Therefore, if the cars go unsold, dealerships typically can't just send them back to the manufacturers and get a refund. This is because the manufacturers have already sold the vehicles to the dealerships, and the dealership then marks the cars up to try to resell them for a profit.
Why are car dealerships low on inventory?
This is thanks to the combination of low interest rates, consumers flush with stimulus and tax refund monies, pent-up demand from 2020's Covid-19 uncertainty, and a rental car market that is clamoring for new vehicles while not pumping used models into the market.8 Sept 2021
Do used car dealerships own their inventory?
This may come as a surprise to you, but most car dealers don't actually own the cars they're selling. There is usually several million dollars worth of inventory on a typical dealer's lot, and those cars are all owned by a bank or finance company.
What happens unsold inventory?
Many shops sell it to discount stores like TK Maxx, or online discounters like the Outnet. Others launch periodic online sales of what needs to go, or have their own outlet stores that sell last season's merchandise at a discount.4 days ago
What do car dealerships do with unsold inventory?
They can't just send the unsold ones back to the manufacturer at the end of the year. In order to make money, they have to get customers to buy them. 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.26 Feb 2019
What happens to new cars that remain unsold?
A final resort for the dealer with vehicles that don't sell at the dealership is to sell them at an auto auction. Most areas have auto auctions that are frequented by new- and used-car dealers.11 Sept 2020
Why is there a car shortage at dealerships?
Microchip Shortage Leads to New Car Shortage A worldwide shortage of microchips and other supply chain struggles have forced automakers to cut the number of cars they produce. Virtually every automaker has idled factories at some point in 2021 because of a shortage of necessary parts.12 Nov 2021
Why are car dealers lots so empty?
Empty car lots are the most visible sign of a new vehicle shortage that has plagued the auto sales business since early 2021 — the result of an international microchip shortage and a dearth of truck drivers nationally, according to Sunderland and others who operate area car dealerships.3 Jan 2022