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Originally Posted by DK__LA
Yup, these brands are in huge profit right now and they have no reason to change anything.
You're exactly right , they will purposely cut supply because why change something that works so well for them right now.
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One of my good friends is a GM at a Mercedes dealer here and they are contemplating moving towards the Tesla style ordering system and only keeping a few cars on hand for test drives. They're making 4-5x the amount on new cars vs what they used to and they're not discounting new cars below MSRP to get them moved when they sit too long. This way they're not investing money upfront and locking it up in the new cars so then they can purchase more used cars which have higher margins. On top of that, the service department profits way more from used cars.
Quote:
Originally Posted by HorsePower
Wow. I guess that would help enable high mark-ups, if they’re financeable.
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They don't use MSRP though, they use market value so markups shouldn't be relevant. Depending on who it is, they use KBB, Edmonds, or MMR which is the most accurate because it uses the last 5-10 actual sales to show market value.