Quote:
Originally Posted by Cliffy1
If they can't be moved, the dealer "writes it down" and keeps reducing the price until he finds the point where somebody will buy it. Sometimes, this means taking it to auction and just taking your lumps.
Your point about wholesale and retail is also right on. The guides you see are not always correct. Currently, the used car market is in freefall. At least it is in my area. You can throw all the books out for both retail and wholesale right now. Used car managers are so scared, they are looking at the most recent auction reports and backing off by another 10% in order to keep from taking a wholesale loss when determining the value of a trade. Its rough in the used car market right now.
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Thanks for the insight, Cliffy!
Here's another question I've always wondered: What happens when, say, a manufacturer inflates the residual on a vehicle for a promotional lease term? Take BMW for example; virtually all their vehicles have inflated residuals, so what happens to all those lease returns that are nowhere near the lease-end value?