Car dealers come in two very different forms: 1) new-car dealers and 2) used car dealers.

New-car dealers are franchised and authorized by the car company they represent. For example, Ford dealers are authorized by the Ford Motor Company to sell and lease Ford vehicles. They buy their vehicles from Ford and typically use Ford Motor Credit as their “captive” finance company for loans and leases. All new-car dealers are independent businesses and are not owned by a car company, although they have agreed to conduct business in a way defined by the car company.

Used-car dealers are independent businesses not associated with car manufacturers, although many are part of a ownership groups that have more than one location. Some are regional, some national. Examples of such groups are AutoNation and CarMax.

Used car dealers can come in the form of small local dealerships that specialize in selling and self-financing older cars to people with credit problems (“buy-here-pay-here”) to dealers who specialize in selling only relatively new high-end previously-owned luxury vehicles.