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As a Toyota dealer, at O’Brien Toyota we earn new vehicles from the manufacturer based upon how fast we can turn our inventory. Therefore, if a dealer becomes greedy and holds out for a sale with less of a discount they are likely going to lose a portion of their allocation from the manufacturer compared to dealers who turn their inventory faster. Also, the manufacturers are offering 0% for 60, 72, even 84 months for many new models. The rebates are also larger than in the past. Considering the above, I have encouraged many of our employees to take advantage these incentives while the last, as they are intended to spur sales after the coronavirus shut down.
Auto dealers, not manufacturers, are the #1 provider of tax revenue to the State of Indiana. They are also the 17th largest employers in the nation. A medium small dealership spends about $400K in its community every month. According to the US DOC, auto sales drive the US economy. A solution for them today is an economic solution for the US.
While new-vehicle inventory is sparse, and it may take months or years to rebuild the supply lines – maybe never if coronavirus resurges – there are tsunamis of lease-return vehicles flooding the market and millions of unsold new vehicles some as old as 2014.
An immediate solution is practical application of good-old fashion, level-yield used-car-leasing, which is a tremendous savings for consumers as well.