Car dealerships provide important services to manufacturers and buyers. They also impose costs through showrooms, lots, staff and inventory holding.
Dealerships can attract new customers by offering incentives. They can also promote their business by sponsoring local professional, college and high school sports teams. They should also invest in quality online promotion and customer service.
Car dealerships are more than a bunch of people standing around on a lot. They have various departments that work together to sell vehicles and provide services for their customers. Those looking to get into the business should learn about these departments and what each one does.
The sales department is the face of the dealership to customers. This is where you’ll find the front-line salespeople who are able to talk about every feature of a vehicle and answer any questions. Salespeople are often paid on commission, so they’re motivated to meet or exceed quotas.
Sales managers are responsible for setting goals and training the sales team. They should be able to recognize problem areas in their employees and offer individual or group training accordingly. Employees should be trained in automotive software usage, advertising and customer service.
Many dealerships have a separate finance department that helps customers arrange an auto loan. This department may also upsell customers with add-ons such as rust-proofing or extra paint protection.
The accounting department handles billing and records transactions for the dealership. Employees in this department rarely interact with customers, except for when they’re processing a warranty claim. A dealership’s accounting clerks should have strong math, business and computer science skills. They’re also encouraged to take any automotive classes that are available.
The finance department at a car dealership handles the paperwork related to the sale and financing of vehicles. The dealer may have a relationship with multiple banks or finance companies and can offer you a choice of financing options. However, the dealer typically profits from these loans and may not always offer you the best rates.
Another way the dealer makes money is by selling add-ons such as a service contract or gap insurance. These can raise the total cost of the vehicle by several thousand dollars. Dealerships also make profit on trade-in cars, and they can charge extra for things like detailing, regular maintenance, and other items.
Depending on your situation, you may be better off getting your own bank loan before visiting the dealership. This option can cut out the dealer as a middleman and potentially save you money. However, you might have to wait longer to get approved for a loan and may be limited to dealers within a lender’s network.
Dealerships that offer in-house financing, called buy here pay here (BHPH) dealerships, can be a good option for buyers with bad credit or who aren’t interested in spending time shopping around for loans. But these dealerships can charge higher interest rates and tack on markup fees that they’re not legally required to disclose.
Dealerships have specialized technicians with the expertise to perform work on a wide range of cars. They are also likely to have access to the latest service information, which can help ensure that repairs are made correctly and the car is running as it should. In addition, dealerships can offer a wider range of services than a smaller independent shop, including a variety of car maintenance packages and loaner vehicles.
However, there are some disadvantages to bringing your car to a dealer for service. For one, they typically have higher labor rates than a small shop, which can cost you more money over the life of your vehicle. Additionally, many dealer mechanics are prone to recommending unnecessary work in order to make a profit, such as fluid flushes and tire rotations.
Another disadvantage of dealership service is that it’s not always the best place to bring your vehicle if it’s under warranty. Depending on your manufacturer, you may be better off going to an independent repair shop for service.
If you want to pursue a career in auto service, enroll in an automotive technology program such as UTI’s Automotive Technology program. This program offers a comprehensive education in all aspects of the industry, so you’ll be ready for a wide range of jobs in the field. The program includes courses on automotive service writing, which can help you learn the skills necessary to communicate with customers and set expectations regarding costs, time estimates and warranties.
A parts department at a car dealership is responsible for the inventory of components that go into building vehicles. Parts departments are also responsible for ensuring that customers can easily find the parts they need when they come into the dealership. Parts department employees must have strong organizational skills in order to keep track of inventory, place orders and ensure that all team members have the parts they need.
It is important to use technology in the parts department, as it helps to reduce the amount of manual work required and increase efficiency. Parts department staff can also use data to determine which products are selling well and which are not. This will help them to make smarter decisions about the stock they buy for their store.
As the internet becomes more and more prominent, many dealerships are turning to online sales to increase parts revenue. This is an effective way to reach a larger customer base and boost overall sales revenue. By utilizing online solutions like RevolutionParts, dealers can quickly and easily set up their own parts store to generate tens of thousands of dollars in additional revenue each month.
Dealerships can also leverage their relationship with the service department to increase parts revenue. Service technicians often recommend additional parts and accessories to their customers, such as wiper blades, batteries and other common replacement items. They can also recommend branded products in consumer packaging and offer service specials that earn great margins.