Where do unsold new cars go?

A final resort for the dealer with vehicles that don’t sell at the dealership is to sell them at an auto auction. Most areas have auto auctions that are frequented by new- and used-car dealers.

Why is there a chip shortage for new cars?

The COVID-19 pandemic messed up supply and demand forecasts. When mass shutdowns and quarantines began in March 2020, auto manufacturers anticipated a huge drop in new car demand. So they reduced sales forecasts and cancelled part orders for components like microchips.

What happens to old cars that are never sold?

This had led to a whole new practice of dealerships constantly sending their unsold inventory to huge parking lots. The problem then just keeps on mounting up. In the end, the unsold cars that are older than two years old, will have no alternative but to be either crushed, dismantled and/or their parts recycled.

What does it mean when a car is sold?

In many cases, these cars are probably “sold,” according to automaker inventory listings. What happens is, automakers will give dealers huge financial incentives to mark a car “sold” at the end of a month, or a quarter, or a year, or whatever, so dealers will do it — and automakers will mark these cars as “sold.”

What happens when a car has been on the dealer lot?

If the car has been sitting on the dealer lot for two years, the warranty is almost over— and that means reallynobody is going to want to buy it. Now, a really good dealer will respond to the automaker’s financial incentive with some incentives of its own.

How long do dealerships hold on to new cars?

Timeline. A dealership will generally hold onto a new car for 2 years before taking an action to either sell it off to another party or offer deep discounts to customers. Even though the car is brand new and never driven, it is still 2 years old, possibly outdated, and potential customers may start to wonder if there is something wrong with it.