This Black History Month, we are celebrating the diversity that exists within our industry while also recognizing the disparities and the need to be more inclusive. We’re pleased to welcome Lawrence Vaughn, Dealer Principal of Wise Chrysler Dodge Jeep Ram, to share his story, his recommendations for car dealers, and how business is today at his store in Ohio.
Vaughn has been in the automotive for 16 years and spent the last four trying to buy his own dealership. Back when he was the general manager of a Dodge store in Mississippi, Vaughn applied to the Stellantis Dealer Diversity program. He was accepted, and after putting the financing in place, closed on Wise CDJR in the Fall of 2021.
Vaughn had to put up a significant amount of capital to make this purchase, and he believes that access to funds is one of the biggest barriers facing aspiring minority car dealers. There are not many banks out there willing to lend to brand new car dealers either.
“The monopoly that starts to happen, is that you have qualified candidates, but they’re qualified as far as the manufacturer can see, but they don’t have the support when it comes to borrowing power,” says Vaughn.
Today, Vaughn’s car dealership is facing many of the same challenges car dealers across the countries are facing. Low new car supply, strict used car management, and lingering effects of COVID-19 have put the auto market into a precarious position.
“The used car game is, is more like chess,” explains Vaughn. “You have to be three moves ahead. And the best way to explain that market is, you’re going to pay a little bit more for a car.”
The fixed-ops department has been a strong source of business for Vaughn as well. Consumers are holding onto their cars for longer than usual. Pre-owned cars are also valued higher right now as we all know. Cars with 50,000 miles have not depreciated at the expected rate. Vaughn says it seems like every 10 to 15 years the industry goes through something completely unexpected. However, car dealers continue to adjust and continue to be profitable.
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