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.
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.
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.
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.
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.
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.
Car
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.
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.
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.
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.
Car
Toyota 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.
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.
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.
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.
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.
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 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.
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.
Depreciation is how much less your car is worth as time goes on. Most cars lose value quickly, especially right after you buy them.
LIVE
It's 12 30. Is that right? Is it the right one though? Is it the right one? I mean in the settings on the on the computer
anyway, this is courage and
Sugar sugar sugar sugar settings. Here we go. Take a look at scarlet. Yeah. Oh, I guess my ears aren't working today
Well, that could be
So there you have it ladies and gentlemen my microphones, right? My son is wrong. He's in San Francisco
I'm here in Ventner. How are you today? Handsome. I don't think the microphones, right? That's all I'd say
I got on to the right side, but Pots. It's probably a me issue, but that's okay. We moved up like is it working now?
No, it still sounds echo-y, but you do you meant it's okay. It's okay. You've got a bit of an echo, but that's okay folks
we're gonna be talking today about the
800,000 vehicles that are still unsold 2024s 2025s
That dad these dealers now we are into the second week of January
They cannot sell these vehicles and we've got some of the latest data for vehicle sales from 2025 where we did see many brands grow
Year over year now. He's much lower. We're we're up to a strong start here in January pops
It's great. I don't know what kind of start we're off to is it too loud now. It's perfect, man. It's perfect
Car help does we've heard anyone that too instead, but that we're gonna talk about that. So let's start here pops
I'm gonna pull it up on the screen right now
You go over to the car old car search and you go over and you're gonna search for new cars. We're gonna go nationwide
There's 2.8 million for sale right now, which is down a little bit
We had been closer to 3 million, but what would be interesting is if I come here to the year
And I do 2025 we've got
822,000
New a prior model year vehicles still out there. What's going on pops? How long can these dealers sustain themselves with?
800,000 plus left over new cars. Well depends on depends on their cash position
I
When that is when that what do you mean? Well, you know, if if if they have a strong cash position in the bank
Then they can then they can continue to carry this inventory
And not necessarily worry about the finance charges associated with it. Go go deeper explain what that means. I don't understand
well as we know most dealerships
finance their inventory and if they have strong cash flow and
And and and a lot of cash in the bank then they can ride out
Slogans sales periods where they're sitting on inventory that's not selling as quickly and they're paying a lot of interest to maintain that inventory
if if
Your cash flows not nearly as good or your bank account is not nearly as flush
Well, guess what you kind of have to turn that inventory sooner rather than later because cash flow is king
You've got payroll. You've got everything all the expenses associated with running a dealership and you you need to write
Checks in order to make it all work. So yeah, let's let's do a real example dad with a particular dealership
Like I I really want to dig in here
So either let's do a dealership you previously worked for or a random dealership doesn't really matter to me name a dealership
And I'm gonna pull up their inventory specifically or we could just use one of the first ones that comes up here
What do you want to do?
Whatever you want to do you you you you want to you want to do
Many of thousand is that well? I don't really want to do a mini dealership many feels too niche
I want to go maybe you used to work for which Audi dealership did you work for well? It's now
Audi of owing's mills
All right, give me a second here
Audi of owing's
Good this might take a second since we're nationwide, but let's see
Drumroll, please
Okay, Audi of owing's mills because I'm in Omaha's not pulling up
We're just gonna go to Audi of Des Moines for a second here just for the purposes of doing this demonstration
So at Audi of Des Moines, yes
Just to make this easy they've got 29
New vehicles that are prior model year right now. Yes to walk me through you're the sales manager at Audi of Des Moines
And you've got these 29 new cars sitting there and you're talking about okay?
It's all about cash flow and things like that. I've seen some pretty aggressive pricing
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
Yeah, well that you know, that's what you got to do
I mean, we know that for instance Audi sales were way down last year
We know that that the Audi dealers are having a difficult time finding
Enough customers for the products that they're selling. So if you're sitting on 29
2025 and some of them are 180 190 days old and and let's just assume
For a second that Audi
Covered the finance charges to finance that inventory for the first 60 days that that car was there
That's called floor plan assistance. Yeah. Yes. So so if the car's been there 190 days
we're talking there's 130 days where the dealership has now covered the cost of the financing involved in that inventory and
You're talking about 70 some thousand dollar
Audi's I'm just gonna guess that I don't know the monthly charge for one of those vehicles
There's what between five and six hundred dollars a month. Maybe it's had more
so
How long?
Do you want to continue to stare at that inventory and know? Okay, if it sits here another month
It's another six hundred dollars in finance charges that we the dealership have to pay for
So you you should become
Extremely motivated if and when you finally have a customer who says I'd like to take that home
But I need the price to be lower
Yeah, and I think it does to your point earlier
Back to how much money they've got coming into that dealership because to your point if I can't pay the bills from week to week
Or month to month my motivation to liquidate the inventory is going to be different. So we look at this at the macro level
There's 822,000 prior model year vehicles that have not sold that are now here in 2026
They haven't sold and then you go to the micro level
Look at this one particular Audi dealership again Audi of Des Moines
And you can see that on some of these options are being very aggressive on others. They're not that like this q5 sport back
Yeah, only advertising
$900 to be $1900 below MSRP versus like we saw a second ago here at the q7 $7,000
Well, is that the difference between 64 days on the lot and 172 days on the lot? What do you think?
I think that could have something to do with it
Yes, you know if if for instance the floor plan assistance from Audi was enough to cover the interest charges
For the first 60 days of that vehicle being there
Well, you know, are you as highly motivated to move that car as the as the same vehicle that might have been sitting there for 170 days?
that's why
I've always said to you and others that
If you're interested in a particular model and you're open to color perhaps
When when you contact the dealership
Say, hey, I noticed you have a couple of these vehicles that I think I would be interested in
Which one's been sitting on your lot the longest?
Because I know you're interested in moving your older age inventory sooner than your younger aged inventory
And what we might be able to help each other out
and and so if you if you look at that
And and you see that the dealer has two vehicles one's been there 60 days and one's been there 170 days
Say, I'll do you the favor
Assuming everything's working properly and the one that's been there 170 days
That's the one I'll buy but I'm going to need a really good deal in order for me to do that
Now that we know that not all brands are created equal when it comes to this leftover inventory, for example
Ford notoriously has some of the most left over
Inventory, so let's do this same experiment, but now just with Ford. So I'm going to get rid of Audi Des Moines
Okay, we've still got 822,246
2025 or older new cars for sale nationwide. Let's come down here Ford
Let's look at a Ford dealer dad
this thing a second here
I'm gonna update to have to reload the page. Oh, it's loading. Here we go. Uh, we've got
Board of Omaha. Here you go. 66
New prior model year Ford vehicles on this dealer's lot. Let's take a peek. Holy cow. The first one
Let's just hone in on the first one here. Jeez MSRP 66,290. They're advertising it at 51,706 bucks
Let's actually click into this one because I want to go to the dealer website
I want to get a sense here. Let's come all the way down all the way down all the way down all the way down
Go to the dealer site. I want to go to the dealer site dad because I want to see how they're advertising this
I mean, okay. All right. Holy
I mean, look at that man
So you got your woodhouse discount of almost $11,000 and then you have
bonus cash and more bonus cash
Um, so yeah, do you now now the question becomes
um
If somebody went in there to buy it would they actually sell it to them at 51,706 dollars
Could you click into that little thing that says details?
Stand by
And maybe it'll tell us what the various and assorted details are
So the bonus cash
Um
The joy April 1st
And the customer cash
Is good till April 1st?
That's a manufacturer putting $4,000 towards you. Yeah, that's the dealerships giving you almost an $11,000 discount
Yes, allegedly
Yeah, yeah, of course. You have to request out the door price all that fun stuff. Remember earlier this year
We contacted 104 dealers trying to get pricing but dad I think this shows
I mean, we did not see it an $11,000 discount on that Audi
We're seeing $11,000 discount on a Ford f-150 and I think back to your point. Let me pull it back up here
meet one second
This one dealership has 66 prior 66 leftovers. Yeah, they've got 66
Reasons to figure out how to get those vehicles and somebody else's hands
You know, some of them haven't been there particularly long
Um, but they realize they're still 2025 and we're in the 2026 and and
These discounts are massive though, man. Like this here's another 13,000 dollars off even on this Broncos sports
Yeah, thousand dollars off. This is absolutely nuts
Yes, right. I would
I would be curious as to all the details to find out if there's any dealer installed accessories and add-ons that they
That they don't list that that you would get
Let me here. I'll I'll um, I'll unleash the agent on this one. So
We can look back at this tomorrow. So here we go
We've got the agent that's going to reach out to the dealership MSRP
$66,000 dealers advertising it for $51,000. We're going to shoot for $50,100. Why not live a little
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. We know dealers have leftover inventory. We know dealers have leftover vehicles
This dealership has 66
leftover vehicles right now
Yeah, I would think you have a new car manager at that dealership that scurry in to make those disappear
You know, he he wants to be
Um, this generation is david copperfield
Okay, he he wants to perform a magic trick
And and open up 66 spots on his lot by getting rid of those 66
leftover f1 or leftover ford. So
some dealers
would look at that and be motivated and just based on their advertised pricing
This is it for a dealer that looks at their leftover inventory
And is motivated to get rid of it as opposed to some other dealerships
That look at their old aged inventory and hope that it's like fine wine that will get better with age
And it usually does not let's do one more example here and let's go to the opposite end of the spectrum
Rondi Toyota you want to do Honda? Where do you want to go for that? Toyota? I you know, you're going to be hard pressed to find
um
Well, well, and I'm obviously prior model years. Yeah
Yeah
Give me a second here. All right
Be this this Toyota dealership
22 supposedly. Yes
That's actually more than I had to anticipate although I am curious. We're going to take a peak here in a second
I am curious how many vehicles this dealership just has in inventory in general
So there's they've got 22 prior model year options
Out of their 112. So that's actually a significant number at that
Yeah, my guess is they just haven't been picked up yet. You think they're already sold. They're still on the website, but they've already been sold
um
knowing what we know about
um, the short supply of
Toyota inventory
That Toyota is nationally running about a 22 24 day supply of vehicles
Yeah, I I would think that most of their inventory either on the ground or in coming
Is spoken for and in many cases once the vehicles that were incoming
Get to the dealership. Well, then it's just
Trying to figure out the exact time that the person who left at the positive on that vehicle
Is going to be able to come in and finalize the transaction
But I would I would think
That the vast majority of those
22
Are already spoken for yeah, I hear you now it is interesting. I don't know if you remember but last week
On the show dad, we did spend a couple minutes and we actually reached out to some Toyota dealers with regards to a
2026
Yes, and we actually got some pricing back here
So i'm going to pull that up quickly because I want to show you there actually are even with some of these brands
For example, Toyota and not even one of these leftovers. This is the 2026 the agent went back and forth and back and forth
There's messages galore here
At the end of the day we got all sorts of pricing information and you can see here dad
We were able to get a 24 hundred dollar discount
From this dealership now the unfortunate thing here is you've got an 800 dollar dock fee, but yes
Well, this is on a 2026 not even a 2020 not even a 2025 not even one of those leftovers
So I'd be curious. Oh whoops. I wasn't sure my screen here you go. Um, you can see here dad
We've got the 2400 dollar discount. So I'd be curious
What the opportunities are for even if it is a toyota if it hasn't actually already been sold
If it is one of those vehicles that it's sitting there
What type of discounts you'd be able to get because again the motivation is extra high when it comes to these prior models
Your vehicles again, this is on a 26 and a toyota and a Prius and a plug-in hybrid
And and I would say we're sitting on january 12
2026 so
The motivation is is even greater than what we would normally expect because well, we know
That either this month or next month will be the slowest sales month of the year
for all these dealerships, so
Even if you're at a toyota dealership
You know, you're not going to get that much floor traffic this month
And so if you have a vehicle that's available and you have somebody that's expressing an interest
And wants to go back and forth with you via email. Guess what you're going to do it. It's january damn it
so, yeah, it is
It is regardless of whether it's a 2025 leftovers or 2026 brand new ones
it's january
And anybody that has spent any time in retail automotive
Knows that january or february is going to be the slowest sales month of the year
um
Regardless, so let's let's get out there and make some deals
Now dad, I just want to show you something and then we'll switch gears here
But the first otd price that this dealership provided us with was $43,410
their discount
The final otd price was $40,951 so a testament here to what can happen when you negotiate with the dealership
It is so cool. By the way, I mean this literally the the dealer initial message was about, you know
Here's your pricing and it'll be $20 cheaper if you pay cash, etc, etc
And then obviously the agent negotiating
negotiating
Ultimately here going back and forth back and forth back and forth so many messages between the agent and the dealership pops
Ultimately getting us from this initial price of 43,410 bucks
to
$40,951 so freaking cool
I think as you are out there and you're thinking about buying a car these 800 thousand left over ones are a great option
Obviously even to your point because it's january and things are starting to slow down even on 26s
We saw right there some some negotiation. You got $2,400 off. That's crazy
And and let me ask you a question
Were you involved in any of those negotiations or was that merely
Your your ai agent that did all that? Absolutely crazy man when it works. It is pretty dog on magical now another story that we've been covering
Is with regards to used car prices and I want to pull this up briefly dead last week
We talked about car packs and this has been getting a lot of attention because car max has said they're going to lower their prices
In an effort to try and sell more used cars. So i'm curious to your take on this
We've got the 800 000 left over new cars and we've got the you know industry giant car maxing
They need to lower their prices on used cars
We talked about at the end of last year as a buyers market
Do you think now because it is january because things have slowed down in the auto industry?
Is it another little buyers market moment before?
The spring selling season and I think if you could spend some time here talking about what the spring selling season is
That'd be really really helpful. I think for the next
Four to six weeks
um
On used cars it will be a bit more of a of a buyers market than a sellers market
By the time we reach the end of february we start getting federal income tax refunds back
and
Those trigger a lot of used car sales and and so
Come march 1st. You're going to see used car dealers
Or those selling used cars holding pretty farmed at their prices because they know
Over the next eight to ten to twelve weeks that they're going to sell out of all that inventory
It is it is for many many dealerships come march 1st
It's like somebody hit a light switch and turn the lights back on
You know you come out of you come out of the darkness into the light
And and you come out of there's three people that show up every two days at the dealership
To there's 30 people there all look in the buy a car. So I think for the next
Four to six weeks
You you have some leverage
After that when it comes to used cars your leverage is gone
Probably till the middle of may
Yeah, wow. Wow. Wow. Wow. And I think you're on to something there because and you can see it here from rich
Brandon at car questions answer is buying cars like crazy. I mean now is
You better be yeah, we've been doing this for years now
I mean, this is just what happens is the industry slows down the market slows down and then it picks up
Like crazy. So I wondered that on march 1st too
Yeah, actually on march 1st and then on april 1st
I cannot wait to look at how many prior model year new cars are still for sale
How many leftovers are still for sale because if they haven't sold out by then
You're really getting desperate and on the used car side of things
The the time to make a move is between now and march 1st because
March 1st to march 31st. It's going to be busier than heck in the used car business
That's just what happens every single year. Yes
You know, there's there's certain things you can count on
Uh, and I think it's like every 17 years the cicadas will come back and they'll make a lot of noise
and you just know it's going to happen and
And you can count on with people getting their income tax refunds
Pre-owned sales spiking
That just happens. There's it's never not happened. So
Yeah, it'll be a busy time come march 1st through the end of april middle of may
Where these used cars will be
commanding their highest prices
Before we start seeing them go down a little bit
It'll be very interesting to see what the big used car dealers. I'm thinking car max
I'm thinking car vana and obviously your local mom and pop and uh sonics and
I'll be very interested to watch their pricing over the next couple of weeks here
Let's actually do a little bit
Of an experiment here
We're going to use that same Toyota dealership that we were just looking at a moment to go
We were looking at their new vehicles and yes with which with which they have 112
Same dealership. I now want to look at their used vehicles. They have 70
Used vehicles and what I'm interested in that is I want to see some pricing trends here
So I want to find one. Let's sort this by days on market oldest
Look at that. Wait, can we just take a second here? The oldest used car this dealership has on their lot is
51 days that is
Can you take a second to just express to our community how brilliant from a dealership perspective that is that is textbook
It is, uh, you know, most dealerships have
An aging policy for their pre-owned cars
Either they get sold in 60 days as a re 60 to 90 days as a retail
And at the end of 60 days if it hasn't sold as a retail at most dealerships
Then it has to go to the auction and it gets sold as wholesale
So for for them to have 70 pre-owned cars
And the oldest one in inventory of those 70
Is 51 days. Well, that would be a used car manager that probably
Gets a big bonus check along with that big pat on the back for doing such a good job
Yeah, I mean that is literally textbook, but let's click into it
Let's see dad over these past 51 days because this is the oldest vehicle on this dealer's lot. Let's go take a peek
But here's the here's the thing
I
I I don't really believe I how are they selling that is a used car. It's got 10 miles on it
Oh, interesting. I didn't even notice that. All right. Let's look at a different one. Then yeah, that's a good point
Yeah 10 miles 25 miles 53 miles. What are they doing with their are are?
I I I don't quite get it. Let's look at this one. This one I feel comfortable comfortable in 40 days on the market
So let's see here. Good call-out pops. I want to look at that price history. Okay. They listed it for sale
on december 10th
at 25 500 dollars
The next day 25 000 dollars a week lady later 24 5
a week later
23 9 a week. No, excuse me two weeks later 23 5
And they're 23 5 right now. I mean this is what's going to be happening to use car prices
between now and obviously, you know spring selling season and this is a used car manager that is looking
at his inventory and saying, okay
We haven't had a lot of activity on this civic
When we were at 25 5 and he didn't wait long. He or she didn't wait long
So we are making moves
They they made a move the very next day and then they waited another week and they made another move
because
Apparently this used car manager gets it
The idea is to turn the stuff as quickly as you possibly can
As opposed to holding on to it for as long as you possibly can
So this is a this is a pre-owned manager. He or she
Who really gets it and and is what I would call?
dynamically pricing their inventory by looking at
At how many people have expressed an interest in it
And because it's only been on the lot a month 40 days 40 days for this vehicle dad and they've already dropped the price
$2,000. So yeah, that's that's what a good use car manager does
So fascinating to see what the pricing trends will be here. All right now. Let's come back here to the chat
I'm going to come to mark's message in just a moment. Thank you mark. But first from kenny mccormick. Thank you, kenny
We appreciate the kind contribution last month. I had a deal for a link an hour before delivery
I asked if the numbers were final and the sales rep said yes minutes later
They called and said that my trade had dropped in five by five thousand dollars in a week
Still looking eight dealers. Oh man. That's a way to blow up a car deal
And and that's like just taking a stick of dynamite to a car deal
You know
Most vehicles don't appreciate five thousand dollars in a month let alone five thousand dollars in a week
I mean, you know, you're talking at the rate of a thousand dollars a day. I don't believe that to be the case
So maybe maybe the numbers on the deal were final
If you didn't trade your car
And and that is one of those unfortunate cases where you need to have
um a cash offer from someone
That if the if the dealer blows up the trade amount, you say not a problem
I'll buy the car if he agreed upon numbers. I'll take care of my trade myself
But that's that's craziness from mark. Thank you for the kind account mark really really really thoughtful and appreciate mark's been with us
For years now and brings a smile to my face to see him and so many of you
There's only less if you contribute with these gifts or not
It's just we're so grateful to be able to do this. Hey courage team hoping your holidays were great
I miss being around so much. Well, we're glad you are here. We um, we let's take a moment that though and let everyone know
So we're gonna have a bit of a wonky schedule here for the next two weeks or so
We have a bit of a wonky schedule last week. We're gonna have a bit of a wonky schedule this week and next week
Yes, we're just gonna take a second
So before before we do that again a friendly reminder that if we can help you with anything car edge
Dot com
Please check out our website if we can help you shopping for new cars use cars our car buying service
Carage pro which is the ai agent that we were just looking at the warranty insurance
We have so much to offer back at car edge dot com and we appreciate everyone that checks out the website
We're gonna be okay. So we're on tomorrow. Let's talk this through you and me that we're on tomorrow
I'm not on the mar. Okay. We're off tomorrow
I I I I I have I I have I have a ride to the airport and fell it off. We had 11 30 in the morning tomorrow
so
And unless I can make arrangements to figure how to do it from the backseat of a car do that don't do that
Okay, so we're off tomorrow. Yeah
Wednesday we have
All the all the car edge team about 30 of us will be in las vegas. We're doing an off site
So we're not going to be doing a show. Maybe we'll find a way to do a show
But right now we've got a pretty jam-packed schedule. So I don't think we're doing a show
Thursday instead of doing a show. We're going to volunteer as a team at a food bank
Okay at a food kitchen and a food bank. So we won't be well won't be doing a show. We're gonna be volunteering
Friday we will be in Tucson, Arizona for a
Wedding rehearsal for a wedding that's on saturday. So I don't think we're doing a show friday
Well, you know, we could at nine o'clock in the morning
Okay, we might so friday will probably be back and then dad the following monday holiday tuesday and wednesday
I'm not going to be available. So we're back that thursday. So
folks
Thanks for tuning in today. Um
But you know, it's gonna be a little little hit or miss here. Let's try and hit friday
I know I know if if we well actually it would be 10 a.m
Tucson time because it's only a two hour time difference
um
If we could do 10 a.m in the morning Tucson time and then at 11 I have a radio interview from Tucson that I have to do
Um
And then yeah, it becomes problematic
Yo, whatever. Yeah, exactly. We'll be back probably on friday. But y'all just thanks for tuning in. Thanks for hanging out with us
and
Yeah, we'll see you. We'll see you when we see you
Yeah, and uh, and if and when we see you tell a friend
All right, dad. I want to jump on the meeting. I love you. I love you too. Thank you. Bye guys
If you liked the show, please take a moment to rate review and subscribe
It really does help the show to grow. Thank you for listening
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.
Today on CarEdge Live, Ray and Zach discuss the latest new car market information. Tune in to learn more! Hosted by Simplecast, an AdsWizz company. See https://pcm.adswizz.com
for information about our collection and use of personal data for
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