I find it hard to imagine that every single car a manufacturer produces gets sold to private parties, rental agencies, other fleets, etc.
I mean, I know that the excess probably gets special pricing, they probably have deals with some fleet purchasers, and so on. But for some reason I find it hard to believe that every single last car is sold or donated to some worthy cause.
And yet, it appears that this is so…I haven’t read any stories about them having to recycle any unsold (or undonated) excess.
So, I ask you out there in DoperLand, is this so? If not, is there a New Car Burial Ground out there somewhere where I could dig up a complete 1952 Hudson Gopher if I only knew where to look? Or a Chevy Overstocks outlet center somewhere near me?
They all sell eventually. You will sometimes see a “new” car on a lot that is almost two model years old and it will be heavily discounted but still has a full warranty and dealer backing. It is often one in a less popular color of a certain model. I am not sure why they send those to the lots as stock in the first place but you can get a good deal on them if you wait long enough.
In 1992 a Chevy dealer I was shopping at had a “new” 1986 with about 80 test drive miles on it at a seriously good price. It was an odd combination of “every option available” but with a standard transmission. I actually considered it seriously but it had been swapped to another dealership before I could make up my mind for sure. I don’t know if that is the record for new-old stock but its the most extreme example I ever came across.
When the new model year starts appearing on the lots, they get serious about discounting. I’ve bought my new cars that way every time. They’ll usually knock 10-15% right off the top because that’s the first-year depreciation. Still, they haven’t been owned by anybody else and IIRC there’s some drop dead date after the new models come out when they can’t be sold as “new” any more.
When does a car stop being a new car though? I wouldn’t consider a 4 year old car that hasn’t been owned to be new anymore. Can they sell a 5 year old car as a new car if nobody has bought it?
Also, non-japanese cars depreciate rapidly during the first 2-3 years. A 3 year old ford may only cost 60% as much as a new one. So why buy a 2007 ford that hasn’t been used for 20k when a used 2007 ford with 35k miles might be 13k? Does a new car lose 30-50% of its value after 2-3 years even if it doesn’t sell?
One issue: the first “new” car I bought was red. After a year or maybe two, the paint started fading (which I understand is a common problem with red paint). I point that out b/c some parts of a car age visibly whether they’ve been bought or not. Tires dry rot and undriven cars have fluids that freeze and thaw. So I think it boils down to whether the mfrs are going to honor the new car warranty.
I’ve always heard that a car depreciates 15% the instant you drive it off the lot. Less with Japanese or high-demand cars, but most people figure “Why pay top dollar for a car someone else has used when I could buy a new one?” A co-worker said that he got top dollar on his Prius…the demand for it was so high that people would take a used one rather than get on a two-year waiting list.
Data point: the new 2006 Hondas were out when I bought my 2005, in January 2006. I think I got 12% off plus the Honda financing offer of the day…the very last day it was available IIRC.
As far as I know this is pretty much true. I had a friend that bought a car from a dealership that had been used as a courtesy car that was two model years old (the new ones had just come out) and had about 10,000 miles on it. He still had to go through the motions of registering it as a new car because the dealer had just run it with dealer plates. What I thought was interesting was that the warranty started from when he bought it, so he got the full 5-year 50,000 (or whatever it was) regardless of what the actual age and mileage of the car was.
It was a pretty good deal, since he paid about what a “real” used one would have cost, but had the full warranty!
As has been pointed out the car makers don’t own the rental car companies. furthermore, car makers do not transfer unsold inventory to rental fleets. Rentals are usually bottom of the line, or near bottom of the line models. Unsold models are often the one that they ordered with one of every option in the catalog.
Fleet sales keep the factory busy, they don’t help an individual dealer sell some bight pink with purple poka-dot POS that he was dumb enough to order.
Not sure how it works in the US, but when i sold new cars in Australia in the early 1990s, the dealer often didn’t have much choice about the inventory he got from the manufacturer. A truck would turn up with six or eight cars on it, and they were ours to sell. Sometimes we got cars that we clearly had no want or need for, and that we would never have ordered in a pink fit.
It was explained to me at the time that one of the conditions of becoming a dealer was that you agreed to take on whatever inventory the factory chose to send you. You could try and order desirable models or spec/trim combinations, but you didn’t always get them.
Over here the dealer can order cars equipped pretty much the way they want them.
With Volvo, up to a particular date, the dealer can alter the model, color, engine, interior color, various option packages, pretty much everything. After a particular date, nothing can be changed as the parts for that car have been ordered.
