Apply to the local department of motor vehicles to get a dealer license. Used auto parts dealers must have a special license in most states, similar to the license a car dealer would have. At this time, you should also apply for a general business license and tax identification number at your local revenue office.

Acquire a tow truck. Most used auto parts dealers have their own tow trucks; if you are unable to acquire one, this business model may be difficult. Most of your inventory will come purchasing broken down vehicles and having them towed to your location.

Set up your business office. You will need general retail and office supplies such as computers, fax machines and a cash register. It is also recommended to purchase inventory software to help keep track of the parts you have coming and going. At this time, you should set up a sign on the exterior of your business that highlights basic information, including your business name and telephone number.

Set up contract database with other used auto parts dealers. This is the network that allows used auto parts dealers the ability to get used parts they do not have in inventory. You can also list your available parts through the service. Having this service is crucial; you risk losing business if you cannot secure a part for a customer (see Resources).

Begin collecting vehicles for storage. The vehicles you collect will supply your business with the majority of your used auto parts. It is recommended to run advertisements that offer to buy “junk” vehicles or others that people may want to get ride of. Offer a small cash payment for the vehicles and free haul-off.

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