A nearby SUV also caught on fire.
About 35 firefighters were called to the scene and were able to knock out the fire within 20 minutes while making sure nobody was in the building.
Fire crews were careful in fighting the fire because of potential larger explosions. There were dozens of used cars surrounding the building with gas engines.
"We've had a couple of these commercial fires where we have had people inside. So we wanted to get inside and make sure we had the primary search completed. Cars were a little bit lower down the list," said Capt. Bryan Powell, of San Diego Fire Rescue.
San Diego Fire Rescue said the fire was caused by an accidental electrical problem.
"We had some little explosions on scene upon our arrival. We didn't know exactly what was burning at first. We had an exposure group do a good 360 of the building," said Capt. Powell.
J.P. Bo, owner of Pacific Honda said "I'm just grateful that no one was injured and as the employees come in we'll move the cars across the street."
The building manager was able to go inside and recover a box with all of the car keys.
The owner, J.P. Bo, said the dealership had been in the family for over 30 years.
"It's everything to me. I started in 1985. I pulled in here from San Francisco and got a job over the phone. I walked through the building and sold my first car out of this building."
Damage is estimated at $500,000, including the damage done to the SUV.
"I want everyone to know what a great job to San Diego fire department did in controlling this blaze only one car was destroyed and nobody was in the building and we're very grateful for everyone's cooperation," said the dealership owner.