In the high demand, high price new and used car markets lately, it can be hard to imagine a car dealership with “unsold” inventory.
What is unsold inventory at a car dealership?
Most cars that come to a dealer are going to be sold one way or another. So, what exactly is unsold inventory.
Unsold inventory typically refers to vehicles that have been sitting on the dealer’s lot without being sold for longer than the dealership would like them to be. That time frame may vary from dealer to dealer.
But, at some point, the dealership is going to take steps to move inventory that’s not selling.
What happens to unsold inventory at a car dealership?
Most vehicles reach the end consumer like this:
- A manufacturer produces a vehicle.
- A dealership purchases a number of new vehicles from the manufacturer or used vehicles from previous owners, other dealerships, auctions, etc.
- The end consumer visits the dealer and buys it from them.
But, if there’s a delay between steps 2 and 3, the dealer will often take steps to sell the car quicker.
First, you should understand that different dealers will have different motivations for how quickly (or slowly) they need to sell unsold cars.
Dealers with little cashflow or a lack a space on their lot are going to want to sell a vehicle quicker than a dealership that’s flush with cash and has plenty of room to store their cars for sale.
But, at some point the time will come where the dealership is going to try to do things to get the car sold.
The first steps may involve lowering the price or throwing in extra incentives to sweeten the deal.
In general, a vehicle that has been on the lot for longer can be a dealer deal that the brand new model that just arrived.
If you’ve been keeping your eye on your local dealership’s inventory and you’ve noticed that something has been there for a while, that can give you a leg up in the negotiations.
Next, if the dealership is unable to sell the car themselves, they may then try to either:
- Move it to a sister location.
- Sell it to another dealership.
- Trade vehicles with another dealership.
Moving the car to another location is one tactic dealers can use to sell unsold inventory. Certain areas may have a higher demand for certain models or types of vehicles.
Another tactic many dealerships will employ is to incentivize their sales team to move the unsold inventory. Things like cash bonuses for moving cars that have been sitting on the lot are common. So, if a salesperson really wants to get you into a particular vehicle, it’s possible they’ll be getting a nice bonus if they can move it.
Cars that still won’t sell leave the dealerships with a few more options.
First, the dealer may purchase the vehicle themselves to use as part of its service fleet or as a loaner.
After a certain point, this now used vehicle may be sold a pre-owned on the lot or sold at auction to other dealers.
How to Get the Best Deal on Unsold Cars
When buying a car, it pays to be patient.
If you can wait to shop around, compare, and search for the best deal, you’re going to be better off than if you absolutely NEED to buy a car today.
Start by narrowing down which makes and models you’re interested in.
If you don’t need the latest and greatest that the new model of a particular vehicle has to offer, checking out last year’s model or even pre-owned inventory can be a great way to save money.
One of the best times to go shopping for “unsold” inventory is right around when the dealership starts to advertise for new model year vehicles. Previous model years that are still on the lot at this point tend to be discounted. Look for this around later summer or fall.