Why Dealership Used Cars Cost More
I currently work in this industry and the only thing I see that&#x27;s drastically out of line with the real world is this:<p>&gt;All the cars you see on the lot? They are owned by the dealership itself.<p>This, at least for the dealerships I work with, is almost never the case. For independent dealerships the only cars on the lot that they actually own are previous trade-ins. The majority are bought at auctions on credit (called &quot;floor planning&quot; in the industry). These are short term lines of credit that usually mature in 90 or 180 days. If the lot is productive, the unit will be long sold by then and the line of credit paid off, only to be used again. Depending on the number of sales made in the past year, the credit line with the floor plan company fluctuates.<p>Often, the same company (like Manheim in the US) owns the auction AND the floor plan financier. Cox Enterprises (Manheim&#x27;s parent company) and KAR Auction Services in particular seem to be buying up smaller businesses in the industry left and right not unlike your big players in Silicon Valley. My company has fielded offers from both in the past, but our owner won&#x27;t budge.<p>But I digress...the only other thing in the article that seems off to me is the emphasis on Certified Pre-Owned vehicles. Almost every dealer I work with will budge on that price. Making the sale is more important than a few extra dollars, in most cases. Plus, independent dealerships have a harder time with even getting vehicles certified, as opposed to the franchise stores that already have certified mechanics on site.