Understanding how car dealerships work helps you get the best deal.
This guide explores everything you need to know about car dealerships, including how they operate, what services they offer, and how to choose the right one for your needs.
How Car Dealerships Work
A car dealership is a business that sells new and/or used vehicles.
Car dealerships typically provide:
- Selling brand-new and used cars
- Arranging car loans or lease agreements
- Assessing the value of current cars
- Post-sale automotive support
Whether you're buying or selling, a dealership can simplify the transaction.
Types of Car Dealerships
The type of dealership you choose can impact your vehicle selection.
Main types include:
- Franchise dealerships
- Not tied to one manufacturer
- Finance directly to customers in-house
- Online car dealerships
Each type of dealership has advantages and limitations.
Tips for Selecting a Car Dealer
Choosing the right dealership can make a big difference in your satisfaction and cost.
Tips for selecting a dealership:
- Read real experiences before visiting
- Make sure the dealership stocks models you’re interested in
- Know what’s included after purchase
- Choose dealers with multiple lending partners
Doing your research in advance can save money.
Why Choose a Dealership Over Private Sellers
Many buyers prefer dealerships over private sellers due to the added security they provide.
Advantages of dealership purchases:
- Peace of mind with used vehicle purchases
- More payment flexibility
- Legal documentation and title handling
- Ongoing support after you drive away
These benefits make car dealerships a go-to source for buying cars safely.
How Car Dealerships Make Money
A car dealership’s revenue comes from more than just selling vehicles.
What drives here their profits:
- Vehicle sales and manufacturer incentives
- Finance and insurance products (F&I)
- Buying low and selling high on used cars
- Offering service for vehicle owners
Understanding this helps you ask better questions.
Final Thoughts
Car dealerships are an essential part of the automotive industry, offering solutions for all types of buyers.
With the right preparation, visiting a dealership can be a smart move for your next purchase.