Punching cars hurts everyone

Punching cars hurts everyone: "Faking new-vehicle sales. Reporting as "sold" new vehicles that stay on the lot as service loaners, rentals, demos or "executive" cars. Vehicles quickly resold as used at big discounts, with little or no mileage.

I'm not talking about normal demos and service loaners that see significant use before being resold.

Every calendar year, there's a discrepancy between reported U.S. sales and registrations, averaging 128,000 annually between 2005 and 2014. But in 2015, that jumped to 286,832. That's a lot of, ahem, service loaners.

Call it car punching. Call it fuzzy sales. It's probably not illegal. I'm sure some automaker can trot out a business plan showing it makes financial sense and is legit.

Car punching is still a bad habit.

And automakers should knock it off. Especially in a market still rising.

There are drawbacks to overdoing incentives, leasing, long loans and dumping unwanted vehicles into rental fleets. But the results are fairly predictable. Excessive leases or rental cars become gluts of returning used cars. Big spiffs crush profits. Long loan buyers stay out of the market longer.

But fake sales are toxic. Like acid, they slowly eat away at brands.

If at month end, an automaker pressures dealers to self-register several new vehicles -- as service loaners, demos, dealer rentals or dealer employee short-leases -- that may boost "sales" that month.

But it's a bad deal all around. The dealer's factory cash may not cover losses on discounted "used" cars. The factory pulled that bonus from other marketing funds -- or profits."



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