How to Become a Car Dealer in Nigeria

Cars are not only widely used in Nigeria but everywhere in the world. Nigeria has a wide population of car owners, with hundreds of thousands of cars still being bought every day. Some families own more than one car while many like to upgrade their cars every few years. This makes a car dealership profession a very profitable one. Here are steps on how to become a car dealer in Nigeria.

How to Become a Car Dealer in Nigeria

Create a Business plan

As a business owner, the first most important step is to form a plan. This is where you decide how you want to run your business. Your business plan must answer such questions as:

Do you want to sell used or new cars?

Will you hire salespeople?

How will you market your business?

How much capital will you need to raise and how many cars to start with?

It is important you put every aspect of your business plan on paper before moving on to the next stage. Business plans help you to stay on track with budget and other priorities when your car dealership business starts running.

Raise Capital

No business, especially a car dealership can ever be established or run successfully without adequate financing which is why you need to have a plan on how to raise capital. Starting a car dealership business in Nigeria is a big investment that may require that you get investors. If you do not want to run into trouble later in the business, you must have sufficient funds in the form of liquidity and assets. Assets refer to creditworthiness or having those who can stand as guarantors for you when you need to get loans from financial institutions to fund your car business. Having committed investors and adequate capital is necessary for the success of your business and determines the type of license you should obtain.

Decide the Type of Dealership you want to Venture into

There are two types of car dealerships. You can choose to be a wholesaler or a retailer. Whatever level of dealership you decide on really depends on your financial capacity. Wholesalers have the license to sell to other wholesalers or retailers while retailers are only licensed to sell directly to consumers that is individuals or the public. Wholesale dealers are able to buy cars at discounted prices directly from the manufacturers while retailers may not be able to handle large numbers of cars like the wholesalers.

Pay for a Car Dealership License

In order to officially become a car dealer in Nigeria, you must apply for and pay the ‘Car Dealership License’ fee. This payment certifies you as an authenticated car dealer. There are also many benefits that come with having a car dealership license. Such benefits include the chances of becoming a certain car manufacturing company’s franchise that is you sell only their car models. There are also bidding sites that accept only certified dealers and here, you will find very cheap deals that will run you lots of profits. Lastly, running a car dealership business without a license can make you become prosecuted by the law. The process of registration for a car dealership license can be found in the road safety offices at whatever location you may be.

Buy your Cars

There are several ways you can get your cars, such as through international auctions and bidding sites which are open to you as a certified dealer. Cars are cheaper at international auctions compared to other bidding sites. When you buy cars at international auctions, you will be asked to input your shipping address, so that it will be brought to you via the port because of customs clearance. It just like ordering a product online. Another place to buy your cars is at Cotonou or Benin republic where you can buy and drive the car all the way to Lagos through the Lagos ports which is the legal route to bring cars into the country. If you already have a franchise for a particular brand, the company will handle the logistics for you. Your only responsibility will be to sell and order again. Franchise arrangements are only possible if you are dealing with brand new cars.

Marketing your Cars

You can market your cars online on popular websites where you get to list the vehicles as classifieds adverts. Selling on popular online markets is a smart move because these kinds of sites have a lot of reach. There are also car sales sites where other dealers like yourself list their cars for customers to make their purchases. This type allows for competition and faster sales.

When marketing your cars online, follow these steps to ensure increased sales:

  • Add your location: This is because customers prefer to buy from dealers whom they can see their current location so they can calculate their car delivery fee.
  • Add pictures of the car so the customer can see its quality.
  • Write a short description of the vehicle, pointing out its model, any defects, type, duration of use and other necessary details.
  • Your contact information

While many of these websites allow you to post your ad for free, you can make paid adverts to be featured and promoted vigorously on the site. This way, you will get to appear at the top of search results and be assured of maximum exposure which will, in turn, help you make sales faster.

Find a Plot of land or Garage

In addition to marketing online, you can also have a plot of land or garage which will run as a showroom so you can display your cars for consumers to see. This method is more popular among car dealers in Nigeria. Whatever space you decide to use must not lack the appropriate space and facilities to house a car. The showroom or garage must also have security measures to avoid you getting robbed.

Follow these steps to help you become a successful car dealer in Nigeria.


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