How dealers work?

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Fri 28 Apr 2023 15:41
How dealers work? - movilogo

Do the dealers buy new cars from factory using their own money or they borrow the car from manufacturers and pay them back only when the cars are sold?

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Fri 28 Apr 2023 23:19
How dealers work? - Adampr

Assuming you mean franchise dealers, my understanding is that they have bought all the cars you can see, but are just an agent for any factory orders.

They have bought the 'pre-reg bargains' that you see from time to time at well below retail so that they can bolster their sales figures and get bonuses from the manufacturers, then sell them at a price somewhere between cost and retail so that they make some margin and buyers get a lower price.

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Sat 29 Apr 2023 08:11
How dealers work? - pd

They are usually purchase using stocking finance which is a sort of buy now, pay later scheme.

Once they have the car they have to pay for it either after a fixed period (e.g. 6 months) or when they sell it.

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Sat 29 Apr 2023 09:05
How dealers work? - Falkirk Bairn

The big dealers such as Lookers & Pendragon have little in the way of capital - huge turnovers of say £5Bn+ and have a stock market value of a few hundred million and little cash in the bank.

They rent premises and their stock in the showrooms/ forecourt are financed. You buy a car, they pay off the debt and keep the balance - repeat hundreds of times a day.

Large dealers used to own their stock and finance the huge spares stock they held - long gone - everything is financed and spares holding is minimal with most parts delivered in a day or two from the manufacturer.

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Sat 29 Apr 2023 09:13
How dealers work? - SLO76
Most new stock will be on a manufacturer or importer run stocking finance system, some larger dealers (such as Arnold Clark) used to bulk buy and sell cheap using their own funds I believe but the days of forecourts being full of pre-reg bargains are gone sadly.

The dealer I worked for owned all their used stock outright, they were cash rich and stable. But even they had all their new stock on a financing agreement with Mitsubishi and Proton.
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