car business plan pdf

Used Car Dealership Business Plan Template

Written by Dave Lavinsky

Used Car Dealership Business Plan

You’ve come to the right place to create your Used Car Dealership business plan.

We have helped over 1,000 entrepreneurs and business owners create business plans and many have used them to start or grow their Used Car Dealerships.

Below is a template to help you create each section of your Used Car Dealership business plan.

Executive Summary

Business overview.

Reliable Motors is a used car dealership located in Portland, Oregon. We specialize in offering a wide selection of high-quality used vehicles to customers in our local area. With a focus on exceptional customer service and competitive pricing, we aim to become the preferred choice for individuals looking to purchase reliable pre-owned vehicles.

Reliable Motors is run by Otto Masterson. Otto has 12 years of experience in vehicle sales and dealership operations. His customer-centric approach, and strong understanding of the local market will ensure that our firm is successful.

Product Offering

Reliable Motors offers a diverse inventory of used cars, trucks, SUVs, and vans from various makes and models. Our selection includes vehicles that are carefully inspected, tested, and certified to meet our stringent quality standards. We also provide vehicle history reports and offer extended warranties for added peace of mind. Our knowledgeable sales team is committed to assisting customers in finding the right vehicle that suits their needs and budget.

Customer Focus

Our primary target market includes individuals and families in Portland, Oregon who are looking to purchase a reliable used vehicle. We will cater to customers with various budgets, offering a range of price points to accommodate different financial situations. Additionally, we will also establish partnerships with local businesses, such as car rental companies and auto repair shops, to provide them with fleet vehicles and maintenance services.

Management Team

Reliable Motors’ most valuable asset is the expertise and experience of its founder, Otto Masterson. Otto has been in automotive sales for the past 20 years. Throughout his career, he has developed a strong base of repeat customers, many of whom have stated that they will buy their next car from Reliable Motors once the company is established and running. Otto’s customer-centric approach, and strong understanding of the local market will ensure that our firm is successful.

Success Factors

Reliable Motors will achieve success by offering the following competitive advantages:

• Quality Inventory: We will ensure our inventory consists of well-maintained and reliable used vehicles that meet our strict quality standards.
• Competitive Pricing: We will offer competitive prices to attract customers and provide value for their money. Our pricing strategy will consider market trends, vehicle condition, and fair market value.
• Exceptional Customer Service: We will prioritize customer satisfaction by providing a personalized and hassle-free buying experience. Our knowledgeable and friendly sales team will assist customers in finding the right vehicle that meets their needs and budget.
• Transparent Processes: We will establish trust by providing accurate vehicle information, pricing details, and facilitating open communication.
• Strong Industry Partnerships: We will collaborate with reputable suppliers, finance institutions, and service providers to enhance our offerings and provide additional benefits to customers.

Financial Highlights

Reliable Motors is seeking $1,000,000 in funding to establish and grow the business. The funds will be allocated as follows:

• Inventory acquisition: $800,000
• Renovation and setup of the dealership facility: $100,000
• Marketing and advertising expenses: $50,000
• Working capital: $50,000

The projected financials indicate steady revenue growth and profitability within the first three years of operation

Company Overview

Who is reliable motors.

  Reliable Motors is run by Otto Masterson, a 12 year veteran in vehicle sales and dealership operations. After working for several dealerships around town, he surveyed his most loyal customers to see if they would be willing to switch to his new dealership once it is established. Most of his customers responded enthusiastically, which motivated Otto to finally launch his business.

Reliable Motors History

Once he canvassed his loyal customer base and located a potential location, Otto Masterson incorporated Reliable Motors as an S-Corporation in April 2023.

The business is currently being run out of Otto’s home office, but once the purchase of the dealership location is finalized, all operations will be run from there.

Since incorporation, Reliable Motors has achieved the following milestones:

• Found a location and made an offer of purchase
• Developed the company’s name, logo, and website
• Hired an architect to design the lot, the service area, and the office building
• Determined equipment and fixture requirements
• Began recruiting key employees

Reliable Motors Services

Reliable Motors will provide the following services to its customers:

• Vehicle Sales: offer an inventory of used cars, trucks, SUVs, and vans, catering to various customer preferences and budgets.
• Financing Assistance: assistance with financing options through partnerships with local banks and financial institutions.
• Trade-ins: Customers will have the option to trade in their current vehicles, allowing them to apply the value toward their purchase at Reliable Motors.

Industry Analysis

The used car industry is experiencing steady growth, driven by factors such as rising new car prices, improved vehicle reliability, and a growing preference for cost-effective transportation options.

The used car industry is expected to grow over the next several years. According to a recent report by IBISWorld, the used car dealerships industry is expected to grow at a CAGR of 1.2% from now until 2028. This growth is due to increasing environmental consciousness, which has caused many consumers to avoid purchasing new automobiles. This increase in demand and industry growth ensures that Reliable Motors will achieve success.

This industry presents a significant opportunity for Reliable Motors to cater to customers seeking quality used cars at competitive prices.

Customer Analysis

Demographic profile of target market.

Reliable Motors primarily targets individuals in the Portland area who are in the market for a reliable and affordable pre-owned vehicle. By understanding our customers’ needs and providing a personalized buying experience, we aim to build long-lasting customer relationships.

Customer Segmentation

Reliable Motors will primarily target the following customer profiles:

• First-time car buyers
• Professionals
• Individuals

Competitive Analysis

Direct and indirect competitors.

Reliable Motors faces competition from both direct and indirect competitors in the used car dealership industry. Direct competitors include other local dealerships offering similar vehicle options. Indirect competitors include online marketplaces and private sellers.

AutoWheels is a used car dealership that carries a large variety of used cars, trucks, SUVs, and vans. Their line of car brands include Chevrolet, Dodge, Ford, Jeep, and Toyota. AutoWheels’ focus is offering clean, newer model used cars with affordable monthly payments. The dealership offers flexible financing approval for buyers with any credit score or financial situation.

AutoWheels partners with Portland Precision Auto Care for its automotive maintenance and repair needs. This partnership enables AutoWheels to offer services that include Car and Truck care, Electronic Services, Electrical Services, General Services, Heating and Cooling Services, Engine & Transmission, Miscellaneous Services, Transmission Services, Undercar Services, and Brakes.

James Rivers Automotive Outlet

Located in Portland’s Sellwood-Moreland neighborhood, James Rivers Automotive Outlet is a member of the James Rivers Family-Owned and Operated group of dealers in Portland. The dealership carries a large inventory of new, certified pre-owned, and pre-owned line of cars, trucks, SUVs, and vans. Their line of vehicles are in all price ranges and body types. James Rivers Automotive Outlet also offers trade-in evaluations at their other franchised stores – James Rivers Honda, Acura, and Toyota. The dealership also offers affordable financing options.

Eastside Used Cars

Established in 2011, Eastside Used Cars is a family-owned used car dealership. The dealership is fully internet based and all sales are by appointment only, in one of two locations: Sandy and Gresham. The dealership claims to have the best prices in the market, offering wholesale prices to the public. Customers may also expect to receive top dollar for their trade-ins.

The dealership currently offers an inventory of 175 vehicles, ranging in price from $6,990 to $60,800. It offers a variety of finance options for consumers with all levels of credit, but outside financing is welcomed.

Competitive Advantage

Reliable Motors holds the following advantages over the competition:

• Rigorous Vehicle Inspection : Each vehicle in our inventory undergoes a thorough inspection to ensure its mechanical and cosmetic condition, providing customers with peace of mind.
• Customer-Centric Approach : We prioritize customer satisfaction by offering personalized assistance, transparent pricing, and a hassle-free buying experience.
• Extensive Inventory : Our diverse inventory caters to various customer preferences and budgets, ensuring a wide range of options to choose from.

Marketing Plan

Brand & value proposition.

Reliable Motors will offer a unique value proposition to its clientele:

• Client-focused automotive sales, where the customer is treated fairly, with transparent pricing and a variety of financing options
• Service built on long-term relationships
• Top-quality automotive repair and maintenance, at competitive prices

Promotions Strategy

The promotions strategy for Reliable Motors is as follows:

Reliable Motors understands that the best promotion comes from satisfied customers. The Company will encourage its customers to refer other businesses by providing economic or financial incentives for every new customer produced. This strategy will increase in effectiveness after the business has already been established.

Social Media

Reliable Motors will invest heavily in a social media advertising campaign. The company will create social media accounts and invest in ads on all social media platforms. It will use targeted marketing to appeal to the target demographics.

Website/SEO Marketing

Reliable Motors will invest heavily in developing a professional website that showcases current inventory, and provides valuation tools for potential trade-ins. It will also invest heavily in SEO so that the firm’s website will appear at the top of search engine results.

Operations Plan

The following will be the operations plan for Reliable Motors. Operation Functions:

• Otto Masterson is the Owner of Reliable Motors. In addition to providing inventory management and sales, he will also manage the general operations of the business.
• Otto Masterson is joined by a full-time administrative assistant, Mandy Bobo, who will take charge of the administrative tasks for the company. She will also be available to answer incoming calls and make service appointments.
• As the company builds its customer base, Otto will hire more sales professionals to grow our business further.

Milestones:

Reliable Motors will have the following milestones completed in the next six months.

• 6/2023 Finalize location purchase
• 7/2023 Design and build out Reliable Motors
• 8/2023 Hire and train initial staff
• 9/2023 Kickoff of promotional campaign
• 10/2023 Launch Reliable Motors
• 11/2023 Reach break-even

Reliable Motors’s most valuable asset is the expertise and experience of its founder, Otto Masterson. Otto has been in automotive sales for the past 20 years. Throughout his career, he has developed a loyal customer base, many of whom have stated that they will switch to Reliable Motors when it comes time to purchase a new vehicle. Otto’s customer-centric approach, and strong understanding of the local market will ensure that our dealership is successful.

Though he has never run his own business, Otto Masterson worked his way up from automotive sales associate to sales manager, where he gained an in-depth knowledge of the operations (e.g., running day-to-day operations) and the business (e.g., staffing, marketing, etc.) sides of the industry. He also already has a starting customer base that he served while working for other auto dealerships. He will hire several other employees who can help him run the aspects of the business that he is unfamiliar with.

Financial Plan

Key revenue & costs.

Reliable Motors’s revenues will from vehicle sales, with additional income generated through financing options and after-sales services. Key costs include

The notable cost drivers for the company will include inventory acquisition, overhead expenses, marketing expenses, personnel costs, and facility maintenance.

Funding Requirements and Use of Funds

Key assumptions.

The following outlines the key assumptions required in order to achieve the revenue and cost numbers in the financials and pay off the startup business loan.

• Number of clients:
• Year 1: 400
• Year 2: 500
• Year 3: 750
• Year 4: 1000
• Year 5: 1250

Financial Projections

Income statement.

		FY 1	FY 2	FY 3	FY 4	FY 5
Revenues
	Total Revenues	$360,000	$793,728	$875,006	$964,606	$1,063,382
Expenses & Costs
	Cost of goods sold	$64,800	$142,871	$157,501	$173,629	$191,409
	Lease	$50,000	$51,250	$52,531	$53,845	$55,191
	Marketing	$10,000	$8,000	$8,000	$8,000	$8,000
	Salaries	$157,015	$214,030	$235,968	$247,766	$260,155
	Initial expenditure	$10,000	$0	$0	$0	$0
	Total Expenses & Costs	$291,815	$416,151	$454,000	$483,240	$514,754
EBITDA		$68,185	$377,577	$421,005	$481,366	$548,628
	Depreciation	$27,160	$27,160	$27,160	$27,160	$27,160
EBIT		$41,025	$350,417	$393,845	$454,206	$521,468
	Interest	$23,462	$20,529	$17,596	$14,664	$11,731
PRETAX INCOME		$17,563	$329,888	$376,249	$439,543	$509,737
	Net Operating Loss	$0	$0	$0	$0	$0
	Use of Net Operating Loss	$0	$0	$0	$0	$0
	Taxable Income	$17,563	$329,888	$376,249	$439,543	$509,737
	Income Tax Expense	$6,147	$115,461	$131,687	$153,840	$178,408
NET INCOME		$11,416	$214,427	$244,562	$285,703	$331,329

Balance Sheet

		FY 1	FY 2	FY 3	FY 4	FY 5
ASSETS
	Cash	$154,257	$348,760	$573,195	$838,550	$1,149,286
	Accounts receivable	$0	$0	$0	$0	$0
	Inventory	$30,000	$33,072	$36,459	$40,192	$44,308
	Total Current Assets	$184,257	$381,832	$609,654	$878,742	$1,193,594
	Fixed assets	$180,950	$180,950	$180,950	$180,950	$180,950
	Depreciation	$27,160	$54,320	$81,480	$108,640	$135,800
	Net fixed assets	$153,790	$126,630	$99,470	$72,310	$45,150
TOTAL ASSETS		$338,047	$508,462	$709,124	$951,052	$1,238,744
LIABILITIES & EQUITY
	Debt	$315,831	$270,713	$225,594	$180,475	$135,356
	Accounts payable	$10,800	$11,906	$13,125	$14,469	$15,951
	Total Liability	$326,631	$282,618	$238,719	$194,944	$151,307
	Share Capital	$0	$0	$0	$0	$0
	Retained earnings	$11,416	$225,843	$470,405	$756,108	$1,087,437
	Total Equity	$11,416	$225,843	$470,405	$756,108	$1,087,437
TOTAL LIABILITIES & EQUITY		$338,047	$508,462	$709,124	$951,052	$1,238,744

Cash Flow Statement

		FY 1	FY 2	FY 3	FY 4	FY 5
CASH FLOW FROM OPERATIONS
	Net Income (Loss)	$11,416	$214,427	$244,562	$285,703	$331,329
	Change in working capital	($19,200)	($1,966)	($2,167)	($2,389)	($2,634)
	Depreciation	$27,160	$27,160	$27,160	$27,160	$27,160
	Net Cash Flow from Operations	$19,376	$239,621	$269,554	$310,473	$355,855
CASH FLOW FROM INVESTMENTS
	Investment	($180,950)	$0	$0	$0	$0
	Net Cash Flow from Investments	($180,950)	$0	$0	$0	$0
CASH FLOW FROM FINANCING
	Cash from equity	$0	$0	$0	$0	$0
	Cash from debt	$315,831	($45,119)	($45,119)	($45,119)	($45,119)
	Net Cash Flow from Financing	$315,831	($45,119)	($45,119)	($45,119)	($45,119)
	Net Cash Flow	$154,257	$194,502	$224,436	$265,355	$310,736
	Cash at Beginning of Period	$0	$154,257	$348,760	$573,195	$838,550
	Cash at End of Period	$154,257	$348,760	$573,195	$838,550	$1,149,286

Used Car Dealership Business Plan FAQs

What is a used car dealership business plan.

A used car dealership business plan is a plan to start and/or grow your used car dealership business. Among other things, it outlines your business concept, identifies your target customers, presents your marketing plan and details your financial projections.

You can easily complete your Used Car Dealership business plan using our Used Car Dealership Business Plan Template here .

What are the Main Types of Used Car Dealership Businesses? 

There are a number of different kinds of used car dealership businesses , some examples include: Franchised dealership, Independent dealerships, and “Bad Credit” dealerships.

How Do You Get Funding for Your Used Car Dealership Business Plan?

Used Car Dealership businesses are often funded through small business loans. Personal savings, credit card financing and angel investors are also popular forms of funding.

What are the Steps To Start a Used Car Dealership Business?

Starting a used car dealership business can be an exciting endeavor. Having a clear roadmap of the steps to start a business will help you stay focused on your goals and get started faster.

1. Develop A Used Car Dealership Business Plan - The first step in starting a business is to create a detailed used car dealership business plan that outlines all aspects of the venture. This should include potential market size and target customers, the services or products you will offer, pricing strategies and a detailed financial forecast. 

2. Choose Your Legal Structure - It's important to select an appropriate legal entity for your used car dealership business. This could be a limited liability company (LLC), corporation, partnership, or sole proprietorship. Each type has its own benefits and drawbacks so it’s important to do research and choose wisely so that your used car dealership business is in compliance with local laws.

3. Register Your Used Car Dealership Business - Once you have chosen a legal structure, the next step is to register your used car dealership business with the government or state where you’re operating from. This includes obtaining licenses and permits as required by federal, state, and local laws.

4. Identify Financing Options - It’s likely that you’ll need some capital to start your used car dealership business, so take some time to identify what financing options are available such as bank loans, investor funding, grants, or crowdfunding platforms.

5. Choose a Location - Whether you plan on operating out of a physical location or not, you should always have an idea of where you’ll be based should it become necessary in the future as well as what kind of space would be suitable for your operations.

6. Hire Employees - There are several ways to find qualified employees including job boards like LinkedIn or Indeed as well as hiring agencies if needed – depending on what type of employees you need it might also be more effective to reach out directly through networking events.

7. Acquire Necessary Used Car Dealership Equipment & Supplies - In order to start your used car dealership business, you'll need to purchase all of the necessary equipment and supplies to run a successful operation.

8. Market & Promote Your Business - Once you have all the necessary pieces in place, it’s time to start promoting and marketing your used car dealership business. This includes creating a website, utilizing social media platforms like Facebook or Twitter, and having an effective Search Engine Optimization (SEO) strategy. You should also consider traditional marketing techniques such as radio or print advertising. 

Learn more about how to start a successful used car dealership business:

• How to Start a Used Car Business

Where Can I Get a Used Car Dealership Business Plan PDF?

You can download our free used car dealership business plan template PDF here . This is a sample used car dealership business plan template you can use in PDF format.

How to Write an Auto Repair Shop Business Plan + Free PDF

Elon Glucklich

8 min. read

Updated February 16, 2024

Looking for a free, downloadable auto repair shop business plan Word doc or PDF to help you create a business plan of your own? Bplans has you covered.

You don’t need to find a sample business plan that exactly matches your business. Whether you’re starting an independent garage, a specialty shop for imports, or an auto body shop, the basics of the plan will be the same.

More than 280 million registered vehicles were on the road across the United States at the end of 2022. With a vast majority of them being used vehicles, the need for skilled auto repair technicians is higher than ever.

In this article, we’ll cover the basic elements of how to write an auto repair shop business plan, from your marketing plan to your financials. We also provide a sample auto repair shop business plan PDF for you to download and incorporate into your own plan.

What should you include in an auto repair shop business plan?

Are you writing a business plan for your auto shop because you’re seeking a loan ? Are you looking to clarify your path to creating a profitable, long-lasting business? 

Independent auto repair shops account for three-quarters of all used car repairs in the U.S., so there are numerous examples of successful business models to guide your business. 

But no two auto shops are exactly the same, so your plan will differ from others based on who you’ve identified as your target market , and what products and services you’re offering them.

Many business plans include the following sections:

• Executive summary
• Company overview and funding needs
• Market and competitive analysis
• Products and services
• Operational plan
• Business structure
• Marketing and customer acquisition strategies
• Financial planning and projections

One thing that makes an auto repair business plan different from many other service-based business plans is the sheer number of different products and services you might offer. 

For instance, besides providing auto repair services, you might also sell parts, accessories, and car care products. Each might require a different promotional strategy to maximize the number of sales you make.

You may also want to think about how you’re pricing your services and if you have specific staffing requirements or training programs.

Here’s an example of an auto repair shop business plan outline.

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The 8 elements of an effective auto repair shop business plan

1. executive summary.

The executive summary is a high-level overview of your business plan. 

It shouldn’t be more than two pages, and even though it goes at the beginning of the plan, you should write it last. That’s because the executive summary is basically a condensed version of your business plan.

Your executive summary should include a mission statement that describes the purpose of your business and what sets it apart from competitors. Maybe you can guarantee a quicker service time than other shops in your area, or you offer a unique mix of services.

Your business plan helps you focus on these key factors that will help your auto repair shop thrive, and the executive summary makes your plan more credible to anyone reading your plan.

2. Company overview and funding needs

The company overview is a short summary of your auto repair shop, including its legal structure , location, and history. 

If you aren’t seeking a loan or investment for your business, you can likely skip this section. 

If you are writing the business plan for funding, clearly state: 

• How much you need
• What you will use it for
• How it will benefit the business

For instance, you may need funds to renovate your building, buy equipment, or place advertisements.

3. Marketing plan and competitive analysis

The marketing plan focuses on analyzing the auto repair shop market in your area, both in terms of potential customers’ needs, and how other shops in the area are (or aren’t) meeting those needs.

Researching your market involves researching local demand for auto repair services. For instance, a shop in a colder climate might have customers with different car issues than a shop in a warmer area. A shop in a lower-income market might get more customers with older vehicle models than one in a high-income market.

The market analysis should also examine your competitors , noting their strengths and weaknesses and how you can differentiate your shop.

4. Products and services

This section outlines the range of services your auto repair shop will offer. You can list them as bullet points, though you should also take some time to explain why you are offering them. 

Start with your most profitable services, and work your way down. Also, separate any unique services products that differentiate your auto repair shop from competitors (you’ll need to do market research to know which services will set you apart).

A list of products and services could include:

• Engine repairs
• Transmission work
• Suspension and steering
• Brake repair
• General maintenance
• Auto part sales

You can also include specialty services like:

• Classic car restoration
• Hybrid and electric vehicle maintenance 

5. Operational Plan

The operations section details the everyday functioning of the auto repair shop. It includes the shop’s operational hours, workflow management, and customer service policies.

The idea with this section is to cover the processes that you’ll deploy in your business to make sure your shop is operating efficiently, so you can maximize the number of customers you’ll serve and revenue you’ll bring in. 

Be sure to touch on how you’ll manage inventory , work with parts suppliers, and ensure equipment maintenance protocols are being followed. Also, outline safety procedures and environmental compliance measures you’ll implement.

6. Business structure and management

This section describes the organizational structure and management of the auto repair shop. If you skipped the Company Summary and Funding Needs section, include information about your legal structure here. 

Many owners choose to incorporate their business as Limited Liability Companies (LLCs) . This option strikes a balance between protecting the business from legal liabilities while providing flexibility in how they operate their business.

The management team section provides information about the auto repair shop’s key personnel. This includes the shop owner, managers, technicians and front office support. 

Briefly explain their roles, responsibilities, qualifications, and experience. 

7. Marketing and customer acquisition strategies

This section is where you’ll outline your strategies for attracting and retaining customers. You might want to offer loyalty programs for repeat customers, discounts for customers coming to your shop for the first time, or add-on services like a free car wash.

Cover the various marketing channels you’ll use, like local advertising or online marketing. Maybe you want to create a strong website and leverage social media. Or maybe you’ll rely more on partnerships with local businesses and participation in community events. 

Focus on how you plan to build a strong reputation to attract and retain customers.

8. Financial planning and projections

Your financial plan should give detailed financial projections, including sales , expenses , and profitability . If you’re running an existing business, you can start with your previous year’s numbers. If you’re just starting out, put in your best guess.

Set a goal for yourself — maybe you want to grow revenue by 5 percent. Create a 12-month cash flow statement, income statement, and balance sheet that rises by 5 percent from the beginning of the year to the end.

Then, run your business. 

As you compare your actuals to the forecast over time, you’ll see where you need to make strategic adjustments in order to reach your goal or if you need to revise your target. 

It’s totally fine to adjust your forecast over time — forecasts are just guesses, after all.

Building a successful auto repair shop business plan: Key considerations

Understanding your target customer’s needs is crucial to writing an auto repair shop business plan that you can use effectively. 

To ensure your business plan is the foundation of a growing operation, ask yourself whether you’re taking these considerations into account.

1. Service range

Vehicle owners have varied needs. 

You should offer a broad spectrum of services that meet as many of the needs in your market as you can realistically provide, from basic maintenance to specialized repairs. Catering to more customer segments than your competitors is a good way to set your shop apart.

2. Pricing strategy

Competitive pricing is crucial. You want to attract customers with reasonable rates, while ensuring profitability by bringing in more revenue than expenses. Researching your competitors’ prices should help inform your pricing decisions.

3. Technician expertise

Skilled technicians are vital to your reputation and your bottom line. Make sure your technicians undergo regular training so that they’re up to date with the latest automotive trends and technologies. 

Take some time to research technician wages in your area, to ensure you’re paying a competitive wage that will attract qualified employees.

4. Online presence

A strong digital footprint is essential. 

Even if you plan to rely on traditional advertising and word-of-mouth sales, a website that is search engine optimized can help you generate good online reviews and attract customers in your area who are searching for auto repair services online. 

If this isn’t an area of strength for you, consider hiring a website designer .

5. Shop environment

It may not make or break your business, but providing a welcoming environment at your shop signals to customers that you’re running a credible organization—a factor that might affect whether or not they return. 

Focus on cleanliness, organization, and professional service.

Download your free auto repair shop sample business plan PDF

Download your free auto repair shop sample business plan PDF now, or explore Bplans’ collection of over 550 sample business plans for other options.

There are numerous reasons auto repair shop owners can benefit from writing a business plan — you’ll almost certainly need to write one if you need a bank loan.

But even if you’re not seeking funding, writing a business plan increases your chances for sustained growth .

Elon is a marketing specialist at Palo Alto Software, working with consultants, accountants, business instructors and others who use LivePlan at scale. He has a bachelor's degree in journalism and an MBA from the University of Oregon.

Table of Contents

• What to include in your business plan
• Elements of a business plan
• Key sections
• Example and template

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4+ SAMPLE Used Car Business Plan in PDF | MS Word

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Used Car Business BUSINESS PLAN

BUDGET CARS

145 Water Street Alpena, MI 49707

This business plan addresses all relevant concerns by presenting a comprehensive account of a month-by-month marketing strategy coupled with an extensive report on all aspects of the needs of a successful used car center. The care and detail of the financial figures assures a well-thought and carefully considered proposition. Note the effort to make the lender comfortable and familiar with the staff.

PRODUCTS AND SERVICES

Industry description, market definition, marketing plan, company structure, financial plan, resumes and personality profiles.

• Mission —The mission of Budget Cars will be to buy and sell a desirable mix of quality used cars, trucks, and vans, and to create a friendly atmosphere where Budget Cars will be known for being your family used car center.
• Legal Status/Location —The legal status of Budget Cars is a subchapter "S" corporation. The location is in Alpena, Michigan.
• Products and Services —The products that Budget Cars will offer are quality used cars, trucks, and vans at below market value. The services that will be offered are in-house financing provided by area banks with approved credit and a full automotive detail center that will recondition all units for sale.
• Market and Sales Strategy Due to several different factors (season changes, market changes, opening date, etc.), our advertising strategies are going to vary accordingly. We are going to be consistent with our advertising in the "Out and About" section that runs every other week in the Alpena Journal and at least one ad once a month in the Daily Herald. January 15, 1997—Our goal is to open the doors and start our advertising in the "Out and About" section of the Alpena Journal , $40.00 each run, reaching 5,000 homes, and an ad in the Daily Herald . February—First week, buy the front page of the Daily Herald, $525.00, reaching 17,000 homes and continue with every other week in the Alpena Journal . Also concentrate on 3 spots a week in the classifieds, about $27.00 per week. March—This month we'll continue our "Out and About" section, 3 spots a week in the classifieds, and at least one ad in the Daily Herald to keep in contact with the out county. April—"Grand Opening" will be held this month. With the snow gone and everyone ready for a cookout, we'll have our "Family Festive." Included in this will be a tent, grilling hot dogs, contacting acquaintances with "Victorian" cars, and asking them to bring them to the lot for display. Also, the "Out and About" section and the ads in the classifieds will be run along with an ad in the Daily Herald . May, June, and July—We'll start with a little radio advertising, maybe sponsoring a morning weather program and continuing with our "Out and About" section and an ad in the Daily Herald . As for the classifieds, we'll determine at that time if they are worth using. August, September, and October—Still keeping with radio, sponsor a local high school sport and continue the "Out and About" section and an ad in the Daily Herald . November—We'll go with the "Out and About" section and the ad in the Daily Herald and determine if it's time to advertise in the classifieds. December—Have a coloring contest for the kids, with prizes that tie in with the holidays, advertising in the Alpena Journal and the Daily Herald. Budgeting $575.00 a month, a total of $6,900.00 a year, this should be a realistic dollar amount and provide us with plenty of exposure.
• Management Team and Responsibilities —The management team members are Ben Heath, Margerie Heath, and Peter James, with Ben ultimately being the leader. Margerie's responsibilities will include F&I, bookkeeping, answering and routing phone calls and payroll. Peter will be maintaining and operating the automotive detail center. Ben will be responsible for the buying and selling of automobiles and overseeing all operations. The number one responsibility of our management team is to create a friendly atmosphere where our customers come first. They will always be courteously acknowledged with a friendly smile and a handshake.
• Our main objective is to buy and sell 180 quality used vehicles in the first year of operation, with an increase per year of 60 vehicles, ultimately reaching an average of 300 cars per year.
• We project $171,000.00 in gross profit for the first year, making that a $950.00 per unit gross after marketing sales expense is deducted, increasing accordingly with the number of units sold per year to reach our $315,000.00 gross profit by the fourth year.
• Profit Projections —Budget Cars will have a net profit in the first year of operations.
• Balance Sheet Projections —We are projecting an increase of net worth of the business by $39,154.05.
• Initial Products and Services —When we first open in January 1997, if the weather is typically like most northern Michigan winters, there will be snow on the ground. Purposely the inventory will be minimal and focus on 4x4 trucks, utility units, and a family budget row of used cars that will satisfy the second car needs.
• Need for the Product and Service —With the prices of new vehicles reaching an average of $20,000.00 plus, and continually raising each year, the used car, truck, and van market has become stronger. That's why Budget Cars is opening their doors in January 1997 to take a share of the market which is wide open in this area.
• Major Suppliers —A majority of the vehicles that Budget Cars will offer will come from auctions and new car dealerships. The auctions will be our major suppliers of late model vehicles and the new car dealerships will be an access to the vehicles we can offer between $3,000.00 - $7,500.00. Other vehicles will come from trade-ins and private purchase units.
• Background of the Industry —Immediately following World War II, there were roughly nine buyers for every new car produced. Sales personnel merely had to find out who could afford a new car. "Afford" was defined as paying cash. This condition existed until the early 1950s when supply began to discover that some new terms were creeping into the retail salesperson's vocabulary. Words like "overallowance," "discount," "deal," and "terms." The emphasis, however, was still not on product but on price. In addition, the asking price was no longer final. There was also, if you could haggle a little, a taking price. It was possible to bargain with the dealer for the first time. During the 1960s, other new merchandising techniques were introduced. "Sticker price," "fleet price," "hard sell," "50 over invoice," "high-powered advertising," and "free" accessories were but a few new innovations. The buyer was becoming better educated, better able to buy—thanks to 24- and 36-month payments—but still confused and fearful of price. "Good deals" became "bad deals" after talking to friends and neighbors. Caution became the watchword when buying a car. The advent of the 1970s brought more confusion to buyers with new procedures like leasing, 48-month payments, credit unions, rebates, and consumer advocates. However, in defense of the consumer, books on "How to Buy a Car," "Invoice Prices U.S. Cars," and "Used Car Buyers Guide," were published and sold by the millions. During the 1970s automobile salespeople became conditioned to the notion that customers were interested in only one thing—the very lowest price. The automobile showroom atmosphere didn't change very much from the 1970s to the 1980s. Most retail salespeople saw the business of selling automobile as an "us against them" hard-sell game. Those who sold popular Japanese products became arrogant and insensitive to their customers and those of us who sold American vehicles continued with the approach that price, and price alone, sells vehicles. As the 1980s came to a close, however, the winds of change began to impact the retail automobile marketplace. Today, in the mid 1990s, the business of retailing automobiles is quite different than it has ever been in the past. In today's marketplace, 5 out of every 6 cars sold in the United States are used.
• Trade Association Assistance —Federal Register offers assistance with compliance guidelines for used car rules and (NADA) National Auto Dealers Association offers assistance.
• Industry Trends —Vehicle sales seems to be a trend with our Michigan seasons. While the sun is shining and the temperatures are warm, outdoor family activities become more popular, encouraging camping, vacations, and sight seeing. These activities increase the demand for minivans, station wagons, and sport utility vehicles. As the kids head back to school and the weather turns cold, road conditions deteriorate. This creates demand for a more rugged, durable unit such as light duty trucks and vans. The extra security of four-wheel drive is also more popular during this season.
• Number and Kind of Businesses in the Area in the Industry —There are four new car dealerships in Alpena that offer a line of used vehicles. There are also three used car lots in town offering a very limited selection of units.
• Government Regulations —An important regulation of the government is to obtain and maintain a class "B" license. The Federal Trade Commission also publishes rules and regulations for operating a used car lot. The used car rule has four basic components. (1) Prepare and display a Buyers Guide on each used vehicle offered to the consumer. (2) To include a special disclosure in the contract of sale. (3) To identify the final warranty terms in the contract of sale. (4) To give the purchaser a copy of the Buyers Guide that includes the final warranty terms.
• Business Cycle —Ups and downs go with any industry, but with the sale of used vehicles there seems to be more of a plateau. When the economy is good, sales are great. When the economy is sluggish, used cars are still in demand because of their price factor.
• Customer Profile —Budget Cars will be focusing on three customer profiles. One being a first-time buyer, age 16-25, next being the middle-class family looking for a second car, and third, age 50 and over low-income adults.
• Buying Decision Determinants —After presenting to the customer quality used vehicles that have been safety checked, backed with a warranty and a competitive low price, the main determinant that we believe will bring the customer to the close is working one on one with the owners and their honesty and reputations.
• Customer Awareness of Product/Service —Our advertising campaign will ensure that the customer knows who and where we are. Our up close and personal interview process will be a thorough, detailed, step-by-step explanation of our product and commitment to our customers' needs.
• Geographic —Our primary source of customer base will come from the local and surrounding counties. Starting from our location in Alpena, all of the counties are within a thirty-mile radius.
• Population —The total population of our targeted customer base is 93,945 people. Using Alpena as a comparison, according to the Census taken in 1990, the total population of Alpena County was 21,265. The number of 18- to 25-year-olds was 1,547, the number of people 25-54 was 8,344, leaving a total of 6,273 over the age of 55. The percentage of population that was over the age of 18 at that time was 76%.
• Sales —A statistic taken in 1990 determined the number of vehicles available per occupied housing unit in Alpena County. Of 8,580 housing units, 777 had no means of motorized transportation, 3,132 owned one vehicle, 3,346 housing units owned two vehicles, and 1,325 had three or more. In order for Budget Cars to reach its projected first-year goal of 15 units per month, only 2.4% of the Alpena market needs to be cornered. Any units sold to customers within the rest of the targeted counties will be additional business.
• Market Growth —An estimated population increase throughout our targeted counties can only mean more people with a need for transportation. There was a population increase from 21,265 to 27,912 in Alpena County by 1995.
• Jenson's Sales and Service Dodge, Chrysler, Jeep, Eagle, and used vehicles
• Alpena Ford Mercury Ford, Mercury and used vehicles
• Boji Buick Pontiac Oldsmobile GMC Buick, Pontiac, Oldsmobile, GMC Trucks, and used vehicles
• Miller Chevrolet Cadillac Geo Chevrolet, Cadillac, Geo, and used vehicles
• Car Trade Center
• Thunderbird Auto
• Jake's Auto Parts
• Strengths and Weaknesses of the Competition —Jenson's Sales and Service is selling new and used cars on a more relaxed approach. Alpena Ford Mercury is aggressive in both new and used vehicle sales, with the majority of their used cars being higher priced program cars. Boji's is focused on new car sales. Miller offers new and used vehicles but are not very aggressive. There are three older used car lots in town that maintain a "B" license. Selling cars is not their main source of income. Very little, if any, priority is given to car sales.
• Pricing —Budget Cars is in a better position than our larger competitors because the overhead is much lower. All deals will be conducted between the owner and customer with no commission paid salesperson taking a cut from the profit made on the deal. The clean-up and reconditioning of all vehicles will be completed in-house. This way we will be able to beat the larger dealers' prices every time and still make enough profit to maintain business expenses and build capital for future expansion. Our main goal will be to sell more for less and be known as "Your Family Used Car Center."
• Marketing Overview —Budget Cars plans to focus on young first-time auto buyers, familes with second car needs, and low-income adults aged 50 and over. To capture this market we plan to advertise with the local newspaper and radio. But, more importantly, is the support and participation that we will show in community activities.
• Marketing Objectives —Budget Cars's main marketing objective is to focus on the customers' wants and needs and, at the same time, maintain a marketable selection of vehicles at all times. This will allow us to effectively influence and persuade them to buy.
• Advertising —Our main advertising strategy is to let our potential customer know that we are aware of their wants and needs and have quality inventory and prices. To prove it, we will let them know that if we don't have what they're looking for, we'll get it.
• Marketing Budget —From the time that Budget Cars takes possession, until the point of sale, the marketing budget will average $300.00 per unit. This includes the driver's expense, a safety check, repair work, if needed, reconditioning, and all forms and documents used to track market trends.
• Facility Requirements —The ideal facility for Budget Cars is a highly visible location with a lot large enough to hold 30 units and enough space for customer parking. Also, we will need a building large enough to house a reconditioning center and a sales floor with several private offices.
• Reconditioning Department —The equipment needed for this area will be a rug doctor, shop vacuum, stripping wheel, six-foot ladder, hose and nozzle, buffer, heat gun, miscellaneous small tools, and a plow vehicle for snow removal.
• Office and Sales Department —The equipment needed for this area will be two desks, nine chairs, one computer and printer, one fax machine, two phones, copy machine, two calculators, and a coffee machine.
• Labor Requirements —Budget Cars will have two salaried owners as their main operators. Ben will be manning the sales and Peter will take care of the reconditioning department. Margerie, a full-time employee, will be handling the office duties.
• Legal Status —Budget Cars will be a subchapter "S" corporation.
• Accountant —William P. Johnson of William P. Johnson Company PC CPAs, Alpena, Michigan, will be Budget Cars' accountant.
• Insurance —Cheryl Booker and Robert Ordowski of The Floyd Agency, Alpena, Michigan, will be Budget Cars' insurance agents.
• Consultant —Phillip J. West of Alpena Community College, Alpena, Michigan, has been a consultant for Budget Cars.
• Start-Up Costs —The start-up cost for Budget Cars will be $9,994.00. This figure includes office supplies, $377.00; marketing and reconditioning, $4,215.00; accounting and legal, $1,350.00; rental security deposit, $1,100.00; insurances, $1,575.00; gas expenses, $300.00; car phone and pager, $100.00; Chamber of Commerce dues, $177.00; and improvements to location, $800.00.
• Sources/Uses of Funds —Personal funds, a $25,000.00 ten-year loan and $150,000.00 of floor plan will be used to operate the business.
• Cash Flow Projections —Budget Cars foresees no cash flow projection problems.
• Profit/Loss Projections/Breakeven Analysis —The Company expects to have a gross profit the first year of $60,237.00.
• Balance Sheet Projections —Budget Cars projects an increase of net worth the first year to be $39,154.05.
• Business Location —Budget Cars will be located in Alpena, Michigan.
• Location Costs —The lease of the building will be $600.00 per month for two years.
• Licenses, Permits and other Regulations —Budget Cars will need a class "B" dealership license, a sales tax I.D. number, and a city permit for the opening.
• Insurance Needs —Budget Cars will need Fleet Insurance, Workman's Compensation, Renters' Insurance, and will be carrying health insurance for the shareholders.

Income Statement

This chart is a projection of our monthly cash flow after expenses. These figures have been meticulously researched and should be very close to the actual amounts. A start-up cost of $9,994.00 has not been included with these calculations.

Projected Yearly Gross Profit

This chart shows the average gross profit per unit and the profit potential with volume. Budget Cars has established goals in gross profit and volume for the next four years.

(with sales marketing expenses deducted)

15	162,000	171,000	180,000	189,000	198,000	207,000
17	183,600	193,800	204,000	214,200	224,400	234,600
18	194,400	205,200	216,000	226,800	237,600	248,400
20	216,000	228,000	240,000	252,000	264,000	276,000
23	248,400	262,200	276,000	289,800	303,600	317,400
25	270,000	285,000	300,000	315,000	330,000	345,000

Projected Monthly Material Expenses

This chart shows the materials required monthly for the clean-up and reconditioning of 15 safety-checked units.

(These figures are included in the Sales Marketing Expense.)
2 Gallons	Tire Dressing	25.00/Gal.	50.00
2 Gallons	Interior Cleaner	10.50/Gal	21.00
2 Gallons	Mag Wheel Cleaner	15.50/Gal	31.00
1 Gallon	Window Cleaner	9.00/Gal	9.00
1/4 Gallon	Miracle Wax	24.00/Gal	6.00
1/4 Gallon	Rubbing Compound	16.00/Gal	4.00
1/2 Gallon	Bug Remover	10.50/Gal	5.25
4 Each	Buffing Pads	4.50/each	18.00
3 Each	Stripping Pads	8.50/each	25.50
6 Each	Interior Paint	4.50/each	27.00
6 Each	Semi Gloss Paint	3.00/each	18.00
1/4 Gallon	Interior Deodorant	21.00/Gal	5.25
3 Gallons	Wash Soap	12.50/Gal	37.50
1 Each	Chamois	20.00/each	20.00
2 Gallons	Mineral Spirits	5.00/Gal	10.00
1/4 Package	Razor Blades	12.00/each	3.00
1 Case	Paper Towels	18.00/Case	18.00
5 Each	Wax Applicator	2.00/each	10.00
1/2 Roll	Polishing (Cheese) Cloth	30.00/Roll	15.00
6 Each	Touch up Paint	4.00/each	24.00

Class "B" Licensing Requirements

This list includes the necessary steps to take when acquiring a Class "B" Dealers License.

Original Application Assumed Name and/or Corporate Filing Fingerprint Cards Sketch or Photo of Business Location Zoning Approval Sheriff or Police Signature Repair Facility or Service Agreement Sales Tax License Secretary of State Branch Designation Fleet Insurance 2 Dealer Plates (Minimum) $10,000 Vehicle Dealer Surety Bond

Number of Vehicles Available per Household

This chart shows the number of vehicles per housing unit in Alpena County. We only need 2.4% of this market to reach our first-year gross profit goal.

Ashland	245	8	89	99	49
Botten	544	24	158	248	114
Cathro	199	0	40	92	67
Grass Island	244	25	73	107	39
Herron	316	20	140	112	44
Hubbard Lake	763	40	241	333	149
Lachine	2,896	492	1,256	888	260
Leer	1,092	33	350	505	204
Long Rapids	449	43	162	172	72
Metz	108	2	43	31	32
Ossineke	470	34	166	198	72
Polaski	521	36	163	208	114
Posen	257	3	98	122	34
Presque Isle	200	7	63	91	39
Sprat	276	10	90	140	36

Resumes and personality profiles of Budget Cars's management team.

CAREER GOAL

To own and operate a successful used-car dealership that I can devote all my energy and enthusiasm to.

WORK EXPERIENCE

Pine Country Ford, August 1986 - October 1990/July 1996 - Present (Sales Manager / Consultant)

*Create and maintain a diverse customer base *Conduct telephone interviews with potential customers *Maintain a thorough knowledge of all current inventory *Determine which inventory is marketable and contact buyers that may be interested *Persuade buyers into a oneon-one meeting *Recognize and satisfy customers' wants and needs *Assist customers in determining which vehicle and financing terms best fit their needs *Be the connecting link between the buyer and dealer while settling on a price which satisfies all parties involved

Alpena Ford Mercury, January 1991-June 1996 (Sales Consultant / Sales Manager)

*Oversee all sales operations to include showroom, display lot, and reconditioning shop *Appraise trade-in vehicles and offer a fair price that will encourage a sale and create a marketable trade-in *Order new vehicles from factory for retail and dealership inventory *Create a positive, enthusiastic atmosphere for the subordinate sales consultants that will promote increasing sales and high moral *Devise and carry out marketing plans to include advertising & promotions that will ensure growth and sales *Recognize customer needs and limitations through brief descriptions provided by sales consultants *Request and accept dealer trades that will satisfy a multitude of parties involved *Interact with the public on a constant daily basis in a positive, friendly, honest manner *Create and maintain a consistent marketable lot that will stimulate sales and growth through consumer tracking, market trends, and analyzing area economic status

United States Marines, March 1982 - July 1986 (Medical Administration Specialist)

*Decipher doctor-prepared patient charts and type them for future reference *Monitor, maintain, file, and organize patient records to ensure quality care *Operate all office equipment to include multi-line telephone, computer, printer, copy machine, facsimile machine

EDUCATIONAL BACKGROUND

University of Miami, Miami, Florida - December 1989, Used Vehicle Management

Ford Division Increasing Sales through Prospecting Course - April 1987

Ford Division Compact and Full-Size Light Truck Selling Course - March 1987

Ford Division National Walk Around Course (First place in competition) - February 1987

Roger Bolt Advance Sales Course - October 1986

Roger Bolt Professional Sales Course - November 1986

Alpena Community College, Alpena, Michigan - September 1981-June 1982, Business Management

*Psychology *Public Speaking

Central High School, New York, New York - September 1981-June 1982

*Algebra *Geometry *Accounting *English *Government *Economics *History *Social Studies

SPECIAL QUALIFICATIONS

*Ford Division Legend Leaders 300/500 Leadership Recognition Award 1995 *Top 10% Customer Satisfaction Diplomat Society Honors 1991, 1992, 1993, and 1994 *Ford Division Recognition for being the Top Salesperson for Alpena Ford 1990, 1991, 1992, 1993, promoted to Sales Manager in 1994 *Ford Division Recognition for being the Top Salesperson for Pine Country Ford 1986, 1987, promoted to Sales Manager in 1988 and in 1989 won Ford Division Professional Sales Managers Award, Top 10%

OUTSIDE INTERESTS

*Sunday School Teaching *Camping *Horseback Riding *Participating in outdoor activities with family *Gardening *Handy work around the house

REFERENCES AVAILABLE UPON REQUEST

Summary of Predictive Index Results

Name: Ben Heath Survey Date: June 12, 1996 Report Date: June 24, 1996

Ben is an engaging, stimulating communicator, poised and capable of projecting enthusiasm and warmth, and of motivating other people.

He has a strong sense of urgency, initiative, and competitive drive to get things done, with emphasis on working with people in the process. He understands people well and uses that understanding effectively in influencing and persuading others to act.

Impatient for results, and particularly impatient with details and routines, Ben is a confident and venturesome "doer" and decision-maker who will delegate details and can also delegate responsibility and authority when necessary. Ben is a self-starter who is skillful at training and developing others. He applies pressure for results, but in doing so, his style is more "selling" than "telling."

At ease and self-assured with groups or in making new contacts, Ben is gregarious and extroverted, has an invigorating impact on people, and is always "selling" in a general sense. He learns and reacts quickly and works at a faster-than-average pace. Able to adapt quickly to change and variety in his work, he will become impatient and less effective if required to work primarily with repetitive routines and details.

In general terms, Ben is an ambitious and driving person who is motivated by opportunity for advancement to levels of responsibility where he can use his skills as team builder, motivator, and mover.

MANAGEMENT STRATEGIES

To maximize his effectiveness, productivity, and job satisfaction, consider providing Ben with the following:

• Opportunities for involvement and interaction with people
• Some independence and flexibility in his activities
• Freedom from repetitive routine and details in work which provide variety and change of pace
• Opportunities to learn and advance at a fairly fast pace
• Recognition and reward for communications and leadership skills demonstrated
• Social and status recognition as rewards for achievement.

Prepared by: John Harper Copyright © 1994 by Profiles, Inc. All rights reserved.

PETER JAMES

Occupational goal.

Seeking employment with a professional establishment that provides a challenging stimulating work atmosphere to individuals who demonstrate a positive self-starting attitude.

• Alpena Ford Mercury, 1/17/95-Present Employer (Automotive Appearance Enhancement Technician) *Clean and detail engine compartments. *Strip excess finishes and imperfections with low RPM power wheel. *Repair minor scratches and discolorations of surface paints. *Rustproof over spray removal. *Paint Protection application. *Apply new finishes. *Perform interior cleaning and minor repair. *Apply dye to carpets and upholstery. *Operate industrial debris extractor. *Apply after market and OEM accessories.
• American Waste Systems, 1/14/94-11/9/94 (Route Coordinator) *Maintain continuity of 10 collection routes by filling in and training new drivers for routes with short callings. *Organize route changes for maximum efficiency and make changes in computer automated route sheets. *Complete route audits and analysis.
• Jackson's Disposal Service Inc., 1/6/91-1/13/94 (Collection Route Driver) *Operate manual and automatic transmission heavy trucks *Operate Clark Pneumatic Forklift. *Operate industrial recycling equipment such as cardboard baler, paper shredder, and glass crusher. *Operate FCC licensed two-way radios. *Operate front end loaders.
• Holiday Inn of Alpena, 7/11/90-10/12/90 (Night Auditor) *Investigate cashier discrepancies *Credit card collection. *Complete computer automated audits. *Computer interfacing. *Accounts Payable/Receivable. *Word processing. *Facsimile sending & receiving *Modem communication. *Automated telephone switchboard operation.
• United States Marines, 8/9/84-2/23/90 (Food Service Shift Leader, 4/1/89-2/20/90) (Shift Supervisor 3/10/88-4/1/89) (Night Auditor 1/1/86-3/10/88) (Desk Clerk 10/15/84-1/1/86) *Operate Wang Mainframe Computer. *Operate NCR cash register. *Utilize manual and computerized telephone switchboards. *Prepare City Ledger Accounts. *Accounts Payable/Receivable. *Bank deposits. *Assign Duties. *Prepare schedules. *Train personnel on computer. *Complete employee performance reports. *Meal preparation and stock ordering. *Calculate amount of food required for each day's consumption.
• ASB Leadership School, June 7, 1989-July 6, 1989 *People/Resource Management
• Alpena Community College, August 28, 1988-June 1, 1989 *Mathematics *Music
• Community College of the Marines, October 15, 1984-February 23, 1990 *Hotel/Restaurant Management
• Alpena High School, September 1, 1982-June 1, 1984 [Diploma 3.5 GPA] *Accounting *Algebra *Art *Geometry *English *Drafting *Physics

*Own and operate Acer 7100 personal computer with Microsoft Windows/Works & MS DOS. Also Installed Drivers for a Canon BJC 4000 Ink Jet Printer that is used with this computer. *Clean driving record with a commercial Class B endorsement. *Own & operate various Multi-Track sound recorders and mixers. *Perform extensive automobile repair & Car Stereo installations.

*Playing Guitar *Sound Recording *Operating my personal computer *Electronics *Automobiles *Home remodeling

Name: Peter James Survey Date: September 11, 1996 Report Date: September 11, 1996

Peter is an intense, results-oriented, self-starter, whose drive and sense of urgency are tempered and disciplined by his concern for the accuracy and quality of his work. His approach to anything he does, or is responsible for, will be carefully thought-out, based on thorough analysis and detailed knowledge of all pertinent facts.

Strongly technically oriented, he has confidence in his professional knowledge and ability to get things done quickly and correctly. With experience, he will develop a high level of expertise in his work and will be very aware of mistakes made either by himself or anybody doing work under his supervision. Peter takes his work and responsibilities very seriously and expects others to do the same.

In social matters, Peter is reserved and private, with little interest in small talk. His interest and his energy will be focused primarily on his work and, in general, he is more comfortable and open in the work environment than he is in purely social situations. In expressing himself in his work environment he is factual, direct, and authoritative.

Imaginative and venturesome, Peter is a creative person, capable of developing new ideas, systems, plans, or technology, or of analyzing and improving old ones. He relies primarily on his own knowledge and thinking, with little reference to others, relying as much as possible on himself alone to get things done. He will find it difficult to delegate, feeling strongly that if he is to be sure that something is done right, he must do it himself.

When, as a supervisor, it may be necessary for Peter to delegate details, he will follow up very closely and will be quick to spot and correct mistakes. His primary concern is to get things done right and quickly, and in accomplishing that goal he will be demanding of himself and others. While he may be perceived by other people as a rather aloof person, he will earn their respect for his knowledge of his work and the soundness of his decisions.

To maximize his effectiveness, productivity, and job satisfaction, consider providing Peter with the following:

• Opportunities to broaden the technical knowledge of his work with learning experience in increasingly responsible positions
• As much autonomy as possible in expressing his ideas and putting them into action
• Recognition for tangible results obtained, rather than for political or selling skills

MARGERIE HEATH

To contribute the skills and abilities needed in the successful formation and continued operation of a profitable business.

Henderson Real Estate, June 1996-Present - Smith Realty, May 1987-June 1989 [Receptionist/Sales Agent]

*Receive and route phone calls *Arrange and store of documents *Prepare legal documents and business forms with word processor *Greet customers *Build and maintain a customer base *Identify the needs of customer requests *Present a list of available options *Conduct tours of properties of their interests *Acting as Liaison between Seller and Buyer to reach a result which is suitable to all parties

Hidden Valley Resort, June 1984-May 1996 - Duchess Inn, July 1987-January 1989 (Waitress/Hostess/Bartender/Supervision)

*Provide people a with warm, friendly atmosphere *Take orders and relay them to the kitchen staff utilizing a data processor *Fulfill orders and beverage requests in a quick and orderly manner *Monitor dining area and recognizing patrons' needs *Prepare guest check on computer *Process payment and provide correct change to guest *Recognize personnel shortages and take necessary action *Delegate responsibilities to co-workers *Train new personnel *Credit card collection *Prepare bank deposits

Michigan State University, September 1984-February 1987 *Business Administration/Psychology

Northern High School, September 1980-June 1984 *Business *Accounting *Algebra *Geometry *Pre-Calculus *English *Typing

*Maintain a valid real estate license *Teach Sunday School Courses *Full-time parent *Outgoing *6 year Cheerleader *Awarded for top monthly sales October 1995 *Caring *Enthusiastic

*Camping *Riding bike *Participating in outdoor sports of all kinds *Cooking *Playing cards *Gardening

Name: Margerie Heath Survey Date: July 10, 1996 Report Date: July 10, 1996

Margerie is a patient, stable, and cooperative person who will do her work as instructed and will depend on management and professional training to provide the necessary guidelines. She has the patience and tolerance required for routine work and can be relied on to do such work consistently and in a relaxed manner.

She will focus on the details of her work and will handle them with somewhat better-than-average accuracy. In work involving repeated contact with people, Margerie will be pleasant and agreeable, helpful and cooperative. She derives satisfaction from being of service to others, works comfortably under close supervision, and likes to feel part of a secure team.

Fairly easygoing, Margerie works at a steady, relatively unhurried pace and is comfortable doing the same things in the same way repeatedly. In the event of change in her work and responsibility, she needs to be given time to learn the new work thoroughly, which is best done with some opportunity for practice. Once having learned, she retains well.

In social terms, Margerie is unassuming, friendly and pleasant in general contact. She is a patient and willing listener, particularly with people she knows well and with whom she feels at ease.

Dependably consistent and steady in her work habits, Margerie will need close support and encouragement from supervision when she is required to work under pressure or in changing conditions.

To maximize her effectiveness, productivity, and job satisfaction, consider providing Margerie with the following:

• Thorough, careful training in all detailed aspects and routines of her job
• Opportunity for repetitive practice doing what she has been trained to do
• A stable, familiar work environment and organization, with assurance of security provided by helpful, supportive management
• Expressions of recognition for long service, cooperation and work well done
• Assurances of stability, security, and continuity of relations with familiar coworkers

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Making a plan to pay for long-term care: Insurance and other alternatives

Almost three-quarters — 70% — of people  turning 65  will  need long-term care  in their lifetime, according to a  report  by the Urban Institute and the Department of Health and Human Services. How to pay for that care is worrisome for many families. 

Stacey Hachenberg, 58, and her partner, Sharon Fleming, 53, have been caring for their parents for several years. Hachenberg’s father died in April after staying at an assisted living facility for two years. While she coordinated his care, the cost was covered by his savings, pension and veterans benefits. 

“It took about a year to actually get those benefits,” Hachenberg said, even with the facility’s help navigating the Veterans Affairs application process.

“Had we not had a tiny little bit of money in my father’s savings, we would have been in trouble,” she said.

Finding benefits to pay for care

Understanding what benefits you have or may qualify for is a critical part of  planning for long-term care , financial advisors say. Figuring out where you want to receive long-term care, who will be your caregiver and how you’ll pay for the care should all be part of the planning process, said certified financial planner Marguerita Cheng, CEO and founder of Blue Ocean Global Wealth in Gaithersburg, Maryland. 

“Long-term care insurance can be helpful because it allows you to transfer some of the risk,” said Cheng, who is a member of the CNBC  Financial Advisor Council .

Long-term care insurance typically  pays for care  if you have a chronic illness, have dementia or a severe cognitive decline, or can’t do at least two out of six “activities of daily living” without assistance: bathing, dealing with incontinence, dressing, eating, getting on or off the toilet or getting in or out of a bed or chair. 

Fleming said her mother, Toni Arfa, has Alzheimer’s disease and is now in an assisted living facility that costs about $8,000 a month. “She doesn’t need skilled nursing. She just needs to be safe,” Fleming said. 

Arfa is not eligible for veterans benefits and never purchased long-term care insurance, so her savings are covering the cost, Fleming said. She figures her mother can pay for about another two years of care before the money runs out.

“Then my brother and I will have to help, or she’ll have to go to another facility,” she said. 

Most Americans wind up paying for long-term care by depleting savings and other assets, experts say. Medicaid will pay for long-term care, but it only kicks in for people with few assets and limited income.

LTC policy costs are like ‘a car payment, without the car’

Fleming and Hachenberg are now considering buying long-term care coverage for themselves. They don’t want to become a burden on their adult children, they said, but affording the high cost of insurance is challenging. “It’s like having a car payment, without the car,” said Fleming. 

Howard Gleckman, a senior fellow at the Urban-Brookings Tax Policy Center who also works on long-term care issues for the Urban Institute’s Program on Retirement Policy, said the problem is many companies mispriced these insurance policies years ago and lost money on them — so the long-term care coverage isn’t as generous now and rates are higher.

Insurers are “very afraid of what they call the tail risk, which is people who need care for a very long period of time,” Gleckman said. “It’s really expensive for them.” 

It’s costly for consumers too.

Premiums for a healthy 55-year-old woman can range from $1,500 to $7,000 a year, depending on the benefits, according to the  American Association for Long-Term Care Insurance . If she’s healthy at that age, the cost averages about $3,700 a year for a benefit that grows at 3% yearly and would yield a benefit of about $400,000 at age 85.

Premiums are generally lower for men, since they don’t live as long and are less likely to use the benefits. For both men and women, as they age, premium costs rise and it gets harder to qualify. 

To compare, a 60-year-old woman would pay $4,400 in annual premiums for a benefit that grows at 3% yearly and would yield about $345,500 at age 85, based on AALTCI figures. 

“We’re both really aware that long-term care insurance would be a very smart investment right now. Not just for us, but for our kids,” Hachenberg said.

Fleming’s daughter, Alexa, is a financial advisor and is helping them review their options.

“It’s important to be comfortable with the facility that you’re going to be moving in, and feeling safe and feeling accepted and feeling supported,” said Alexa Fleming. “If you don’t have the funds to be able to do that, it’s not going to be a great end-of-life experience for you.”

Cheng said there are two important considerations to make when shopping around for long-term care insurance:

Does the policy cover at-home care?

Is there “inflation protection,” meaning does the daily benefit increase as the cost of living rises? 

“You want to make sure that you don’t cut corners on home care, or inflation, even if it means you have to get a lower benefit” to cover the cost of care, Cheng said.

Few people have long-term care insurance 

Only an estimated 3% to 4% of Americans have long-term care insurance, according to LIMRA, a life insurance industry research group. Many companies have stopped selling stand-alone long-term care policies as their risk increased and many consumers saw spikes in  premium  prices on older inflation-adjusted policies. 

“It’s a classic market failure,” Gleckman said. “People don’t want to buy it, and insurance companies don’t want to sell it.” 

Hybrid policies, such as life insurance or annuities with long-term care benefits, are alternatives to a traditional, standalone long-term care insurance.

You can also boost your savings in a tax-advantaged  health savings account  or high-yield savings account to pay for care as you go.

“Don’t feel like traditional long-term care policies, if they put a poor taste in your mouth, [are] the only option,” Cheng said. “It’s really important to take a measured, tailored approach, whatever you do.”

More from CNBC:

• With a good credit score, ‘doors will open.’ But many face a roadblock
• 100-year-old still has $1 million saved: ‘I always lived within my means’
• Middle-class Americans want to know how the wealthy make money

As CNBC's personal finance correspondent and senior commodities correspondent, Sharon Epperson reports on personal finance for the network and also covers the global energy, metals and commodities markets from the floor of the New York Mercantile Exchange.

In addition to reporting for CNBC and CNBC.com, Epperson is a regular contributor on NBC's Today and Today.comand appears frequently on NBC Nightly News, MSNBC and NBC affiliates nationwide. She also frequently reports for Public Television's "Nightly Business Report," which is now produced by CNBC.

Her book, "The Big Payoff: 8 Steps Couples Can Take to Make the Most of Their Money—and Live Richly Ever After," was a finalist for the Books for a Better Life Awards, honoring works that have "changed the lives of millions." She also was a contributing writer for "The Experts' Guide to Doing Things Faster."

Epperson's personal finance expertise has been featured in numerous publications, including USA Weekend, The Wall Street Journal, The Washington Post, The Boston Globe, Self, Essence, Ebony and Time, where she had covered business, culture, social issues and health as a correspondent prior to joining CNBC. 

She is committed to improving financial literacy, particularly in underserved communities. She has been invited to the White House to speak about financial literacy and to moderate a public meeting of the President's Advisory Council on Financial Capability at the U.S. Treasury Department. She also speaks frequently at conferences and events for local and national organizations, colleges and universities about many facets of personal finance.

Epperson has received the Vanguard Award for her distinguished career in business and personal finance reporting from the National Urban League Guild, the All-Star Award from the Association of Women in Communications and the Gracie Allen Award from the American Women in Radio and Television for a series of reports on female CEOs. She also has won awards from the New York Festivals, the New York Association of Black Journalists and the National Association of Black Journalists.

An adjunct professor at Columbia University's School of International Public Affairs for more than a decade, Epperson enjoys teaching the importance of budgeting and building long-term savings as part of her course on professional development for graduate students interested in media careers.

Epperson received her bachelor's in sociology and government from Harvard University, and a master's of international affairs degree from Columbia University. A Pittsburgh native, Epperson lives with her husband and two children in Westchester County, N.Y.

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• Best for customer satisfaction
• Best for older adults
• Best for long-term care
• Best for high returns
• Best for agent support
• Best for term life
• Why you should trust us

Best Life Insurance of June 2024

Affiliate links for the products on this page are from partners that compensate us (see our advertiser disclosure with our list of partners for more details). However, our opinions are our own. See how we rate insurance products to write unbiased product reviews.

Life insurance is as complicated as the policyholders and beneficiaries who use it. That means there's no single "best" life insurance company. Instead, you can find the best option based on what you want or what you prioritize.

Summary of the Best Life Insurance Companies

• Best for customer satisfaction:   State Farm Life Insurance
• Best for older adults:   Prudential Life Insurance
• Best for agent support:   New York Life Insurance
• Best for long-term care:   Columbus Life
• Best for high returns:   Allianz Life
• Best for term life:   North American Company

Best Life Insurance Companies of 2024

While there is no such thing as the objective best life insurance policy, you will be able to find the best insurance policy for your specific needs. Here are our picks for the best life insurance companies, whether you want to use your life insurance policy to build wealth through cash value or you're just looking for a term life insurance policy .

Best Life Insurance for Customer Satisfaction: State Farm Life Insurance

Bundling is standard, and agents often quote with multiple discounts.

• Check mark icon A check mark. It indicates a confirmation of your intended interaction. Best in JD Power customer service ratings
• Check mark icon A check mark. It indicates a confirmation of your intended interaction. Company offers a range of different insurance products to meet buyer needs
• Check mark icon A check mark. It indicates a confirmation of your intended interaction. Agents are knowledgeable about its products
• con icon Two crossed lines that form an 'X'. Life insurance products are conservative and limited
• con icon Two crossed lines that form an 'X'. Buyers may be subject to multi-year waiting periods before they qualify for full payouts on life insurance policies
• con icon Two crossed lines that form an 'X'. State Farm agents cannot offer alternative options if State Farm is unable to bind a life insurance policy

State Farm is one of the insurance industry's most prominent insurers offering auto, home, and other insurance. Bundling is standard, and agents often quote with multiple discounts. Its term, universal, and whole life insurance products are no exception.

• Life insurance products include term and permanent life
• Ranks highly for customer satisfaction

State Farm Life Insurance gets the best life insurance ranking in J.D Power's Individual Life Insurance Study, with a score of 843/1,000. The company is also ranked A++ with AM Best for its financial stability with term, universal, and whole life insurance options. 

All State Farm policies have to be purchased through a State Farm agent. Your agent can help you bundle and save or buy one policy. State Farm is also among the companies offering "survivorship universal life insurance ," which means the policy covers two people, and it kicks in after the second person dies. Couples looking to maximize their death benefit for beneficiaries with one premium payment each month may enjoy lower overall costs.

State Farm agents can run quotes and compare options to find the right plans for each applicant. The range of options, discounts, and familiar name all contribute to the popularity of State Farm's life insurance.

Read our State Farm Life Insurance review here.

Best Life Insurance for Older Adults: Prudential VUL Protector Life Insurance

Offers aggressive financial plans.

• Check mark icon A check mark. It indicates a confirmation of your intended interaction. Available in all 50 states (New York residents may have different plans)
• Check mark icon A check mark. It indicates a confirmation of your intended interaction. Buyers can withdraw money to pay for nursing home bills due to severe illness or disability
• Check mark icon A check mark. It indicates a confirmation of your intended interaction. Knowledgeable agents who can walk you through your options
• con icon Two crossed lines that form an 'X'. Financial returns are limited
• con icon Two crossed lines that form an 'X'. Limited policy options for seniors and other groups who might struggle to find life insurance

The aggressive financial plans offered by Prudential may appeal to many younger buyers and those with a stable income. However, those with lower income or buyers who aren't sure about the financial system may be more hesitant to engage with Prudential. Like many other industry giants, Prudential is working to change this perception.

Prudential Life Insurance is available in all states except New York. New York residents can buy the Pruco Life of New Jersey VUL Protector plan. This plan allows buyers to pull money out of their plan to pay for nursing home expenses. Cash value policy premiums are fixed, so you won't have to worry about extra costs later on. Internal costs are low, which minimizes risk. Due to age, many older adults want a safe investment option for their money. Prudential VUL Protector invests to avoid loss. That also means you're not as likely to see big increases in your available funds outside of what you deposit.

Read our Prudential Life Insurance review here.

Best Life Insurance for Long-Term Care: Columbus Life Insurance

Offers lien method to makes it easier to calculate the financial impact of pulling money out early.

• Check mark icon A check mark. It indicates a confirmation of your intended interaction. Buyers can pull money out for medical and other bills in the event of disease or disability
• Check mark icon A check mark. It indicates a confirmation of your intended interaction. Columbus uses lien method to simplify accelerated death payments
• Check mark icon A check mark. It indicates a confirmation of your intended interaction. Company offers a wide range of riders to customize policies
• con icon Two crossed lines that form an 'X'. Premiums may be higher than competitors
• con icon Two crossed lines that form an 'X'. Term policies are not guaranteed to be converted to whole

Best for long-term care and accelerated death benefits.

Columbus Life offers a wide range of riders to customize your policy with affordable premiums. The company also allows you to convert term policies to whole life insurance policies until the end of your term (generally around age 70). For this and many other reasons, customer satisfaction is high.

When using living health benefits (otherwise known as accelerated death benefits), buyers are allowed to pull money from policies early to pay for medical bills, living costs, etc. under certain circumstances. Most companies use a discounted death benefit, which reduces your final payout using two models. Columbus uses the lien method, which makes it easier to calculate the financial impact of pulling money out early.

Best Life Insurance for High Returns on Income: Allianz Life Insurance

Offers life insurance policies for foreign nationals with H-1B visas.

• Check mark icon A check mark. It indicates a confirmation of your intended interaction. Plans offer high returns on investment
• Check mark icon A check mark. It indicates a confirmation of your intended interaction. Great for investment and long-term retirement planning
• Check mark icon A check mark. It indicates a confirmation of your intended interaction. May increase your income by as much as 20%
• Check mark icon A check mark. It indicates a confirmation of your intended interaction. Allianz offers plans for foreign nationals including H-1B visas
• con icon Two crossed lines that form an 'X'. Plans are meant specifically for high-income adults, alternatives may not be offered

Best for investing and high returns on income.

Allianz Life plans are geared towards high-income adults looking for more tax-free income. Allianz offers a 40% multiplier bonus with a 1% annual assets charge. In short, the professionals managing your investments take 10%. Overall, your investments would pull in an extra 14%-1% asset charge. This means you end up with 3% more than what you deposit every year your life policy is active. This plan offers strong returns when using a life policy to supplement your retirement savings. Allianz also offers specialized plans to grow your income by as much as 20% according to some estimates.

Of note: Allianz also offers plans for foreign nationals, including those with H-1B visas.

Best Life Insurance for Agent Support: New York Life Insurance

Offers aggressive financial products and extensively trained agents.

• Check mark icon A check mark. It indicates a confirmation of your intended interaction. Strong life insurance options for financial planning and wealth building
• Check mark icon A check mark. It indicates a confirmation of your intended interaction. Policies available nationwide
• Check mark icon A check mark. It indicates a confirmation of your intended interaction. Knowledgeable life insurance agents
• con icon Two crossed lines that form an 'X'. May require a medical exam
• con icon Two crossed lines that form an 'X'. Buyers looking for more modest policies may not find the most competitive pricing

If you're preparing for a comfortable retirement or looking to build generational wealth, New York Life is one of the strongest options. If you have questions or genuinely want to understand your life insurance options, New York Life agents are among the most qualified professionals in the business.

• Life insurance provider with policies available across the US

New York Life Insurance agents go through extensive training before they ever hit the sales floor. What does this get you? Policies vary widely, and New York Life offers both large and small payouts. Some policies have significant penalties for early withdrawal, but taking a loan offers more options. Whatever your questions, New York Life agents are trained to offer comprehensive support giving you accurate information about its policies every time. The company comes in at position eight in J.D. Power's latest life insurance customer satisfaction study.

Read our New York Life Insurance review here.

Best Life Insurance for Term Life: North American Life Insurance

Offers term policies alongside accelerated death benefits for critical, chronic, and terminal illnesses and more.

• Check mark icon A check mark. It indicates a confirmation of your intended interaction. Offers accelerated death benefits for critical, chronic, and terminal illnesses
• Check mark icon A check mark. It indicates a confirmation of your intended interaction. Offers conversion for life policies up to 70 years old
• Check mark icon A check mark. It indicates a confirmation of your intended interaction. Term policies can be renewed up to age 95 for qualifying applicants
• con icon Two crossed lines that form an 'X'. Not all term policies qualify for renewal or conversion

Best Term Policy.

North American Company offers term policies alongside accelerated death benefits for critical, chronic, and terminal illnesses and more. The company allows one conversion on a 20-year policy at 15 years or 70 years old (whichever is earlier). The conversion cannot happen later than the five-year marker regardless of which policy you choose or the length. North American Company also offers a term policy with a lower premium renewable up to the age of 95 for qualifying insureds.

Types of Life Insurance

While there's many different types of life insurance policies , broadly speaking, there are two types of life insurance: temporary and permanent. Let's go over each in detail.

Temporary life insurance

Temporary life insurance is often called term life insurance. This type of policy covers you for a set amount of time before expiring, usually between 10-30 years. If you pass away after your policy expires, your family won't receive any benefits. Additionally, your policy won't accrue cash value like a permanent policy. That said, some term life insurance policies offer a conversion from term to whole life insurance, so you can extend your coverage. 

Because its benefits aren't guaranteed, term life policies are generally cheaper than permanent life insurance. That said, the vast majority of term life insurance policies never pay out. on

Permanent life insurance

Permanent life insurance is an umbrella term for a variety of life insurance policies that will insure you indefinitely and guarantee a payout as long as you maintain your policy. Policy types that fall under permanent life insurance includes:

• Whole life insurance
• Universal life insurance
• Variable life insurance
• Variable universal life insurance
• Simplified life insurance
• Guaranteed issue life insurance

These policies vary widely in purpose and intended buyers, but all guarantee death benefits to your loved ones. Some permanent life insurance policies, like whole, universal, and variable have a cash value component , which you can use as a savings tool or to leave your heirs a larger death benefit.

How to Pick the Best Life Insurance Policy for You

Finding the right fit in life insurance starts with finding a trusted insurance agent. Because there are so many state regulations, shopping for homeowners or auto insurance can be easily done online. Life insurance is not required. So it's a voluntary purchase. Many buyers don't know what they need or when they need it. Before making your selection, consider a few things:

Some companies will sell you a policy for your child as soon as they're born. While this may seem morbid, early sign-up means lower rates for a policy your child could enjoy in the future. Regardless, early sign-up equates to more policy for lower premiums and a higher likelihood of acceptance. At 20, you may be healthier and be able to pay into the policy for a longer period compared to when you're 50 with more age-related conditions.

As a general rule, never agree to more than you can afford. For the average life insurance agent, their job is to sell you a large policy with a large commission. Consider not only how much you make now, but how likely your current income is to continue. If you work on a project basis and your project is scheduled to end in 12 months, you may want to reconsider a policy premium outside your monthly savings.

How much are you prepared to buy? Some people only want a small policy to cover funerals and other end-of-life expenses. Others build a life policy into their retirement plan. Whatever direction you're going, involving a financial planner could help you make the right decisions. Depending on the carrier, customers can also compare set limits with index universal life policies, which set no limit. These policies never expire, and the value builds over the entirety of your life.

Living Benefits

Life happens unexpectedly. You could be healthy one day and in the hospital the next. Many life policies offer living benefits. These allow you to draw a limited amount out of your policy to cover medical and other bills you cannot pay while sick.

Much like a 401(k), many life insurance policies have penalties for early withdrawal. No matter what policy you want, this question is critical to an informed decision. It's a question of how early you can withdraw and how much you'll lose from the total to have the money in 10 years instead of 30 or after death.

Some policies require insured parties to pay premiums for at least one year before any significant payout would be available. Suicide exclusions are common. Even with no medical exam policies, the company may still do a check for known conditions. An insurance company has to mitigate its risk.

Flexibility

Once you've been denied a life insurance policy, a mark goes on your record. No matter the reasons, other insurance companies may deny you coverage based on the first denial. So consider your whole situation and choose your policy carefully before you submit any applications. Some policies have greater flexibility if you lose your job or otherwise can't make payments. Others will lapse if you miss even one payment.

Payment Type

Even within whole life or term life insurance policies, customers have the option to choose guaranteed fixed or variable rates. Some have guaranteed payouts, but you'll need to ask your agent for details.

What is your intended use? Why are you shopping for a life insurance policy in the first place, and what are your goals? Many successful financial planners also have a background in life insurance. So while they may not be able to find you a specific life insurance policy, financial planners can help you set out a blueprint for your purchase.

Why You Should Trust Us: How We Reviewed the Best Life Insurance Companies

In life insurance, it's easy to get "sold a bill of goods." Many life insurance agents pass a state test to be thrown into the deep end. Agents sell the company product, but not all know the products. In this vein, we look at the products each company offers. We also look at agent training.

A good life insurance agent may not volunteer all facts upfront. But a company's agents should answer questions about its products accurately and in a way the average consumer can digest. Agents should be able to inform you about the long-term benefits and limitations. This will help customers find the right policy for their long-term plan.

We consider affordability, policy sizes available, and performance for a comprehensive assessment in our insurance rating methodology . If you can, we recommend also working with a financial advisor to make a plan for your future with life insurance.

Our Expert Panel for The Best Life Insurance Companies

To inform our choices for the best life insurance companies, we spoke with the following experts:

• Paul LaPiana , head of product at MassMutual
• Barbara Pietrangelo , CFP, CLU, and chair of the nonprofit Life Happens
• Wykeeta Peel , Corporate Vice President and Market Manager, African American Market Unit at New York Life

The Experts' Advice on Choosing The Best Life Insurance for You

How much life insurance coverage do you believe the average buyer should have.

Paul LaPiana, Head of Product at MassMutual

"There are different approaches to determining how much life insurance you need. One is the 'human life' approach, which estimates the current value of your future earning potential. Another is securing specific coverage to pay off debts such as a mortgage or provide for the education of children. A comprehensive protection plan should provide the right amount of coverage over the course of your working life and into retirement."

Barbara A. Pietrangelo, Chair of Life Happens

"There is no one-size-fits-all life insurance policy because everyone is different. One way to get a rough estimate is to multiply your income by 10 to 15; another is adding $100,00 to that amount, should you have a child and anticipate college education expenses.

Your best bet is to talk to a financial professional or use the Life Insurance Needs Calculator on LifeHappens.org to analyze what's right for you."

Wykeeta Peel, Corporate Vice President & Market Manager African American Market Unit at New York Life

"As you consider what policy best meets your needs, it can help to answer four key questions: First, how much death benefit do you need? Second, how long will you need that coverage? Third, what is your budget (or how much monthly premium can you afford to pay?), and finally, what is your investment risk tolerance?

To determine how much death benefit makes sense, it's helpful to think beyond using life insurance to cover funeral expenses and consider whether anyone is relying on the policy owner's income to maintain a lifestyle, pay rent or a mortgage, or fund a child's education and for how long.

There are various rules of thumb regarding the right amount of Life insurance coverage. Some tips can be found online, but they only provide an estimate and don't necessarily factor in an individual's specific needs. In my opinion, human guidance, powered by technology, is required. Basically, it comes down to how much money your loved ones would need to remain on firm financial ground if your earnings were no longer in the picture and that is different for everyone."

What is the biggest opportunity you see for improvement in the life insurance industry?

"Increased accessibility through digital and other channels as well as through underwriting enhancements. Increased tailoring of products and features. And an increased emphasis on health and wellness programs."

"Having enough qualified insurance professionals to walk potential buyers through the multiple benefits of life insurance will be pivotal to the growth of the industry. Education is a key factor here, as professional agents also need to be able to explain life insurance and its benefits in an easy, digestible way, especially when there are so many misconceptions about life insurance."

"The need for life insurance is greater than ever. In fact, a recent New York Life Wealth Watch survey found that 37% of adults have been thinking about life insurance more often these days – and half of adults report that financial products that provide protection (50%) and reliability (50%) are more important now compared to last year. This may be especially true for middle-market and Cultural Market families.

Our organizational structure of having Cultural Market agents embedded in the communities where we live and work allows us to understand the needs of diverse communities and develop solutions that resonate with them."

What advice would you give to buyers who are debating whether or not to buy life insurance?

"It is difficult to say with any certainty how healthy you will be years from now. That's why securing life insurance, and insuring your insurability, today, when you are the youngest you'll ever be again, and perhaps your healthiest is a wise decision."

"Do you love someone? If the answer is yes, then life insurance is certainly something you should consider. Many buy gifts and experiences to express their love, but haven't considered that life insurance is just another way to say I love you. Nothing says support like ensuring your family's financial security and peace of mind."

"If you have someone depending on your income, you should consider purchasing life insurance. A death benefit from a life insurance policy can replace income from the loss of a breadwinner, ensure a family can stay in their home, fund educational or retirement expenses, address debt and so much more.

A life insurance policy can also help you grow your family's wealth over time. Once the risk of an unexpected loss has been managed, you can begin to think more broadly about your family's financial future. Life insurance can enable your mindset to shift from death to growth."

What's the most important thing buyers should look for when choosing a life insurance agent/company to buy from?

"With life insurance, you are securing a future commitment that may be decades away. Research the company behind the policy to ensure it has high financial strength ratings, longevity, and an excellent track record of paying claims."

"When looking for an insurance agent or company, be sure to do your research. When comparing companies, be sure to remember that the policy features that fit you and your loved ones best is the most important factor. Don't automatically assume you should buy from the higher-rated company.

If the policy from the other company has more of what you're looking for, it might be the better choice. If you're unsure where to start, try the Life Happens Agent Locator to find an insurance professional in your area."

• "The insurers' track record: At its core, life insurance is protection - a hedge against the unexpected - and you are paying premiums in exchange for the promise that the insurer will be there when you need them, so the financial strength and track record of the company backing your policy is critical.
• Customer service: Are service professionals available by phone and digital channels? Is there is an online dashboard where you can manage your policy? Beyond ensuring assistance is available after you purchase a policy, it's also critical to ensure you have access to trusted advice and guidance before you buy.
• Flexibility in conversion: How easy is it to change? Life can be unpredictable and while term insurance can cover your loved ones through a critical period of time, you may decide that access to cash value is an important piece of your strategy.
• Accelerated online applications : Online applications are convenient but don't replace human guidance. Keep in mind that accelerated online applications may have a maximum coverage amount, meaning that you may not be able to get all the coverage you may need exclusively through an online process.
• A range of payment options: It's important to understand how often you're required to make premium payments and whether and how often you can change the frequency of payments."

Best Life Insurance FAQs

According to JD Power's 2023 life insurance study, State Farm is the highest-rated life insurance company when it comes to overall customer satisfaction. However, you still may want to shop around for quotes from various insurers if you're looking to purchase a new policy.

There isn't one best life insurance company, because the best option for you will depend on the type of policy you're looking for. It's best to work with a qualified insurance agent to help you find the best coverage. If you're deciding between multiple similar options, it's also worth consulting J.D. Power's life insurance customer satisfaction study . The latest study ranks State Farm as the top pick for individual life insurance, outpacing Nationwide by three points.

The best type of life insurance policy for you will differ from someone else's, as your policy should be tailored to your needs. The best policy for you will be affordable and will offer the benefits best suited to your situation. For example, some policies are only meant to cover end-of-life expenses such as burial and funeral arrangements, whereas others include living benefits like a cash value insurance plan , which you can borrow against during your lifetime.

Some life insurance policies are advertised as "no medical exam." This doesn't mean the insurer won't ask you about known conditions or look at medical records. Policies with no medical exam also tend to offer lower benefits with higher premiums. Most companies have a network of medical examiners, some of whom can come to your home. You can find our guide on the best no exam life insurance here.

Each situation is different and requires a knowledgeable life insurance agent to assess your best options. Bring all your questions and the coverage you're looking for to an insurance agent near you to explore your options.

Editorial Note: Any opinions, analyses, reviews, or recommendations expressed in this article are the author’s alone, and have not been reviewed, approved, or otherwise endorsed by any card issuer. Read our editorial standards .

Please note: While the offers mentioned above are accurate at the time of publication, they're subject to change at any time and may have changed, or may no longer be available.

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