How to start a car dealership in Australia
To start a car dealership in Australia you need a dealer licence from your state regulator, a place of business, enough capital or floor plan to carry stock, and systems for the compliance paperwork that comes with every car. Here's the order to do it in, what each step involves, and a checklist for your first 90 days.
- Get licensed in your state first. Dealing without a licence is an offence everywhere.
- Decide your model: buying stock, consignment, or both. It drives your capital needs and your compliance.
- Budget for stock, recon, holding cost, insurance and marketing before the first car sells.
- Set up your register, warranty, PPSR, trust account (if consigning) and finance arrangements before you trade.
1. Get your dealer licence
Every state and territory licenses car dealers, and the rules, training and fees differ. Start with our car dealer licence guide, which links to each state.
If you plan to consign, check your state allows it and what extra it needs. In WA you need Category E on your licence. In Victoria, licensed traders can't sell on consignment for private owners. See car consignment.
2. Choose your model
| Model | Capital needed | Margin per car | Extra compliance |
|---|---|---|---|
| Buy and sell | High: you pay for every car | Higher | Standard dealer obligations |
| Consignment | Low | Lower (a fee) | Agreements, trust account where required, settlement statements |
| Both | Medium | Mixed | Both sets |
Many new dealers start with consignment to build volume without much capital, then buy more stock as cash allows. See consignment vs selling outright.
3. Premises
- Check zoning with your council before you sign a lease: car sales yards usually need the right use approval.
- Your licence covers registered places of business. In QLD, each place of business is registered and needs a licensed person in charge. Check your state's rules.
- Plan for display space, customer parking, a secure area for keys and documents, and somewhere to detail cars.
4. Capital and floor plan
Work out how many cars you want on the lot, your average buy price, and how long each car takes to sell. Your capital need is roughly stock value plus recon plus a buffer for slow months.
A floor plan facility is a revolving loan from a lender against your stock: each car is drawn down when bought and paid off when sold, with interest charged daily. Ask lenders about curtailment (when you must start paying down aged cars) and the fees. Run holding costs through the holding cost calculator.
5. Stock sourcing
- Private sellers: usually the best margin. See how to get more private sellers.
- Trade-ins from your own sales.
- Auctions and wholesale: include buyer's fees and transport in your cost.
- Consignment: owners who want more than a trade-in offer.
- Run a PPSR check on every car before you pay.
6. Insurance
Talk to a broker about motor trade cover (stock on site and in transit, including cars you hold on consignment), public liability, and cover for staff and premises. Make sure demonstrators and test drives are covered, and check what happens to a consigned car that's damaged while you hold it.
7. Compliance from day one
- Dealer register or stock book. Every state expects you to record cars in and out. See dealer stock register.
- Statutory warranty. Most states require a warranty on many used cars, depending on age and kilometres. See statutory warranty.
- Australian Consumer Law. Consumer guarantees apply to cars you sell, including acceptable quality and clear title, and can't be removed by any contract or warranty.
- Finance. If you arrange car finance, you generally need your own Australian credit licence, an appointment as a lender's credit representative, or to fit within the point-of-sale exemption for dealers who arrange finance on cars they sell. The Banking Royal Commission recommended removing that exemption, so check ASIC's current guidance before you write a deal.
- Trust account. Required for consignment money in QLD, NSW and WA.
- Stamp duty and transfers. Know your state's duty and transfer process. Try the stamp duty calculator.
8. Software
You'll need to track stock, recon, leads, deals, compliance paperwork and profit on every car. A spreadsheet works for the first few cars and falls over after that. Our app was built by a working dealer for exactly this; see software for new dealers.
Your first 90 days
| When | Do this |
|---|---|
| Before you trade | Licence granted; places of business registered; business name, ABN and GST registration set up. |
| Before you trade | Premises leased with council approval; insurance in place; bank account (and trust account if consigning) opened. |
| Before you trade | Finance arrangement confirmed (credit licence, representative or exemption); floor plan approved if using one. |
| Before you trade | Contracts, register, warranty and PPSR process ready; software set up. |
| Days 1 to 30 | First 5 to 10 cars sourced, inspected, PPSR checked, reconditioned and listed. |
| Days 1 to 30 | Listings live on the main marketplaces; enquiry process and response times set. |
| Days 31 to 60 | Review days to sell and gross per car; drop prices on cars past your target age. |
| Days 31 to 60 | First month end: register up to date, trust account reconciled if consigning, books to your accountant. |
| Days 61 to 90 | Work out true net profit per car after recon, holding cost and ads. Double down on the sources that make money. |
Write it all down first. Our car dealer business plan template has sections and a 12-month cost table to fill in.
How to start a car dealership in Australia
- Get licensedApply for a dealer licence with your state or territory regulator and complete any required training.
- Choose your modelDecide whether you'll buy stock, consign, or both, and check consignment is allowed in your state.
- Secure premisesLease a site with the right council approval and register it as a place of business.
- Arrange capitalBudget for stock, recon, holding cost and marketing, and set up a floor plan facility if you need one.
- Set up compliancePrepare your register, statutory warranty process, PPSR checks, contracts, trust account if consigning, and finance arrangements.
- Source and list stockBuy or consign your first cars, inspect and recondition them, and list them online.
- Review your numbersTrack days to sell and net profit per car, and adjust pricing and sourcing every month.