Dealers Can't Sell 400,000 LEFT OVER NEW CARS | Episode 1026
About this episode
Dealers are struggling to sell over 400,000 leftover new cars from 2024 and 2025 model years, including gas, hybrid, and electric vehicles. Despite significant discounts—sometimes up to $40,000 off—many vehicles remain unsold due to high prices, poor product-market fit, and buyer hesitation. The hosts discuss how aging inventory can lead to additional costs like battery and tire issues, and advise deal hunters to use market data to find the best bargains while inspecting vehicles carefully. They also touch on dealer practices and the impact of newer model pricing on leftover inventory.
dealership markup
"What does that mean for the auto industry? What does that mean for car dealers out there that are sitting on these vehicles? Well, it means some sales managers will probably join the ranks of the unemployed."
Dealership markup is the extra money dealers add on top of the car's price to make a profit. When many new cars don't sell, dealers might lower this extra cost to attract buyers.
Dealership markup refers to the amount added by dealers above the manufacturer's suggested retail price (MSRP) to increase profit. High inventory levels of unsold new cars can pressure dealers to reduce markups or offer discounts.
new car incentives
"You go on CarEdge.com to the car search right now, and you toggle for new cars 2025 or newer. You've got 432,081 that are first sale nationwide... What does that mean for car dealers out there that are sitting on these vehicles?"
New car incentives are deals or discounts that car makers or dealers give to help sell new cars. These deals can make cars cheaper or easier to buy.
New car incentives are discounts, rebates, or special financing offers provided by manufacturers or dealers to encourage the sale of new vehicles. These incentives can affect inventory levels and pricing strategies for dealerships.
fleet sales
"You go on CarEdge.com to the car search right now, and you toggle for new cars 2025 or newer. You've got 432,081 that are first sale nationwide."
Fleet sales happen when car makers sell many cars at once to companies or governments instead of individual buyers. This can affect how many new cars dealers have to sell.
Fleet sales are transactions where manufacturers sell large numbers of vehicles to businesses, rental companies, or government agencies. These sales can impact the number of new cars available for retail sale and influence dealer inventory.
Ford F150S
"You've got 432,081 that are first sale nationwide. Dad, we know Ford, for example, has 28,000 left over F-150s. We know there are a lot of electric vehicles that are left over year over year."
flat spots on tires
"or there'll be flat spots on the tires or there'll be a rodent infestation in the wiring system,"
If a car sits still for a long time, the tires can get flat parts that make the ride bumpy when you drive again.
Flat spots on tires occur when a car is stationary for a long time, causing the tires to develop a flat area where they contact the ground, leading to vibrations and uneven wear when driving.
rodent infestation in wiring system
"or there'll be flat spots on the tires or there'll be a rodent infestation in the wiring system,"
Sometimes mice or rats can chew the wires in a car, which can cause the car to not work right and cost money to fix.
Rodents can sometimes chew on a car's wiring system, causing electrical problems that can be costly to repair.
prior model year electric vehicles
"We've got 29,565 prior model year electric vehicles for sale out there."
These are electric cars made in earlier years that people are still selling, usually cheaper than brand new ones.
Prior model year electric vehicles are electric cars from previous production years that are still available for sale, often at discounted prices compared to new models.
battery electric vehicles
"Out of the 400,000, about was that 8% maybe, are EVs, just pure battery electric vehicles"
These cars run only on electricity from batteries and don't use gas or diesel engines.
Battery electric vehicles (BEVs) are cars powered entirely by electricity stored in batteries, with no internal combustion engine.
Volkswagen Id
"...big enough. Oh, man, look at this one, that 2025 Volkswagen ID forward pops. 47,271 MSRP, the dealer's advertis..."
Volkswagen Id4S
"...hat it means a couple of things. Yeah, all these ID4s, what are they offering? It's noon here in Vendo..."
MSRP
""At least $10,000 off of MSRP.""
MSRP is the price the car company thinks the car should cost when you buy it from a dealer. It's like the sticker price on the car.
MSRP stands for Manufacturer's Suggested Retail Price, which is the price a car manufacturer recommends a dealer charge for a vehicle. It serves as a baseline for negotiations and pricing.
Ford Mustang
""Oh, wow, look at the discounts on these Mustang Machis. I don't think that's going to move the metal here.""
The Mustang Mach-E is a new electric car made by Ford that looks like a Mustang but runs on batteries instead of gas. It's a type of SUV that is designed to be sporty and eco-friendly.
The Ford Mustang Mach-E is an all-electric SUV introduced by Ford, combining Mustang-inspired styling with electric vehicle technology. It represents Ford's push into the electric vehicle market with a performance-oriented electric crossover.
Nissan Altima
"...ot a Nissan. Look at the discount on this Nissan Altima. This Nissan dealer, Dad, has been sitting on an..."
dealer fees
""include tax, title, license, $599 dock fee, price includes the listed""
Dealer fees are extra costs the car dealer adds when you buy a car. These can make the car cost more than the sticker price.
Dealer fees are additional charges added by the dealership on top of the vehicle's price. Common fees include documentation fees, dock fees, and preparation fees, which can significantly increase the out-the-door price.
rebates and incentives
""price includes the listed rebates and incentives, so yeah, who knows?""
Rebates and incentives are deals that make buying a car cheaper. They can be money back or lower payments to help you save.
Rebates and incentives are discounts or special offers provided by manufacturers or dealers to encourage car purchases. They can include cash back, special financing rates, or lease deals that reduce the effective price.
Cadillac XT6
"no younger than 365 days, and then I'm coming and doing my normal car search. Oh my God, look at this X-T6 pops. Look at this Cadillac X-T6, 374 days on the market."
buying a used car
"But the level of scrutiny you put the vehicle under before you take it home, that increases. Not to the same level of necessarily needing a pre-purchase inspection on a used car. But close, especially for some of these that have been sitting 700 days."
When you buy a used car, you need to check it carefully to make sure it works well and doesn't have problems. This is especially important if the car hasn't been used for a long time.
Buying a used car involves evaluating the vehicle's condition, history, and price to ensure a good deal and avoid unexpected repairs. Increased scrutiny is often needed for cars that have been sitting unused for long periods.
pre-purchase inspection
"Not to the same level of necessarily needing a pre-purchase inspection on a used car. But close, especially for some of these that have been sitting 700 days."
A pre-purchase inspection is when a mechanic checks a used car carefully before you buy it. This helps make sure the car doesn't have hidden problems that could cost you money later.
A pre-purchase inspection (PPI) is a detailed examination of a used vehicle by a qualified mechanic before buying. It helps identify any existing or potential mechanical issues to avoid costly surprises after purchase.
new car shopping
"Go to caredge.com, click on shop new. Set the year filter, so make sure your condition is set to new. Then set the year filter down here to be 2025 or older. There we go, 2025 or older."
When you shop for a new car, you look for a car that has never been owned before. You can use websites to help find the right car by choosing things like the year and if it's brand new.
New car shopping involves selecting and purchasing a brand-new vehicle, often using online tools and filters to find the best deals and desired specifications like model year and condition.
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