A commonly overlooked detail at a car dealership is the kind of business platform that they use. There are two kinds of dealerships, franchise and independent. Franchise dealerships sell cars for a specific manufacturer. This would be like buying an iPhone at the Apple Store. Independent dealerships are allowed to sell cars from any manufacturer so long as they have a contract with the car manufacturer. This is similar to buying an iPhone at a Verizon store instead of through the Apple Store.
Franchise and independent dealers have different business models. Independent dealers are backed by National Independent Automobile Dealers Association and other state-run organizations that leave independent dealers well-trained and well-equipped to provide great service for a great price.
Why Go Independent?
Franchises need a lot of extras from a dealership. These extras include specially designated waiting areas, franchise training, loaner cars, shuttle buses, and other guidelines that can take away from the dealership budget. Those extra costs get passed on to the customer, but independent dealerships don’t have this extra overhead. This means they can pass those savings on to you instead.
Independent dealers usually don’t buy straight from a manufacturer. This may make independent dealers seem like a middle man, but the truth is that buyers can save a lot on fees compared to franchise dealers. Independent dealers are also known for having more diverse stock because they purchase cars from a motor company, private dealers, auctions, private sellers, and other sources. If you’re a buyer and looking for a specific package with a unique car, an independent dealer may have better access to the means of finding you your car.
Independent dealers also have greater financial flexibility. Franchises may be restricted to specific finance companies, but independent dealers can and usually do use outside sources of credit. They may even have their own in-house credit option too. This is good for buyers who need to replace a car but may not have the best credit history.
Franchise dealerships may have nicer interiors, but that doesn’t affect the cost of your car. Independent dealers can give customers what they need without overspending on interior design and still show them the car they came to see. Independent dealers may have lower advertising budgets that result in less visibility, but as we said before they pass those savings on to their customers. This makes them the buyer’s best choice. Before you decide to go and check out the nearest franchise dealership, check out what your local independent dealers have in stock to see if they have a ride that works for you!
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