Discover the fascinating journey of unsold cars, dealership dilemmas, and secrets revealed in the automotive industry.
The Mystery of Unsold Cars
Have you ever passed by a car dealership and wondered about the destiny of those shiny, new vehicles that never find a home? It's a common curiosity we all share. Why don't dealerships just give them away for free? As it turns out, the answer is more complex than you might think, and it's time to unveil the secrets that car dealerships rarely divulge.
The Dealership Dilemma
Firstly, it's crucial to understand that car dealerships operate as franchises. They purchase new cars from the manufacturer and mark up the price to turn a profit. Once those cars are on the lot, they're the property of the dealership. They can't simply return the unsold units to the manufacturer at the end of the year. They must find a way to entice customers to buy them.
Options for Unsold Cars
When cars linger on the lot without buyers, dealerships have several options. One choice is to transport the unsold cars to a different market where demand for that particular model may be higher. For instance, a city Toyota dealer with surplus Toyota pickups might trade them with a smaller-town Toyota dealer in need, as George Iny, president of the Automobile Protection Association, explained to The Globe and Mail.
Auctioning Off Unsold Inventory
Another option is to auction the vehicles. However, this means the dealership loses a portion of the sale to the auction house, resulting in a substantial loss since the cars are already discounted. Alternatively, these cars can serve as loaner vehicles when customers bring their cars in for service.
Discounting and Seasonal Strategies
The last resort for dealerships is to price these unsold cars to sell quickly. It's important to note that car manufacturers and dealerships are eager to clear their inventory to make room for the latest models. Iny suggests that buying a car in the fall is a savvy move since dealerships work diligently to sell off the previous year's stock during this season.
Benefits for Savvy Buyers
So, those unsold cars can indeed benefit buyers. However, before you embark on your journey to purchase a set of wheels, it's wise to familiarize yourself with strategies for negotiating with a car salesman when you step into the dealership.