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Do car companies incur losses or are there other mysterious destinations for these vehicles

It is difficult to determine the exact fate of all unsold new cars, as it can vary depending on various factors such as the dealership, the manufacturer, and the market conditions. However, there are several possible destinations for unsold new cars.

Firstly, some unsold cars may be sent to auction houses, where they are sold to the highest bidder. This option allows dealerships to recoup some of their investment, but they may still incur a loss. According to JD Power and Associates, dealerships may take a loss on unsold cars to avoid carrying the inventory for too long.

Another option is for dealerships to offer unsold cars to employees at a discounted price. This can help to move inventory and reduce the number of unsold cars on the lot. Additionally, dealerships may offer financing options to customers to make the purchase more attractive.

In some cases, unsold cars may be stored in large parking lots until they are sold or until the dealership can find a buyer. This practice has become more common as car manufacturers continue to produce new models with the latest technology, leading to a surplus of unsold cars.

Unfortunately, some unsold cars may ultimately be sent to salvage yards and recycled, particularly if they are deemed to be distressed or damaged beyond repair.

It is worth noting that unsold cars can be a significant financial burden for dealerships, as they must continue to pay for the inventory until it is sold. As a result, dealerships may be motivated to sell unsold cars quickly, even if it means taking a loss.

In summary, unsold new cars can have various destinations, including auction houses, employee discounts, storage facilities, and even salvage yards. The fate of unsold cars ultimately depends on the dealership's strategy and the market conditions.

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