Tesla can't find buyers for the current backlog of nearly 2,400, or $200 million worth of Cybertrucks, despite claiming over a million orders were received.
It usually doesn’t work quite like the example above. Using that example…the dealership will only give you $4k for your old car, even though it’s worth $10k. They then turn around and sell it for anywhere from $8-12k, netting themselves a tidy profit on the vehicle now for the second time.
The convenience makes this worthwhile for most car buyers, even if they could get another few thousand if they did everything themselves and paid full taxes. Dealership of course loves it and laughs all the way to the bank.
Good point, this is fairly common as well. I’d recommend avoiding financing entirely if at all possible because of this, simply not worth it for a car unless it’s the only way you can get one that’s in decent shape.
If you have to finance, often times you can get a much better rate from your local credit union instead. Use that to make the purchase, instead of the dealer’s financier.
It’s what Game Stop (and a myriad of other “buy, sell, trade” stores) does with used games and consoles but with cars. eBay exists but most people don’t want to go to that much trouble.
Not manufacturers, dealers. A legally required middleman in most of the US. They’ll take your $10k car for $7k and try to resell it for $12k. Even if it gets negotiated to a fair price, they still get the opportunity to upsell used car buyers into extended warranties and maintenance plans.
Tesla is a little different in that they do not have dealers, so they instead do no-negotiatiation sales on their used cars. It’s good for them because they can do the same buy low sell high deal. But when the model is not selling, they’ll have to buy it and sit on that asset for months or dump it at auction.
Charge 3k more in order to give the car a once over and then offer a few years extra warranty that will probably never pay out that much in repairs (assuming there’s anything at all).
Why would car manufacturers want their old cars?
It usually doesn’t work quite like the example above. Using that example…the dealership will only give you $4k for your old car, even though it’s worth $10k. They then turn around and sell it for anywhere from $8-12k, netting themselves a tidy profit on the vehicle now for the second time.
The convenience makes this worthwhile for most car buyers, even if they could get another few thousand if they did everything themselves and paid full taxes. Dealership of course loves it and laughs all the way to the bank.
Or they give you more on the trade-in and claw it back by offering you shit terms from their captive finance company.
Some carmakers don’t make a profit manufacturing and selling cars, they only make it on finance.
Interesting, wonder how the economics work for the different players. Also, tangentially:
A decade or two ago, a lady working in dealer finance lamented how internet bank rate comparisons had really rained on their parade
“I want this rate”, she explained customers would say, pointing at a printout or their phone and expecting a match.
Imagine how fat those margins would’ve been when they knew a customer hadn’t yet called around researching rates!
Good point, this is fairly common as well. I’d recommend avoiding financing entirely if at all possible because of this, simply not worth it for a car unless it’s the only way you can get one that’s in decent shape.
If you have to finance, often times you can get a much better rate from your local credit union instead. Use that to make the purchase, instead of the dealer’s financier.
It’s what Game Stop (and a myriad of other “buy, sell, trade” stores) does with used games and consoles but with cars. eBay exists but most people don’t want to go to that much trouble.
Not manufacturers, dealers. A legally required middleman in most of the US. They’ll take your $10k car for $7k and try to resell it for $12k. Even if it gets negotiated to a fair price, they still get the opportunity to upsell used car buyers into extended warranties and maintenance plans.
Tesla is a little different in that they do not have dealers, so they instead do no-negotiatiation sales on their used cars. It’s good for them because they can do the same buy low sell high deal. But when the model is not selling, they’ll have to buy it and sit on that asset for months or dump it at auction.
Because they lowball you
Because they can (usually) resell them for more than they give you for it.
Usually. They might have trouble with Teslas.
CPO cars print money.
Charge 3k more in order to give the car a once over and then offer a few years extra warranty that will probably never pay out that much in repairs (assuming there’s anything at all).