Man starts a car dealership as a ‘fun project’ for racecar parts. Now he’s knee-deep in a problem he never signed up for

James McGhie owns The Used Car Factory in Salt Lake City, Utah, and he’s facing a serious inventory problem. His small side project has grown into a massive operation with 250 vehicles on the lot. McGhie recently shared on social media that his original plan for the business has been completely overwhelmed by success.

McGhie, known on TikTok as (@manic_mcgoo), started the dealership for a very specific reason that had nothing to do with becoming a car dealer. He wanted to fund his racing hobby. He said, “I started a car dealership since I wanted to buy more racecar parts and do fun hood rat s— with my homies.”

According to Motor1.com, the business took off, and the inventory grew far beyond anything he expected. McGhie admitted he has a problem now. He said, “Alright this has completely gotten f—ing out of control.” He added, “And now, we have 250 f—ing cars.”

Having 250 cars is a good problem to have

While managing 250 cars might sound like a major headache, it’s a good problem to have. McGhie’s success story shows just how hard running a real dealership can be. Starting your own business gives you freedom, but going from zero to 250 cars means dealing with massive administrative work. You can’t just wing it when you have that much money tied up in inventory. 

Unfortunately, not all dealerships operate with the same integrity, as some customers have discovered how dealerships can rip them off. Experts warn that starting a car dealership shouldn’t be seen as a simple side hustle because of the huge amount of preparation and legal requirements involved. 

Before you sell your first vehicle, you need to think about five key things. You have to pick the right location, which often means setting up near other dealerships to create an “auto row” that brings in buyers. You also need to decide what kind of dealership you’re running, whether it’s new, used, specialized, or franchised.

You must create a detailed business plan. This plan needs to cover everything from your vision and strategy to a full SWOT analysis, which details your strengths, weaknesses, opportunities, and threats. If you need financing, you have to include detailed projections showing how the business will make profit. The industry has seen its share of controversy, with some dealers allegedly committing serious federal crimes.

Every state requires a license to sell vehicles, so you must check local and state guidelines. Dealerships also need to follow federal laws, including the Federal Trade Commission’s used car rule, which says every car sold must have a buyer’s guide showing its warranty and specifications.

About 21 percent of new businesses in the United States fail within the first year. With 250 cars, McGhie has a massive amount of money tied up. If he can’t sell that inventory fast enough, he risks going into debt just trying to keep the operation running.