One thing I’ve never quite wrapped my head around is why some of the huge volume dealers go so low on their discounting that it makes sense for people like us to buy and resell cars elsewhere. Can’t the dealers just sell directly to other dealers that don’t have enough allocations to fill demand? Feels like a lot of money left on the table for the middlemen.
Does selling cars to another dealer not count as “sold” inventory for volume bonuses?
They don’t Sell, they Trade to other dealers.
To Sell to another dealer they usually use the Auction Model. (Which usually means they are selling below the Consumer rate)
not always, they can sell dealer to dealer, happens often. Plenty of cars over the past two years the final selling price net of rebates is below MMR.
Yes, but they don’t count as RDR’d units. Don’t go toward bonuses, don’t get special spins/money associated with surveys/CSI, etc.
Interesting, never knew that a dealer to dealer sale would trigger rebates.
they wouldn’t get rebates, thats the point. Sometimes the vehicles can still be eligible if they’re sold to another store of the same franchised brand.
So instead of a ‘trade’ Kia A would SELL to Kia B (Hopefully above MMR) and Kia B could still sell it as New and get All Rebates Associated?
Believe so - but probably OEM by OEM
I have never seen a new car sold from dealer to dealer after 7 years in the business. Plenty of dealer trades, but usually dealer to dealer sales are a big no from the OEMs. I suppose it can happen, but it is extremely rare.
To answer your general question, no. Trading a car to another dealer does not count towards any unit bonuses since the car is not punched (reported sold to the OEM). Now if the car is punched (i.e. warranty starts and essentially becomes “used”), then it will count. But as I said before, dealer-to-dealer sales are extremely rare. If anything, they will be offloaded into an auction setting. But even then, most dealers will hold out for a retail customer.
They don’t discount because they don’t have to. There is no reason to take your relatively crappy deal when someone else is going to walk in 5 minutes later and buy it for more. On the flip side, there are high-volume dealers where their entire philosophy is giving cars away.
Only speaking from something CDJR related where I know it happened
Well you did say happens ‘often’, not that you’ve seen the exception.
The LH collective reply…
We all know that the well can only be tapped so many times before it runs out and I am a thirsty fellow.
Specific to CDJR, how common and easy is a dealer to dealer trade? Do other dealers they compete with typically help each other out?
There seems to be a lot of imbalance in in-stock builds from dealer to dealer (one will have all hard tops, the other all soft) based on their preferences and it would seem to help both if they traded.
Dealers with low inventory are always looking to buy from Behemoth Dealers. Big dealers are looking to off-load ‘old’ aged inventory. Turn rate is everything for dealer allocation. There’s still as a minority of Dealers that understand that.
Our GM just sold 10 Old age 1500’s and 2 2500’s to a dealer in West Texas. There’s an entire sub-industry of Brokers who are connecting dealers to do these types of deals.
For dealer purposes- the inventory and MSO’s are transferred to the new BAC, and the money is wired (if floorplan is shared-then it’s really easy).
Hope this helps
PS- We’re possiblyyyy one of those High Volume Giveaway artist Dealers! And I’m the biggest Giveaway guy here!
This ^ I think Wams opinion is skewed by experience in the luxury market. Zero reason in this climate for a Porsche dealer to do a dealer to dealer sale. Ditto for most lux brands.
Jeep moved a shitload of wranglers 4xe to the NE because of the carb credits. Reps actually helped facilitate dealer to dealer sale of those units too
Ftr- our dealer trades are off 99% from when I was a sales director in ‘17
Was customary- and a great skill set to have on the floor- now almost irrelevant
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