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Advice from Intellichoice: Understanding Dealerships - Dealership Overview

Approaching an auto dealership can be as intimidating and confusing as arriving to pick up a date at her parents' house. Who are these people and what do they do? Whom should I speak with? Will I make it out of there alive?

We see dealerships everywhere, and most people eventually visit at least one in their lives. But other than "They make money by selling cars," most of us have little knowledge of the nuts and bolts of the business. To give you better insight into how a dealership works, we've broken down and dissected the various parts that make up the whole.

An auto dealership is a model of division of labor: Each department has its own distinct tasks and responsibilities, as do each of the employees within those departments. According to Carl Ragsdale, COO of dealer services at the National Automobile Dealers Association (nada.org), most dealerships - even the mammoth, shopping-mall-sized ones - are structured similarly, with either five or six different departments. And, virtually all of them have converted their dungeons to wine cellars. (That's a joke; everyone knows dungeons are too dank to store wine in.)

The typical departments include new-car sales, used-car sales, service, parts, accounting and sometimes a body shop. According to recent data from the NADA there are an estimated 18,458 new car dealerships in the U.S., employing about 912,000 people. When we consider dealership employees, usually only salespeople and mechanics (the p.c. term now is "technicians") come to mind. But there's a wide variety of jobs at a typical dealership, including administrative positions such as accountants, cashiers and receptionists.

The highest-profile activity at any new-vehicle dealership is sales. New-car sales are, after all, the raison d'être for the whole operation, right? But while sales might attract all the attention, the dealer runs profitable business through its other departments as well. Each of these departments fits into the dealer's overall structure like the pieces of a puzzle. Some pieces might be bigger than others, but the picture would be incomplete without each of them.

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