Why Car Dealerships Refuse To LOWER PRICES (IT'S A HUGE MISTAKE) | Episode 1078

MSRP (Manufacturer’s Suggested Retail Price) is the sticker price automakers publish for a vehicle. It’s often used as a reference point in dealer pricing discussions, even though the actual selling price can be higher due to markups or lower via discounts.

Dealer markups are added charges above the vehicle’s base price (often above MSRP) that increase what you pay. They’re a key reason some shoppers see “sticker shock” even when the car’s market value should be lower.

A buyer’s market is when supply is high relative to demand, giving shoppers more leverage to negotiate. The host frames it as the current situation for many brands, implying dealers should lower prices to move inventory.

The Lincoln Aviator is Lincoln’s midsize luxury SUV, and the “Black label” trim is a higher-content version aimed at buyers who want more premium interior and tech. In this segment, it’s used as a real example of a 2025 Lincoln sitting unsold for a long time on a dealer lot.

A dealer management system (DMS) is the software dealers use to run sales and inventory operations. In this context, the DMS screenshot is being used to show how long a specific vehicle has been sitting on the lot.

This segment promotes a search filter that targets vehicles sitting on lots for at least 365 days. The idea is that long-lot-time inventory is more likely to be discounted or subject to dealer “final pay” pressure.

“Final pay” is a dealer incentive structure where the manufacturer provides one last payment to help underwrite (offset) the costs of selling a specific vehicle once certain conditions are met. In practice, it can be a large dollar amount that effectively reduces the net price the dealer can offer.

The Audi A8 is Audi’s full-size luxury sedan, known for its upscale interior and high-end pricing. In this segment, the hosts use the Audi A8 as an example of how large manufacturer incentives can be paid as a “final pay” amount to help dealers move inventory.

The Dodge Challenger is a performance-focused muscle car from Dodge. Here it’s used as a real-world example of a “final pay” incentive that helped the seller move the car at a large discount versus MSRP.

Lincoln’s Black Label is a luxury branding tier used on certain Lincoln models, typically implying higher-end trim and pricing. The hosts speculate that the “final pay” incentive on a Black Label Lincoln could be sizable, reinforcing their argument that the vehicle’s starting price was likely inflated to begin with.

This is a pricing strategy claim: the host argues the vehicle’s initial listed price was set higher than it needed to be so that manufacturer incentives (like “final pay”) could later make the final transaction price look like a discount. The underlying idea is that the “discount” is partly funded by the manufacturer rather than purely dealer negotiation.

Carrying costs are the expenses a dealer keeps paying while a vehicle remains unsold—such as floorplan interest, storage, and administrative costs. Even if a dealer eventually recoups money through incentives, the unsold inventory can still cost them in the meantime.

This phrase describes a common dealer-incentive dynamic: dealers may believe they’ll be compensated later through manufacturer programs or deal structures rather than discounting immediately. The argument is that delaying price cuts can still be rational if the dealer expects to “make whole” later.

“Dealer lots” are the physical inventory areas where unsold new cars sit while they wait to be sold. When cars sit for a long time, dealers may face ongoing carrying costs and pressure to discount to move inventory.

The dealer invoice price is what the dealer is billed by the manufacturer for the vehicle. It’s often used as a benchmark for whether a dealer is selling at a profit, breaking even, or taking a loss.

“Rebadged” means the same vehicle is sold under a different brand name, usually with different badges and minor cosmetic changes. The host uses it to explain why the Acura version of the SUV cost more than the original Azuzu model.

“Boat anchors” is a slang term meaning something is heavy, slow, and not very useful. Here, the host is criticizing the SUV’s appeal and sales performance, implying it was difficult to move off the lot.

The Acura SLX is a luxury vehicle associated with Acura, positioned as a higher-end model that would attract attention in a discussion about desirable, high-status cars. It’s mentioned in the context of someone making an offer, which suggests it’s a notable or sought-after example rather than a mainstream daily driver. In a podcast, cars like this often come up when talking about buying, collecting, or evaluating specific listings.

“Floor plan costs” are the interest and carrying charges a dealership pays to finance its inventory—basically the cost of having cars sitting on the lot. If a dealer discounts a vehicle, it can reduce how long that financing has to run, but the math can still be painful depending on how long the car has been held.

“Dealers’ inventories” are the vehicles a dealership currently has on hand to sell. The longer cars sit in inventory, the more they can accrue reconditioning costs (like tires/batteries) and the harder it becomes to sell without taking a bigger price hit.

“Flat-spotted tires” are tires that develop a noticeable worn spot from sitting in one position for too long. Dealership inventory aging can cause this, and it may require tire replacement or additional work to make the car presentable and safe for sale.

“Dead batteries” refers to batteries that have discharged while the car sat unused. In dealership inventory, long storage can lead to battery failure, which then adds direct replacement cost and can delay getting the car ready to sell.

The idea here is letting a car remain on the lot without selling it immediately. Dealers may do this to time the sale with incentives, pricing changes, or to avoid taking a loss right away.

CPO stands for Certified Pre-Owned. It’s a dealer-backed program where a used car is inspected and certified to meet specific standards, often with added warranty coverage and perks compared with a regular used car.

An “aging policy” is an internal dealer rule for how long a vehicle can sit on the lot before it must be repriced, reclassified, or otherwise handled. The transcript suggests dealers treat new and used inventory differently as it “ages,” which affects when they’re willing to discount.

Cash flow is how money moves in and out of the dealership day to day. In this context, it’s a key reason dealers don’t want to discount too aggressively: selling cars too cheaply can reduce the cash they need to keep inventory moving and pay operating costs. The hosts frame it as one of the two most important dealership priorities.

Inventory management is how a dealership controls its stock of cars—how many it holds, how long they sit, and when it changes pricing or sales strategy. The transcript connects it to avoiding vehicles that stay unsold for more than a year, because long-staying inventory ties up capital and increases holding costs. It’s presented as a core dealership priority alongside cash flow.

“Excess of a year” refers to used cars sitting on the lot for more than about 12 months. In dealership terms, that’s usually a sign the vehicle is aging in inventory and may require discounting or other actions to move. The transcript uses it to argue why dealers shouldn’t keep cars that long without a plan.

“Tax right off” is shorthand for taking a tax deduction or write-off to reduce taxable income. The transcript suggests some dealers accept a financial loss on an aged vehicle because they believe the tax impact softens the blow. It’s part of the argument about why discounting and losses are sometimes rationalized internally.

CarAgeCarSearch appears to be a tool or database used to filter dealer inventory by age and location. In this segment, it’s used to find vehicles sitting for over a year in the Cleveland, Ohio area.

Cleveland, Ohio is the geographic area the hosts are using to filter inventory. The point is to show how local dealer pricing and discounting behavior affects whether cars sell.

“Dealer slots” refers to the inventory space on a dealer’s lot—cars that are physically sitting for sale. The hosts use it to describe vehicles that have been sitting for a long time, which often pressures dealers to discount to clear inventory.

The Honda HR-V is a subcompact crossover, and the “Sport” trim is the more equipment-focused version. In this segment, the hosts are using the HR-V Sport’s listing price versus MSRP to illustrate how much discount a dealer is (or isn’t) offering.

The Cadillac Escalade IQ is an all-electric version of Cadillac’s large Escalade SUV, and “Luxury 1” refers to a specific equipment/trim level. The hosts use it to discuss how dealers may need to discount more aggressively off MSRP to move slow inventory.

The Hyundai Palisade is a three-row midsize SUV, and the “Calligraphy” trim is Hyundai’s top-of-the-line style/feature package. “Night Edition” typically adds darker exterior styling and appearance-focused upgrades. In this segment, they’re using the specific Palisade listing to discuss why dealers may resist lowering prices.

Spitzer Auto World is a car dealership location mentioned as the source of the listings they’re clicking through. It’s relevant here because the hosts are using a specific dealer’s inventory to illustrate how pricing and discounting behavior can vary by store.

“Unsold leftover” refers to vehicles that remain in dealer inventory long after they were expected to sell, often because demand is weaker than anticipated or because the pricing hasn’t moved enough. In practice, these cars can become “aged units,” and dealers may use tactics like loaner use or selective discounting rather than immediately cutting price.

A “service loaner fleet” is a set of cars a dealership keeps to loan to customers while their own vehicle is being serviced. When a dealer uses loaners, the cars can accumulate miles without being “sold,” which can make inventory look older/used even though it’s still in the dealership’s sales pipeline.

A retired service loaner is a car a dealership used to loan customers while their vehicle was in for service, then later sold after it’s no longer needed. Even if it’s advertised as “new,” it has real usage (miles and wear), so pricing and discounting should reflect that.

An over-mileage charge is a fee assessed when a leased car exceeds the mileage allowance in the lease contract. The host uses Hyundai lease terms as an example, noting that the per-mile penalty (e.g., 20–25 cents per mile) implies the dealer should discount a higher-mileage car more.

“Miles over” refers to how many miles a vehicle has exceeded its agreed-upon allowance—most commonly in a lease. In this segment, the host ties “miles over” to how much a dealer should discount a car that already has thousands of miles.

A car sitting on a dealer lot for a long time can develop issues that aren’t obvious at first glance, such as battery drain, tire flat-spotting, fluid degradation, and corrosion risks depending on storage conditions. The key point in the segment is that “time sitting” can matter, so buyers should evaluate the specific car rather than assuming it’s fine because it’s “new.”

The Buick Enclave is a three-row midsize SUV, and the “Sport Touring” trim is positioned as a more feature/appearance-focused version of the family hauler. In this segment, it’s used as an example of a vehicle that’s been sitting on a dealer lot for a long time before being sold.

A test drive is a hands-on evaluation where you verify how the car behaves under real driving conditions. In this segment, it’s emphasized as the best way to judge whether a long-lot car is actually in good shape, regardless of whether it’s labeled new or used.

“Flat spots” are areas on a tire tread that get compressed while the car sits in one position for a long time. When you start driving, that deformed section can cause vibration, thumping, or bouncing until the tire heats up enough to reshape—often it won’t fully recover.

A “voltage readout” is a measurement of battery voltage used to estimate state of charge and health. On modern cars with many electronic modules, a battery can drain while parked, so checking voltage helps decide whether a jump or a replacement is needed.

“Constant drain” refers to parasitic electrical draw from a car’s systems while it’s parked—like infotainment, security, and control modules. Even when the engine is off, these systems can slowly discharge the battery over time.

Rodent infestation refers to animals getting into a vehicle and damaging components. In cars, rodents are especially notorious for chewing wiring and insulation, which can cause electrical faults and even safety-related issues.

A pre-purchase inspection (PPI) is a professional inspection done before you buy a used car. It’s meant to uncover hidden problems—like mechanical issues or damage—that aren’t obvious during a quick look or test drive.

“Leftover” vehicles are unsold inventory from a previous model year that dealers still have on their lots. These cars often become eligible for larger discounts because the dealer wants to clear space and reduce aging inventory.

BMW is mentioned here as a brand that requires dealers to replace batteries on vehicles that sit for a while. The point is that BMW has a policy to reduce dead-battery issues for inventory sitting on lots.

CDJR is shorthand for Chrysler Dodge Jeep Ram, the dealer group/brand umbrella the speaker contrasts with BMW’s battery policy. The implication is that not all brands or dealer practices handle long-sitting inventory the same way.

The Jeep Wrangler 392 refers to the Wrangler equipped with a 6.4-liter V8 (the “392” naming comes from the engine’s displacement). It’s a performance-focused Wrangler variant, so buyers often expect it to be ready to start and run reliably when they show up to buy.

A dead battery means the car’s battery voltage is too low to start the engine. On dealer lots, batteries can degrade faster if vehicles sit for long periods without being maintained or periodically charged.

A voltage reading is a measurement of the battery’s electrical charge level. In this context, the dealer is checking and documenting the battery’s voltage over time to prove whether the battery was kept in an acceptable state.

In this segment, “warranty” refers to who pays when a battery fails—BMW covers the customer, but not the dealer. That difference affects whether the dealer will replace a battery on an in-lot car or treat it as the customer’s problem.

“Battery goes dead” means the car’s 12-volt battery has dropped to a level where it can’t power the vehicle’s electronics or start the engine. Even if the car is otherwise fine, a dead battery can prevent unlocking and starting, which kills the sale quickly.

The Ford Mustang Mach-E is an electric crossover built on Ford’s EV platform, and it relies on battery health for everyday functions like unlocking and starting. If a Mach-E sits on a dealer lot for a long time, the battery can degrade enough that the car won’t respond to the key fob or won’t be ready to drive, which directly hurts a sale.