What is Car Dealership?

The car dealership is considered as the vehicle distribution business which deals in buying and selling new and used cars. It is entirely based upon the dealership contract with the dealers and they employ the salespeople to sell their vehicles.

They also offer repairing and maintenance services of cars and also deals in their spare parts. There are two elements of car dealership such as

Independent dealers basically deal in the used cars from every brand, they do not work it as a franchise. They do not involve in any sort of agreement or contract with the car manufacturers. The independent dealers never use the one prominent car brand i.e. (Honda, Toyota, Chevy, etc.) as their in order to sell the vehicles instead they create their own name of the dealership where they pursue their business activities and sells cars of every brand.

Franchise dealership deals in used cars, as well as they, acquire one prominent car brand to pursue their business activities. In the new car segment, they cannot mix selling one or more brands as it will term illegal. They can sell only one brand for which they have taken ownership.

Unlike an independent dealership, they have to get through the agreement and contracts which makes them authorized franchise dealers. They make a contract with the manufacturer in order to sell their cars. The franchise car dealer has all the rights in order to sell cars as they are the direct agents of the brand.

The franchise dealership not only deals with the new cars they also focus on providing the service facilities even on pre-owned or used cars. People who purchase certified pre-owned cars from dealers. They also offer them services regarding claim submission against their warranty.

As we all know, the independent car dealer deals in the used cars which means you won’t get the office or store which you visit at the time of buying a new one.

• They provide remarkable customer service.
• They have a wide variety of options available in the vehicles.
• They have the best deals present every now and then on cars.
• Financing benefits and they will make sure you get loans easily.

If you’re considering buying a new car from the franchise dealership you can get the car from the reputed dealer which provides you the best customer service.

• Huge financing benefits.
• Dealerships offer the correct amount of pricing.
• You can customize the car and can ask for the dealer-installed accessories.
• Extended warranty.

Pros

Low Prices

There is huge competition among dealers as they offer lower vehicle prices to customers.

Financial Services

Franchise dealerships have an excellent finance network and trade-in opportunities to sell cars.

Services

The consumers can get their vehicles serviced from franchise dealerships, which leads to building a sense of trust in the community.

Advocacy

The franchise dealership advocates on their customer’s behalf when they face any issues with the vehicle.

Cons

Less Competition

The auto manufacturers are required to sell only through franchise dealerships, which eliminates the competition.

Limited Options Available

Some consumers prefer buying directly from the manufacturers rather than going to dealerships.

Higher Costs

The dealerships tend to raise the prices by adding another layer of cost to their distribution system.

Pros

Fast & Better Service

Independent Dealerships offer faster services as fewer services are scheduled each day than franchise dealerships.

Complete Control

The independent dealerships are starting everything from scratch; they have the leverage to do anything and make it work as per their liking.

Huge Product Portfolio

Independent dealerships offer a series of various makes and models, which makes it a one-stop shop for all family car needs regardless of franchise dealerships.

Excellent Customer Service

The smaller places offer excellent customer service and lead to maintaining a healthy relationship with the customer, service persons, and salespeople. However, when compared to franchise dealerships, independent dealerships offer personalized customer service.

Cons

Retaining Funding becomes a Task

If you aren’t wealthy enough and you are struggling to start up your own business, retaining Funding becomes a task. The franchise dealerships are backed up by a brand where securing Funding is easier than said. 

Huge Work

Running an independent dealership requires huge work, which means you have to do the groundwork. A successful business requires 100+ hours of work every day to build something and reap the benefits at a later stage. 

Brand Recognition & Familiarity

The independent dealership must have the franchise dealership’s brand familiarity, making it difficult to sell the make and model all day. It creates tough competition for them in the market and makes it quite difficult to attract clients.