An add on tv said 700 cars to choose from
2007-08-24 04:13:44 · 10 answers · asked by Grand pa 7 in Cars & Transportation ➔ Buying & Selling
Most dealers finance the vehicles from the factory just as you do when you purchase the car. That is why you typically go to the manufactures finance corporation for your lease/loan as well. It's more of a transfer of lease from the dealer to you.
Some dealers do own a large percentage of the cars on their lot though. Having the money to own what you sell is a by-product of doing good business and investing wisely back into the company.
2007-08-24 04:24:15 · answer #1 · answered by Kyle G 4 · 2⤊ 0⤋
it's called 'floor plan'. The inventory is actually owned by a large bank/financial institution (usually the primary lending institution used by the dealer to sell to the public) and the car dealer pays them interest monthly on each vehicle sitting on his (or her) lot until it is sold and hopefully the buyer will get financing with that same bank/institution therefore improving the return on their investment (the bank)
and it's not true that most car dealers are millionaires because I personally know a few that are not, however the better the dealers credit rating and financial statement, the more inventory he can carry (it's called 'credit risk') just like the individual applying for credit when purchasing a vehicle and floor plans can cover used autos as well as new
2007-09-01 03:55:49 · answer #2 · answered by Anonymous · 1⤊ 0⤋
Most of the car dealers are millionaires. You buy a car for $8000 the dealer may have only $5000 in it.
2007-08-24 13:05:54 · answer #3 · answered by Coop 366 7 · 0⤊ 1⤋
It's not easy. Every one of those cars are eating money every day in the form of floor plan interest. The longer you keep a vehicle the more money you are losing on it.
2007-08-24 11:19:53 · answer #4 · answered by Brad T 3 · 1⤊ 0⤋
consignment. the dealer has an arrangement to not purchase them. once the car is sold the com pay gets their cut and the dealer gets his.
2007-08-24 11:31:30 · answer #5 · answered by Marvin R 7 · 0⤊ 0⤋
well, aside from other answers for New Vehicles, some of them are trade-in used cars from customer...
For those, they can have it on their lot as long as they want. Even tho it suffers depreciation due to age...
2007-08-24 11:39:24 · answer #6 · answered by steak5959 3 · 1⤊ 0⤋
floor plan is correct. They usually have 30 days before they start paying interest.
2007-08-24 11:21:19 · answer #7 · answered by Dana Blanco 4 · 1⤊ 0⤋
Because they don't own them. They finance them, and hope to sell them off before they have to make too many payments.
2007-08-24 11:16:13 · answer #8 · answered by JeffyB 7 · 2⤊ 0⤋
They take out second mortgages on their homes and children. The banks like them.
2007-08-24 11:36:53 · answer #9 · answered by Granny 6 · 0⤊ 1⤋
train
2007-08-24 12:56:29 · answer #10 · answered by bigturkeyme 6 · 0⤊ 2⤋