Why do used car dealerships fail?

Discussion in 'Growing and Managing a Business' started by question, Jun 30, 2011.

  1. question

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    I've noticed that so many public used car dealerships fail. What would be some reasons for this?
     
  2. sigma

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    business fail basically due to few reason such as pricing, quality, and service.
    of course, it can be also due to global/local economy
     
  3. GekiDan

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    Welcome to Business Advice Forum. Thanks for posting your question here.

    You mean buy and sell cars kind of stuff? The few reasons had already been stated by sigma.
    But if I may add, carnapped vehicles have already entered the circulation on these type of business. In our country, there are some syndicates that carnapped cars and customizes it, like changing paint etc, and sell in a few weeks. Once you buy it, even if you know if it's carnapped or not, a case may be files against you.

    I don't know about your place, but this is one of the major reasons I see in ours.
     
  4. Fergal

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    Welcome to our Business Forum question. Are you planning on starting a car dealership yourself? What country are you based in?

    I would say that the reasons why some of them failed in Ireland include the following;

    1. The recession means that people are spending less on their cars
    2. A government scrappage scheme means that more of those who can afford to are buying new cars
    3. More second hand car owners are selling directly to the buyer, via online classified sites
    4. The growth of other sales methods such as second hand car auctions
    5. Concerns re the quality, reliability and guarantees on vehicles purchased from used car dealers.

    Are any of those reasons relevant to you?
     
  5. Haydendiego

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    Dealing of used cars now a days exhausting. Because people preferes to buy new fully furnished cars. As the used are of bold type models, lack in speed compared to the today's cars. Dealership of used cars decreases day by day because many times people are cheated by the dealers in terms of price, maintenance.
     
  6. James Greg

    James Greg
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    I agree with you fergal and there might be one more reason to add here, used car dealers have lost their reputation by cheating the customer. They place it shiny and term it in the best condition ever, while after a few days used cars usually are seen in garages due to various breakdowns.
     
  7. Fergal

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    Good point James, when we think of used car sales men we don't always think of honest reliable business people.
     
  8. Peter Birganza

    Peter Birganza
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    Hi,

    It can be any cause. mostly it is observed that it happens because of:

    1: Tax deduction policies of government

    2: Second hand cars are not much reliable

    3: Chances of risk in purchasing second hand cars are high

    These are the common problem due to which used car dealership is not successful.
     

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