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  #1  
Old 03-08-2005, 12:47 PM
Misnomer Misnomer is offline
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What happens to new cars that never get sold?

I would imagine that car dealers sometimes have "leftovers": what happens if a new car hangs around, unsold, for a model year or two? They don't just destroy it, do they? Does it go back to a giant warehouse somewhere? Is it possible to walk into a dealership and ask for a new car that is a model year or two behind (i.e., does anyone still have brand new '02/'03 cars lying around)?

(This feels like a question whose answer will make me go , but it popped in my head yesterday and now I gotta know!)
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  #2  
Old 03-08-2005, 12:55 PM
Exapno Mapcase Exapno Mapcase is online now
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Like everything else, if you make something valuable cheap enough it will sell. Sooner or later a new car will be discounted enough to make it sell. End of problem.
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  #3  
Old 03-08-2005, 01:05 PM
Si Amigo Si Amigo is offline
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Rental car fleets and deeply discounted bargins for the most part. You can get some great deals on last years models in December, but it will usally be a base/stripped down model.
Some end up going south of the border as well, but not as much as they used to.
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  #4  
Old 03-08-2005, 01:12 PM
BarnOwl BarnOwl is offline
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What if the dealer sold the parts of his unsold cars to a chop shop?

I understand that when sold separately, car parts can bring in many times the sticker price of the wholly assembled car.
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  #5  
Old 03-08-2005, 01:16 PM
BarnOwl BarnOwl is offline
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Quote:
Originally Posted by Antiochus
What if the dealer sold the parts of his unsold cars to a chop shop?

I understand that when sold separately, car parts can bring in many times the sticker price of the wholly assembled car.

Hmm. Maybe 'chop chop' is a dumb idea. Instead, how about the Ford dealer selling to a car parts dealer?
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  #6  
Old 03-08-2005, 01:32 PM
Si Amigo Si Amigo is offline
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A car dealer can sell to anybody as long as the manufactuer gets there invoice price (which isn't set in stone) and they are free to take a lost. But I can't imagine this happening (parting out) with a major manufactuer. Parts dealers can buy warrentied parts from the OEM all day long cheaper and easier than taking them off a vehicle.

But if memory serves me I believe that you could buy new Yugos for a couple of years after they went out of business. I can recall some people buying two so that they would have a parts car.
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  #7  
Old 03-08-2005, 01:44 PM
iamthewalrus(:3= iamthewalrus(:3= is offline
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My car (a '91 Mazda Miata) wasn't originally purchased until late 1992. Given that new model years come out the year before, it was two years out of date at that point. I assume that the original buyer got a good deal because of it.
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  #8  
Old 03-08-2005, 02:03 PM
Rick Rick is offline
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Funny thing about the auto business, every new car that gets built gets sold. Watch the ads starting in about Juneish here in the states. You will hear about model year clearance sales. By November if these ads are still running (they will only run if there are still last years cars left over) they are offering some very atractive deals.
You have to understand that a car dealer usually does not own the cars on his lot, the bank does. The bank charges intrest on the money borrowed to keep these cars there (called flooring). If a dealer were to keep new cars around for a year or more, they are losing their ass on the flooring charges.
The last time I saw any cars left over for more than just a few months after the new year was when Yugo went out of business here in the US.
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  #9  
Old 03-08-2005, 02:27 PM
vetbridge vetbridge is offline
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Bargains Bargains Bargains
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  #10  
Old 03-08-2005, 02:48 PM
kunilou kunilou is online now
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The last three cars the missus and I bought were all from the previous model year. Yes, they were heavily discounted.

Sooner or later even that lime-green stripped down model gets discounted enough to be sold.
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  #11  
Old 03-08-2005, 09:41 PM
rackensack rackensack is offline
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It's still early enough in the year that if you take a close look at the weekend auto dealer ads in any major city newspaper, you'll find a few '04 model closeout deals still available. In fact, I even heard one dealer locally (Atlanta) running a radio ad in the last couple of weeks that mentioned extremely steep discounts on remaining '04 models in stock (whether they actually had any '04 models remaining in stock is, of course, another issue). I have actually seen at least one car that was two model years old still sitting on a dealer lot, but that's a pretty rare sight.
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  #12  
Old 03-08-2005, 09:49 PM
CBEscapee CBEscapee is offline
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Quote:
Originally Posted by Si Amigo
Some end up going south of the border as well, but not as much as they used to.
??????
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  #13  
Old 03-08-2005, 10:16 PM
Diceman Diceman is offline
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A few years ago, when I was shopping for a new car, I saw a Plymouth Sebring sitting in a Chrysler dealer's lot. (This was after the Plymouth name had been discontinued.) It was a couple of years old, but was being sold as new for less than $10,000. I figured that it had to be a lemon.

I eventually ended up buying a Saturn, in case anybody was wondering.
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  #14  
Old 03-08-2005, 10:39 PM
Shagnasty Shagnasty is offline
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A family member of mine bought a 1999 7 series BMW new in 2001. It was an unpopular color and just sat there for 2 years. There was a very steep discount on it.
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  #15  
Old 03-08-2005, 10:56 PM
elfbabe elfbabe is offline
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Gotta ask, Shagnasty... what color?
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  #16  
Old 03-08-2005, 10:58 PM
Shagnasty Shagnasty is offline
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Quote:
Originally Posted by elfbabe
Gotta ask, Shagnasty... what color?
It's Burgundy. Its not bad a bad color really but 7 series BMW's are kind of like personal limos and most people like them in black or a dark blue.
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  #17  
Old 03-08-2005, 11:02 PM
Shagnasty Shagnasty is offline
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Quote:
Originally Posted by elfbabe
Gotta ask, Shagnasty... what color?
Just like this one in case you want to see.

http://www.autobytel.com/content/buy...vch/Washington
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  #18  
Old 03-09-2005, 08:34 AM
Mr. Goob Mr. Goob is offline
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I've seen this a lot with motorcycle dealers. Right now it's not uncommon to see an '05 on the floor next to an '04. If you ask, they sometimes trot out an '03 from the back room. Eventually they will drop the price to just get rid of the damn thing.
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  #19  
Old 03-09-2005, 10:12 AM
Polycarp Polycarp is offline
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Quote:
Originally Posted by Any Car Dealer's Fast-Talking Ad
We have ## brand new '04 cars on our lot, and we have to move them to make way for the new '05's. Come in right now! The prices will never be lower!!
If you have never seen that sort of promotional ad, the rest of us envy you!

For those few cars that are not moved even in that way, plus demo. cars and a few other groups of technically-new-but-not-really cars, they are often sold off to higher-end used-car operations, sometimes as part of a single corporate dealership with the new-car franchise.
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  #20  
Old 03-09-2005, 10:32 AM
Johnny L.A. Johnny L.A. is offline
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Quote:
Originally Posted by Rick
Watch the ads starting in about Juneish here in the states. You will hear about model year clearance sales.
But what are these 'Urine Clearance Sales' they keep talking about?


Quote:
Originally Posted by Mr. Goob
I've seen this a lot with motorcycle dealers. Right now it's not uncommon to see an '05 on the floor next to an '04. If you ask, they sometimes trot out an '03 from the back room. Eventually they will drop the price to just get rid of the damn thing.
I bought my 2003 Yamaha YZF-R1 in July or August 2004. Same bike as the 2004s, but $500 less than the already-discounted prices on the 2004s. Now, I wouldn't have cared about $500 at the time (I had a good job), and I would have bought a 2004 if I was 'in the market'. But the 2004s were only offered in blue or silver. The 2003 was red.

Hey, it's not my fault I bought a new bike! They're the ones who put the red R1 in the showroom! They're the ones who put a good price tag on it! I only went there to get new tyres for my Seca II.
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  #21  
Old 03-09-2005, 10:34 AM
Misnomer Misnomer is offline
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Quote:
Originally Posted by Rick
Funny thing about the auto business, every new car that gets built gets sold.
That was the crux of my question.

Of course I know about the "'04s must go to make room for the '05s!" stuff; what I wondered was what would happen if the '04 didn't sell and was still around when the '06s or maybe even '07s were coming out; and, would a dealership ever get to a point where they'd stop trying to sell it. It seems like the answer is that, while rare, it's not unheard of to be able to buy a new car that is several model years "old."

Thanks to everyone who replied!
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  #22  
Old 03-09-2005, 10:43 AM
Huerta88 Huerta88 is offline
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Quote:
Originally Posted by Antiochus
Hmm. Maybe 'chop chop' is a dumb idea. Instead, how about the Ford dealer selling to a car parts dealer?
I have heard the "car is worth lots more chopped up then sold whole" story any number of times, and I guess I believed it for awhile.

Then I got to thinking: Huh?

Why would anyone be selling whole cars?

Why wouldn't I be buying whole cars off of lots and selling them for parts?

We know the market's not flawless.

But if this old chestnut were true, some market forces, I'd have to think, would have intervened to either raise the price of whole cars or lower the price of chop-shop parts as the market was flooded by parts intentionally chopped by profitmongers.

A couple of speculations I've come up with that would help explain this dubious "fact:"

**The statement is meant to be [UNSPOKEN PARTS IN BRACKETS] -- "When a car thief sells any given car part that he's chopped, he may be able to do so at a price that, multipled on a pro rata basis for all the other parts, would lead to a total sum greater than the car's value [BUT NO ONE CAN EVER SELL ALL OR EVEN MOST OF THE PARTS OF A CHOPPED CAR, SO MOST OF IT GOES TO WASTE];

or . . .

"When a car thief sells several chopped parts from a car, he may make more than he would make from selling the whole car [BUT THIS COULD STILL BE A SMALL NUMBER, MUCH LESS THAN THE RETAIL VALUE OF THE WHOLE CAR, BECAUSE MARKET PRICES FOR WHOLE STOLEN CARS ARE EXTREMELY LOW BECAUSE THEY'RE EASIER TO TRACE THAN PARTS].

Either of these possibilities would mean that no car dealer would find chopping for parts a very attractive option for surplus car inventory.

Or, the whole chop-shop-profit story is just made up.

[/carjack]
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  #23  
Old 03-09-2005, 10:53 AM
Johnny L.A. Johnny L.A. is offline
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Quote:
Originally Posted by Huerta88
I have heard the "car is worth lots more chopped up then sold whole" story any number of times, and I guess I believed it for awhile.

Then I got to thinking: Huh?

Why would anyone be selling whole cars?

Why wouldn't I be buying whole cars off of lots and selling them for parts?
I thought the same thing.

But then I considered the car parts market. What cars need parts? Usually, cars that have been on the road for a while. The longer a car is on the road, the more chance it has to be in a collision or have a part fail. So, I reasoned, an older car might be worth more in needed parts than it would be worth whole.
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  #24  
Old 03-09-2005, 10:54 AM
Khampelf Khampelf is offline
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[QUOTE=Johnny L.A.]But what are these 'Urine Clearance Sales' they keep talking about?



Our prices can't be Peed!!!
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  #25  
Old 03-09-2005, 01:51 PM
kniz kniz is offline
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The auto manufacturers give the dealers a rebate on all old models that are left after a certain length of time. This allows the dealers to offer big discounts.
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  #26  
Old 03-09-2005, 02:07 PM
Happy Fun Ball Happy Fun Ball is online now
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Rocky's Auto, a used care dealer here in Denver (can't find a web site for some reason), has been advertising some new 04 Pontiacs at 1/2 the sticker price on the TV lately. Makes me wonder where they got them and how much they payed...
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  #27  
Old 03-09-2005, 02:24 PM
aktep aktep is offline
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We bought a new car at a Toyota dealership last October. We got to talking to the salesman about how long cars stay in inventory, etc, and he told us this story:

GM makes as many cars as their factories can handle, and hopes they can all sell. There is a GM dealer in Houston, that is part of the same corporation where we were, that has, on its lot, over 20 2002 GM vehicles, and it "simply can't sell them". The discounts they were offering on the 2002s were still not enough to make up for the fact that 2003s, 2004s, and 2005s were also coming with deep discounts and special financing.
Presumably, someone would one day wander in and be happy with the deal he could get on the 2002. Or the car would be sold at auction.
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  #28  
Old 03-10-2005, 08:13 AM
zagloba zagloba is offline
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Quote:
Originally Posted by iamthewalrus(:3=
My car (a '91 Mazda Miata) wasn't originally purchased until late 1992. Given that new model years come out the year before, it was two years out of date at that point. I assume that the original buyer got a good deal because of it.
That's remarkable. '91 was the first model year and they were still getting large dealer markups, at least in northern CA.
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  #29  
Old 03-10-2005, 08:27 AM
Johnny L.A. Johnny L.A. is offline
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Quote:
Originally Posted by zagloba
That's remarkable. '91 was the first model year and they were still getting large dealer markups, at least in northern CA.
Incidentally, according to Classic Motorsports magazine, the Mazda Miata (especially the older models) is a 'future classic'.

Once upon a time, there were MGBs all over the place. In the 1980s you could pick them up in very good condition very cheaply. Nowadays, a fully-restored (concourse) chrome-bumper model will fetch prices in the high teens (Source: car auction lists I've read). Even restored 'rubber-bumper' prices are going up. (Still, the earlier-model chrome-bumper cars from 1962-1973 are more desireable.)

The Miata has been called 'The MGB That Works'. It is very much in the spirit of the classic roadster, and it has superior Japanese engineering. Now might be the time to pick up a '91 or '92 Miata and restore it. It may not be worth much until a long time after production ends, but it seems destined to be a classic eventually.
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  #30  
Old 03-10-2005, 09:31 AM
Santos L Halper Santos L Halper is offline
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Quote:
Originally Posted by zagloba
That's remarkable. '91 was the first model year and they were still getting large dealer markups, at least in northern CA.
Actually, '90 was the first model year for the Miata (they first went on sale at the end of June 1989).
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  #31  
Old 03-10-2005, 10:28 AM
AskNott AskNott is offline
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In '98, when a crash forced us to shop for Mrs. Nott's new car, a local Cad/Olds/GMC dealer showed us a nearly-3-year-old Oldsmobile that had never been titled. It was not a big enough bargain for us to buy it. Yes, it was brand-new, but the minute we drove it home, it would have been 3 years old. The price was not even enough to make up for 2 years' depreciation.

We bought a '98 Pontiac Bonneville instead, which now has barely 50,000 miles on it.
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  #32  
Old 03-10-2005, 10:42 AM
DrDeth DrDeth is offline
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If I remember what I read right, some Edsels did never get sold- they were given away.

Usually, at a large lot, you can find a "last years" car or two lurking around.
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  #33  
Old 03-10-2005, 11:09 AM
zagloba zagloba is offline
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Quote:
Originally Posted by Santos L Halper
Actually, '90 was the first model year for the Miata (they first went on sale at the end of June 1989).
I knew that! Really!

In fact, I had a '90 for a while. I was thinking about them being introduced before the usual model year start and and go that mixed up with the year 1990.

Still own a '93, though. Love it!
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  #34  
Old 03-11-2005, 09:46 PM
jasonh300 jasonh300 is offline
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In 1982, a local Chrysler dealership took a brand new Imperial and put it into storage. (It was a Chrysler Cordoba with a different grille and headlight covers and different taillights, and of course, "Corinthian Leather".)

The car sat in storage until 2002 when they sold it as a new car for about $8000. It had never been titled and carried a 3 year/36k mile warranty.

It was a 20 year old brand new car.
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  #35  
Old 03-12-2005, 05:43 AM
LouisB LouisB is offline
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Quote:
Originally Posted by aktep
We bought a new car at a Toyota dealership last October. We got to talking to the salesman about how long cars stay in inventory, etc, and he told us this story:

GM makes as many cars as their factories can handle, and hopes they can all sell. There is a GM dealer in Houston, that is part of the same corporation where we were, that has, on its lot, over 20 2002 GM vehicles, and it "simply can't sell them". The discounts they were offering on the 2002s were still not enough to make up for the fact that 2003s, 2004s, and 2005s were also coming with deep discounts and special financing.
Presumably, someone would one day wander in and be happy with the deal he could get on the 2002. Or the car would be sold at auction.
Automobile manufacturers scale their production to match demand. If they all made "as many cars as their factories can handle," the market would be flooded and prices would fall to rock bottom. Plus, automobile workers would never be laid off and we all know that isn't true. And, if I lived in Austin and heard of a lot in Houston where 20 2002 models were available I'd make the trip and make a dern good deal. I doubt the salesman was being totally honest---I know it is hard to believe that a car salesman would tell a lie, but a few of them sometimes do.

I own a 2001 Dodge Conversion van that had never been titled. I bought it around Easter time of 2002. It came with a very deep discount and a full warranty. Plus, they threw in a new front bumper and a trailer hitch to sweeten the deal. It now has just under 17K miles and is clean as a pin and it is for sale---come to Seminole and I'll make you a great deal on it.
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  #36  
Old 03-14-2005, 02:49 PM
HeadNinja HeadNinja is offline
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All cars are sold. Flooring (or floorplanning) , mentioned earlier in this thread, is the loan the dealer takes out to have the car on their lot.

A dealer's fiscal relationship with their casr is not unlike the relationship you have with your house. They are massively leveraged. They might take out a million dollars in loans for 50 cars, and their goal is to move those cars before they make too many payments.

Depending on the relationship they have with their lender they may be only paying interest on a vehicle, or they may be paying a portion of the principal too. So the longer the car is on their lot the bigger a drain it is on their finances.

Most dealers are extremely proactive about pricing vehicles to move. The sooner it goes the less interest to pay.

There is rarely any benefit to having a car on the lot for more than a month. (unless it is something that get's customers on the lot to look around) This is why ordering a car tends to get better deals. The dealer assumes far less risk.
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