Wednesday, January 7, 2026

What happens to New cars that don't sell?

https://youtu.be/MGvk8VXrVvI?si=hBW83SgqwFgXbe2x

  1. Sell within 90 days
  2. "Punching" the car - reporting it was sold (to prevent loan fees) then selling it as a used model, with the warranty clock already running. Dealer gets a bonus for a quick sale. 
  3. "Sell" it to the service department as a loaner car, then sell it used months later. Often sells faster at higher profit margin as a "certified pre-owned" (CPO) than of it remained new on the lot. 
  4. Dealer trades - ship the car to a hotter market
  5. Wholesale auction: sell at a loss but avoid loan penalties. 
  6. Sell to rental fleet. Manufacturer keeps rights to buy vehicle back and sell as used. 
  7. Gray market export - "bought" by intermediaries who ship vehicles overseas where demand is higher. 
  8. Emerging market export. Often it's "punched" first (#2 above) then expected as a used vehicle to save on duty. 
  9. Scrapped. To avoid tarnishing the brand by flooding the market at low prices. 
When dealers add "market adjustment fees" and so on, it's too pay for all these costs invited on vehicles that don't sell. 

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