This is what really happens to new cars that no one buys which just sit on a lot for hundreds of days

Have you ever wondered what happens to those older brand new cars that have just been sitting on the lot?

Some end up parked for ages, untouched and collecting dust, and dealers still have some 2023 models to shift, even some from 2022.

But dealerships cannot afford to hold onto stale stock forever.

Here is what really happens to these cars behind the scenes.

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What happens to new cars that no one buys?

It turns out that once a car arrives at a dealership, it becomes the dealer’s problem.

Dealers use something called a floor plan loan to finance their entire inventory, giving them around 60 to 90 days of low or zero interest before costs start racking up.

When a car sits past that window, the dealership begins losing money, fast.

To stop the bleeding, they turn to a few strategies – one is putting the car into the service loaner fleet.

This adds a few thousand miles to the clock, but the manufacturer sends the dealer a monthly reimbursement based on how often the car gets loaned out, and it means that later, they can sell it as a lightly used model with a justified discount.

Discounting is the most common move that dealers use; they cut the price slowly, sometimes dropping tens of thousands of dollars off the asking price.

During the 2022 and 2023 market cooldown, some cars, especially SUVs and off-road models, saw $20,000 to $30,000 taken off after sitting too long.

What sitting on the lot for hundreds of days really leads to

If it still will not sell, the dealership may send it through a dealer-only auction, which is the fastest way to clear unwanted stock, but it usually means taking a loss since wholesale prices sit below market value.

The car becomes ‘used’ the moment it sells at auction, even if it has never actually belonged to anyone.

Dealers also offer small cash bonuses that push salespeople at the dealers to move stubborn inventory, and in rare cases, dealers trade old stock with another store of the same brand.

No matter how long it sits, even for hundreds of days, every stranded car eventually goes somewhere – it gets discounted, loaned out, traded, or sold at auction.

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