How to keep your independent car dealership competitive

  • August 9, 2023
  • eduardovalencia

Independent car dealerships must remain competitive compared to other independent dealers in their area and large national chains with big budgets, a strong brand identity, and access to a nationwide inventory. It can be tough out there, but many independent dealerships are not only competitive, but they thrive.

How do they do that? They pay attention to industry trends, understand what customers want, and actively work to stay competitive. Here are some ways they do just that.

While the used car boom that sent prices sky high may be winding down, there is still a large demand for quality used vehicles. With the cost of new cars reaching new highs, interest rates rising, and supply chain woes still plaguing the industry, used cars still rate as an excellent choice for many consumers.

Once seemingly overvalued, older cars will take the biggest hit, while late-model cars will hold steady or decline slightly, mirroring the trend for new cars. While EVs are sparking more excitement, long wait lists for new vehicles are still growing, so the opportunity to sell used EVs is enormous.

What do customers want?

According to a survey conducted by the National Independent Automobile Dealers Association (NIADA), customers want many of the same things they have come to expect from independent dealerships: transparency, honesty, and fair pricing. But that’s not all.

They also prioritize quality vehicles, a wide selection of inventory, and knowledgeable salespeople who can help them find the right car for what they need and that fits within their budget.

Along with those things, customers value convenience and a positive buying experience, including easy financing options, reliable service and maintenance, and a welcoming atmosphere. Essentially, they want a positive and professional experience. How does this translate to what you do every day to stay competitive?

8 Tips to Stay Competitive

It’s great to know what industry trends are and what customers are looking for, but it is also essential to take action to stay competitive. Here are eight things you can do.

  1. Offer a wide variety of vehicles: Customers like choices, including new popular hybrids or EVs. But they also like a variety of prices, models, and years to choose from. Don’t be afraid to be creative or even niche down and specialize.
  2. Build a robust online presence: It’s a digital world, and many customers pre-shop online. Be sure to list your vehicles and have good, professional-looking photos.
  3. Provide excellent customer service: This includes your parts and service departments if you have them. Customers remember the image you portray everywhere, so be sure that customer service runs through your culture.
  4. Focus on quality: Ensure that your dealership’s vehicles meet high-quality standards by only offering vehicles with clean histories accompanied by thorough inspections.
  5. Offer financing options: Just like a variety of cars, customers like a variety of financing options. Be sure to offer choices for those with everything from excellent to below-average credit. The more choices your customer has, the better.
  6. Embrace technology: Car dealerships can use technology to their advantage with advanced dealer management software like IDMS, which is built specifically for independent and BHPH dealers to help them increase revenue, better manage inventory, improve sales processes, and maximize productivity.
  7. Offer unique services: Find what sets your dealership apart from others in your area by offering specialized services and options. For instance, LoJack Go from GoldStar gives dealers connected vehicle technology for consumers by offering easy digital payment options, which minimizes delinquencies and increases dealer collections. Choose a niche where you can focus your attention and open different departments to better serve your customers.
  8. Attend local events: Attend local events and trade shows, hold or be a part of offsite sales, sponsor local non-profits and events, and more.

While it can seem like there is a lot of competition at times, this fact helps you focus on ways to improve your dealership, which benefits you and your customers in the long run. This relates to everything from your sales team to your parts department and service desk.

To learn more about the competitive advantages offered by Solera, visit