IRVINE, Calif. -

In a departure from what is typical for the Labor Day holiday at dealerships, Kelley Blue Book believes that leasing incentives and low APR finance deals may be the name of the game this weekend instead of the usual cash rebates that automakers pile on this time of year.

Ordinarily, automakers use Labor Day weekend to kick-start their efforts to clear out old-model-year inventory on their lots in advance of new-model-year units arriving in late September, offering hefty cash incentives to spur dealership traffic during the holiday.

But with supply down for the hot-selling fuel-efficient models, KBB believes that cash rebates won’t be as prevalent this year.

“However, that is not to say that there won’t be deals available. Many automakers are offering attractive lease deals and APR finance opportunities in lieu of cash rebates,” said Alec Gutierrez, manager of vehicle valuation for Kbb.com.

“Since used-car values are expected to remain strong for the foreseeable future, manufacturers are able to increase the availability of leases due to the reduced risk of taking a loss at the end of the lease term,” he added. “However, pay special attention to days’ supply; many of these vehicles may be difficult to find due to inventory shortfalls stemming from the earthquake in Japan.”

Truck/SUV Deals

Continuing along, Gutierrez noted that although there may be few cash deals on compact models, there may be deals to be found on full-size trucks and SUVs, thanks to the impact of high supply on these units and high fuel costs.

“Many manufactures possess a relatively high supply of trucks and SUVs today and as a result, these vehicles are available with very attractive cash rebates,” he explained. “High gas prices also have contributed to a reduction in demand, so there will be fewer people chasing more vehicles, equating to a better opportunity to negotiate a great deal.”

Late-Year Incentives

Looking forward, KBB is projecting a lift in incentive spending later in 2011. With Japanese brands expected to get fully back on track production-wise this month, they will likely be ready to boost incentive spending later this year when their inventory supply is in better shape.

When that happens, KBB expects other automakers to join in.

“It is widely expected that Japanese production will be fully operational sometime this month, so if consumers can’t find the Toyota Prius or Honda Civic they are looking for, they may be better off waiting until November or December,” Gutierrez explained. “As inventories ramp up, Kelley Blue Book predicts Japanese manufacturers will increase incentive spending, which likely will lead other manufacturers to follow suit.”