Incentive Spikes Continue in May

Incentives were on the way up earlier this spring, and analysts predicted the trend would continue, with manufacturers and dealers working to move old inventory.

It seems they were right, as Cars.com chief analyst Jesse Toprak shared this week plentiful May incentives are making for a buyer’s market this late spring.

This continues a trend seen earlier this year, as March average incentive spending came in at $2,714, marking an 8.1 percent year-over-year lift and a 4.5 percent hike from February, according to Cars.com.

In April, the industry handed out an overage of $2,580 per vehicle to move new metal, representing a 2.1 percent lift year-over-year.

Toprak shared the current rise in incentives is a result of a relatively slow new-car sales pace so far this year.

"Though new-car sales are picking up after a slow start in 2014, above-average inventory levels will likely keep consumer incentives high through spring and into the summer sales period," said Toprak. "Considering how much value consumers are getting for their money today, we can safely claim that there has never been a better time to buy a car."

May has brought with it rising incentives in the mid-sized sedan and compact segments, as well as the large truck category, in particular, Toprak shared.

According to his analysis, the compact SUV segment is continuing to drive showroom traffic for dealers — one way dealers are capitalizing on this popularity is through ramping up incentives.

Special deals for this segment this month include models such as the 2014 Chevrolet Equinox, 2014 Ford Escape, 2014 Honda CR-V, 2014 Hyundai Santa Fe, and the 2014 Nissan Juke.

And though incentives continue to rise in time with the market this spring, in a whitepaper released in April, NADA Used Car Guide said automakers aren’t likely to become “haphazard,” in this department, and are expected to temper their spending later in the second quarter.

During Q2, it’s likely that incentive spending will slow down, NADA predicts. Moreover, OEMs are expected to continue honing in on finance and lease subvention as their discount approach instead of customer cash. NADA emphasized that customer cash is the incentive that is “most destructive to used-vehicle prices.”

Check out this month’s incentive deals provided by Cars.com below:

Finance Incentives:

Cash Incentives:

Lease Incentives: