4 Reasons New Auto Dealerships Commonly Are Located Near Each Other

It may seem like a questionable strategy for competing retailers to locate close to one another, but it's not uncommon. New vehicle dealerships are no exception. In the case of Nissan dealers and their direct competitors, there are five main reasons why this happens.  

1. Zoning Regulations and Local Preferences  

Business owners can't just buy property and have a building constructed. They must get approval from the local governing body first. That doesn't always happen, even when zoning regulations allow commercial establishments. For example, a city council or town board may decide that a car dealership simply isn't a good fit for this particular neighborhood.  

Dealerships nearly always have repair shops, which means noise near a residential neighborhood. At night, dealer lots are brightly lit to deter theft and vandalism. People also may not appreciate the idea of an enormous car dealership in a business district characterized by historic buildings or small independent shops. Some municipalities and counties have areas zoned specifically for car dealerships, limiting their locations to just a few parts of town.  

2. Land Availability  

There's also the issue of acreage. A dealership takes up a large amount of space compared to many other retailers. The vehicle manufacturer needs space that would otherwise go to a business such as a strip mall or a big-box store.  

3. Proximity to Highways  

As with hotels, auto dealers may prefer to build on the edges of town along interstates and other major highways. These new stores have a significant advantage over an older dealership located many miles further in, especially in a very large city. Many people won't want the hassle of driving there.  

4. Competing at the Source  

Vehicle manufacturers may like locating a dealership near a competitor because it's the most efficient way to get potential buyers on the lot. Not everyone knows exactly the type of car or truck he or she wants when starting the search, and many people are looking for good used cars at these dealerships. They might be inclined to drive over to a nearby lot to see what's there, while not feeling motivated to run all over the city.  

5. What This Means for Car Buyers  

No matter what the reason that dealerships tend to locate near one another, it means convenience for car buyers. If you're in the market for a new or used vehicle, you can spend less time driving from place to place, and more time viewing and test driving vehicles.