Car dealers sell new and used cars to customers. They provide financing to make the vehicles more affordable, and they can assist buyers with title and regulatory paperwork. Some dealerships also perform maintenance on cars and sell parts to consumers.
Dealerships also make money by selling additional insurance and warranty packages to new and used car buyers. The profit margins on these sales can be very high, and good finance managers are a valuable asset to the dealership.
Many dealers work with captive lenders, such as Ford Credit and Toyota Financial Services, to offer customers financing options on the vehicles they sell. This arrangement gives the dealership an advantage in competing with other independent finance sources. Dealerships often receive ‘hold-back’ funds from the automakers to offset the cost of reconditioning the vehicles.
In the United States, car dealers are highly regulated. They are governed by state Departments of Motor Vehicles, and the titles of new cars must be transferred to the buyer by the dealership. Many dealers are members of national or state dealer associations, which can wield considerable political power in Washington.
The success of a car dealership depends on its ability to attract and retain customers. The dealership’s sales staff is usually paid a commission, and bonuses are sometimes paid to employees who meet or exceed quotas. Many dealerships also have a general manager, who oversees the day-to-day operations of the store. The GM is usually a salaried employee. car dealers