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?
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.
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!