The Benefits of Owning a Car Dealership in Texas

Happy car dealer leaning on the hood of a car for sale
Starting a car dealership can be a rewarding and lucrative business venture, yet one that requires a significant amount of time, effort, and capital to get off the ground. You can read elsewhere on Texas Dealer Education about the processes required to obtain your car dealer license in Texas. In this article, however, we’d like to spend some time covering the benefits of owning a used car dealership, both broadly and specifically in Texas.

Benefits of Owning a Car Dealership

There are several benefits to owning a car dealership:
  • Potential for high earnings: Car dealerships can be very profitable, especially if they are successful in selling a high volume of vehicles.
  • Control over inventory: As the owner of a car dealership, you have control over what types of vehicles you stock and sell. This allows you to tailor your inventory to meet the needs and preferences of your customers.
  • Potential for growth: A successful car dealership can expand and open additional locations, which can lead to further growth and success.
  • Opportunity to be your own boss: Owning a car dealership allows you to be your own boss and have control over your own business. You get to make all of the decisions and reap the rewards of your hard work.

Benefits of Being an Independent Car Dealer

There are some additional benefits of being a used car dealer (otherwise known as an independent dealer), as well:
  • Lower overhead costs: Used car dealerships typically have lower overhead costs than new car dealerships, as they do not need to carry the same inventory of new cars or pay for factory incentives.
  • Higher profit margins: Used cars generally have higher profit margins than new cars, as they are often sold at a lower price point. This means that used car dealers can potentially make more money on each sale.
  • Strong demand: There is always a demand for used cars, as not everyone can afford to buy a new car. This means that used car dealerships can often generate steady sales and revenue.
  • Ability to specialize: Used car dealerships can often specialize in a particular make or model of car, or focus on a particular price range or demographic. This can allow them to build a loyal customer base and differentiate themselves from other used car dealerships.
  • Opportunities for refurbishment: Used car dealerships can often refurbish and repair cars before selling them, which can increase their value and profitability.

Benefits of Being a Texas Car Dealer

Finally, there are several benefits to being a car dealer in Texas:
  • Large market: Texas is a large and populous state, which means there is a huge demand for vehicles. This provides car dealers with a large customer base to sell to.
  • No state income tax: Texas is one of a few states in the US that does not have a state income tax. This means that car dealers in Texas can keep more of their profits, as they don’t have to pay income tax on them.
  • Favorable business environment: Texas is generally seen as a business-friendly state, with relatively low regulations and taxes. This can make it easier for car dealers to operate and be successful.
  • Strong economy: Texas has a strong and diverse economy, which can provide car dealers with a stable customer base and support for their business.
  • Access to major markets: Texas is home to several major cities, such as Houston, Dallas, and Austin, which are major markets for car dealers.
Starting a car dealership can be a challenging but rewarding endeavor. It’s important to do your research and carefully plan each step to ensure that your business is successful. Once you do, you may find that it is one of the best personal and professional decisions you have made.
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Criminal History Offense and Action on License Notice

If you have a criminal history and are concerned about your eligibility for a license, you MAY request a criminal history evaluation before applying for a new dealer’s license. This can be done by setting up a user account through the TxDMV website and requesting a criminal history evaluation in the eLICENSING portal. (Note: This step is NOT a requirement but it might be helpful IF you have a criminal history).

By entering this site, you verify you’ve been notified of your rights outlined in the Texas Occupations Code Chapter 53, Subchapter D, as well as the current criminal history guidelines found in the Texas Administrative Code §211.3.