Jun 23 , 2020
If you’ve ever driven by a car dealership and seen the rows and rows of new cars, you’ve probably wondered what happens to the ones that never get sold. Where do they all go when it comes time to make room for the newest models? Dealerships don’t just give the cars away. Things are a little more complicated than that. You’ll want to read up on these secrets that car dealerships won’t tell you.
Plus, learn these things that you may be doing that are shortening the life of your car:
So What Happens To All The Cars?
Car dealerships are franchises. That means they buy new cars from the manufacturer and sell them at a higher price to make a profit. Therefore, once the dealership buys those cars, they belong to them. They can’t just send the unsold ones back to the manufacturer at the end of the year. To make money, they have to entice customers to buy them. These are the end of the year sales tricks car dealers use.
Move Them to a Different Market
There are a few options for the dealership when their cars don’t sell. They can ship the unsold cars to a different market where the specific model might be in demand. “For example, a city Toyota dealer with a Toyota pickup may trade it with a small town Toyota dealer who needs it,” George Iny, president of Automobile Protection Association told The Globe and Mail.
Sell them at Auction
The cars can also be sold at auction. That forfeits some of the sale to an auction house, which means the dealership loses a lot of money since the car would already be discounted. Another option: The cars can be used as loaners when people bring theirs in for service. This is the best day of the week to buy a car.
Price Cars to Sell
The final option is to price the cars to sell. At the end of the model year, carmakers and dealerships want to get rid of inventory so older cars aren’t competing with newer models. Iny suggests purchasing a car in the fall because that’s when dealerships push to get last year’s cars sold. Car dealers aren’t going to tell you these things about leasing.
So all the unsold cars can actually benefit the buyer. But before you go to purchase a new set of wheels, make sure you know how to outsmart a car salesman.