Why Car Dealerships Don't Make Money Selling Cars

A lot full of shiny new inventory, customers walking in every weekend, and you're the one holding all the cards at the negotiating table. That's the fantasy. Here's what actually happens once you look at the numbers. This video breaks down the real economics of owning a car dealership: what it costs to get a manufacturer to approve your franchise agreement, the mandated facility renovations that can run into the millions, how floor plan financing quietly charges you interest on every unsold car, and why new vehicle margins have shrunk to almost nothing. Then we get into where the real money actually is — the finance and insurance office, and the service department that keeps a dealership alive long after the sale. Includes the real case study of the 2009 GM and Chrysler bankruptcy dealer terminations, when nearly 2,000 profitable, multi-generational dealerships were cut loose almost overnight, and the courts ruled they had no right to compensation. If you're into business, cars, investing, or just want to know why the finance office is such a hard sell, this one's for you.