What Happens to New Cars That Never Sell? Behind the Dealer Lots! (Video)
In this 22 March 2025 video, the host talks about how vehicle supply is far exceeding demand, the car market has been on a crash course since the middle of 2024. Vehicle manufacturers are needing to slow or halt production on many cars, trucks and SUVs.
Between the astronomical price tags, insane insurance premiums, and the overall cost of living… People are giving up. They’re no longer buying new cars. And rightfully so. We are seeing rows upon rows of unsold inventory right now, many cars and trucks being 2024 models. Something has got to give soon.
With that said, have you ever wondered what happens to NEW cars that never sell? Well, I’ll talk through it all in this video:
https://youtu.be/i1BdnVPoNNQ
With the cost of vehicles shooting to the moon over the last 5-6 years… people are no longer able to buy new cars so often.
Average price $48,405… $64,266 trucks
$760 new… $525 used… $1000 trucks
Cars are financed by the dealer… Flooring costs.
Dealers are stuck with vehicles
Sales produce allocation rates
Predict consumer demand
Predict inventory rates
Inventory growth has been unprecedented…
Slashing prices and offering incentivized interest rates
Car market crash will be 10-15% below invoice
Dealer discounts plus manufacturer rebates
State dealer franchise laws protect dealerships
Markups when demand exceeded demand
Auction or wholesale is the last resort.
If a dealer goes belly up, the inventory gets turned back to the manufacturer.
A dealership is generally required to have sufficient wherewithal to survive tough times for 2 years.
Overproduced vehicles that didn’t sell… like the f150 lighting
Store in lots and export to other countries, to international markets where demand is higher
Scrap the vehicle to salvage useful parts and write off the loss… selling at a huge discount would be harmful to the brand.
Dealers would rather take a huge loss via auction than to undersell to their local customers. If word got out…
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