Estimate how much it costs to start a car dealership in the UK. Adjust the figures below to match your plans and the financial breakdown updates as you type.
If you fund stock with a lender, stock funding tracking in Haswent shows what each stocking loan costs you per car.
The cost to start a car dealership in the UK typically ranges from £50,000 to £150,000 or more, depending on the size of your operation. This includes FCA registration (around £1,250), premises costs, motor trade insurance, initial stock investment and working capital. A small independent dealer starting with 10-15 vehicles at an average cost of £7,000 each will need around £70,000-£100,000 in total capital to cover setup, stock and the first three months of overheads. Use the calculator above to model your own figures, and read what to think about before starting a car sales business.
You do not need FCA registration simply to buy and sell cars. However, if you offer any form of consumer credit or arrange finance for customers through a broker or lender, you must be authorised by the Financial Conduct Authority. The application fee for limited permission is currently around £1,250. Our guide to the legal requirements for running a used car dealership covers the rest of the rules. Most dealers obtain FCA authorisation because offering finance is a significant revenue stream and customers increasingly expect to be able to finance their purchase at the point of sale.
Most successful independent dealers recommend starting with at least 10-20 vehicles. Having enough stock gives customers choice and helps you generate consistent turnover. The exact number depends on your budget, premises size and target market. A higher stock level means more capital tied up but also more potential sales. Use the calculator above to model different stock levels and see how they affect your break-even point and profitability.
You need motor trade insurance (often called road risks) to drive the cars in your stock, and employers' liability insurance by law as soon as you employ staff. Public liability, premises and stock cover are not usually required by law, but many dealers with premises or customers on site take them, often as part of a combined motor trade policy. Prices depend on your drivers, stock value and premises, so get quotes from specialist motor trade brokers. Our guide to motor trade insurance explains the options.
Haswent gives new dealers a dealer website, a dealer management system, Google Vehicle Ads and social media automation, so you can launch and grow your dealership online.
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