Start a small used car yard

Private buyers looking for affordable, reliable cars, plus people trading in their old vehicle.

You earn the gap between what you pay for a car (auction, trade-in or private purchase) and its sale price, after reconditioning costs. Some dealers also earn commission on finance or add-ons.

• Judging a car's condition and value
• Negotiating with buyers and sellers
• Paperwork and record keeping
• Customer service

• Motor car trader licensing is required in most states and territories, so check your state's rules before buying any stock
• Statutory warranty and consumer law obligations on used cars, including the Australian Consumer Law
• Checking each car for finance owing, stolen status and write-off history (for example through the PPSR) before buying
• Garage keepers, public liability and stock insurance, plus possible council approval for the yard
• Tied-up cash in stock if cars are slow to sell

Startup costs are typically estimated at around $40,000 to $150,000, depending on your yard or showroom, licensing, insurance and how much stock you buy. Remember that cash can be tied up in cars that are slow to sell.

Monthly revenue is typically estimated at around $40,000 to $200,000, depending on how many cars you sell and at what price. That is revenue, not profit, so stock costs and slow-selling cars will affect what you keep.

Check whether motor car trader licensing is required in your state or territory before buying any stock. Also check statutory warranty and Australian Consumer Law obligations, PPSR checks for finance owing, stolen status and write-off history, insurance, and council approval.