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Car Dealerships: The Local Distribution Business


What is a car dealership?

A car dealership is a local vehicle distribution business that sells the vehicle at a retail price. The vehicles that are sold by the car dealers are mostly used cars. Used cars refer to cars that previously had one or more retail owners. A used car is also known as a second-hand car. People may return their car to car dealers due to various reasons like inability to pay the car loan or in the case when they are planning to buy a new car. The used car dealers basically enter into a contract with the car owner or an automaker or its subsidiary sales company. A used car dealership employs automobile salespeople for the selling purpose who may also provide services like car washing, car polishing or repairing the car.

A used car dealerships may also involve giving of a new car in exchange for an old car. A car dealer makes a profit by buying an old car at a low price and selling that car to the customers at a comparatively high price. The other sources of earning for a car dealer are by the sale of accessories, exchange cases, providing service, and commission through a bank loan. Note that in case you are selling a car to the car dealer because of non-ability to repay the loan, the car dealer does not pay the loan. The car dealer will buy the car from you in exchange for money. This money, however, most of the time is fairly less to pay the loan. So the actual burden of the loan falls on the actual owner of the loan.

What are the pros of a used car dealership?

  • The car that you buy from a car dealer gives you a satisfaction that you are buying from a unit specialized in cars and other vehicles. Moreover, a lot of services are also provided by car dealers. Thus you are always ensured of good high quality.
  • A car dealership allows for flexible payment options which are helpful for people who can’t pay the entire sum at once. Here it acts as an upper hand to individual car sellers.
  • In case when you buy a car from an individual, the individual may lie to you about the condition of the car. This does not happen in the case of a car dealer. A car dealer is always accountable for the car.


However, it does not mean that car bought from used car dealers does not have its negative consequences. By the fact that one is buying a used car, we can see that the car would need more maintenance in comparison to a new car. Before buying the car one needs to make sure that the car has the latest and safest features. Moreover, when one buys from a used car dealer one cannot customize anything as it happens while buying a new car where one can negotiate on colour, style etc. In spite of all these no doubt buying cars from a used car, the dealership is advantageous for a lot of people.