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How Much Does It Cost to Build a Showroom for Car Dealership?

The average cost to build a car showroom in the United States varies significantly by state. In New York, the costs are on average 134 U.S. dollars per square foot. However, the cost in Texas is significantly lower at 91 U.S. dollars per square foot. New car showrooms can be expensive enterprises, with double-height glazing, blazing lights, and costly stone floors.

And that’s before you even get into the realms of internet cafes and branded clothing. A car is indeed one of the most expensive purchases a person makes and today’s showroom has an important role in helping customers make that decision. In an increasingly segmented market, an outlet needs to cater to a range of clients and their needs. Dealers know that just as important as how the dealership looks, is how the dealership works.

In today’s brand-driven society, cars and lifestyle overlap, and the sales environment are expected to reflect the customer’s preferences. The scope of a car dealership scheme is not limited to sales. After-sales service is an element of the business model so a service reception and a part and workshop facility are often located on a showroom site.

Car showrooms are expected to be located on highly visible sites with good access to main transport routes and an eye-catching frontage. Display of the car range is very important and the layout and orientation of sites and display areas will have a major impact on sales.

These considerations affect environmental control strategies, as not all buildings can be oriented to mitigate solar gain and heavily tinted solar control glass is not generally considered for the main façade. For most new car dealerships, sustainability is not a primary business driver, but delivering buildings that meet manufacturers’ design codes could be a challenge.

However, the good news is that sustainable buildings are on the increase and developers are starting to see that sustainable properties may point towards lower energy costs throughout the life of the building, creating lower overheads.

With the value of the stock on display, security is also a major concern. Showrooms are expected to have comprehensive access control, alarms, and sophisticated CCTVS. CCTV tends to be located internally and externally and uses infrared for night-time vision. It may feature movement tracking and link back to remote monitoring centers.

Some systems feature loudspeaker systems used by remote monitoring teams to warn intruders that they are on camera. Discreet physical security measures such as forecourt bollards, guard railing, and perimeter fencing are also imperative to prevent unauthorized vehicle entry and exit, but must not interfere with aesthetics and customer views of vehicles on display.

Estimated Cost of Building a Car Showroom

Depending on whether you are building a simple car showroom or a modern energy-efficient car showroom, both construction costs and time will vary. Some factors that affect costs and time include:

  1. Upfront Planning, Design, and Commissioning

This will be the first expense you encounter when looking to build a car showroom. This cost account for a significant portion of the upfront costs of building a car showroom, except 20 to 25 percent of the total upfront construction cost.

  1. Land – $8,000 and $20,000

The next expense you will have is renting or buying your dealership location. Prices in this category may vary greatly depending on the type of property you are considering, its location, and the state you are in.

Monthly costs for a lease can vary between $8,000 and $20,000 with one source citing about $53,000 in annual fees for renting a shop/garage for selling used cars. Finding a good location and negotiating a good lease on commercial property can be a complex process. Make sure to be acquainted with the details or get in touch with a professional who can help.

  1. Materials Used

Indeed most car showrooms are either built using concrete tilt-up or pre-engineered metal construction. For smaller car showrooms consider pre-engineered metal structures which tend to be cheaper and faster to construct. For large car showrooms and car showrooms, the concrete tilt-up method is more cost-effective as the total area increases.

  1. Fire Suppression and Detection – $20,000 and $60,000

The sole reason for car showrooms is to sell and supply cars. These cars need to be protected by all means and that’s the reason why fire suppression and detection devices are mandated for car showrooms in the United States. The complex and specialized fire suppression systems cost between $20,000 and $60,000 for a several thousand square foot car showroom.

  1. Building Permits and Taxes – $70 per square foot

Every business in the United States needs to fulfill some legal obligations before it can start transacting. To avoid being on the wrong side of the law, entrepreneurs are advised to first research and seek clarification about their legal needs before starting a car showroom. Note that the costs will vary significantly across the U.S., but for the sake of this article, the estimate is around $70 per square foot in building permits and local taxes.

  1. Energy Associated Costs

Although better building insulation and automatic lighting systems increase your building cost, investing in this kind of solution will make a huge difference to your bottom line and the cost of these improvements will pay for themselves with relative speed. Also, consider reducing water consumption in little ways such as automatic flush low flow toilets and hands-free faucets.

7. Mechanic/Service Station – $115,000 – $320,000

Most car showrooms have an on-site service station, and this can bring many customers to the location, whether they are offering light maintenance services, preventative services, or a full-blown mechanic. All in all, there is a high profit margin for these services.

However, unlike the above amenities, service stations generally will not experience the same volume due to both customer availability and restrictions. Expect to spend around $115,000 – $320,000 to construct this.

  1. Other Costs – $15,000 – $20,000

There is a variety of other costs which are not accounted for above which include: legal consultations, advertising, buying shop equipment and furniture, as well as the cost of launching a website. Make sure to include all of these in your initial plan, because these could easily cost you another $15,000-$20,000.