch over it. It's only about 5 miles from my house, too.

I already have cars, and need a place to go with them anyway... and I always have a desire to save more if I can. So, if I can put cars into the hands of people who'll build 'em, and put a few bucks in the bank for my trouble it might be worth the time.

I have my welding shop here on my land and could maybe qualify that as the "work space" needed for the dealership license.
I'm sure there's regs I'll need to follow, but I think if I keep it small, and spread the number of cars between a few different people, I may not have to jump through those same hoops as the lots selling great numbers of cars.


JOE

 

Sounds like you've got the right spirit to bring this about. How well you and the owner get along will call for much, clear, communication.
I'd say, to map out your plans, list the needs...space, hours of operation, what-ifs or contingencies, and the financials. I guess they call these "business plans"? Be open to what presents itself (issues, opportunities, crisis' )...and have some fun in making it happen.
It sounds just right, BTW!

 

with the bar mixed into this I see it ending badly. whole bunch of drunk people milling around the lot looking at your cars. seems to me alot of potential for damage.

 

I'm thinking it is around $1000-2000 to get set up as a used dealer here in Oklahoma, which included all your paperwork, bonds, dealers licenses, and dealer tags. Check with State Farm for a 'blanket insurance' policy. Dad has one which states "Any and all vehicles owned or operated by Odie's Automotive" and covers everything we get behind the wheel of.

As for paperwork on your vehicles, you will only need to be able to document where/who you purchased them from, and so forth. You will be able to sell these vehicles, but you'd have to do a completed bill of sale (state approved forms) to keep track of what you are doing and who you are selling to.

Beauty of having a license and D-tags is that even without a title, you will be able to drive your rides anywhere you want, without registering them! We drove an old dodge 4x4 for 2 years without a title! The old man's old workhorse - 99 Dodge 1 ton dually 4x4 served as his wrecker, hay hauler, trailer puller, and daily driver. When the first year tag expired, he stuck the D-tag on it and drove it for 4 years that way. When he sold it, they were able to get around the penalties and such because he was a dealer.

I still say go for it. You only have to sell 4 cars at $500 each to make it worth your while!

 

I don't think they'll give you a dealer's licence on that lot unless there's a building there with an office and a bathroom. I wanted to make my shop a dealership but I looked into it and it's a pretty big hassle. You could PM Cliffy, he has a legit dealership in Oshkosh and deals in a lot of old cars.

Don't just stick a bunch of old cars out there with for sale signs and hope to get away with it. They watch that shit like hawks. And if they caught you jumping titles there is a massive fine for it.

Would be real cool if you got it set up all legit though.

 

This may never even happen, as we're only just talking about it at the moment...
It's fun to dream though...

I just looked online and the Wisconsin regs don't seem too outrageous.

A 12x20 indoor sales area and office wouldn't be that tough to throw together.



To qualify for a retail dealer license you must meet all of the following requirements:

• A permanent business location—not a residence—with office space, a 12x20-foot indoor vehicle display area and an adjacent display lot. Note: If you are selling only motorcycles, display area need only be large enough to display or repair three motorcycles.
• Zoning and local permit approval for the location.
• A sales tax seller permit is required. To obtain one, contact the Department of Revenue at (608) 266-2776 or on their Web site under Sales and Use Tax.
• A $50,000 surety bond or irrevocable letter of credit. For a list of insurance companies accepting applications for bonds, see Insurance companies that accept applications for bonds. Note: If you are selling only motorcycles, you need a $5,000 bond or letter of credit.
• A service department or written agreement with a nearby service facility.
• At least one licensed salesperson. That could be you or someone else.
• A business sign and posted hours.
• A lease for the business real estate unless the license applicant owns it.
• A manufacturer’s certificate of appointment (franchise) if you will be selling new vehicles.
• Dealer license fee, dealer plate fee, and fee to the Department of Financial Institutions. (More information on fees follows.)
• You must be at least 18 years old.
• You must be of good character, and must not have been convicted of a serious crime directly related to the sale of motor vehicles.

It also says...
(Individuals can sell up to five of their own vehicles each year without a dealer license.)
So, like I said, that could be split up between a few other "individuals" and forget about the red tape.

JOE

 

Whatever path you decide to follow, I'd highly recommend going into the partnership with this guy legally to spell out exactly what the terms are. Verbal agreements have a way of souring when the money starts coming on or blame needs to be assigned. Also set yourselves up as an LLC to protect your homes and personal belongings in the event of a lawsuit. Good luck~!

 

a guy i have done some work for has a used car lot in Bruce , wisconsin...that apears to be not far from cable. he seams to be doing fine..must be room for one more

 

Junky, PLEASE-PLEASE set the partnership up with a lawyer doing the paper work for you. I guarantee problems sooner or later if you don't. Just my 2 cents on this from personal expirence. Normal Norman

 

I'll take that "partnership" advice to heart... Thanks


JOE

 

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don't be a used car salesman, I hate car salesmen....almost more than I hate cops

 

I'll let Jerry's hot stripper bartenders sell the cars.


JOE

 

I've considered doing this myself. Setting them up to basically where they are mechanically sound and then sell'em. I grew up with some buddies I knew who used to haul 3 or 4 at a time from Sounthern OK to Cali and triple their investments! They made 3 or 4 trips a year, and wound up with a helluva income. Then again, they got busted several years later participating in a major chop shop operation.

I'd say buy the cars, do the broadway or vintage title thing, and sell cars WITH transferrable titles and you'll be sitting on a literal goldmine.

I envy you Joe. Lucky sumbitch!

Do the legal thingie too with the partnership. Set it up so's Homer can't screw you out of your deal. I'd go for a 5 year type plan or something, or along the lines of as long as you keep a dealer's license over the place, you'll be able to stay in business there. 5 years'll give you enough time to know whether or not you want to do this full time, and if it'll support itself. Hell, in a few years you might be able to become a full time used car dealer!

 

i can't agree more with the guys recommending setting up an LLC, or getting incorporated or whatever. regardless of our optimism, we GOTTA protect our personal stuff (ie, home, cars, land, etc.) first! if the shit hits the fan, the man will come in and clean you out! so protect what you love first.
other than that, i say go for it. i can tell you this: you can do whatever you believe you can. ultimately, if things don't work out; at least you gave it a shot. far more pathetic to live our lives without even trying.
besides, everyone's definition of success is very different. sounds to me like you're just looking to find a way to spend your days busting your knuckles on old cars, without anybody fucking with you for it.
sounds like heaven to me.

 

Yeah and you are the only one in the state that has ever been smart enough to ever think of this. Once they get a whiff of what you are doing they will make life so miserable for you that you will bail.

As a Md state inspector, I worked with several used car lots. It ain't easy and it ain't fun.

You will start out OK with no overhead and make money but if it goes anywhere then you need to step up to the plate with insurance, licenses and all the rest. That's when the fun stops.

Yeah we are all so negative with no ambition. Just trying to get you to think farther down the road. Sure it can be done but it ain't all peaches and cream.

Good luck and don't do anything without a legal contract.

 

TOMMY- I'm all for doing it right. My welding business is all above board... zoning, permits and tax ID... etc. If I did go the "individual" route with the cars it would only be for the immediate future... but, would wholly intend to make it legal to the letter.

..and I'm only thinking about 5-10 cars at a crack. Not a super-store of old iron.


JOE

 

Lots of good advice given here so far. I'll just add whats important to me : Always be honest and fair with everyone you deal with, customers and vendors. Yeah, I believe in Karma.

Cheers,
John

 

Sell to HAMBers below wholesale!

 

Joe, I have done this and did well at it. But I did not own the land and ended up getting screwed by my "friend" who owned the land and wanted to take over what I had started. You are better off getting a lease in writing and paying an agreed to price rather than just using this man's land for free. Some day there will be a problem that neither of you see coming. Whether it be liability or damage or whatever. Don't be naive, it's all fun and games until someone gets hurt. Have fun and good luck.

 

I doubt he can get a licence to do both on one lot, period.

 

You'll have to grow a moustache and buy several flashy sport jackets. Are you ready for that kind of commitment Joe?

 

Just watch this movie a few times, take notes, and you'll be fine.

 

As an "individual" you might still need to title and register the vehicles (see comments about "jumping" titles above). If registering requires insurance it will eat at the profits pretty quick. Where I'm at a car lot is required to be paved, not sure what the conditions are of the lot in question but might look into that as well. Good luck.

Cory