We’ve all seen them — small auto dealers based in an old house with 10-12 cars and trucks sitting in their lot or on the front lawn. While the “smart” buyer may drive past these lots without a second glance, you may be surprised at what treasures you could find in purchasing a vehicle from a smaller auto dealer.
First, there is little to no room for negotiation. This type of dealer has often purchased their vehicles from an auto auction, which means the larger dealer has passed on trying to sell them. The smaller dealer will sell you the vehicle knowing they have to make a certain profit margin on that vehicle based on the cost of the vehicle to the dealer.
While they may have a smaller selection on the lot, they are also privy to additional vehicles they are purchasing in the near future. They may also know of trade-ins that other buyers are using to purchase vehicles from their lot, which they can essentially hold for you while they are finalizing the deal on that vehicle.
Smaller dealers are also more personal in nature, making them easier to work with. They will often give you a fairer deal on your vehicle in terms of trade-in value, and will work with you to ensure you drive away in the vehicle you are interested in.
Another benefit to working with these smaller auto dealers is that if you are not pre-approved to finance a vehicle, they tend to only work with one or two financial institutions, which means their revenue is not necessarily tied in to the financial institution that secures your loan. They do not have an allegiance to the financial institutions, because their main objective is to sell you a vehicle.
Smaller dealerships will also remember you when you come back for repeat business. They may not exercise a huge post-marketing campaign, but when you come back by to look at another car several years later, they will not forget you. Their repeat business is completely based on how well they treat their customers—with respect—integrity—and with high quality vehicles.
The only warning about smaller dealerships that not all of them are high in integrity, and not all of them carry the higher quality used vehicles (this can also be said of larger dealerships). Shop around a little to ensure the smaller dealer that you choose to work with is a good dealer, with good vehicles, and will work to gain your current and repeat business.
Buying a car from a small dealer vs. large dealer can be less intimidating, less frustrating, and often more rewarding due to the overall experience for both the consumer and the auto dealer.