You certainly can start a used car lot, but if you intend on selling new cars, you will need to secure a new car franchise from the major manufacturers.
I was thinking about starting a car business selling only pre-ordered cars. My plan was having a customer pre-order the car and then I would build the car from scratch with other employees. I would buy the parts for it. So the car would be built with the specifications that the customers wants. It's a pretty big dream. But I want to know what I would have to do to start such a business? What kind of legal stuff would I have to do?