Dealers Can't Sell 800,000 LEFT OVER NEW CARS | Episode 997
About this episode
Dealers are facing a significant challenge with over 800,000 unsold new cars from the 2024 and 2025 model years. The hosts discuss the implications of this surplus, including the financial strain on dealerships and aggressive discounting strategies to move inventory. They analyze specific dealership examples, highlighting the differences in pricing and inventory management among brands like Audi and Ford. The conversation also touches on the seasonal nature of car sales, predicting a shift in the market as tax refunds come in, potentially creating a buyer's market for used cars in the coming weeks.
prior model year
"...they've got 29 new vehicles that are prior model year right now..."
Prior model year means cars that were made last year but are still new and available to buy. They often cost less than the newest models.
Prior model year refers to vehicles that were manufactured in the previous year but are still being sold as new. These cars may be discounted to make room for the latest models, appealing to budget-conscious buyers.
cash flow
"...it's all about cash flow and things like that..."
Cash flow is about how money comes in and goes out of a business. For car dealerships, it’s important to sell cars quickly to keep money coming in and to pay for expenses.
Cash flow refers to the movement of money in and out of a business. In the context of car sales, it indicates how quickly a dealership can sell vehicles to maintain financial stability and support ongoing operations.
aggressive pricing
"...it's all about cash flow and things like that. I've seen some pretty aggressive pricing..."
Aggressive pricing means lowering the price of a car a lot to encourage people to buy it. This is often done when a car has been available for a long time and needs to be sold quickly.
Aggressive pricing refers to significantly reduced prices intended to stimulate sales, especially for vehicles that have been on the market for an extended period. This strategy is often used to clear inventory or attract buyers in a competitive market.
Audi Q7
"...this is on a 2025 Audi Q7 172 days on the market. They're taking $7,000 off the top here just to try and move on from this vehicle..."
The Audi Q7 is a large luxury SUV that can carry many passengers and has a lot of high-tech features. The 2025 version is the latest model, and it’s designed to be both comfortable and powerful.
The Audi Q7 is a luxury midsize SUV known for its spacious interior, advanced technology, and strong performance. The 2025 model continues to build on these attributes, offering a blend of comfort and capability.
inventory
"...the dealership has now covered the cost of the financing involved in that inventory..."
Inventory means the cars that a dealership has on hand and is ready to sell to customers.
In the automotive context, inventory refers to the cars that a dealership has in stock and available for sale.
floor plan assistance
"That's called floor plan assistance. Yeah. Yes. So so if the car's been there 190 days..."
Floor plan assistance is when car dealerships get financial help to pay for the cars they have in stock for a certain period, so they don't lose money while waiting to sell them.
Floor plan assistance is a financing arrangement where dealerships receive help covering the costs of holding inventory, typically for a limited time, to manage cash flow.
finance charges
"...the dealership has now covered the cost of the financing involved in that inventory..."
Finance charges are the costs you pay for borrowing money, usually added on top of the amount you owe.
Finance charges are fees charged for borrowing money, typically calculated as a percentage of the loan amount over time.
Audi Q5 Sportback
"they're not that like this q5 sport back"
The Audi Q5 Sportback is a type of SUV that looks sporty and stylish. It has a lot of space inside and comes with modern technology.
The Audi Q5 Sportback is a luxury crossover SUV that combines the practicality of an SUV with the sleek design of a coupe. It offers a spacious interior, advanced technology, and a range of powerful engines.
MSRP
"they're not that like this q5 sport back... $900 to be $1900 below MSRP"
MSRP is the price that the car maker suggests the car should be sold for. It's like a starting price before any discounts or negotiations.
MSRP stands for Manufacturer's Suggested Retail Price, which is the price that the manufacturer recommends for a vehicle. It serves as a starting point for negotiations between the buyer and the dealer.
dealer discount
"...you got your woodhouse discount of almost $11,000 and then you have..."
A dealer discount is when a car dealership lowers the price of a car to make it cheaper for buyers. This can help sell cars faster or get rid of older models.
A dealer discount is a reduction in the price of a vehicle offered by the dealership, often to attract buyers or to clear out inventory. It can significantly lower the final purchase price of a vehicle.
out-the-door price
"...request out the door price all that fun stuff. Remember earlier this year..."
The out-the-door price is how much you'll actually pay for a car after adding everything together, like taxes and fees. It's the final price you need to know before buying.
The out-the-door price (OTD) is the total cost of purchasing a vehicle, including the vehicle price, taxes, registration fees, and any additional dealer fees. It's important for buyers to know this amount to avoid unexpected costs.
Audi
"...we did not see it an $11,000 discount on that Audi..."
Audi is a brand that makes luxury cars, known for being stylish and having lots of technology. They are often seen as high-end vehicles.
Audi is a German automotive manufacturer known for its luxury vehicles and advanced technology. The brand is recognized for its performance-oriented models and sophisticated design.
Ford F150
"...we're seeing $11,000 discount on a Ford F-150 and I think back to your point..."
The Ford F-150 is a big truck that many people use for work or hauling things. It's very popular and known for being tough and reliable.
The Ford F-150 is a full-size pickup truck known for its durability, versatility, and strong performance. It's one of the best-selling vehicles in the United States, popular for both work and personal use.
Ford Broncos Sports
"...even on this Broncos sports..."
The Ford Bronco Sport is a smaller SUV designed for off-road driving. It has a tough look and is popular among people who like outdoor adventures.
The Ford Bronco Sport is a compact SUV that offers off-road capabilities and a rugged design, appealing to adventure seekers. It's part of the Bronco family, which has a rich heritage in off-road vehicles.
add-ons
"...if there's any dealer installed accessories and add-ons that they..."
Add-ons are extra features you can choose to include when buying a car, like a sunroof or special paint. They usually cost more money on top of the car's price.
Add-ons refer to additional features or options that can be included with a vehicle purchase, often at an extra cost. These can range from aesthetic enhancements to functional upgrades, and they can significantly affect the final price of the vehicle.
dealer installed accessories
"...if there's any dealer installed accessories and add-ons that they..."
Dealer installed accessories are extras that a car dealership can add to a car before you buy it. These can be things like better speakers or special mats for the floor, and they can make the car more expensive.
Dealer installed accessories are optional features or enhancements added to a vehicle by the dealership before the sale. These can include items like upgraded audio systems, floor mats, or roof racks, which may increase the overall cost of the vehicle.
OTD price
"Stand by let's actually see what happens when we get the otd price from this particular dealership dad because I am fascinated by this."
OTD price means the total amount you'll pay for a car, including everything like taxes and fees. It's the final price you need to pay to take the car home.
OTD price stands for Out-the-Door price, which includes the total cost of purchasing a vehicle, including taxes, fees, and any additional charges. It's the final amount a buyer pays to drive the car off the lot.
Toyota 2026
"...we actually reached out to some Toyota dealers with regards to a 2026..."
The 'Toyota 2026' refers to cars that Toyota will release in the year 2026. It means they are planning new models or updates for that year.
The mention of 'Toyota 2026' refers to a future model year for Toyota vehicles, indicating that the company is planning new releases for that year. This could include updates to existing models or entirely new vehicles.
dock fee
"...the unfortunate thing here is you've got an 800 dollar dock fee, but yes..."
A dock fee is an extra charge that some car dealerships add for getting a car ready to sell. It's like a preparation fee for the vehicle.
A dock fee is a charge that dealerships may impose for the handling and preparation of a vehicle before it is sold. This fee can cover costs associated with transporting the vehicle from the port to the dealership and getting it ready for sale.
plug-in hybrid
"...and a Prius and a plug-in hybrid..."
A plug-in hybrid is a car that can use both gas and electricity. You can charge it at home, and it can drive farther on electricity than regular hybrids.
A plug-in hybrid is a type of vehicle that can run on both gasoline and electricity. It has a larger battery than regular hybrids, allowing it to be charged from an electrical outlet and drive longer distances on electric power alone.
Toyota Prius
"...this is on a 26 and a toyota and a Prius and a plug-in hybrid..."
The Toyota Prius is a popular car that uses both gas and electricity to help save on fuel. The 2026 model is the latest version of this car.
The Toyota Prius is a well-known hybrid vehicle that combines a gasoline engine with an electric motor to improve fuel efficiency and reduce emissions. The 2026 model continues this tradition with advanced technology and eco-friendly features.
dealer fees
"But the first otd price that this dealership provided us with was $43,410... The final otd price was $40,951 so a testament here to what can happen when you negotiate with the dealership"
Dealer fees are extra costs that car dealerships might add when you buy a car. These can include things like paperwork fees or costs for getting the car ready for you.
Dealer fees are additional charges that a dealership may add to the price of a vehicle, which can include documentation fees, preparation fees, and other administrative costs. These fees can vary significantly between dealerships.
negotiating
"And then obviously the agent negotiating ultimately here going back and forth back and forth back and forth so many messages between the agent and the dealership pops"
Negotiating means talking to the car dealer to try to get a better price or deal on the car. It's like trying to agree on a price that works for both you and the seller.
Negotiating in the context of car buying refers to the process of discussing the price and terms of the sale with the dealer to reach a mutually agreeable deal. It often involves back-and-forth communication to lower the price or improve financing terms.
used car prices
"Is with regards to used car prices and I want to pull this up briefly dead last week"
Used car prices are how much people are willing to pay for cars that have been owned before. These prices can change based on how many cars are available and how much people want to buy them.
Used car prices refer to the market value of pre-owned vehicles, which can fluctuate based on demand, supply, and economic conditions. Factors like vehicle condition, mileage, and market trends also play a significant role in determining these prices.
buyers market
"...Is it another little buyers market moment before? The spring selling season..."
A buyers market is when there are more cars for sale than people wanting to buy them, which usually means lower prices and better deals for buyers.
A buyers market occurs when there are more cars available for sale than there are buyers, leading to lower prices and better deals for consumers. This situation often arises during slower sales periods in the automotive industry.
sellers market
"...On used cars it will be a bit more of a buyers market than a sellers market..."
A sellers market is when there are more people wanting to buy cars than there are cars available, which usually means higher prices and less room to negotiate.
A sellers market occurs when there are more buyers than available cars, resulting in higher prices and less negotiation power for consumers. This typically happens when demand outstrips supply in the automotive market.
used car manager
"...this is a used car manager that is looking at his inventory..."
A used car manager is the person at a car dealership who takes care of selling used cars. They decide how much to sell the cars for and try to sell them quickly.
A used car manager is responsible for overseeing the inventory and sales of pre-owned vehicles at a dealership. They analyze market trends and adjust pricing to maximize sales.
Honda Civic
"We haven't had a lot of activity on this civic..."
The Honda Civic is a small car that many people like because it's dependable and gets good gas mileage. It's often used as a family car or for commuting.
The Honda Civic is a compact car known for its reliability, fuel efficiency, and practicality. It's a popular choice among consumers for both new and used car markets.
appreciate
"Most vehicles don't appreciate five thousand dollars in a month let alone five thousand dollars in a week"
When we say a car appreciates, we mean it becomes more valuable over time, which is rare. Usually, cars lose value as they get older.
In automotive terms, to appreciate means that a vehicle's value increases over time. However, most vehicles typically depreciate, meaning their value decreases as they age.
depreciation
"Most vehicles don't appreciate five thousand dollars in a month let alone five thousand dollars in a week"
Depreciation is how much less your car is worth as time goes on. Most cars lose value quickly, especially right after you buy them.
Depreciation is the reduction in the value of an asset over time, particularly in vehicles. Cars typically lose value quickly, especially in the first few years after purchase.
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