How Car Dealerships Operate


Car dealerships are generally owned by a single person, a family, or a group of investors. They generally sell both new and pre-owned vehicles, and conduct vehicle trade-ins so that customers can exchange their old cars for newer models at a reduced price. In addition to selling cars, car dealerships also provide repair and maintenance services and sell vehicle parts and tires.

In order to sell a particular vehicle brand, owners of car dealerships must purchase what is known as a “franchise” for that vehicle. Generally, purchasing a franchise comes with special rules about what sales pitches to make and how to decorate the showroom. Vehicle manufacturers generally have a specific image they want to project, so their corporate office will create these rules to make sure the dealership has an image and atmosphere that matches what the brand is trying to project.

Car dealerships consist of many different departments, including the sales team, the management, the service and repair staff, and the finance department. All of these departments play different roles and work together to keep the dealership running smoothly.

The sales team’s job is very customer-based. They greet customers when they first walk in the showroom, explain the features and pricing of various vehicles, and answer any questions that the customer may have. This requires an extensive knowledge of all of the vehicles, the financing deals, and the available customizations. A salesperson’s goal is to explain the features and benefits of the vehicle and make the customer want to buy it. However, they have no power to negotiate prices. This is the sales manager’s job. Once the customer and the sales manager have negotiated the final price, the salesperson will walk the customer through the rest of the purchasing process.

The sales manager oversees all of the salespeople. They set quotas for the salespeople to meet and give bonuses to the salespeople who are consistently exceeding those quotas. They are also in charge of ordering new vehicles, because a dealership will generally try to keep at least two months of inventory in stock. Sales managers must think about what styles and colors will appeal to customers so that customers can get the cars they want without waiting for a special order.

The finance department is in charge of processing applications for financing or accepting payments that customers have pre-arranged. They also sell extended warranties and financing packages, and they must make quotas every month just like the sales staff.

The service and parts department works to provide repair and maintenance services and replace any vehicle parts that may have broken or deteriorated with age. Additionally, they prepare new vehicles for the showroom when they first arrive at the dealership. This includes cleaning, washing, and polishing the vehicles. If a customer made a special order, the service department will install any add-ons that the customer ordered.

Source by Anders Abadie

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