Interesting read:
2 Likes
āConsumers know what expired produce looks likeā Jominy said in an interview.
Nearly every supply chain Iāve worked on reduces to āripening bananasā. No exception here.
Jominy estimates that there may be another 30,000 cars from 2018 still waiting to be sold.
That is A LOT metal that dealers are paying floorplan on. Worse if any of it is still sitting at the port.
I wonder how many are FCA Vans? lol
8 Likes
Who still has lease support on 2018s.
Iām in market come December, was looking to hack a 2019 X7 or X5 at the end of year, possibly a Q8, and lately Iām intrigued by the Expedition. It was redesigned in 2018, so if I can find an aging one and somehow it still had lease support, feel like that could be a home run (although I doubt it).
2018 Volvo S90 had lease support last month (mostly for West Coast region) with some crazy lease cashā¦
Probably just as many as Alfa Romeo Giulias and Stelvios. Haha
The article specifically mentioned that muscle cars and light duty pickups were a big part of the 2018 overhang.
1 Like
Should have set their Pickup trucks RV at 80+% like Toyota did:)
4 Likes
Yeah, this is what I donāt get about car dealerships. You have a depreciating asset. What makes you think you can sell it for X today if you havenāt been able to sell it for X over the past 9 months. The only answer is the floor plan financing reflects the cheap money floating about, there isnāt a serious limit on financing available and the floor plan model dictates that dealers canāt use the money in a more efficient manner.
3 Likes
Nobody outside of a pocket of Volvos @moodyhank mentions on the west coast. These would all be purchase only. At this point, there is probably no factory support either, so it would all be dealer discount.
1 Like
Even at nearly 0 interest, and theoretically if the sales price isnāt dropping, itās still costing something after 30/60/90 days (depending on dealerās floor plan agreement) for that unit to sit there, waiting to earn its first birthday cake.
And: in āturn and earnā stores, that undesirable unit is costing you an allocation of something that is potentially more desirable. Lost opportunity cost.
Generally speaking: inventory and portfolio management seems to be one of the weakest skills in the dealership business.
8 Likes
Yet, still we donāt see cascading failures of said dealerships on the news similar to other retail stores. They still exists because of Accord Hybrid deals and that covers up their failures in inventory management.
I saw only one to close - Buick of Milford in CT where I got my mom a 2 year old brand new Encore for 50% off. Didnāt even have to negotiate. It was advertised as such. Few months later it closed and website was shut down. But thatās the only one Iāve seen.
1 Like
I only have 4 2018s left. I get mooch offers on them all the time. I just say that if they canāt afford it at the sale price then it will be turned into a service loaner in 2020.
1 Like
Thatās actually a pretty smart way of doing business. At least thereās a plan.
Makes a lot more sense than refusing to discount 15% for 2 years, then deciding on day 731 that youāll accept 15% only to find that it now needs a 30% discount to sell.
6 Likes
At least make a logical sense.
Yep it isnāt true but it is a great way to smack a mooch in the face.
1 Like
But the value of that 2018 will keep falling, I still donāt get the logic of just saying adios to it and writing it off?
For example, you have a 2018 Accord that is collecting dust, I walk in on 12/31/2019, you have it listed for $20k, down from an original of $25k, and I say Iāll take it for $14k, you wouldnāt counter and move it for like $16k just to get rid of it?
That you only have 4 2018ās is telling that youāre otherwise competitive in your market.
How much is a āmoochā offer?
According to my calculations, my 2018 Accord will depreciate at approx. 4.5% per year for the first several years just due to age (not considering mileage). I bought mine for 13.5% off when they first came out. So based on that, I would offer you 18% off MSRP.
Deal?
2 Likes
I got 50 questions and I want 50% off.
3 Likes