How to grow your independent car dealership

Although dealerships have been severely affected by the pandemic, they were well on their way to recovery by the end of 2021. Instead of worrying about how to support the business, they can now continue to plan for growth.

Everything has been radically transformed, new trends have been introduced and consumer behavior has changed. Combining these with the number of cars sold each year in the United States (17 million) it means stiff competition between dealers and the need for independent dealers to expand their business increases.

What are some of the growth opportunities and tricks that will help your dealership thrive? Whether you are an industry newbie or seasoned veteran, there are plenty of resources available to help you. We’ve done the legwork and listed some of our best items so you can make the most of 2022 and grow your dealership.

Tips for starting your own independent dealership

If you’ve always had a passion for new or old cars and have always dreamed of having your own business, a car dealership might be for you. To possess an independent car dealership it can be a viable career path as customers always need quality new and used cars.

But before you start buying cars and signing a lease, form a business plan and decide if you want to focus primarily on new or used cars. Do you intend to sell a single brand or multiple brands? You will need to have a good estimate of upfront costs, including car prices, employee salaries, lease and contract of sale costs, and more.

While a passion for cars certainly helps in the industry, a talent for retail sales is just as important. From vehicle condition to building trust and customer relationships, knowing how to manage the sales process from start to finish is the key to a successful dealership.

Why is car dealership financing important?

If you have decided to start your own car dealership, chances are you already have considerable experience in the industry. While it is important to provide a good range of cars for customers to choose from, you will also need to offer financing programs and understanding the importance of funding successfully start an independent dealership.

Customers have grown to expect every dealership to offer internal financing. If not, you could lose potential customers before they even walk in the door. Financing can also lead to greater customer satisfaction and sales.

How to establish internal financing for your dealership?

The first step for establish internal financing at your dealership is deciding which financing products you want to offer. Once you have decided on the right financing products for your demographic, your next step is to contact the lenders offering those products. This may take time and effort, but working with multiple lenders gives your customers more options.

Alternatively, you can work with a loan partner such as Vantage Finance. We can connect your dealership with lenders that meet your needs and help you optimize your finance and insurance (F&I) department.

Is an F&I department important in a dealership?

Regardless of the size of the dealership, there is no reason not to have an F&I department. If you run a smaller dealership, you know it takes more effort to win over customers than your larger competitors. Here because financing for small car dealerships it is an important and often overlooked opportunity.

Customers expect you to provide internal F&I services like large dealerships. Not offering these services will give customers the misconception that you are cutting corners or can’t afford them. You want to build trust with your customers and make sure your dealership offers the best customer experience.

Small car dealership financing is more than just adding to your profit margin. It can help close more sales, especially for used cars.

How to structure the offers for profit?

Almost all lenders use an automated system to verify customer credentials and speed up the loan process. The latest technology can help you build leverage-based internal credit scoring models such as loan-to-value, business equity, and credit that can be used to optimize agreement structures. Once you understand how these key components of a negotiation structure interact and the various ways to speed up the loan decision process, the art of structuring for profit will come naturally.

Having an experienced F&I manager or department is critical to this process. Once they learn a lender’s likes and dislikes, they can emphasize the likes and work to mitigate or compensate for the dislikes. The F&I manager will also know which lender’s guidelines are non-negotiable, so you won’t waste valuable time putting together a non-initial deal.

Tips for increasing your sales numbers

Trying to increase your sales numbers can be frustrating and challenging. This is especially true of smaller independent dealerships, as you are competing with larger dealerships who have more cars and in-house financing options. That’s why independent dealers are always on the lookout tips and strategies to give them an edge and improve their marketing efforts.

Managing your online presence by building a functional and clean website and taking the time to interact with your audience is key to increasing sales. Try answering questions from potential customers on social media and reaching out to existing customers for reviews. If you receive a negative review, address it immediately and make sure you do your best to provide a better experience for that customer.

Tips for closing car deals

Part of the increase in sales numbers is concluding car business quickly. The best way to do this is to make sure the customer trusts you enough to get value for money. Buying a car doesn’t have to be a tedious task that takes hours to complete.

While customers can approach buying a car logically, the actual act of buying is emotional. Being honest and helping your customers create a mental picture of them already owning the vehicle will encourage them to make the purchase. Providing flexible financing options will also help speed things up.

How Vantage Finance can help with dealership growth

The goal of any dealership is to offer quality service and increase sales numbers. Understanding the importance of F&I, structuring bidding properly for profit, and learning the tips and tricks for increasing auto sales can help you with that.

If you want to broaden your range of funding programs, Advantageous finance can help. We are a virtual finance company that connects independent car dealerships to a wide range of lenders that many cannot access. We can provide your clients with the financing option they are looking for to help you close the deal sooner.

We know your dealership is ready to improve sales and close more deals. Contact us at Vantage Finance and we’ll put you in touch with the right vehicle financing for your dealership.

Are you interested in closing more deals and improving the customer experience? Contact us todayand we will help you set up the best vehicle financing.