There are plenty of ways to do business in Nigeria and make cool cash in Nigeria, there are amazing business ideas that you can tap into in Nigeria.
For a country of around Two Hundred million people, where the average Nigerian family owns a car, the car sales business is a booming one in Nigeria among other businesses.
There is a great perchance for cars among the youth populace of the country and providing that you have the capital to start, owning, and managing your own car sales company is a very profitable one.
And in starting that you might want to think about selling used cars in Nigeria. This is one of the easiest when it comes to selling cars; all you need do is to have a good eye for cars, and a very good platform for selling them.
As against the selling of brand new cars in Nigeria where you have to either travel out of the country to get new cars or import new cars from abroad which could be the united states of America, Germany, or any of the popular automobile producing countries.
So away from the sales of new cars in Nigeria, the business of selling used cars in Nigeria is a booming one, no doubt about that, this is so because of so many reasons.
The economic condition of the country which has led to plenty of its citizens cutting costs to ensure survival has necessitated the need for them to in most cases go for used cars otherwise known as Tokunbo cars.
These are cheaper cars that you can get at affordable rates without having to do a money heist to get them. For the average Nigerian whose salary is barely enough to sustain him or her, they often resort to cheap used cars than to buying the brand new cars which are always costly.
There are several advantages or benefits that come with a used car dealership in Nigeria, they are listed below.
Advantages of Starting Used Car Dealership In Nigeria
- It’s Easy
Many people struggle to sell a vehicle privately. Selling a vehicle on your own requires time (most vehicles don’t sell overnight), effort (advertising the vehicle), money (local classifieds and Internet sites typically cost money), and a bit of vulnerability (interested parties may call your phone number at odd hours). Trading a used car at a dealership avoids all these inconveniences. Dealerships will make an offer for the vehicle on the spot and take it off your hands the same day. Some dealerships will make an offer to buy your vehicle even if you don’t purchase one of theirs.
- Financed Vehicles Are Okay
For one reason or another, some people trade vehicles in that they still owe money on. Regardless of whether the car is paid off or not, dealerships will take the trade. If a used car is not yet paid off, the dealership will contact the lender and pay off the balance. This is an attractive benefit. It allows you to get a new vehicle without first paying off your old one.
Additionally, in these difficult economic times, some people are upside-down in their automobile loans. Dealerships will take these vehicles in on trade, too, and pay off the loan. Granted, any balance that exceeds their purchase offer will be added to the loan balance on the vehicle being purchased. For those looking to get out of an unfavorable loan, this could be a means to accomplish it.
- Down Payment Assistance Is Available
When a used car is traded in, dealerships will apply any positive balances to the purchase price of the new vehicle. Basically, if a car is being traded-in that is either paid off or has positive equity (the value of the car is more than what is owed), you can use that money as a down payment on the vehicle being purchased. If you choose, this allows you to finance and drive the new vehicle off the lot with little to no up-front money out of pocket.
- You Can Trade It and Forget About It
Even if a vehicle is sold “as is” through a private party, the buyer may come back and pressure you to pay for any mechanical issues that may arise. When trading in a used car, the dealership assumes all responsibility for the mechanical trustworthiness of the vehicle. A dealership will not contact you and ask for financial assistance to recondition the vehicle. Once the used car is in the dealership’s hands, the prior owner has no further commitment to the vehicle.
How to Start A Used Car Dealership in Nigeria
- Perform Market Research
Before you can get started as a used car dealer, you need to know what your market looks like. You should learn about the consumers in your area first. What types of cars are they looking for? Where does price come in? What attracts them to a particular dealer?
Then you should get to know the competition. Is there already an influx of one particular type of car dealer in your area? Is there an opportunity for you to stand out in another way or should you focus on a market that is less saturated?
- Choose a Location
During your research, you need to zero in on a location for your used car lot. Ideally, it should be somewhere easy to access enough vehicle traffic to attract customers. Start by getting a general idea for the area you want, then focus down further to find an open lot with enough space for all the cars you want to eventually include in your inventory.
- Identify a Niche
Even though many used car dealers do not specifically affiliate with a single auto manufacturer, you still might find it useful to choose a niche for your business. You could sell just one brand of vehicle or even just focus on a specific price point. This will help you more effectively market to your target audience. As you grow, you could always branch out into new brands or price points as well.
- Learn About Regulations
Used car dealerships do need to comply with the Federal Trade Commission’s used car rule, which states that dealers must include a buyer’s guide for each vehicle and allow buyers to inspect the vehicle before purchasing, among other requirements. Some states and local communities also have rules that apply to car dealerships. So make sure you do your homework about compliance standards before starting up.
- Register Your Business
In order to officially get started, you’ll need a business license, dealer’s license and you’ll probably need to register with the DMV in your state. Specific processes vary by state and local community. So check with your state and local governments or converse with someone from your local chamber of commerce to make sure you meet the necessary requirements in your area.
- Build an Inventory
When starting a used car dealership, you probably aren’t franchising with a manufacturer who provides you with vehicles. So you need to source them yourself. Register with auctions in your area so you can find low-cost vehicles to sell or source cars from social media. Most independent dealers will need to start small and then build inventory as you earn money over time.
- Get an Online Presence – This is very vital and important for the growth of your business as a business venture that employs the internet as a veritable tool for creating awareness for its business will, in the long run, gain big and improved visibility, helping the business network expand its reach to many more people. The work of social media platforms in giving visibility to businesses in Nigeria cannot be undermined; there are thousands of websites and other online platforms that help in giving the much-needed visibility to businesses in Nigeria. All you need do is to register with them, get good and nice pictures of your cars and a nice and well-detailed description attached to the pictures, set the price, and over time you get an influx of people making inquiries about your sales. If you do not understand, you can visit Delon Market to have a glimpse of what using an online platform to sell your used cars looks like
- Validate the Legitimacy of all cars– since you are dealing in used cars, which people either refer to as second-hand car or Tokunbo cars, it is very important that you ensure that all used cars brought to your garage for sale, ensure that they come with their complete paper-work, and car history and if necessary ensure that there is a police report to back them up. This when done will help you avoid police cases in the event of stolen cars or cars used for shady businesses or dealings. Do well to ensure the legality of any car before you take them in for sales.
Stocking Your Garage
There are various means through which you can stock your garage with used cars, people want to sell their cars, so one of the best places for you to get cars for your garage is through your local community that is friends and families, also you can get them from your local car mechanic shops. They have good knowledge about who wants to sell cars, all you have to do is to create and maintain contact with them.
Also, you can get your used cars for your garage in Lagos or Kano, there is a big used car market there where you can acquire more cars for sale. Also, you can bank on the importation of cars from the Benin Republic, or from the united states of America or Canada.
By Marcus Amudipe