How to Start a Lucrative Car Dealership Business in Nigeria

There are professional ways to start a lucrative car dealership business in Nigeria, whether you want to sell brand new or used automobiles which you can purchase locally or globally.

Automobiles have evolved into a need and, in some respects, a commodity throughout the years. Thousands of individuals acquire new cars or sell older cars all around the world. Thousands of automobiles are swapped every day in Nigeria (either bought or sold) to meet the need of a burgeoning population of auto owners.

A car dealership is a business that involves selling new and secondhand cars to the general public. Some dealers in Nigeria import automobiles from other countries (such as the Cotonou automobile market in the Benin Republic) at very low prices, while others can be obtained through local transactions and auctions.

There are simple stages to being a lucrative auto dealer in Nigeria, whether you want to sell brand new, tokunbo, or used cars, source locally or worldwide.

It is recommended that you become acquainted with the company first. Make inquiries with vehicle dealership owners that have been in business for a while. Only if you are well-versed in the operation of the business will your auto dealership be profitable.


If you want to be successful in this business, you must have a car dealer’s business plan. This strategy will assist you in understanding how to run your company. Things include how much money you’ll need to start a vehicle business, how many cars you’ll import or buy, whether you should sell new or used cars, and how you’ll publicize your business to attract customers. The cost of land for a garage, for example. This step should address all of your questions.

The purpose of a business plan is to guarantee that you have covered all bases and have a clear picture of how the company will operate. You’ll be able to determine your priorities and budget for your auto dealership business after reading this.


We needed capital to start a car dealership business. Finance is required for every business to be formed, and it is also required for any firm to survive or continue to exist. Starting a vehicle dealership in Nigeria is a significant investment, and as a potential investor, you should be aware of this.

You should make sure you have enough finances, both in terms of liquid assets and assets. Assets indicate that you are creditworthy and may easily obtain financing for your firm from financial organizations. This is critical to your company’s performance and could have a significant impact on the type of license you receive.

Financing can be obtained in a variety of ways which includes:

  • Self-financing: This refers to the capital given by the business owner.
  • Grants from government agencies: There are a variety of grants available through state and federal government programs.
  • Bank loans: Having a clear business plan and establishing your company name will allow you to apply for a variety of bank loans.
  • Investors: Investors who have read your business plan and are confident that your furniture manufacturing business will be profitable can put millions of naira into your company.
  • Family and friends: Families and friends who are willing to support your business can also provide financial assistance.


The type of automobile dealership you choose is determined by your financial ability and backing. Auto dealerships are divided into two categories. You have the option of becoming a wholesale or retail dealer. Your financial capability will still play a role in this decision. Wholesale car dealers can sell to other wholesale dealers or retail car dealers, whereas retail vehicle dealers can only sell to individuals or the general public.

Wholesalers, for example, are the only ones with the authority to sell to other wholesalers and even retailers. Retailers, on the other hand, can sell to the general public. Wholesalers are the ones who import big numbers of cars. They have connections with auto manufacturers and are able to purchase these vehicles at a reduced price. Retailers can be located almost anywhere, and their vehicle costs are typically high.


You must apply for and pay the ‘Vehicle Dealership License’ cost in order to become an authorized car dealer in Nigeria. This payment validates your status as a licensed auto dealer. Having a vehicle dealership license also comes with a slew of advantages. Such advantages include the possibility of becoming a franchisee of a specific automobile manufacturer, in which case you would exclusively sell their vehicles.

There are other auction platforms that only accept certified dealers, where you can locate really low-cost offers that will net you a lot of money. Finally, operating a car dealership without a license may result in legal action being taken against you. The registration process for a vehicle dealership license can be found in the road safety offices of any location.


Purchasing used automobiles and importing them from places where they are inexpensive, such as the United Kingdom, the United States, Japan, and other European countries. Some people can buy online through auction sites or stores; after making a purchase through an auction site, you will be sent to shipping businesses. The requirement for the Car Dealer to know how much the Duty on Used Car is, including the 35 percent Official and 35 percent Levy, as well as the numerous other Charges that will provide him/her the total cost of landing a Car.

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Cars come in a variety of types and features, depending on the manufacturer. The following are examples of different vehicle types:

  • Utility vehicle (SUV)
  • Pick it up
  • A little van
  • Convertible
  • Back to Hatch
  • Wagon-type vehicle
  • Automobile de sport
  • Sedan


There are a few crucial aspects to consider when picking a location for your auto sales business.

One is that it must be in a visible location with easy access from major roads and ample parking space for both your automobile inventory and your clients’ vehicles.

Purchase a piece of land in a desirable location and construct your automobile garage. To buy your autos, you’ll need to make contact with your suppliers.

These are some of the things to think about when deciding on a location for your used car dealership.

  • The demographics of the area
  • The purchasing power of the location’s residents
  • The location’s accessibility
  • The total number of used automobile dealerships in the area.
  • The laws and regulations that apply to your business in the community or state where it is located.
  • Security, traffic, and parking


As a certified dealer, you have access to auction and bidding platforms where you can purchase your vehicles. Cars are less expensive at auction than on other sites, or you may plan a vacation to the Benin Republic. Purchase an automobile and drive it all the way to Lagos, which is currently the only legal option to import autos through the Lagos ports.

You could hire a driver to transport the vehicle to your location. When you buy a car from a foreign country, you normally do so over the phone or entirely online, as if you were shopping on Amazon. You’ll be asked to enter your shipping address, which will be the port in this case due to customs clearance.

Another option is to franchise a specific car brand, in which case the logistics will be handled for you. All you’ll have to do is sell and order again. That arrangement, however, is only conceivable if you are dealing in brand new vehicles.


There are hundreds of famous websites where you can post classified ads for the vehicles in your inventory.

It’s a good idea to list them on sites like,, and because these sites get a lot of traffic. It is mandatory to publish your vehicles on car sales websites where other dealers offer their vehicles at the price they desire and wait for buyers.

Although most websites include form fields that you can fill out if they don’t make some of them mandatory, here are a few that you must fill out while publishing online.

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When you’re dealing in a car dealership business, anything might happen to the vehicles you’re selling. Theft, destruction, or fire are all possibilities. It is advisable for the business owner to have insurance cover for the business in order to avoid losses. For your automobile selling business, you might want to consider the following insurance policy.

  • General insurance
  • Health-care coverage
  • Insurance against liability
  • Compensation for employees
  • Payment protection insurance is a type of insurance that protects you
  • Disability insurance as a sunk cost
  • Group insurance for business owners
  • Insurance against risk
  • Insurance Credit
  • Insurance Deposit


Before purchasing a vehicle from car dealers, an individual must have conducted extensive research on the vehicle they are buying. This is why, in order to increase sales, a car dealership business must have sufficient information about the company, the products it sells, and reviews from former customers on relevant web platforms.

If you own a large business, you may require as much assistance as a male for tasks such as driving automobiles in and out of the garage and parking them, cleaning the cars, and assisting with sales. Even automobile repairs are done on occasion. If the space is tiny, two of you might be able to handle the entire job. When hiring, look for someone who has worked with automobiles before.


When it comes to establishing a car dealership business here in Nigeria, you must take certain steps to market your company and attract consumers. These are some of the marketing methods and concepts that you can utilize to promote your used car shop.

  • Marketing via direct mail
  • Support Television and Radio Programs
  • Install your billboards in key areas throughout the city
  • Using sales agents and sales representatives
  • Marketing on the Internet
  • Marketing Through Referrals
  • Ensure that all of your staff are dressed in your company’s logoed shirts during working hours.
  • Participate in a roadshow in the neighborhood where your used vehicle dealership is located.
  • In the local directory, list your used car dealership.


When it comes to choosing staff for a car dealership business, you need to think about those who are experienced and will be in charge of dealing with a variety of customers and other workers who are equally crucial to the firm.


There are a few things you should think about before getting into this industry.

These include what cars to sell, where your business is located, insurance, licensing, and a variety of other considerations that have already been mentioned.

This is an extremely profitable industry, especially in Nigeria, where there are only a few automobile manufacturing companies, and most of the cars used in Nigeria are made in Western countries and then imported.

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