Free VC Directory
With any B-Plan Purchase
425 Page Capital Directory
Through Apr. 30


Custom Business Plan
$425 Flat Rate
No Templates Used
7 Day Turnaround

All Purchased Plans

Are Updated for 2017


Free VC Directory

With any B-Plan Purchase
425 Page Capital Directory
Through Apr. 30


Custom Business Plan
$425 Flat Rate
No Templates Used
7 Day Turnaround

All Purchased Plans
Are Updated for 2017

Used Car Dealer SWOT Analysis

 

Strengths

 

People will always require vehicles, and for many people their only option when needing a car is to purchased a used one. As such, used car dealers are generally able to remain profitable and cash flow positive during both good and bad economic climates due to the necessity of owning a car. The gross margins generated from new car sales are moderate. One of the positive aspects for a used car dealer is that many of these businesses often couple automotive repair services with vehicle sales. This further ensures that these businesses can generate a highly predictable stream of income on a month to month basis. These businesses have substantial economic staying power, and despite continued technological changes in the economy - the business model of a used car dealership has remained the same. Depending on the market, the barriers to entry for this type of business is moderate.


Weaknesses

 

The most prominent issue faced by used car dealers is ongoing competition threats from other companies in the target market. Within any town or metropolitan area, there are always a number of businesses that specialize in the sale of used cars (including from new car dealers that are offloading inventory).  With the advent of the internet, many people now conduct their initial searches online for locally sourced used cars. As such, any individual seeking to enter this business needs to be technologically savvy as it relates to listing vehicles for sale online.

 

Opportunities

 

The opportunities for used car dealers to expand their operations is substantial. There are a number of financial institutions that specialize in lending to car dealers for inventory acquisitions. As such, these businesses can rapidly expand provided that they acquire quality used vehicles to sell to their customer base. Many used vehicle dealers often seek to expand their operations by acquiring companies that are already in operation. Finally, many dealerships integrate their own financing programs for their customers in order to drastically boost revenues.

 

Threats

 


The primary threat faced by the businesses are ongoing competitive issues. The secondary threat is changes in regulations pertaining to in-house financing offered by used car dealerships. However, there is no current pending regulations that would impact this aspect of operations.