Car Dealerships Explained


Car dealerships play a vital role in helping people drive away happy and satisfied. They often specialize in one or more automotive brands and provide a variety of services for buyers looking to buy new and used vehicles. Dealerships can also offer in-house financing, which makes it easier for shoppers to purchase a vehicle.

Many car dealers sell vehicles on their own, while others work with a franchised manufacturer. In this scenario, a dealer principal owns all of the stores and may appoint a general manager to oversee daily operations. The dealer principal also sets sales quotas and profitability goals for the managers and sales staff. Some dealers pay their sales staff on commission, while others offer bonuses for hitting a certain percentage of profit on a sale.

In terms of selling new cars, manufacturers set an MSRP or base price that dealerships can’t exceed when negotiating with buyers. In addition to traditional sales profits, most dealerships make money by offering manufacturer rebates and incentives for buyers. Dealerships can also tack on various fees to the sale, including documentation fee, dealer preparation fee and sales tax.

As a shopper, you can avoid dealer-initiated fees by doing your research ahead of time. You should have an idea of the type of car you want and a clear understanding of what features matter to you before visiting a dealership. This can help prevent a salesperson from trying to push you into buying something you don’t want or need. Additionally, it’s always wise to shop around and compare prices before committing to a vehicle. car dealerships