Cars that never get sold, often called "brand-new old stock" or "leftover inventory," don't just vanish. Manufacturers and dealers have a multi-step process to manage them, with the final stop often being a wholesale auction. These vehicles are typically sold at significant discounts to other dealers, rental car companies, or export markets after sitting on the lot for an extended period, usually 6 to 12 months.
The primary reason dealers need to move aging inventory is the financial burden. Each car on the lot is financed through a floor plan loan. The dealer pays interest on this loan for every day the car remains unsold. Once a vehicle is considered aged, the manufacturer may stop providing interest assistance to the dealer, making it costly to keep. Furthermore, new model-year arrivals make older models less desirable, and the car itself may suffer from deferred maintenance like dead batteries or flat-spotted tires from sitting static.
Dealers employ several strategies before resorting to auctions. They offer substantial factory incentives and rebates directly to customers. They might also use these cars as dealer demo vehicles or loaner cars for service customers. As a last resort, the car is sent to a wholesale auction where it's purchased, often well below invoice price, by smaller dealerships or businesses that specialize in selling older new cars.
The table below outlines common destinations and the typical price impact on an unsold car.
| Destination | Typical Age Threshold | Typical Price Reduction | Notes |
|---|
| Dealer Incentives | 6+ months | 10-20% off MSRP | Includes factory rebates and dealer discounts. |
| Rental Car Fleets | 9-12 months | 20-30% off MSRP | High-volume sales help manufacturers meet quotas. |
| Wholesale Auction | 12+ months | 25-40% off MSRP | Bought by other dealers for resale. |
| Executive Fleet | Varies | N/A | Used internally by the manufacturer's employees. |
| Export Markets | 12+ months | Varies | Shipped to regions where the model is still in demand. |
