Estimate how much it costs to start a car dealership in the UK. Adjust the figures below to match your plans and see a full financial breakdown instantly.
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 specific scenario.
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. 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.
At minimum, you will need motor trade insurance (also called road risk insurance), which covers you to drive and demonstrate vehicles. You will also need public liability insurance, employers' liability insurance (if you have staff), premises insurance and potentially product liability insurance. A comprehensive motor trade policy typically costs £300-£500 per month depending on the number of vehicles and drivers covered. It is worth shopping around and speaking to specialist motor trade insurance brokers to find the best deal.
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