An Overview of Car Dealerships

A car dealership is a company that sells new or used vehicles. They often also provide spare parts and services.

State governments regulate dealerships. They collect sales tax and other fees, perform safety inspections and act as conduits for financing entities.

Dealerships generally have a large inventory of new and used cars. Therefore, it is essential to shop around before making a purchase.


The sales department of a car dealership is responsible for interacting with new and used vehicle buyers. It includes answering questions about the features of each vehicle and taking customers out for test drives.

In addition to providing information about the vehicles, the sales department also helps potential customers with financing options and warranties. It also involves building a rapport with the customer to improve their chance of closing a sale.

It's also important to keep track of leads that need more time to be ready for purchase. These are known as "low funnel" leads.

It is where personalized communication, which shows a genuine interest in the customer's experience, can have a lasting impact on sales. Customers will be more likely to return or recommend your dealership to their friends if they have a good relationship with you.


The service department of a car dealership, like that Kia dealer near Mechanicsburg, is a critical part of the customer experience. It can play an essential role in a customer's loyalty and future auto sales, as well as driving revenue.

The technicians at a dealership are often factory-trained and experts on the make and model of your vehicle. They also stay updated on all new manufacturer recalls and service bulletins affecting your car.

Dealerships have access to the latest equipment explicitly designed for modern vehicles. It translates into better service when diagnosing and repairing issues with modern systems.

Getting your car serviced at a dealership may cost more than an independent garage, but it's worth it for the quality and convenience. A warranty likely covers you, and the parts will be genuine. Plus, they may offer perks like loaner cars and pick-up/drop-off service.


A dealership's parts department is a critical part of the overall operation. The department's primary responsibilities include providing customer service and selling parts to customers.

You must have a good staff working in the parts department to achieve these goals. They should be appropriately trained, knowledgeable about their products, and able to handle customer questions or problems effectively.

Parts managers are also responsible for ensuring that parts are in stock and ready to be ordered when needed. They also need to maintain relationships with vendors for warranty and product support.

Inventory turnover is a critical measure of your parts department's performance. True inventory turns - which use only parts sold from stock to calculate the amount of inventory used - generate higher gross profit margins and translate into greater net profits for your dealership.


Dealerships have relationships with several lenders, and their finance department often can get you approved for a car loan. These financing companies base their decision on your credit score and monthly income.

Many dealers offer "in-house" financing, which means your loan will be issued directly by the dealership rather than through a bank or credit union. It makes them an attractive option for people with less-than-perfect credit scores but may also cost you more interest in the long run.

Unlike banks, which are required by law to offer you the best possible interest rate, dealers can set higher rates or longer terms. They can do so, in part, by taking on more risk for themselves and demanding a higher return in the process.