How to Start a Used Tire Business

Used tire businesses sell and install tires that have been previously driven on. Some businesses also offer tire repair services, but the sale of tires accounts for the majority of a business’ revenue.

The used tire industry is strong and growing. According to the Rubber Manufacturers Association (RMA), between 30 and 35 million used tires are sold annually. About 10 percent of drivers have these tires on at least one vehicle.

Learn how to start your own Used Tire Business and whether it is the right fit for you.

Ready to form your LLC? Check out the Top LLC Formation Services.

Start a used tire business by following these 10 steps:

  1. Plan your Used Tire Business
  2. Form your Used Tire Business into a Legal Entity
  3. Register your Used Tire Business for Taxes
  4. Open a Business Bank Account & Credit Card
  5. Set up Accounting for your Used Tire Business
  6. Get the Necessary Permits & Licenses for your Used Tire Business
  7. Get Used Tire Business Insurance
  8. Define your Used Tire Business Brand
  9. Create your Used Tire Business Website
  10. Set up your Business Phone System

We have put together this simple guide to starting your used tire business. These steps will ensure that your new business is well planned out, registered properly and legally compliant.

Exploring your options? Check out other small business ideas.

STEP 1: Plan your business

A clear plan is essential for success as an entrepreneur. It will help you map out the specifics of your business and discover some unknowns. A few important topics to consider are:

Luckily we have done a lot of this research for you.

What will you name your business?

Choosing the right name is important and challenging. If you don’t already have a name in mind, visit our How to Name a Business guide or get help brainstorming a name with our Used Tire Business Name Generator

If you operate a sole proprietorship, you might want to operate under a business name other than your own name. Visit our DBA guide to learn more.

When registering a business name, we recommend researching your business name by checking:

  • Your state's business records
  • Federal and state trademark records
  • Social media platforms
  • Web domain availability.

It's very important to secure your domain name before someone else does.

Want some help naming your used tire business?

Business Name Generator

What are the costs involved in opening a used tire business?

The startup costs for a used tire business go to three primary areas. Business owners need:

  • A retail location
  • Equipment for installing tires
  • Used tires

A good location will have a storage space for inventory, a small retail area and a garage for working on cars. It’ll also be in a low-rent district so that overhead can be kept minimal. Good locations include old auto shops and warehouses that are no longer in use.

Business owners that want to reduce equipment costs can look for used equipment that’s in good condition. Purchasing used, high-quality equipment is preferable to getting new, lower-quality tools because high-quality equipment is often more efficient to use. It’ll save time and reduce labor costs associated with installing purchased tires.

When purchasing tires, business owners should get a large, varied selection. The inventory gathered should include many sizes of car, truck, low-profile and high-performance tires. Good places to purchase tires include junkyards, tire shops and retreading centers.

It’s also a good idea to forge a relationship with a wholesale supplier of rims, but rims can be purchased on an as-needed basis.

In total, these expenses may range from a few thousand dollars to tens of thousands. The range depends on how much a space costs, what type of equipment is purchased and how large an inventory a business opens with.

What are the ongoing expenses for a used tire business?

The ongoing expenses for a used tire business are manageable. They include lease payments, utilities, employees’ salaries and inventory expenses.

Who is the target market?

The target market of a used tire business is anyone who owns a vehicle and wants to save money. All vehicles need tires, and many drivers are willing to consider used tires because they provide an excellent value.

How does a used tire business make money?

A used tire business makes money by selling used tires to customers. Most tires are sold individually, in pairs of two or in sets of four. Tire Business reports that the average sale at one business, Drakes Tire’s, is a pair. Sales at another business, Rob’s Used Tires, are evenly split between individuals, pairs and sets.

How much can you charge customers?

Used tires cost much less than new ones. Gently used tires sell for up to half their initial cost, while more worn tires sell for much less.

Despite these low prices, businesses can still earn a handsome profit. Used tires can be purchased wholesale for very little because other businesses must pay a fee to dispose of old tires if they don’t sell them to a used tire business.

For each tire sold, many businesses charge an additional $15 to $45 to mount and balance the tire.

How much profit can a used tire business make?

Because there is such demand for tires, a used tire business can bring a significant profit. For instance, S & S Distributors, LLC moves 10,000 tires each week. Even at a fraction of the cost of new tires, that amounts to a sizable weekly revenue.

How can you make your business more profitable?

A used tire business can increase its profitability by also selling rims and new tires, and by offering tire repair service. Some businesses may get into more significant automotive repairs.

Want a more guided approach? Access TRUiC's free Small Business Startup Guide - a step-by-step course for turning your business idea into reality. Get started today!

STEP 2: Form a legal entity

The most common business structure types are the sole proprietorship, partnership, limited liability company (LLC), and corporation.

Establishing a legal business entity such as an LLC or corporation protects you from being held personally liable if your used tire business is sued.

Form Your LLC

Read our Guide to Form Your Own LLC

Have a Professional Service Form your LLC for You

Two such reliable services:

You can form an LLC yourself and pay only the minimal state LLC costs or hire one of the Best LLC Services for a small, additional fee.

Recommended: You will need to elect a registered agent for your LLC. LLC formation packages usually include a free year of registered agent services. You can choose to hire a registered agent or act as your own.

STEP 3: Register for taxes

You will need to register for a variety of state and federal taxes before you can open for business.

In order to register for taxes you will need to apply for an EIN. It's really easy and free!

You can acquire your EIN through the IRS website. If you would like to learn more about EINs, read our article, What is an EIN?

There are specific state taxes that might apply to your business. Learn more about state sales tax and franchise taxes in our state sales tax guides.

STEP 4: Open a business bank account & credit card

Using dedicated business banking and credit accounts is essential for personal asset protection.

When your personal and business accounts are mixed, your personal assets (your home, car, and other valuables) are at risk in the event your business is sued. In business law, this is referred to as piercing your corporate veil.

Open a business bank account

Besides being a requirement when applying for business loans, opening a business bank account:

  • Separates your personal assets from your company's assets, which is necessary for personal asset protection.
  • Makes accounting and tax filing easier.

Recommended: Read our Best Banks for Small Business review to find the best national bank or credit union.

Get a business credit card

Getting a business credit card helps you:

  • Separate personal and business expenses by putting your business' expenses all in one place.
  • Build your company's credit history, which can be useful to raise money later on.

Recommended: Apply for an easy approval business credit card from BILL and build your business credit quickly.

STEP 5: Set up business accounting

Recording your various expenses and sources of income is critical to understanding the financial performance of your business. Keeping accurate and detailed accounts also greatly simplifies your annual tax filing.

Make LLC accounting easy with our LLC Expenses Cheat Sheet.

STEP 6: Obtain necessary permits and licenses

Failure to acquire necessary permits and licenses can result in hefty fines, or even cause your business to be shut down.

State & Local Business Licensing Requirements

All businesses involved in automotive vehicle maintenance must comply with federal and state-level environmental regulations. A checklist for compliance with federal environmental regulations can be found here.

In most states, it is necessary to obtain an appropriate business license. Learn more about licensing requirements in your state by visiting SBA’s reference to state licenses and permits.

Most businesses are required to collect sales tax on the goods or services they provide. To learn more about how sales tax will affect your business, read our article, Sales Tax for Small Businesses.

Certificate of Occupancy

A used tires shop business is generally run out of a “garage,” a retail location uniquely equipped to store and repair cars. Businesses operating out of a physical location typically require a  Certificate of Occupancy (CO). A CO confirms that all building codes, zoning laws and government regulations have been met.

  • If you plan to lease a garage:
    • It is generally the landlord’s responsibility to obtain a CO.
    • Before leasing, confirm that your landlord has or can obtain a valid CO that is applicable to an Car Repair business.
    • After a major renovation, a new CO often needs to be issued. If your place of business will be renovated before opening,  it is recommendedto include language in your lease agreement stating that lease payments will not commence until a valid CO is issued.
  • If you plan to purchase or build a location:
    • You will be responsible for obtaining a valid CO from a local government authority.
    • Review all building codes and zoning requirements for you business’ location to ensure your used tires business will be in compliance and able to obtain a CO.

STEP 7: Get business insurance

Just as with licenses and permits, your business needs insurance in order to operate safely and lawfully. Business Insurance protects your company’s financial wellbeing in the event of a covered loss.

There are several types of insurance policies created for different types of businesses with different risks. If you’re unsure of the types of risks that your business may face, begin with General Liability Insurance. This is the most common coverage that small businesses need, so it’s a great place to start for your business.

Another notable insurance policy that many businesses need is Workers’ Compensation Insurance. If your business will have employees, it’s a good chance that your state will require you to carry Workers' Compensation Coverage.

FInd out what types of insurance your Used Tire Business needs and how much it will cost you by reading our guide Business Insurance for Used Tire Business.

STEP 8: Define your brand

Your brand is what your company stands for, as well as how your business is perceived by the public. A strong brand will help your business stand out from competitors.

If you aren't feeling confident about designing your small business logo, then check out our Design Guides for Beginners, we'll give you helpful tips and advice for creating the best unique logo for your business.

Recommended: Get a logo using Truic's free logo Generator no email or sign up required, or use a Premium Logo Maker.

If you already have a logo, you can also add it to a QR code with our Free QR Code Generator. Choose from 13 QR code types to create a code for your business cards and publications, or to help spread awareness for your new website.

How to promote & market a used tire business

A used tire business is best marketed through inexpensive marketing tactics that don’t increase how much a business must charge. Radio and online ads work well, as do Craigslist postings.

How to keep customers coming back

One of the challenges of getting customers is convincing drivers that used tires are a safe alternative to new ones. Businesses can do this by telling customers about their pre-sale tire inspections and offering a warranty. Rob’s Used Tires offers two-, four- and eight-week warranties based on tire grade.

STEP 9: Create your business website

After defining your brand and creating your logo the next step is to create a website for your business.

While creating a website is an essential step, some may fear that it’s out of their reach because they don’t have any website-building experience. While this may have been a reasonable fear back in 2015, web technology has seen huge advancements in the past few years that makes the lives of small business owners much simpler.

Here are the main reasons why you shouldn’t delay building your website:

  • All legitimate businesses have websites - full stop. The size or industry of your business does not matter when it comes to getting your business online.
  • Social media accounts like Facebook pages or LinkedIn business profiles are not a replacement for a business website that you own.
  • Website builder tools like the GoDaddy Website Builder have made creating a basic website extremely simple. You don’t need to hire a web developer or designer to create a website that you can be proud of.

Recommended: Get started today using our recommended website builder or check out our review of the Best Website Builders.

Other popular website builders are: WordPress, WIX, Weebly, Squarespace, and Shopify.

STEP 10: Set up your business phone system

Getting a phone set up for your business is one of the best ways to help keep your personal life and business life separate and private. That’s not the only benefit; it also helps you make your business more automated, gives your business legitimacy, and makes it easier for potential customers to find and contact you.

There are many services available to entrepreneurs who want to set up a business phone system. We’ve reviewed the top companies and rated them based on price, features, and ease of use. Check out our review of the Best Business Phone Systems 2023 to find the best phone service for your small business.

Recommended Business Phone Service: is our top choice for small business phone numbers because of all the features it offers for small businesses and it's fair pricing.

Is this Business Right For You?

Anyone who likes working on vehicles and enjoys working with their hands might be well-suited for running a used tire business. Having basic people skills is also helpful, as business owners must be able to sell tires to customers.

Want to know if you are cut out to be an entrepreneur?

Take our Entrepreneurship Quiz to find out!

Entrepreneurship Quiz

What happens during a typical day at a used tire business?

A typical day at a used tire business consists of:

  • Picking up used tires from nearby locations
  • Inspecting used tires for condition and quality
  • Selling used tires to customers
  • Installing used tires that customers purchase

Installing tires involves removing tires that are currently on a vehicle, and mounting and balancing the used tires that are purchased.

What are some skills and experiences that will help you build a successful used tire business?

In order to successfully run a used tire business, it’s necessary to know how to inspect used tires and how to install them. Business owners can get an initial education by working at a tire center (either used or new), and they can further their knowledge through courses offered by the Tire Industry Association. Some courses that business owners might want to take include:

These courses cover topics like dismounting, mounting, installing, removing and repairing tires.

More advanced courses on commercial tires are also available. When starting out, however, business owners should focus on the basic courses that focus on tires for personal vehicles. This is where most of the market demand is.

What is the growth potential for a used tire business?

Some used tire businesses focus on online sales in order to reach buyers across the country. Most, however, have one or two locations that serve a defined geographic area. Hooper’s Tire Outlet is a business that has two locations serving Upstate New York. is an example of an online-based business.

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Take the Next Step

Find a business mentor

One of the greatest resources an entrepreneur can have is quality mentorship. As you start planning your business, connect with a free business resource near you to get the help you need.

Having a support network in place to turn to during tough times is a major factor of success for new business owners.

Learn from other business owners

Want to learn more about starting a business from entrepreneurs themselves? Visit Startup Savant’s startup founder series to gain entrepreneurial insights, lessons, and advice from founders themselves.

Resources to Help Women in Business

There are many resources out there specifically for women entrepreneurs. We’ve gathered necessary and useful information to help you succeed both professionally and personally:

  • Funding
  • Events
  • Guides
  • Support

If you’re a woman looking for some guidance in entrepreneurship, check out this great new series Women in Business created by the women of our partner Startup Savant.

What are some insider tips for jump starting a used tire business?

When opening a used tire business, it’s important to only sell safe, good-quality tires. All tires should be inspected, and they should have a decent amount of life left. Just one bad tire that fails could cause an accident and devastate a business.

Some ways to test tires’ conditions include:

  • Performing air tests to check for leaks
  • Visually inspecting tires for defects or previous repairs
  • Inspecting tread depth and overall wear

How and when to build a team

Used tires businesses usually have a small team of employees from the outset. The number of employees can be kept minimal, but at least a couple people are needed so that someone can talk with customers while another employee is installing tires.

Useful Links

Industry Opportunities

Real World Examples

Further Reading

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