Franchise vs. Independent Car Dealers: What’s The Difference?

Car salesmen can usually be broken down into two categories, which are franchise and independent car dealers. Understanding the differences between them can help a great deal when planning the purchase of a new or used vehicle.

Franchise Dealers

These are salesmen that are given authorization from specific automakers to function as agents when selling their automobiles. They tend to only specialize in one brand and will not offer vehicles from rival companies. They are easy to recognize since the logo of the brand they represent will be prominently displayed on the outside of their building.

These dealers have a distinct advantage when it comes to interest rates, which are typically lower than independent dealers. This is partly because the financing will be done through the financial services offered by the parent company. The downside is that franchise dealers are less flexible with those that have poor or shaky credit, and will often turn them down. While franchise dealers also sell used cars like their independent counterparts, their models still tend to be newer.

When it comes to pricing, franchise dealers will almost always charge more since they primarily offer late model cars, and these are also the dealerships that tend to carry high-end luxury or sports vehicles. Therefore, these dealerships are ideal for middle-aged or retired adults who have lots of savings with established credit and can therefore afford higher-end automobiles.

When it comes to vehicular servicing, the majority of franchise dealers retain service departments in-house and employ technicians who are specially trained for working on the brands they represent. This is advantageous because they can get repairs done faster and will have more knowledge of specific parts and issues.

Independent Dealers

These salesmen have no allegiance to a specific auto brand and will sell cars from multiple manufacturers on their lot. Because they have no authorization agreements they will rarely sell new cars and most of the vehicles they offer will be used. The financing and interest rates offered by these dealers tend to be higher than their franchise counterparts, but they are also more flexible in working with those that have poor or shaky credit.

There is no comparison when it comes to variety. Independent dealers aren’t beholden to a single brand so they can sell just about anything they want. Those who want the most options will benefit from the services they offer. Additionally, those on a budget will definitely want to stick with an independent dealer, since their prices will almost always be lower than franchises. Independent dealers are therefore ideal for high school and college students who usually don’t have a lot of money and are looking to buy their very first car.

Unlike franchises, most independent dealers do not have their own in-house service departments. This means that if you run into a mechanical issue with the vehicle, you’ll have to contact an independent mechanic who can take a look at it, but their knowledge will be more generalized when compared to franchise technicians.