Used car dealerships have dramatically evolved from the stereotype of the latter part of the 20th century. As buyers have become more sophisticated and the market more complex, the purveyors of previously owned vehicles have become more specialized to meet the demands of their demographics and area. Different business models have been adopted as the industry expands and competition increases.
Types of Dealers
Used car dealerships can be separated into different classes depending on the features and business structure of each operation.
These are large, nationally syndicated enterprises that provide inexpensive transportation options to the local community. The warranties offered are more comprehensive than the other options. The vehicles offered are usually of a higher quality due to the more rigid, standardized checks performed before being placed on the market.
Chain operations may not have the same pricing flexibility, due to corporate standards, so that can limit the amount of negotiation flexibility that a sales person may have during the sales process.
This type of dealer follows a more traditional model of used automobile sales. The business is typically locally owned and caters to the needs of the community. Price flexibility is a key component in this type of operation. The sales staff have a greater deal of leeway in negotiating and, as a result, the consumer can often find much lower prices here than from the nationally syndicated dealers.
The trade off is that the quality of vehicles is often much lower and the warranties offered might be limited, both in scope and in length. For those only looking for daily transportation, utilizing the services of an independent mechanic prior to purchase can help the potential buyer make a more informed decision.
A franchise scenario is much like a hybrid between the chain companies and independent lots. A local enterprise is authorized by the national “parent” to feature vehicles under the corporate banner. Being locally owned (as opposed to being run by a national company), pricing is often more flexible and can be tailored to the particular community’s needs.
Franchise operations will generally offer certified pre-owned cars and trucks that have met the rigid quality control standards dictated by the national corporation. However, because they are locally owned, the marketing of the inventory is left to the dealer/owner to dictate price points and negotiation flexibility. As a result, the franchise model is somewhere in the middle of the previously mentioned dealers.
Choosing between the types of used car dealerships is a matter of personal requirements for transportation needs. Considerations such as price, warranties offered, brand loyalty, even dealer attitude and reputation all are factored into deciding the best place to select and, ultimately, purchase a pre-owned automobile or truck.