What Is a Car Dealership?

A car dealership is a business that sells vehicles, provides vehicle finance and insurance, and repairs or sells replacement parts. They also provide marketing and administrative services.


Photos are critical to people who shop online for cars, so a dealership should always use professional photographers. Images should look realistic and avoid any distracting elements.

Customer Service

Dealerships depend on their customer service teams to represent their brands. These team members communicate with customers directly and must have excellent communication skills to ensure that all customer concerns are addressed in a professional manner. Dealerships also rely on these teams to create positive customer experiences that generate repeat business and referrals.

Whether they are greeted by a friendly face, offered a loaner vehicle, or offered an attractive car service package, the dealership service experience can have a huge impact on sales and customer satisfaction. To maintain a competitive edge, dealers must continually improve their customer service and customer experience.

One of the biggest frustrations for customers with car dealerships is long wait times, which can lead to a bad experience and a poor review of the brand. To prevent this, make sure that your customer service staff monitors online reviews and social media posts and promptly and professionally addresses negative comments.

It is also a good idea to offer customers multiple options for communicating with the dealership beyond traditional service hours, such as chat tools or email. In addition, have an easy-to-use digital check-in process that allows the customer to quickly and easily schedule their appointment on their own time, while saving your team from having to manually verify and track these customers. In addition, encourage your service advisors to educate the customer on their vehicle maintenance needs and recommend services based on their current driving habits.

Inventory Management

A dealership’s success depends on the ability to balance customer demand with inventory supply. Too much inventory results in lost sales and wasted time and money, while too little leads to a poor buying experience for consumers. To keep up with consumer demands, dealers need to regularly analyze vehicle data and make adjustments accordingly. This data is often locked away in the dealership’s CRM and DMS systems – but analyzing it is crucial to making smarter business decisions.

The first step is to understand how your current inventory stacks up compared to the local market’s demand. Then, you can fine-tune resourcing processes to get more vehicles into your dealership faster. The right software can help you manage this process. It can even give you a head start on future demand by predicting what your audience is searching for.

The next step is to ensure your vehicles are priced accurately. A dealer’s pricing strategy can dramatically increase profits while also improving customer satisfaction. This is possible with a good car dealership management checklist and an automotive inventory data provider that offers detailed information about each vehicle, including visuals and VINs. This information can help your dealership stand out online and attract the most qualified buyers for your vehicles. It also helps you determine if a car is worth keeping in inventory and when it is time to send it to auction.

Finance Department

Approximately 85% of all vehicles purchased in the United States are financed, which means that the finance department is a major part of any dealership’s operations. The finance department is also responsible for preparing all of the necessary paperwork to complete a car sale, including the sales contract and the financing documents. The finance department also negotiates the terms of a loan, including the purchase price of the vehicle, the down payment, and the interest rate.

A finance manager needs to have a good understanding of the dealership’s finances and how to make budgets. They should also be able to explain complex financial topics in an easy-to-understand manner. In addition, finance managers need to be able to communicate effectively with customers and employees.

Dealerships typically offer their own in-house financing, as well as third-party financing through banks and credit unions. They may also sell extra products and services like extended warranties, paint protection and GAP insurance. These additional products and services can account for a significant portion of the dealership’s profits.

A career as a finance manager can be a rewarding choice for people interested in the automotive industry. Although it is recommended that people attend auto finance school, many people reach this position after years of working as a salesperson at a dealership. People in this position usually receive on-the-job training to learn the dealership’s specific finance software and processes.

Sales Department

A dealership’s sales department is the front face of their business. The salespeople that work in the showroom are usually the people that you expect to be selling cars, but there’s more to a car dealership than just them working in a high-pressure sales environment.

The sales manager is the leader of the sales team, and they keep track of sales quotas and goals. They also hire new salespeople and write up work schedules. They will likely be the person who tries to up-sell you on additional products and services like paint protection or a car alarm system.

In larger dealerships, there may be a Business Development Center (BDC) that is the first point of contact when you call or email the dealership. The BDC representative will answer your basic questions and set you up with the salesperson who can help you. They will also follow up with you by phone or email if they don’t hear from you after your visit.

Other departments that might be in a car dealership include the Parts department, which works closely with the service department to sell parts and accessories. They also order replacement parts for the vehicles in the inventory. The Parts department also has a manager who oversees the day-to-day operations of the part sales and parts ordering.