# Auto makers and unsold cars **URL:** \ **Category:** Factual Questions\ **Created:** [November 19, 2001, 2:12am UTC](https://boards.straightdope.com/t/auto-makers-and-unsold-cars/94133 "2001-11-19T02:12:49Z")\ **Posts on this page:** 11\ **Page:** 1
**Author:** ![omni-not](https://avatars.discourse-cdn.com/v4/letter/o/8dc957/32.png) [@omni-not](https://boards.straightdope.com/u/omni-not)\ **Post date:** [November 19, 2001, 2:12am UTC](https://boards.straightdope.com/t/auto-makers-and-unsold-cars/94133/1 "2001-11-19T02:12:49Z")
What do they do with them when the new models come out? ---
**Author:** ![Ruffian](https://avatars.discourse-cdn.com/v4/letter/r/71e660/32.png) [@Ruffian](https://boards.straightdope.com/u/Ruffian)\ **Post date:** [November 19, 2001, 2:42am UTC](https://boards.straightdope.com/t/auto-makers-and-unsold-cars/94133/2 "2001-11-19T02:42:18Z")
…they have a sale. Whenever these ads come up on TV boasting 0% down, 0% financing, etc., my hubby gruffly comments: “Translation? We’ve got way too damn many left!” I know that may not account for all of them, but it moves a great many. I’d conjecture that after that, they end up in the “used” car lot. ---
**Author:** ![Duck\_Duck\_Goose](https://avatars.discourse-cdn.com/v4/letter/d/50afbb/32.png) [@Duck\_Duck\_Goose](https://boards.straightdope.com/u/Duck_Duck_Goose)\ **Post date:** [November 19, 2001, 2:49am UTC](https://boards.straightdope.com/t/auto-makers-and-unsold-cars/94133/3 "2001-11-19T02:49:31Z")
This from the Better Half, who is reading the paper in the dining room behind me (condensing his rather wordy and enthusiastic “car guy” explanation): It’s like any other consumer good. The manufacturer (and the dealer) is stuck with them until somebody buys them. His brother once bought a 3-year-old car off a dealer’s lot, brand new. Been sitting there for three years. So if the manufacturer has a lot of unsold 2001 models when it’s time for the 2002 models to come out, they offer their dealers special incentives to take on more of the 2001 models. And the dealers offer “sales”, like Ruffian said. He adds that GM has a 370-day inventory of Pontiac Aztecs. ---
**Author:** ![omni-not](https://avatars.discourse-cdn.com/v4/letter/o/8dc957/32.png) [@omni-not](https://boards.straightdope.com/u/omni-not)\ **Post date:** [November 19, 2001, 3:10am UTC](https://boards.straightdope.com/t/auto-makers-and-unsold-cars/94133/4 "2001-11-19T03:10:39Z")
I was aware of, if not strongly suspected, that major sales/incentives were involved: you get rid of them the best way you can. But what if, even after a number of years, you _still_ haven’t been able to dump them (take known lemons, for example). Does the auto maker then bite the bullet, sell them for scrap, recuperate parts, give the vehicles to charities (which would be fiscally advantageous for them, I would guess)? ---
**Author:** ![yabob](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/yabob/32/2821_2.png) [@yabob](https://boards.straightdope.com/u/yabob)\ **Post date:** [November 19, 2001, 3:35am UTC](https://boards.straightdope.com/t/auto-makers-and-unsold-cars/94133/5 "2001-11-19T03:35:10Z")
There’s a saying in the car business, “There’s an ass for every seat.”. Eventually, by lowering prices and offering big enough spiffs to the salesmen, the dealer will get the damn thing off his lot. Take a stroll through your local car lot - you will occasionally see 2 or 3 year old “new” cars. What I wonder about - new car dealers usually sell on a type of consignment deal from the manufacturer, commonly called a “floor plan”. They don’t actually buy the shiny new cars up front, they’ve been loaned them, and pay interest on them, quite high interest. When you buy it, they pay off the manufacturer. It’s one reason why the “how do you expect us to stay in business on 3% over invoice” argument doesn’t hold water - they never actually forked over the invoice amount, they just paid interest for a while. Their real return should be figured against the interest payments they made, usually substantially less than the invoice price. I hadn’t thought about this - when a car doesn’t move for months on end, is there some point a which the dealer has to actually cough up the invoice price to the manufacturer, and buy the thing outright? ---
**Author:** ![honkytonkwillie](https://avatars.discourse-cdn.com/v4/letter/h/3da27b/32.png) [@honkytonkwillie](https://boards.straightdope.com/u/honkytonkwillie)\ **Post date:** [November 19, 2001, 6:55am UTC](https://boards.straightdope.com/t/auto-makers-and-unsold-cars/94133/6 "2001-11-19T06:55:18Z")
They do a lot to minimize the problem. Something not mentioned yet is the fact that the next year’s production run starts in September or October of this year. My 1992 Chevy Truck was built in October of 1991. The manufacturers have done this for a long time too as evidenced my my old 1974 Datsun 260-Z which was built in September of 1973. ---
**Author:** ![Benanuel](https://avatars.discourse-cdn.com/v4/letter/b/f14d63/32.png) [@Benanuel](https://boards.straightdope.com/u/Benanuel)\ **Post date:** [November 19, 2001, 9:54pm UTC](https://boards.straightdope.com/t/auto-makers-and-unsold-cars/94133/7 "2001-11-19T21:54:01Z")
> [@](#): > > \*Originally posted by yabob \* > \*\*I hadn’t thought about this - when a car doesn’t move for months on end, is there some point a which the dealer has to actually cough up the invoice price to the manufacturer, and buy the thing outright? \*\* I was told, last year when we were in the market for new vehicles, that the dealer has something like 60 to 90 days, depending on manufacturer. Which would explain why, when I bought my car in April, the dealer was so anxious to sell me the one in the showroom, which had been there since January. They had to get rid of it or start paying on it. A few months later, when we bought Mr. Ben’s car, that (different) dealer had had his car for only a couple days and were less inclined to do the kind of haggling that happened when we bought my car. YMMV, tho. ---
**Author:** ![Swede\_Hollow](https://avatars.discourse-cdn.com/v4/letter/s/3bc359/32.png) [@Swede\_Hollow](https://boards.straightdope.com/u/Swede_Hollow)\ **Post date:** [November 19, 2001, 10:44pm UTC](https://boards.straightdope.com/t/auto-makers-and-unsold-cars/94133/8 "2001-11-19T22:44:04Z")
Some dealers start the new model year even earlier and have even more time to get rid of the “old” ones. My 1995 Plymouth Neon (don’t ask) was made in February of 1994. They had plenty of time to get rid of the older Dodge Shadows, Plymouth Sundances, and Plymouth Colts by the time the Neon was really ramped up on the production line. ---
**Author:** ![OxyMoron](https://avatars.discourse-cdn.com/v4/letter/o/e9a140/32.png) [@OxyMoron](https://boards.straightdope.com/u/OxyMoron)\ **Post date:** [November 20, 2001, 5:07am UTC](https://boards.straightdope.com/t/auto-makers-and-unsold-cars/94133/9 "2001-11-20T05:07:32Z")
I thought it used to be that a lot of them were dumped on rental fleets (IIRC, each of GM, Ford and Chrysler owned a major rental agency, and partly just to absorb overrun). Any truth to that? ---
**Author:** ![PhiloVance](https://avatars.discourse-cdn.com/v4/letter/p/e19adc/32.png) [@PhiloVance](https://boards.straightdope.com/u/PhiloVance)\ **Post date:** [November 20, 2001, 7:35am UTC](https://boards.straightdope.com/t/auto-makers-and-unsold-cars/94133/10 "2001-11-20T07:35:14Z")
Not sure, but I do know Hertz at one time was owned by Ford, and Avis by GM, but I believe they are generally independent now. I don’t know which one Chrysler owned, maybe National? I usually rent from Avis and I usually get GM cars, so they must still have some kind of agreement with GM, tho now I do get a few Nissan’s and occaionally a Toyota. 😉 ---
**Author:** ![Balthisar](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/balthisar/32/2825_2.png) [@Balthisar](https://boards.straightdope.com/u/Balthisar)\ **Post date:** [November 21, 2001, 12:14am UTC](https://boards.straightdope.com/t/auto-makers-and-unsold-cars/94133/11 "2001-11-21T00:14:51Z")
> [@](#): > > \*Originally posted by PhiloVance \* > **Not sure, but I do know Hertz at one time was owned by Ford, and Avis by GM, but I believe they are generally independent now…** Hertz is still owned by Ford. Reduced travel means reduced rentals, which is another of those pesky things hurting Ford’s financials in addition to that 0% financing. Check out the Hertz link on [http://www.ford.com](http://www.ford.com). These businesses _are_ run independantly of the parent corporation. For example, I’m a DirecTV customer, which is owned by GM (as of today, anyway), but you’d never, ever know it by dealing with just DirecTV. (actually, it’s a division of Hughes, which is owned by GM, which is planning to sell to EchoStar [Dish Network] who will lose me as a customer if I have to buy their cruddy equipment). As per Avis, when I worked at GM, it was the “preferred” rental company, and we were always urged to ask for GM vehicles. But, according to Avis’ web site: > [@](#): > > **Avis is recognized as the industry leader in applying new technologies and is one of the world’s top brands for customer loyalty. The company is a wholly owned subsidiary of Cendant Corporation (NYSE:CD) and has marketing agreements with Avis Europe Plc, a separately owned UK-based company owning or franchising an additional 3,050 Avis locations in Europe, the Middle East and Africa.** Then following the link to [http://www.cendant.com](http://www.cendant.com) I can’t find any relationship to GM, but it seems that Cendant owns a lot of familiar brands besides Avis.