When Mr. Ruggles spoke to us last week I remember one point he made stuck out to me. He explained to us that dealerships only make about 2% profit on their car sales. This to me seemed very low compared to what I assumed dealerships would bring in on sales. One major reason why I was so surprised by the low return on sales that dealerships get is because of Tom Benson. Mr. Benson is the owner of the Saints and Pelicans, but he has one of the best rags to riches stories I know. He started his career as a car salesman and eventually purchased the dealership that he worked at from there he purchased more dealerships and developed wealth which he turned into more wealth and eventually purchased the Saints and Pelicans and is now the wealthiest person in Louisiana. Knowing his story made me wonder how this was possible with such small profit margins on cars sold in dealerships. My confusion led me to ask Mr. Ruggles how this would be possible and luckily Mr. Ruggles knows who Tom Benson is. Mr. Ruggles explained to me that since interest rates are low a dealership owner can take loans out on their inventory and if their dealership is successful then they can pay off their loans completely from their business and just generate equity. He explained that by expanding and using this method in multiple dealerships it is easy to amass wealth quickly and because of the success of Benson’s dealerships, he was able to expand into purchasing banks and real estate to gain more wealth.
Ruggles: Equity Building Through Dealerships and Tom Benson
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