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Understanding the Different Types of Used Car Dealers

by Autotropolis Contributors
April 21, 2010

In today's economy, proper consumer research is crucial, especially when it comes to big-ticket items such as used cars. While countless articles detail the specific features of individual cars, shoppers are given little information regarding the differences between various types of used car dealers. A company's advantages might vary based on its business model. However, experts categorize providers by the size and scope of their operation. Let's take a look at some of the most common types of used car dealers.

Some entrepreneurs start national or multinational corporations to provide inexpensive used cars to the community. These large chain companies offer the most comprehensive warranties aside from certified used cars from a franchised used car dealer. Also, their cars are typically held to higher quality standards than that of independent used car dealers, due to the standardized checks every car goes through before being offered for sale.

However, large chain companies can be bound by onerous corporate policies. This might mean that they charge more than other used car dealers. When you shop at a large chain dealership, your sales representative might not have the flexibility to adjust prices in real time. For those consumers that love to haggle with used car dealers, smaller companies might provide a better experience.

When comparing different types of used car dealers, franchises incorporate some of the specific features attributed to both independent and chain stores. Essentially, corporations authorize entrepreneurs to sell products and services under their banner. As a result, many franchised dealerships offer quality assurance and warranty programs that rival those of national chains. Since they are typically owned by local, these used car dealers are free to adjust prices based on the needs of the local community.

Most franchises offer certified used vehicles under the umbrella of the brand they represent (Ford Certified Pre-Owned, for example). Rigid quality standards must be met at each location. However, an individual owner is allowed to buy and sell cars according to his or her market's needs. Every local market is subject to a specific set of economic factors that influence the valuation of vehicles. As a result, locally-owned franchises are sometimes cheaper than national chains. While their certification and quality assurance methods are often more reliable than purely independent used car dealers, the quality of any used car can be hit and miss. In a general sense, franchised dealerships combine some of the advantages of corporate supervision with the improved flexibility of local independent used car dealers.

Some consumers prefer to shop at local stores. Independent used car dealers sell used cars to their local community and are almost always locally owned. Also, their profits are usually reinvested in the local economy. However, independent used car dealers are not held accountable by a national corporation. This might affect the condition of their vehicles. As a result, consumers face a degree of additional risk when making purchases from independent used car dealers.

However, this increased risk comes with some distinct advantages. Local car dealerships typically offer the lowest prices. For the consumer that drives a hard bargain, sales representatives might be empowered to slash prices in certain situations. One would be more likely to find an uncommonly favorable deal at an independent dealership. Conversely, local used car dealers might sell lower quality vehicles. This is not necessarily a disadvantage; some consumers purchase lower quality cars at bargain prices to facilitate the daily commute to work. Alert shoppers might benefit from the consultation of a mechanic when purchasing vehicles from independent used car dealers. By incorporating the advice of a mechanic from an unrelated company, a consumer can apply his or her own quality judgement to a potential purchase.

Each person must weigh the benefits and disadvantages of specific used car dealers when shopping for vehicles. Every national or multinational chain has a distinct corporate philosophy. Franchises blend corporate policies with the specific attitude of the owner of the facility. Independent used car dealers conform to the wishes of the owner. A company's leadership directly affects its pricing, inventory, and customer service. Different companies provide various types of warranties and financing options. Also, individual used car dealers might have more or less trustworthy reputations. It is important to consider the advice of friends and family when making such a critical decision. Also, consumer reports might shed light on the practices of different used car dealers. Before buying a pre-owned vehicle, a wise shopper should research local providers. Consumer research improves the relationship between used car dealers and the local community.


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