How to secure car dealership licence in Nigeria


Posted by: Okenwa Emeka

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Becoming a car dealer in this part of the world is a big business. Follow this article below by Naijauto for requirements to secure a car dealership licence in Nigeria!

The Nigerian automobile industry is a wide one. One can delve into so many opportunities and  leaves enough room for every interested investor.

Becoming a car dealer in this part of the world is a big business as the country on its own is one that is largely populated with cars forming the most common means of transportation. Take for instance Lagos which is the former capital city and a commercial hub with its large population and  millions of cars plying the roads every day to the point of causing serious traffic hold ups; Not to talk of other major cities like Abuja, Kano, Port Harcourt, Awka etc.

For this reason and more people now know that car dealership is a very profitable business yet it seems only a little amount of information has been made available as regards this subject. Here Naijauto would give you some tips, conditions and requirements you will need to secure a car dealership license in Nigeria.

1. Make financial arrangements

We had to start with financial matters. No business can be established without finance and none can stand or continue existing without finance. Starting up a car dealership business in Nigeria is a big investment and as a prospective investor, you need to understand this.

You should ensure you have sufficient funds both in the form of liquidity and assets. Assets means you are credit worthy and can easily get loans from financial institutions to fund your business. This is necessary for the success of your business and could have a major influence on the type of licence you would obtain.

>>> You may want to refer to: 10 factors that reduce your car’s resale value


To be a car dealership, you must have sufficient funds

2. Decide the level of dealership you want to venture into

There are two major levels of auto dealership. It is either you choose to be a wholesale dealer or a retail dealer. This decision will still boil down to your financial capacity. Wholesale car dealers are licensed to sale to other wholesale dealers or to the retail dealers while the retail dealers are only licensed to sale directly to individuals or to the public.

 Wholesale dealers have advantages of buying cars at discounted prices directly from the manufactures. Retail dealers on that hand may not be able to handle large volumes of cars as much as the wholesale dealers and would have to sale to the public at higher prices.

Depending on your financial plan, you could go into whole sale or retail dealership

3. Register and pay for your car dealership license

Once you have made up your mind to be a car dealer; you have the necessary funding and verse knowledge of the auto industry, the next step is to register your business and make it legal. The requirements and registration processes usually varies with states however for every state, you have to apply and make payments for the ‘Car Dealership Licence’. This automatically certifies you as a legal car dealer.

In some states such as Lagos State, a particular body (Motor Vehicle Administration Agency MVAA) mandated by the State law is in charge of issuing out license to car dealers. You should find out if your state has a body in charge of that. The best place to start your enquires about this is from the Federal Road Safety Commission office in your state. If they are not the ones in charge of it, they are in a better position to provide you with information regarding this matter.

You might also need to obtain police permits and licenses from federal agencies such as the Nigerian Customs Services to avoid harassment and to help deal with the issue of car thefts and accidents.

>>> If you are considering starting a car dealership business here are some Simple steps to sell car in Nigeria the quickest


Visit the Lagos state MVAA office to secure your car dealership licence

4. Get a strategic location and delve into your car dealership business

Get a plot of land in a good site and build your car garage. You will need to establish contacts with your suppliers to buy your cars. There are auction and bidding sites for this online. If you are franchising for a particular car brand however, they can help you with handling the logistics if you are dealing with brand new cars.

Do not forget to market and advertise your business online. The internet is where the actual business takes place these days!


Your space could be a closed showroom or an open yard

We have provided here a step by step guide on how to go about getting a licence. However, one should note that the requirements for each states vary seeing they all have their different bodies in charge of the process. It is advisable for more details on each state, visit any “Road safety” office in your state.

>>> Check more car buying and selling tips on!

Okenwa Emeka

Okenwa Emeka


Okenwa Emeka is a prolific writer who combines his content creation skills with a strong passion for automobiles to make engaging articles for Naija car lovers. He is a member of the Chartered Institute of Marketing CAM with a diploma in digital marketing. 

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