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I think this ignores the fact that used car sales are one of (if not the) largest revenue source for dealerships. With current interest rates a lease would prob

I think this ignores the fact that used car sales are one of (if not the) largest revenue source for dealerships. With current interest rates a lease would probably end up bringing in less revenue than a sale, new cars move at low prices because dealerships get volume bonuses. Those same bonuses don't apply to used cars so you're eating away at your bonuses if people are now tempted to lease a 2012 for less than a new car. This wouldn't make financial sense for them to do, even with MB-USA while they offer this service it's not exactly what they push hard to get you to do. Without the infrastructure and support of an auto manufacturer this would be hard to get a profit, and no dealership would find this to be the best business model.

ivankirigin 13y ago
"your margin is my opportunity" It matters a lot more if people are interested in this than if dealerships maximize profit doing it. I think people would move away from ownership if it were easier, and considering all the parts of the process that could be improved, it seems like a good experiment.
blhack 13y ago
>I think this ignores the fact that used car sales are one of (if not the) largest revenue source for dealerships. No, they're not. New car trades are liquidated at auction houses. Source: I work in the automotive industry.
- driverdan 13y ago
  The margins on used cars are many times those of new cars. Most dealerships do make more money from their used cars unless they are very high volume.
- jmatthews 13y ago
  Most used car models are based on retailing a high percentage of dealer trades as they are the highest margin source of inbound vehicles. Easy source checks are any research on CarMax, a light review of any of Pollacks books(Velocity, Velocity 2.0, Velocity Overdrive) Source: I am also a domain expert in the auto industry.
jmatthews 13y ago
The new hotness in the auto business is used car only stores. So not EVERY dealer would suffer from your proposed hardship. Further, the way the market segments some people only consider new cars. It's as much habit or bias as it is an opportunity based decision.

ivankirigin 13y ago

"your margin is my opportunity" It matters a lot more if people are interested in this than if dealerships maximize profit doing it. I think people would move away from ownership if it were easier, and considering all the parts of the process that could be improved, it seems like a good experiment.

blhack 13y ago

>I think this ignores the fact that used car sales are one of (if not the) largest revenue source for dealerships. No, they're not. New car trades are liquidated at auction houses. Source: I work in the automotive industry.

driverdan 13y ago
The margins on used cars are many times those of new cars. Most dealerships do make more money from their used cars unless they are very high volume.
jmatthews 13y ago
Most used car models are based on retailing a high percentage of dealer trades as they are the highest margin source of inbound vehicles. Easy source checks are any research on CarMax, a light review of any of Pollacks books(Velocity, Velocity 2.0, Velocity Overdrive) Source: I am also a domain expert in the auto industry.

jmatthews 13y ago

The new hotness in the auto business is used car only stores. So not EVERY dealer would suffer from your proposed hardship. Further, the way the market segments some people only consider new cars. It's as much habit or bias as it is an opportunity based decision.