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The Misconception With Auto Dealerships

We’ve all been there. It’s time to buy a new car. You shop around and you feel constantly hounded by a salesman. You’re encouraged to take a test drive, but you know that’s when they feel they have you in the palm of their hand. The perception is that these salesmen are shysters, put upon this Earth to squeeze as much money out of you as they can. The REALITY, I’m afraid, is far less exciting or dramatic.

Throughout my life, I've exposed myself to many career opportunities.  In my early 20's, I decided to try my hand at selling cars.  The good news is that the training was first rate, and the business practices employed by my dealership, in a purely ETHICAL sense, were right in line with my own set of moral values.  The bad news, at least for the dealership that invested in me, was that I was not cut out for auto sales.  Now that I'm in a place in my life where I can captivate the masses with the power of the written word, I feel this is an appropriate time to dispel a couple myths.

1.   Those salesmen that approach you at a big dealership are likely new to the trade or at least new to the dealership.  Veteran sales personnel make a great deal of their sales on repeat business and new people take walk-ups.  Statistics show that 33% of people who purchase a car will go back to the last place they bought if they were reasonably satisfied.  Don't be intimidated by those that approach you.  Some of them may be just as nervous as you.

2.   The purchase of a brand new automobile does NOT make the dealership a ton of money.  The sale of a new car will often only fetch a profit of 1,000-1,500 dollars.  The money is made in USED car sales and in AUTOMOTIVE SERVICE (which segues beautifully into my next point).

3.   The service side is the backbone of any auto dealership.  Right now, there is a big problem in the industry and all of the oil changes and brake jobs are getting lost to quick lube businesses and tire centers.  Part of the reason?  Tire centers and quick lube businesses ADVERTISE their ability to make auto repairs whereas dealerships tend to advertise only the inventory they currently have, which would make your commercial obsolete fairly quickly.