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How Do Car Dealership Companies Work?

If you own a car then you are certain to come across a variety of automobile dealerships. They offer a broad selection of cars, used and brand new to consumers. Their product isn’t always easy to sell, but they are able to run a good business, as it appears.

The car dealerships you choose to work with will operate using two methods. They can either acquire cars on consignment for sale or buy the vehicles and then make a profit selling them.

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Let’s look at both of these options for car dealerships:


Consignment’s process is quite simple. The owner of the cars will permit dealers to keep a certain number of cars in their facilities and manage the cars. It’s up to the car dealer to offer the car at greater than its value and to then purchase the car transferred.

Buy to sell

In this model, car dealerships dealers will buy cars they think they could sell. They usually buy only a couple of particular models of cars and use it as a demonstration vehicle that potential buyers can test and drive.

The inside workings of dealerships aren’t too complicated. It’s just a matter of taking time to consider the process. If you can see a significant number of cars on the floor, the dealer may be employing the consignment method to sell those vehicles.