Part 3/10:
In understanding the implications of the current inventory crisis, it is essential to first comprehend how car dealerships operate. Unlike what many might believe, dealerships do not own their inventory outright. Instead, they finance their vehicles, taking out loans which they use to purchase cars from manufacturers upfront. Each unsold vehicle therefore incurs costs in interest, insurance, and storage expenses for the dealership. As a result, when a vehicle sits unsold for an extended period, it becomes a significant financial burden—one that dealerships are keen to mitigate as soon as possible.