Car Dealer

A car dealership or vehicle local distribution is a business that sells new cars and/or used cars at the retail level, based on a dealership contract with an automaker or its sales subsidiary. It employs automobile salespeople to do the selling. It may also provide maintenance services for cars, thus employing automobile mechanics, stock and sell spare automobile parts, and process warranty claims.

Additional services

Dealers may also offer other services, typically through the Finance and Insurance office. These additional services can include:

• Service contracts: While any vehicle sold in the United States now comes standard with some degree of manufacturer's warranty coverage, customers have a wide range of choices to cover their vehicle from mechanical failure beyond that point. Service contracts may have the sames terms of coverage as the vehicle's original manufacturer's warranty, but often they do not.Often service contracts carry a deductible as might any insurance contract. Because of the vast number of choices, it is important for consumers to be aware of the coverages before entering into an agreement. Usually these service contracts do NOT cover regular maintenance items such as brakes, fluids, or filters. In some states, such as Florida, the cost of such agreements are heavily regulated. There are three main types of service contracts offered. The first is offered by the manufacturer through the dealership and is usually good at any dealership in the US that has that same franchise. The second service contract is usually a simple insurance policy that the dealer purchases wholesale and is administered through a third party working for the dealer. This money is put in a "reserve" for the length and / or term of the service contract. The fewer payments made on the service contract the greater the profit to the dealer as any unused portion of the "reserve" is given back to the original selling dealer less an administration fee. The third type of service contract can be purchased directly from a few automobile insurance companies. Check with your agent for information.

• GAP insurance: GAP insurance is protection for the loan in the event that the vehicle is lost as the result of an accident or theft. A GAP policy ensures that in the event of a total loss, the remaining payments are made on the loan so that a customer does not have to pay for a vehicle he or she no longer has. Many states regulate GAP insurance (New York, for example, does not allow dealerships to profit from the sale of GAP insurance).

• Credit/Life/Disability insurance: Customers often have the option of purchasing protection for their loan if anything unfortunate happens to the borrower. While customers can often obtain this coverage from their own insurance companies, dealerships, depending on state regulations, can often offer comparable coverage while also offering the convenience of a "single stop purchase."

• Aftermarket accessories: Many dealerships offer accessories that are not offered by the manufacturer directly. Like Credit/Life/Disability insurance, there are many ways a consumer can purchase these options outside the dealership, but without the convenience factor.

• Maintenance agreements: Many dealerships that have their own service shops will offer pre-paid maintenance agreements. These are sometimes offered directly through the manufacturer (such as Saturn's Basic Care or Car Care programs) or by the dealership alone. Because of the vast differences in programs that can exist from dealership to dealership, it is important to know what gets covered under such a plan and what are the recommended service intervals.