re: Under current interest rates IDK how car dealers with lots of inventory survive.

quote:

---

Yea, I'm calling BS. Rates have not increased 13x.

---

No, but rates have gone up a lot. And higher rates plus economic worries means fewer buyers. So if you combine the higher interest rates with vehicles sitting in the dealership's inventory a lot longer, then I could see how the numbers would make sense. If rates are 3-4x what they used to be on top of vehicles taking 3-4x as long to sell

quote:

---

Yea, I'm calling BS. Rates have not increased 13x.

---

It's not only about the rate. When you are used to selling ordered cars or cars as soon as they hit the lot the interest is zero dollars. When they all start piling up 30-60-90 days + the interest expense shoots up when you are used to having no inventory.

quote:

---

Yea, I'm calling BS. Rates have not increased 13x.

---

The kicker here is that during the pandemic, dealerships didn’t carry a lot of inventory. So of course, their floor plan expense was low. Now, it’s a double whammy… more inventory and higher interest rates.