Car dealerships run on the demand for their vehicle inventory, a necessity paid for with retail floor planning. This is a method of financing in which the dealership uses a floor plan in order to purchase the vehicles, which act as collateral until they are sold off. Furthermore, the dealer must also pay a percentage of the amount of time the car spends on the lot. In this case, the dealer may offer a large scale sale in order to rid of the longest standing cars on the lot, not necessarily to make a profit but to get rid of inventory that is costing more than it brings in. Essentially this is a retail business method frequently used in order to keep the business from plating and remaining stagnant.
With new models coming out each year, car dealerships are at a loss when it comes to their previously unsold goods. Due to the advances that are being released in the most recent vehicles, dealerships know the last batch won’t sell at their original valued price, and thus they must come up with methods of creating incentives for the public to purchase the older models. It is in this case that blowout sales are put in place, in order to entice the public to browse, and hopefully purchase, one of these older models at a more convenient price for both the consumer and the salesmen. Car deals are difficult to navigate, however, without any prior knowledge, and dealerships are well aware of this fact. It comes as no surprise that most deals wind up popping up around the same times of the year. This is a technique used to blind the buyer with the excessive options, making them settle, rather browse longer and in other places, with what may not be the best option on the market.
As a consumer, however, you may be wondering what are the essential tips to keep in mind when strolling through in search of your next vehicle. Car dealers are infamously known to be sharks when it comes to purchases, and as the consumer, you’re in their territory. Take your time to familiarize yourself with all the deals out there and which ones are best for you. Once you have roamed a sufficient amount and have settled on which vehicle you’d like to drive home, however, look into the invoice price of the car as well, meaning the amount it was originally bought for. The sticker price revealed at the lot is more often than not hundreds, if not thousands of dollars more expensive in order to ensure a profit. With that knowledge, you’ll be able to haggle appropriately and acquire your new car at the most reasonable price. Buying or leasing a car is a stressful experience, and before finalizing the purchase it’s recommended to wait at least 24 hours, or in another sense sleep on it.