# Do Car Dealers Own The Cars??? **URL:** \ **Category:** Factual Questions\ **Created:** [May 7, 2010, 2:17am UTC](https://boards.straightdope.com/t/do-car-dealers-own-the-cars/538582 "2010-05-07T02:17:19Z")\ **Posts on this page:** 20\ **Page:** 2
**Author:** ![jz78817](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/jz78817/32/1028_2.png) [@jz78817](https://boards.straightdope.com/u/jz78817)\ **Post date:** [November 21, 2017, 6:36pm UTC](https://boards.straightdope.com/t/do-car-dealers-own-the-cars/538582/21 "2017-11-21T18:36:54Z")
> [@kunilou](#): > > Issues to deal with. > > 1. Automotive dealers are independent businesses, not retail stores for the manufacturers. If you want to custom order a vehicle with specific options, the dealer will be happy to locate one at another dealer or order one from the factory for you (at full MSRP, no discounts.) special order doesn’t mean “no discounts.” you might not have as much “haggle” room on the price, but some incentives apply regardless. the ones you lose out on almost always have something like “take delivery from dealer stock before (_date_)” in the fine print. ---
**Author:** ![jz78817](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/jz78817/32/1028_2.png) [@jz78817](https://boards.straightdope.com/u/jz78817)\ **Post date:** [November 21, 2017, 6:42pm UTC](https://boards.straightdope.com/t/do-car-dealers-own-the-cars/538582/22 "2017-11-21T18:42:07Z")
> [@SamuelA](#): > > Kind of amusing that people act like this, since they won’t be done paying for a new car for years typically. Not something you should buy on a whim… typically I see people wait until they need a car _now_ before they start looking, and can’t wait the 6-8 weeks for a special order. ---
**Author:** ![FoieGrasIsEvil](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/foiegrasisevil/32/16638_2.png) [@FoieGrasIsEvil](https://boards.straightdope.com/u/FoieGrasIsEvil)\ **Post date:** [November 21, 2017, 7:11pm UTC](https://boards.straightdope.com/t/do-car-dealers-own-the-cars/538582/23 "2017-11-21T19:11:21Z")
> [@jz78817](#): > > special order doesn’t mean “no discounts.” you might not have as much “haggle” room on the price, but some incentives apply regardless. > > the ones you lose out on almost always have something like “take delivery from dealer stock before (_date_)” in the fine print. This is correct. I used to sell GMC trucks and had a handful of customers that had to have something on their trucks that wasn’t a popular option or set of options (usually something like a long-box 2500 diesel in a particular color) that we didn’t have on our lot, we couldn’t locate one and/or negotiate a dealer trade for it, so then the customer’s only other option is to have one built. This takes awhile, and what happens is that since the vehicle isn’t “born” yet (ie, no VIN #), whatever rebates and discount programs that apply today will not necessarily be the same as when delivery on the truck is taken. The MSRP is the starting point. The ordered truck is built and priced to the customer the day they order it, and everyone just crosses their fingers that GM won’t take away the Farm Bureau, USAA, etc discounts in the interim…or slash the rebates. ---
**Author:** ![Gorsnak](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/gorsnak/32/7587_2.png) [@Gorsnak](https://boards.straightdope.com/u/Gorsnak)\ **Post date:** [November 21, 2017, 10:08pm UTC](https://boards.straightdope.com/t/do-car-dealers-own-the-cars/538582/24 "2017-11-21T22:08:48Z")
> [@kunilou](#): > > With floor plan financing, the mfr. “sells” the cars to the dealer, but uses them as collateral for the floor plan loan. You pay the dealer, who uses the proceeds to pay off the loan, then pockets whatever profit comes from the sale. As a dealer, you just want to make sure you only borrow against vehicles that actually exist on your lot, because eventually the manufacturer finance people see through your clumsy attempts to repeatedly fax a series of illegible serial numbers to them and you have to hire a couple thugs to kidnap your wife and someone ends up getting fed through a wood chipper. ---
**Author:** ![mixdenny](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/mixdenny/32/2962_2.png) [@mixdenny](https://boards.straightdope.com/u/mixdenny)\ **Post date:** [November 21, 2017, 11:49pm UTC](https://boards.straightdope.com/t/do-car-dealers-own-the-cars/538582/25 "2017-11-21T23:49:48Z")
> [@SamuelA](#): > > This seems really really inefficient. A model where the dealer just keeps a few floor models provided by the manufacturer around and a repair shop (no vast inventory) seems like it would be better. The floor models would have every possible option, and so once the buyer decides what they want, they just configure it using some computer kiosks at the dealer (there could be a walk around preview of how it would look using VR headsets!) and the factory would make that exact model… And dealers have this option. You can always order a car. But very few buyers make this choice, they want the car NOW. They may be willing to wait a day while a car meeting most of their criteria gets delivered from some other dealer’s stock, but that’s about it. Dennis ---
**Author:** ![Clark\_Cello](https://avatars.discourse-cdn.com/v4/letter/c/58f4c7/32.png) [@Clark\_Cello](https://boards.straightdope.com/u/Clark_Cello)\ **Post date:** [November 22, 2017, 12:08am UTC](https://boards.straightdope.com/t/do-car-dealers-own-the-cars/538582/26 "2017-11-22T00:08:51Z")
One facet that I don’t think has been mentioned yet (if I missed it, apologies), is that usually under the dealer’s floor-plan there is an interest free period of 30-90 days (I forget exactly how much), so the dealer can, in an ideal world, keep a decent inventory of cars on the lot, and also avoid paying much interest. This is one reason you can get deals on older cars. The dealer is paying interest on them every month and wants to get them off the lot. I’ve been out of the industry for a few years, so feel free to correct me if anything I have said is out of date. ---
**Author:** ![FoieGrasIsEvil](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/foiegrasisevil/32/16638_2.png) [@FoieGrasIsEvil](https://boards.straightdope.com/u/FoieGrasIsEvil)\ **Post date:** [November 22, 2017, 12:21am UTC](https://boards.straightdope.com/t/do-car-dealers-own-the-cars/538582/27 "2017-11-22T00:21:09Z")
> [@Clark\_Cello](#): > > One facet that I don’t think has been mentioned yet (if I missed it, apologies), is that usually under the dealer’s floor-plan there is an interest free period of 30-90 days (I forget exactly how much), so the dealer can, in an ideal world, keep a decent inventory of cars on the lot, and also avoid paying much interest. This is one reason you can get deals on older cars. The dealer is paying interest on them every month and wants to get them off the lot. > > I’ve been out of the industry for a few years, so feel free to correct me if anything I have said is out of date. It’s not just interest, but insurance too. This 90 day timeclock you’re referring to is applicable mostly to used cars, and there’s all kind of corporate pressures on the used car manager to shed inventory. At the Jeff Wyler Auto “Family” where I worked, there exists a structure for used cars where there’s a timetable whereby the prices get cut after 30 days, then 60, then finally 90 days. If you don’t sell your used inventory after that, the units are at risk of going to the inter-Wyler auction, where another Wyler dealer will buy your car at wholesale, put it on their lot at the original asking price, and the process starts anew. Needless to say, if the records continually show that you have an “unseemly” amount of cars going to auction every month, you will be canned as the used car manager. That position is usually the first to go. The GM, GSM and new car managers are more insulated from this than the used car manager. ---
**Author:** ![FoieGrasIsEvil](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/foiegrasisevil/32/16638_2.png) [@FoieGrasIsEvil](https://boards.straightdope.com/u/FoieGrasIsEvil)\ **Post date:** [November 22, 2017, 12:22am UTC](https://boards.straightdope.com/t/do-car-dealers-own-the-cars/538582/28 "2017-11-22T00:22:51Z")
If you’re in the market for a used car, if you find one you like, find out how long the dealer has had it on their lot. No car dealer wants to let you leave without selling you a car, even if it’s just a $500 profit and a notch on the belt. If you find a car you like that’s been on the lot for 90 days, after everything checks out, jump on it. It’s the best used car deal you’ll get. ---
**Author:** ![bob\_2](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/bob_2/32/3341_2.png) [@bob\_2](https://boards.straightdope.com/u/bob_2)\ **Post date:** [November 22, 2017, 12:36am UTC](https://boards.straightdope.com/t/do-car-dealers-own-the-cars/538582/29 "2017-11-22T00:36:31Z")
It’s different over here. Dealers do not ‘take possession’ of the cars until they register them and they don’t register them until they are sold. Registration gives the car a licence plate and a registration document showing who owns it. They have a contract with their manufacturer to have x numbers of each model every month so there is a lot of pressure to keep those volumes up. For this reason, you can often get a better deal at the month end when they are trying to make their target (unless you want a popular model of course). The exception is when dealers ‘buy a car in’ just to make up that monthly target. To do this they have to register it and that will make the future owner number two on the owner’s document, even though it may only have delivery mileage. Sometimes they will use it as a demonstrator and some employee may get to use it for a while. Most dealers only have a few cars in the showroom and a stock held in a secure park somewhere. I once worked at such a park, an old airfield, where cars were stored for London dealers over 100 miles away. There were a couple of thousand cars parked there and the dealers expected and got next-day delivery on any car they held. My current car was bought ex Ford’s own management fleet. Technically, I bought it through my local dealer, but all they did was to process the paperwork and valet the car before handing it over. It was three months old, with 4k miles on the clock and a discount of over £10k (30%) on the list price. ---
**Author:** ![LSLGuy](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/lslguy/32/5813_2.png) [@LSLGuy](https://boards.straightdope.com/u/LSLGuy)\ **Post date:** [November 22, 2017, 1:23am UTC](https://boards.straightdope.com/t/do-car-dealers-own-the-cars/538582/30 "2017-11-22T01:23:50Z")
> [@FoieGrasIsEvil](#): > > If you’re in the market for a used car, if you find one you like, find out how long the dealer has had it on their lot. No car dealer wants to let you leave without selling you a car, even if it’s just a $500 profit and a notch on the belt. If you find a car you like that’s been on the lot for 90 days, after everything checks out, jump on it. It’s the best used car deal you’ll get. Net of the countervailing point that 90 days’ worth of other customers decided not to buy it. For them, the combo of features, mileage, and condition didn’t warrant the price. Maybe you’re smarter than all those folks. Maybe not. If it’s an unusual car and you have an unusual mission or tastes it’s more likely to be a good deal. If it’s a pretty ordinary car for an ordinary mission you ought to wonder what you’re missing. For darn sure the smart buyer identifies some possible cars and waits for the deal to come to them. At the risk of losing a lot of decent cars that more eager beavers will snap up earlier in the mark-down process. ---
**Author:** ![SamuelA](https://avatars.discourse-cdn.com/v4/letter/s/c77e96/32.png) [@SamuelA](https://boards.straightdope.com/u/SamuelA)\ **Post date:** [November 22, 2017, 1:29am UTC](https://boards.straightdope.com/t/do-car-dealers-own-the-cars/538582/31 "2017-11-22T01:29:57Z")
> [@LSLGuy](#): > > For darn sure the smart buyer identifies some possible cars and waits for the deal to come to them. At the risk of losing a lot of decent cars that more eager beavers will snap up earlier in the mark-down process. Doesn’t the really smart buyer buy used? If you figure a given car has a 200k service life, and the car has 70k miles on it but is selling for 40% it’s original sale price after incentives…isn’t that a smart buy? ---
**Author:** ![jz78817](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/jz78817/32/1028_2.png) [@jz78817](https://boards.straightdope.com/u/jz78817)\ **Post date:** [November 22, 2017, 2:37am UTC](https://boards.straightdope.com/t/do-car-dealers-own-the-cars/538582/32 "2017-11-22T02:37:49Z")
> [@SamuelA](#): > > Doesn’t the really smart buyer buy used? If you figure a given car has a 200k service life, and the car has 70k miles on it but is selling for 40% it’s original sale price after incentives…isn’t that a smart buy? people aren’t robots. new cars have warranties. used cars have myriad kinds of “service plans” which are really insurance policies. those plans have minefields of exclusions, require you deal with adjusters, get work done at approved shops, etc. ---
**Author:** ![Kent\_Clark](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/kent_clark/32/105_2.png) [@Kent\_Clark](https://boards.straightdope.com/u/Kent_Clark)\ **Post date:** [November 22, 2017, 4:09am UTC](https://boards.straightdope.com/t/do-car-dealers-own-the-cars/538582/33 "2017-11-22T04:09:37Z")
> [@zwede](#): > > In the past I’ve bought some new cars from dealerships and I have also bought a Tesla. Having experienced both sales models, the Tesla experience is vastly superior (at least for the consumer). I hope to newer having to set foot at a dealership again. > > With Tesla there was zero sales pressure. No up-sell. No ‘you need to buy the extended warranty TODAY’. Just friendly employees that seemed genuinely interested in making me happy. You may remember that Saturn also had a relaxed, friendly, no haggle policy. They failed because Saturn was just another GM brand. Tesla is unique, in more ways than one. There’s no other vehicle like a Tesla. Someone who wants a Tesla is not only not going to be satisfied with anything else, they’ll be willing to wait until Tesla is ready to serve them. If you go to a fancy bridal shop to get a custom-made gown that takes four months to deliver, they treat you better than the clerk at Macy’s with a rack full of white dresses. ---
**Author:** ![RickJay](https://avatars.discourse-cdn.com/v4/letter/r/bb73d2/32.png) [@RickJay](https://boards.straightdope.com/u/RickJay)\ **Post date:** [November 22, 2017, 4:35am UTC](https://boards.straightdope.com/t/do-car-dealers-own-the-cars/538582/34 "2017-11-22T04:35:21Z")
> [@Jinx](#): > > …You really mean they rob Peter to pay Paul, right? Well, Stan’ll say no dice, Wade, that’s why ya pay 'im. ---
**Author:** ![FoieGrasIsEvil](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/foiegrasisevil/32/16638_2.png) [@FoieGrasIsEvil](https://boards.straightdope.com/u/FoieGrasIsEvil)\ **Post date:** [November 22, 2017, 5:16am UTC](https://boards.straightdope.com/t/do-car-dealers-own-the-cars/538582/35 "2017-11-22T05:16:31Z")
> [@kunilou](#): > > You may remember that Saturn also had a relaxed, friendly, no haggle policy. They failed because Saturn was just another GM brand. > > Tesla is unique, in more ways than one. There’s no other vehicle like a Tesla. Someone who wants a Tesla is not only not going to be satisfied with anything else, they’ll be willing to wait until Tesla is ready to serve them. > > **If you go to a fancy bridal shop to get a custom-made gown that takes four months to deliver, they treat you better than the clerk at Macy’s with a rack full of white dresses.** I think that the red carpet treatment goes way, way up with price and exclusivity of the car. Yes, Teslas are unique, but they are also very expensive at top trim and performance levels. You’d be treated similarly at a Porsche, Bentley, etc dealership. ---
**Author:** ![bob\_2](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/bob_2/32/3341_2.png) [@bob\_2](https://boards.straightdope.com/u/bob_2)\ **Post date:** [November 22, 2017, 10:40am UTC](https://boards.straightdope.com/t/do-car-dealers-own-the-cars/538582/36 "2017-11-22T10:40:45Z")
“Store manager: Just how obscene an amount of cash are we talking about here? Profane or really offensive? Edward: Really offensive. Store manager: I like him so much.” ---
**Author:** ![LSLGuy](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/lslguy/32/5813_2.png) [@LSLGuy](https://boards.straightdope.com/u/LSLGuy)\ **Post date:** [November 22, 2017, 2:51pm UTC](https://boards.straightdope.com/t/do-car-dealers-own-the-cars/538582/37 "2017-11-22T14:51:50Z")
> [@SamuelA](#): > > Doesn’t the really smart buyer buy used? If you figure a given car has a 200k service life, and the car has 70k miles on it but is selling for 40% it’s original sale price after incentives…isn’t that a smart buy? There is nothing about my advice that specifies new or used. People are free to use it on whichever type they prefer. Many people are not interested in maximizing economic efficiency when it comes to cars. There are other factors they put into their optimization algorithm as well. If your car is not a falling apart ghettomobile the same is true for you. It’s a difference of degree not of kind. ---
**Author:** ![DrDeth](https://avatars.discourse-cdn.com/v4/letter/d/b487fb/32.png) [@DrDeth](https://boards.straightdope.com/u/DrDeth)\ **Post date:** [November 22, 2017, 3:25pm UTC](https://boards.straightdope.com/t/do-car-dealers-own-the-cars/538582/38 "2017-11-22T15:25:40Z")
> [@SamuelA](#): > > Doesn’t the really smart buyer buy used? If you figure a given car has a 200k service life, and the car has 70k miles on it but is selling for 40% it’s original sale price after incentives…isn’t that a smart buy? But they dont. The idea that you can buy a one year or two year old used car at 40% off it’s new price is incorrect. Check car dealers, Edmunds, etc. Now, you can only SELL a used car back to the dealer with that sort of loss, but that is different. With various incentives and new safer cars, buying new is often the best bet. ---
**Author:** ![DrDeth](https://avatars.discourse-cdn.com/v4/letter/d/b487fb/32.png) [@DrDeth](https://boards.straightdope.com/u/DrDeth)\ **Post date:** [November 22, 2017, 3:28pm UTC](https://boards.straightdope.com/t/do-car-dealers-own-the-cars/538582/39 "2017-11-22T15:28:54Z")
> [@kunilou](#): > > You may remember that Saturn also had a relaxed, friendly, no haggle policy. They failed because Saturn was just another GM brand. I dunno if 25 years of happy owners is a “failure”. I think the main reason Saturn went out of business is that the new designs really werent that good- and in any case GM was having trouble- they also closed Pontiac, etc… The older versions very very reliable. ---
**Author:** ![jz78817](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/jz78817/32/1028_2.png) [@jz78817](https://boards.straightdope.com/u/jz78817)\ **Post date:** [November 22, 2017, 4:07pm UTC](https://boards.straightdope.com/t/do-car-dealers-own-the-cars/538582/40 "2017-11-22T16:07:47Z")
> [@DrDeth](#): > > I dunno if 25 years of happy owners is a “failure”. I think the main reason Saturn went out of business is that the new designs really werent that good- and in any case GM was having trouble- they also closed Pontiac, etc… The older versions very very reliable. Saturn ceased to exist because they stopped being Saturn. At the end all of their cars were just lightly-restyled versions of stuff you could find in the Chevy showroom. [Previous page](https://boards.straightdope.com/t/do-car-dealers-own-the-cars/538582.md?page=1) [Next page](https://boards.straightdope.com/t/do-car-dealers-own-the-cars/538582.md?page=3)