Mystery Solved: What Happens to New, Unsold Cars?
What if the biggest automobile mystery has been staring you in the face all along?
After you buy a new vehicle and give it proper car insurance, most people drive it home and simply take a few pictures to make everyone on social media jealous. However, driving home means leaving plenty of cars behind, and that has caused many drivers to wonder what happens with these unwanted automobiles.
What happens to unsold new cars? Do they find a new home somewhere, or are they perhaps recycled for scrap? Most importantly, where can you get a good deal on one of these pristine rides? Keep reading to find out!
Unveiling the Mystery of New Car Surplus
What happens to unsold cars? Countless drivers have asked this question over the years. To really understand the answer, you first need to understand how automobiles end up at the dealership in the first place.
What is the rocky road to the dealership lot like, and what is the reality behind these unsold new cars? Below, you’ll find an answer to these questions and more.
The Road to the Dealership Lot
The vast majority of automobile manufacturers do not sell their own vehicles. Instead, they sell the car to dealers who, in turn, try to sell the car to buyers like yourself. Dealerships are highly incentivized to sell all of their stock to make a profit and make room for new vehicles. This is why you may be able to negotiate a good deal for cars that have been on the lot for a very long time.
Myths vs. Reality: What Really Happens?
There’s a persistent myth that unsold cars from dealerships just sit around the lot until they are sold. But while dealerships will try different strategies to offload these vehicles (including offering discounts and special incentives or even making it into a loaner), they will eventually try to sell the vehicle to another dealership or sell it at an auction to avoid having an entire unsold car graveyard on the lot.
From Showroom to Shifting Strategies
What do car dealerships do to unsold new cars? Now you know a bit more about the reality behind unsold car inventory. However, you may not yet know the exact process behind which dealerships explore different options regarding their excess new cars.
What kinds of price adjustments and special incentives are offered to buyers, and what does the journey from overstock to ownership look like? Below, you’ll discover more about what dealerships do with unsold cars.
Price Adjustments and Incentives for Buyers
What happens to unsold cars at first is that the dealership tries to sell them by offering special incentives, price adjustments, or other deals to consumers. The dealership gets to set its own prices, so they can tweak things downward to make a quick sale (great for price-conscious customers worried about car costs like wasting money on gas). They make less profit this way, but this process is still far more profitable than never making a sale at all.
The Journey from Overstock to Ownership
Ironically enough, much of the unsold car inventory at your local dealership may be from automobiles they bought from other dealers. From outright sales to auctions, many of the vehicles on the lot come from other dealerships that didn’t want an unsold car graveyard of their own. The cycle may continue because unsold cars from dealerships in your area may be sold to other dealers who hope to have more luck with customers looking for the best new vehicles in California.
Behind Closed Auction Doors
Where do unsold cars go? At first, they go nowhere, staying on the lot while salesmen try to sell them using special discounts and incentives. Eventually, though, unsold brand-new cars are sold to other dealers or even through special auctions.
Most drivers never learn what dealerships do with unsold cars. Below, you’ll discover more about this process, from dealer exchanges to automobile auction blocks.
Dealer Exchanges and Trade Networks
Exchanges and trade networks exist so that dealers can sell or trade unsold brand-new cars with one another. By themselves, these dealerships would each have an unsold new car graveyard. Working together, they can sell or trade vehicles that are likelier to sell in another dealer’s market than their own.
Off the Public Radar: Car Auctions Explained
What do dealers do with unsold cars when they can’t sell them to other dealers? Some may choose to use the vehicles as loaners for customers, and others may hold out to try to sell them at a discounted price. In most cases, though, they will try to move them at auctions.
Some of these auctions are open to the public (which can be a great method of finding a car for your California commute), and some are only open to dealers. Either way, selling the vehicle this way means that the dealership can make money on the sale right away rather than holding out for hope of a future payment. That’s why auctions are what dealerships do with unsold cars when they have no other options.
Drive Smart: Get Your Car Insurance Today with Cost-U-Less Insurance!
What happens to unsold new cars? Now you know the answer to this question. You also know why the dealerships sell automobiles to other dealers or through local auctions: because they don’t want to end up with an unsold new car graveyard.
However, do you know who can help you protect your car (new or old) from ending up in its own graveyard? Here at Cost-U-Less, we specialize in providing the best insurance options for California drivers just like yourself. Ready for the peace of mind and customer service you deserve? Time to call us at (800) 390-4071 or get a fast car insurance quote online. Don’t forget that you can always find a Cost-U-Less office near you!
