At first glance, most car dealerships seem to function pretty much alike. They will have vehicles on display, salespeople on hand to show you the available options, and administrative staff in the background to keep paper trails up to date. However, the way they go about their business can be vastly different, which can have broader implications on your car-buying experience. Car dealerships operate on one of three different business models:
These are the big guns. Dealer groups are groups of dealerships, across brand names and all over the country, that are all controlled by a single parent company. These groups often span the magnitude of the car sales landscape, covering both new- and pre-owned sales channels, as well as service centres.
Franchise dealers are “Original Equipment” (OEM) retailers. These dealerships have a distribution agreement with a manufacturer or importer. They sell new vehicles from premises with facilities specified by the OEM and usually have parts- and service departments and pre-owned vehicle outlets. However, there is not much difference in the car-buying experience between franchise dealers and dealer groups. As they have the same agreements with the OEMs, certain service- and presentation standards must be met in both cases.
These dealers hold no affiliation with any manufacturer, which means they are not bound to the same standards as franchise dealers. Independent dealers are typically involved in the used-car market. However, some have secured distribution rights for privately imported vehicles. Where franchise dealers are bound by manufacturer standards, independent dealers have their own regulatory body to set standards applicable to their industry—die Independent Dealer Association. However, independent dealers are not compelled to join the IDA.
As the first rent-to-own car company in South Africa, Earn-a-Car has been in business for over nine years, helping over 5000 people get access to affordable vehicle finance with no hidden terms and conditions. For more information, contact us today.