>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.
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.
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.
Re:Startup Idea: Used Car Leasing
by ivankirigin on Tuesday November 05, 2013 @06:49PM
(#6679398)
"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.
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.
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.