Quote:
Originally Posted by speedster911
Trying to understand the Independent used car business model. I understand that a business can ask anything they want for an item they want to sell... but I still do not get it or perhaps understand the business logic.
Hypothetically - lets say a dealer (independent classic car dealer not a P dealer) has a car listed for 100K, The car is super nice, not super rare but fairly unique. The car sits for months without movement in advertised price and the price is higher than other comparable twins to this unique car. I always ask myself , Do they want to sell it or sit on it?
Questions:
1) I understand it may be a consigned car so no $$ out of their pocket to hold the high price. Most places charge an owner to consign don't they? When does an owner say enough monthly charges, sell the car at a realistic price?
2) If they own the car, they have a lot of $$ tied up or are paying interest. Is there a point in the used car business model where they say we need to unload this car?
3) Is there a % profit most classic car dealers are targeting or is it we paid 75K for the car, lets charge/ask 100K?
4) Is the Classic dealer in a tougher financial position because they may not get the lease revenue or commission from a bank for a loan like a P dealer receives?
5) A large % of these classic car dealers have no avenue for service / maintenance dollars after the sale. Their profit is 100% from car sales, what's the margin at the end of the year?
What am I missing to this puzzle, Thanks everyone
Speedster
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9 times out of 10 an overpriced car is #1, on consignment. Every dealer wants his showroom (both real and web) to be stacked with cars, so they don't care if one sells or doesn't, they need stock, even for window dressing. I don't like this model personally, I move em in and move em out. But I also don't take consignments, sell me your car or don't.
---Adam