Every year, every car manufacturer produces tons of cars. And of course, not all of them are sold during the year. My question is where are all those unsold new cars reside? If I go to a dealership (Honda, Toyota, Mazda, BMW, any dealer) they only have either brand new (regarding year, not a condition) cars or used ones. What if I want to buy let's say 2008 Audi A4 that was never sold to anyone and basically smells like a factory. Where can I find those?
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@farnsy So you assume that every car that was manufactured is sold even after the newer version comes up? That means that can production industry is extremely profitable once they don't get any unwanted items..– user40478Commented Mar 30, 2016 at 19:17
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3@GordonFreaman You're making a mistake to equate "lack of unwanted items" with profitability. If they have to discount deeply to clear last year's inventory, they may end up selling at a loss. They still clear all the cars made.– user32479Commented Mar 30, 2016 at 20:33
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4TL;DR: Sold. You can sometimes get good prices at the end of a model year as dealers clear space for the new models, especially if you are willing to be flexible about exactly which features are installed.– keshlamCommented Mar 30, 2016 at 22:59
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1it's a commonplace that they dump them for a lower price, at the end of each model year. walk in to any car dealer and you will instantly see this.– FattieCommented Oct 24, 2016 at 20:31
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related: snopes.com/photos/automobiles/unsoldcars.asp– MD-TechCommented Oct 25, 2016 at 10:48
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2 Answers
When the 2016 models come out, the dealership marks down the 2015 model and then it sells pretty fast. The process doesn't take that long in the car market because the 2015 models are just as good as the 2016 so if they are just a little cheaper, they will sell quickly. If you want a 2008 Audi that has never sold, you are going to be looking for a long time.
The same thing happens in every industry. Where are the older versions of digital cameras? Cell phones? Blenders? Digital pianos? Any item that changes from year to year sits on shelves for a little while after its replacement comes out until the retailer reduces its price by enough and it sells. The only exceptions are goods that depreciate very quickly or go bad, which are recycled or thrown away (like fresh produce, for example).
It seems kind of crazy at first that essentially all goods that are produced by the economy are consumed, but that's the magic of capitalism: prices make markets clear.
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4Re profitability: Yes, pretty much all cars manufactured are sold. Manufacturers normally sell all the cars they make to dealers, but for significantly less than we pay. Dealers make an ok profit on some cars but lose money (after overhead) on cars that stick around to the next year. Margins are not real large overall for either the manufacturer or dealership, though, all things considered. If the manufacturer overestimates demand, they will have to discount sales to retailers and lose money as well, but it all gets sold.– farnsyCommented Mar 30, 2016 at 19:35
Other than being reduced to clear as others have suggested quite a few get sold to large motor stores.
You can often go in and find last years model with around delivery mileage at a very knocked down rate because most people would prefer the latest model direct from the dealer.
Doing this allows dealers to clear old stock incredibly quickly so they can promote the newest model exclusively.
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Not sure this really counts as "other". It's still sold by the manufacturer at a knock-down price, just sold to a motor store rather than direct to public. Still, it's true so I upvoted. Personal anecdote: I bought a 9 month car from a motor store which had 12 miles on the clock (20 after my test drive). Its RRP had been £17k new, I paid £9k.– AndyTCommented Oct 25, 2016 at 15:02
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