Technology is revving with updates at a pace that is hard to keep up with. Be it electronic devices or cars; we have a newer & better version almost every month. But that strikes the question of how do dealerships manage with this speed with unsold cars.
Whenever we come across a dealership, new cars are lined up somewhere around the showroom. One thing we have never pondered upon is that what happens to the vehicles that are not sold. As dealers have to make space for the newer models, let’s unfold this mystery:
How Do Car Sales Work?
The car manufacturers do not sell their products directly to the people. The dealers act as a bridge between the carmakers & consumers. Dealers buy cars from the manufacturer and sell them to the people for their profits.
Once a dealer has purchased cars from a manufacturer, they have to make sure that every last one of them is sold. They cannot return the unsold cars to the manufacturers and get their money back.
There are always slow-selling cars in every brand’s lineup and at every dealership. The sales-people are given incentives to sell the slow-selling vehicles to make space. This is one of the reasons why we have seen the salesperson steering us towards another vehicle without our interest.
Dealer’s Point Of View
The dealer has limited options for taking care of the unsold stock. As they cannot approach the manufacturer, they try to find buyers online or find another dealer at another location who needs those cars.
These cars are also sold at auctions sometimes, but it is the last option for the dealers. During auctions, the house always takes a cut. So they sell it at a loss rather than not selling them at all. At times dealers also keep a few of those cars as ‘loaner cars’ when a customer’s car is being serviced.
How Can Consumers Benefit?
Providing salespeople incentives is not the only trick in the dealer’s books. They also give out discounts on cars when they have been sitting for a long time at their dealership. We can see a similar policy when someone buys a test-drive vehicle at a discounted price.
It would be a dream come true if the dealers gave away these cars for free, but we live in a real world. New models come around October, and we have the festive season around the same time, which can be beneficial for people to buy a car at a great price. It is always better to go prepared to avoid being tricked.