What Happens To New Cars That Don't Get SOLD?

what happens to brand new vehicles that never get sold it's a common issue that dealerships are having to deal with no matter what you're looking at Ford GMC Chevy Dodge they all have vehicles sitting from 2022 2023 sitting on the lot and it's about to be 2025 and it's a big issue it never happened before 2020 I've never seen a new car sit more than 200 days but now you have 500 600 700 days is becoming the norm in some cases it's crazy I wouldn't say the norm but some of these really expensive Grand wagoners

and stuff like that it literally is the norm so it's a bad situation and one of the most common questions I get on this channel in comments is what happens to new vehicles that never get sold let's get into it I've worked at multiple different dealerships and how they operate is they work on a floor plan they actually Finance the inventory in 99.9% of the cases so you have all this inventory that's financed and sometimes they floor plan is interest free for 60 or 90 days so the goal is always to sell it within that

first interest free period or very low interest after that generally it ticks up to be a pretty high rate 7 10 15% interest on millions of dollars or hundreds of thousands adds up very quickly so as you have these cars that sit there and build interest the dealer cannot that it becomes a big issue it's a burden to the dealership and it's throwing money straight to nothing just the interest so a lot of times the dealership will either pay it off they also will offer spiffs to salese to try to get them to sell it

so I've been in in car sales they'll offer $500 $1,000 spiff to get you to hey it's on this unit this car it's a 23 it's been sitting 500 Days and trust me if you pull up another car if a customer walks in they're going to want you to bring the customer in they don't want the they want you to control the whole situation as a salesperson and they want you to bring this car up to them and they want you to make the customer fall in love with that car that's been sitting there forever

so it's how it is and the manager is going to look at that salesp and say why did you not bring up that one we got a spiff on that one but uh he's going to be like the customer doesn't want a 2-year-old new vehicle hey maybe you'll get a deal on one but the issue is think about all the issues these vehicles have that's been sitting since 2022 2023 just sitting riding away for 2 three four 500 days it's not good for the vehicle at all uh I don't think at all so there's another

thing that could happen you the dealership could also use it as a demo so every manager or generally every management employee at a dealership will get a demo vehicle at most dealerships believe it or not it used to be salespeople and some dealerships still do it but because the rising cost of insurance generally dealerships only offer it to their management staff uh but some dealerships still give demo vehicles to all their sales staff and management so that's another reason it can go to the demo uh maybe the owner could drive it because a lot of

times before it was unique vehicles like it would be some sort of hybrid that didn't sell that was sitting there for 200 days and you live in Texas or Oklahoma and they don't like hybrids that much and it was 20177 yeah that's probably not going to sell as quick as a non-hybrid not anymore now it's the high-end brand it's the grand wagoners it's the $150,000 pickup trucks that are not selling because it's too expensive so the owner actually the owner of the dealership might say hey I'll just take it as a demo screw it I'll

take that grand wagon air I'll driver for a few years and we'll sell it to auction for 40 Grand literally that's the kind of loss these vehicles are taking and that's the other situation they could go they could take it to auction and take a loss on it which is honestly sometimes just take your loss get rid of it be done with it sometimes a smartest decision or they could also sell it on their youth side and try to get some the dealership always wants to do a retail customer they want to get you in

there so they can sell you additional products in the finance box so they would rather you do do that at least they'll get someone in the box and um but they could also use it as a service loaner so there's so many different things they could use it as but when these dealerships have okay 1 2 3 now we have 10 now we have 15 cars that have been sitting for 400 Days and they're all 20 23s and we're a month away from 25 that's a common issue that's going on with a lot of these

dealerships and the general managers guess what they get laid off that's just how Car Sales is it's a brutal business and no one feels sorry for the dealership or anybody around there really in most situations because dealership screwed everybody over charging 15K markups at Dum stickers and hey I still see that now in 2024 PE dealership still trying to add an addendum sticker in Market UPS get out of here with that come on what the I can't believe it when I saw that but anyways so you have all this stuff going on it's insane I

can't believe it it doesn't make any sense and no one feels sorry and yes there's extremely high turnover in the dealerships general manager he has 15 2023 sitting around yeah we got to get rid of him and honestly it's probably because the dealership did markups that's the thing these dealerships don't understand if you do greedy tactics a lot of times in the long run it hurts you you actually make less money because customers will just stop coming back they lost a lot a lot of Laural customers they're like I'm not going back to my local

dealership they charged the $5,000 markup on this I'm not going back so drive around buy you look around if you're in the market right now you can get a deal on any vehicle no matter what kind of vehicle it is you can get a discount off of MSRP no matter how valuable or how desirable so look around there is inventory don't be afraid to drive out of state to save thousands of dollars it just makes sense but I wanted to answer this question what happens to all the new inventory that never sells quite a few

different things you know go to auction spiff could be put on it for the salese to sell it they really try to hammer the salesp people to sell it so they're just going to keep adding that spiff and I've seen spiffs as high as $1,000 extra on top of the selling the car part so you can make pretty good money selling that car but the customer just doesn't want it they could send it to auction they could use it as a demo they could use it as a service loaner there's so many different things they

can do with these unsold vehicles but it's still a big issue because the dealership yeah one or two okay but now it's becoming more and more common and keep this in mind guys it never happened before and still to throw that much revenue away 70 80 120k worth of Revenue is what you have to what their the dealership has to drop to pay off this vehicle that's a lot of Revenue either way around but these dealerships have been screwing us over for a while let's just stand together let's not mess around with any dealerships with

the denim stickers markups or any of those BS stuff make them pay and they're really starting to F it they're getting what they deserve finally but hey I had to answer this question let me know what you think have a great day and stay blessed