ASK AN AUTO DEALERSHIP FUTURIST SPEAKER: HOW DO CAR DEALERS GET PAID?

Of all questions auto dealership futurist speakers and virtual keynote speaking pros are asked, how do car dealers make money in such a competitive environment is among the most frequent ones. Naturally, many folks asking the question are wondering how to differentiate and stay ahead of the curve, even as new trends and future technology platforms continue to remake the shape of the field. All things said and done, there are quite a few ways that industry experts bring in income, or so you might be interested to learn. According to the leading auto dealership futurist speakers, here’s how your favorite car dealers find ways to bring in revenue month after year, even amid rising uncertainty.

• New vehicle sales – Dealerships purchase vehicles from the manufacturer at wholesale prices and sell at higher retail prices. The difference is their gross profit on the sale. Accessories and add-ons during sales also boost revenue according to auto dealership futurist speakers and industry experts.
• Used vehicle sales – Similar to new cars, used vehicle sales generate gross profit based on the trade-in vs resale price difference. Certified pre-owned programs also provide profit.
• Financing & leasing – Dealers make money by facilitating auto loans and leases, either via captives (lenders owned by automakers) or third-party banks. According to auto dealership futurist speakers, they earn a fee or spread for each loan or lease contract.
• Service & repairs – The service department performs maintenance, warranty repairs and collision work for a labor rate and markup on parts. High margin revenue stream.
• Trade-ins – Dealerships buy trade-in vehicles from consumers at wholesale prices and later resell them for higher retail prices after reconditioning.
• Fees & add-ons – Admin fees, documentation fees, VIN etching, rustproofing, fabric protection and more create incremental revenue from car buyers.
• Referrals & commissions – Dealers get paid for referring customers to insurance, credit card, accessory companies and also receive holdback commissions from manufacturers like auto dealership futurist speakers point out.
• Manufacturer incentives – Factoring in sales incentives, volume discounts and marketing support helps improve new vehicle profitability.

Interestingly, multiple profit centers centered around new/used sales, F&I, service and parts all contribute to a dealership’s bottom line.