Incentives Drop As Demand Grows
Two things that have gone hand in hand since the early 1980s are new cars and incentives. You haven’t been able to separate the two. The first quarter of 2011 marked the lowest amount that automakers spent on incentives in the last 6 years. The average incentive on a new car was $2,320 in April, down about 14% from a year ago.
That does not bode well for buyers. The drop is directly tied to a lower supply of cars that is projected to last throughout the summer. Supply and demand dictate that consumers will be paying more for a product in short supply. So, instead of raising the average sticker price by a large sum, manufacturers are lowering the cash back incentives that they offer.
Honda bucked the trend and increased their incentives slightly. Nissan led the charge by cutting their incentives by 33%. These companies may have a short supply of vehicles, but do not look to other manufacturers for better incentive programs. American, Korean, and European makers have slashed their incentive programs as well. This summer it will be either grin and bear it or hold on to your used car. Now more than ever, it’s paramount to get compare new car quotes online – otherwise, you could be settling for some pretty disappointing incentives.