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How to Start A Profitable Car Dealership in Nigeria

How to Start A Profitable Car Dealership in Nigeria

The most common means of transportation in Nigeria is by Car, considering the population of the country which is around two hundred million, a large number of its populace are using cars, we have several homes with multiple cars, and adding to this fact there is a large number of cars that are brought into the country every day either legally or through illegal route.

Providing you have the capital to start, selling cars has become one of the most profitable business ventures that you can ever dabble in as it gives a great profit at the end of the sale of each car.

Car dealership otherwise known or regarded as vehicle local distribution is a business venture that sells new cars or used cars at the retail level, based on a dealership contract with an automaker or its sales subsidiary.


The 4 Main Type of Car Dealership


  1. Small Garages-these are limited car dealership ventures, unlike others, they do not have plenty of large varieties of cars at their disposals, a local cart mart in your area will fit into this description so if you are looking for a cheap used car, maybe you are thinking of buying your first car, or work with a certain budget, this is the best place for you to visit. Many brand-specific retailers and largely used car dealerships are only going to stock cars of some value. So this is the place to look if your budget is limited.
  2. Big used Dealership– large car dealership specializing in used vehicles is a great option if you do not know what type of car to purchase. This used dealership provides you with varieties of selection, and some have more than a thousand vehicles on display.
  3. Brand Specific Dealers–  This is car dealers that sell specific cars, they do not just sell cars randomly so if you have researched the precise vehicle type and model you want to buy, it can be a great choice for a particular brand dealership. For example, this type of car dealership may only focus on selling Lamborghini cars exclusively, in this case, they work directly with the car manufacturing company where they get these cars directly. Also, the producing company monitors from time to time these brand-specific dealerships in order to check and help them maintain qualitative sales which are in line with the terms and conditions shared between these two entities.  In addition to this customer service is always of the greatest level at these companies. All that comes at a price however and you can pay a premium brand dealer.
  4. Online Car Dealership– These are online platforms where you can browse through to check out the car of their choice. The internet is a home variety of cars, as you can browse hundreds of cars, check their price and specifications from the convenience. Through these various online platforms, you can also compare the listings side by side without hassle. There are plenty of these online platforms in Nigeria which you can trust to buy your cars, among them is the number one website which has a great listing and variety of cars on sale, ng affords you the opportunity to get your cars online without the hassle or without any fear of police case or mechanical irregularities.

Listings are usually followed by pictures and videos, but the downside is that you are not able to see your wanted car in person before purchasing if you merely choose an online car dealership.


What You Need to Become A Car Dealer

  1. Pay for a Car Dealership License– To become a car dealer in Nigeria, there is a need for you to have the legal right to enable you sells, that is you have to apply for and pay the Car Dealership License fee. When you get this, it certifies you as an authenticated car dealer which comes with numerous advantages. With that, you can become a legally recognized company’s franchise. There are some listing sites that only accept certified dealers to their websites; this is because they will not want to fall for any scam or shady deals which might put them in trouble.
  2. Buy your Cars– after your franchise is legally registered, then you may proceed to stock your garage with cars. You may buy your cars at the auction and bidding sites that are open to you as a car dealer. Cars are cheaper in auction compared to other sites or you can prepare for a trip to the Benin Republic where you can buy these cars and have them legally driven to Nigeria, you can also hire a driver to help you do this. Another method is that you can also import your cars from countries like the United States of America, China, and Germany, etc.

Another way is when you are franchising for a particular brand of a car; they will handle the logistics for you. Yours will be just to sell and order again.   However, that arrangement can only be possible if you are dealing with brand new cars.

List the cars Online- this is a more efficient and better way to give visibility to your cars. When you put your cars online it affords you a larger reach where people can easily access them, check through them. Listing them in sites like, and other websites

It is also incumbent that you lit your cars in car sales sites where other dealers list their cars at a price they want and wait for purchasing customers.

When listing online there are certain details which you must pay cognizance to and ensure that are added to make you’re listing a well-detailed one.

  • Add your location. Customers prefer to buy from where the cars are located to avoid paying exorbitant fees for car delivery.
  • Ensure that you use quality pictures of your cars when listing online. Take them from different angles that will enable potential buys to have a good view of them.
  • Write a short description of the Vehicle, point out its model, mileage, any defects, and any custom-made additions. Specify whether it’s new or old and any other detail you feel is necessary.
  • Your contact information is important so that potential buyers can contact you.


Other factors which you must ensure that you take note of are


  • Choose the rights Location– there are a couple of factors that come into play when choosing a location for your car dealership. For starters, you do have to ensure that you choose a good location and not a hidden one. The more the area you choose is economically viable the more you sales you get to make. Then there is the location visibility to take into consideration. Ensure that there is an accessible road network which people can take to your garage
  • Hire Staff– if you want to run a big place, you might need to hire extra hands to help you run the place. You will definitely need staffs that will help you drive in the cars; wash them and also one that will attend to them in the case of any mechanical irregularities. Also, you will definitely need a security man to help you keep watch over the cars, kindly note that when you are hiring these staff, ensure that you hire experienced workers who can handle and maintain cars.
  • Consult a Professional / Expert– As a beginner, do not just jump ship, ensure that you seek the advice of professionals, consult them before making any major decisions, these experts can review secrets that will be very useful to the business.
  • Insure your cars– while it is necessary that you not only need to have a license but also you need to have your car insured against loss. All car dealership requires comprehensive insurance coverage whether they deal with used cars, new cars, or both. Typical car dealership coverage includes general liability, lot coverage, and comprehensive plans that cover everything from property damage to inventory loss.
  • Create a Business Plan– it is very important that you create a business plan before starting your franchise. You will surely need to formulate a suitable business plan for your franchise. When creating your business plan it must include business equipment costs, researching manufacturer car costs versus used car costs, calculating employee salaries, lease and sales agreement costs, and planning your advertisement budget. All these factors will help you create a business plan that is anchored in reality.


By Marcus Amudipe

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