How can a business charge $60,000.00 for a vehicle and be in debt?????
@SusanShayAvon (1003)
United States
March 14, 2009 10:40pm CST
I would love to know how a car dealership can charge $60,000.00 for a vehicle and be in debt. All this stuff going on in the economy I have noticed that most of the car dealerships are in debt. Maybe it is because the vehicles lose their value so quickly??? I know someone that bought a vehicle and about 2 weeks later went to trade it in on another one and it appraised for $7,000 less than what they gave for it. In 2 weeks it lost that much value?? Maybe this could be why they are in debt but I am not real sure. Does anyone have a clue?
1 response
@spalladino (17891)
• United States
15 Mar 09
Car dealerships have a lot of overhead. They have the expense of inventory, their buildings, staff and other things. They have to borrow in order to keep new models coming in and they're *supposed* to be selling off their current inventory in order to be able to make their loan payments. When the economy sours and folks stop buying, a car dealer can wind up with a lot full of inventory that isn't moving and bills that still need to be paid.
