Huge bankruptcies for used car firms have exposed Wall Street’s entanglement with the sector. Far from derisking after the Great Recession, banks rebuilt the economy on obscure financial intermediaries that are now sinking.
I think it’s something like they but the car for $20k from the factory, it sells for $35k new, but instead they let it sit and sell it as used for $25k. I think they get some sort of refund or something from the manufacturer if the new car doesn’t sell within x days or something like that.
The way it was explained to me in they’re making almost nothing on each sale, but they’re the only place in the area that can get decent cars in right now so enough people are coming in and doing this where it makes sense to keep it up.
How are they making money though? How can you buy a car at the price of a new one and sell it at the price of a used one and be profitable?
I think it’s something like they but the car for $20k from the factory, it sells for $35k new, but instead they let it sit and sell it as used for $25k. I think they get some sort of refund or something from the manufacturer if the new car doesn’t sell within x days or something like that.
The way it was explained to me in they’re making almost nothing on each sale, but they’re the only place in the area that can get decent cars in right now so enough people are coming in and doing this where it makes sense to keep it up.