Underwriting a car

[Christoffer]

Hi guys in the auto trade. Being from Denmark I don't know this expression; What is underwriting a car? I read some about it one the site but can't find what it's for. Is it to agree to buy a car, and then not pay for it until one have sold it off for a profit?

Thanks a lot

[mcflurry]

I am not a trader, but as I understand it; If you are a dealer taking in a car in part exchange it means someone else guarantees the value to buy it from you if you don't want to retail it.

Hope that helps

[Christoffer]

Thanks mcflurry

So one would have to give a pretty low price to the dealer in order for this to work I would imagine. If not no one would wan't to underwrite the car right?
It seems it must be some sort of guarantee to the dealer that the dealer then pays for in this way.

[mcflurry]

As I understand it, say you were a car trader specialising in selling 3 to 6 year old cars.

Whenever your friend at another dealer was offered a car of this age that he didn't want you would offer to buy it, as they couldn't or wouldn't sell that brand.

For example Mercedes wouldn't normally sell a 4 year old Kia on their forecourt.

[Christoffer]

Alright I get it.

Thanks a lot again mcflurry