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Franchise Vehicle Dealership Vs Independent Vehicle Dealership

Franchise Vehicle Dealership Vs Independent Vehicle Dealership

Posted On 14 Mar, 2018

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As surprising as it might sound, the concept of car dealerships didn’t exist back in the nineties. When somebody wanted to buy a car, they either purchased cars from department stores, wholesalers, or traveling salesmen.

But to find the best deal, you must know the difference between an independent vehicle dealership and a franchise vehicle dealership.

In fact you can quite easily identify a franchise dealership just by observing its name. It is so because a franchise dealership’s name is going to include the name of the car manufacturer. This inclusion of the manufacturer’s name means that they have a contract with the carmaker to sell their cars. On the other hand, independent automobile dealerships aren’t associated with any car manufacturer or carmaker. Their names do not include the name of a specific car model or car manufacturer.

Some of the main differences between the two are:

Inventory
A franchised dealer/retailer buys its entire range of vehicles from the manufacturer. A medium sized dealer which is selling only new cars would receive a new supply after every 2-3 months by investing 4-5 million euros on an average for the inventory renewal. Only a small part of the warehouses comprises the customer exchanges. Whereas, the independent retailers set up their entire fleet of vehicles through exchanges, private sellers, auctions, and other resources.

Training
One more significant factor of differentiation between these is the training bit. Franchised dealers have to comply with the set of training standards set by the manufacturer. These standards or guidelines could include training and updating programmes, conducted online or in a classroom for technicians and salespeople. People at the managerial level must also be well-versed with the manufacturer’s warranty and its application(s). This is done by the parent company to ensure that all the quality standards are respected by the dealers. Contrary to this, an independent car dealer is not required to take these courses for any automobile company. Although, it goes without saying that in order to survive in this sector, one must stay updated with on everything related to the full functionality of the vehicle components.

Customer Service
Automobile manufacturers sometimes demand their dealers to follow a certain set of rules when it comes to dealing with their customers and potential leads. This is why it’s not surprising to find a franchised official dealer with a waiting room, offering coffee and snacks. However, these are some of the extra services that represent the cost to the dealer, so independent or private dealers pay more attention to the extra services that they provide to the customers.

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