TrueCar.com: Average Discounts Expected to Rise for Memorial Day
SANTA MONICA, Calif. — With Memorial Day coming in two weeks, analysts from TrueCar.com believe the projected average discount could rival the highest at any point in the year.
According to the site's TrueTrends Report for May that aggregates this data, the average discount off of a new vehicle is projected to be at least 6.9 percent during the next 30 days. Analysts pointed out how the average percentage is near the high for all of 2009, which was 7.5 percent.
They went on to note the 2010 models with the steepest discount off of MSRP, with the top one being the Chevrolet Cobalt at 25 percent. Other new models with substantial discounts include the Jeep Grand Cherokee (18 percent), Hyundai Sonata (18 percent), GMC Sierra 1500 (18 percent) and Toyota Avalon (17 percent).
Ford and Chevrolet tied at the top of the report as brands giving out the highest discounts on 2010 models. The pair each are awarding an average of 14 percent, with GMC, Chrysler and Lincoln coming in behind at 11 percent each.
TrueCar.com analysts also highlighted which vehicles have the best Price Flex Score, a composite reading of total incentives, greatest percentage below MSRP, greatest price drops and days in inventory.
A pair of 2010 vehicles each was given scores of 100 in this report segment, the Ram 2500 and Hyundai Accent. Trailing right behind with scores of 99 were a pair of Mitsubishi vehicles, the Galant and Lancer, as well as the Volkswagen Routan.
Vehicles that TrueCar.com gave a Price Flex Score of just 1 included the Audi A5 and the Lincoln Navigator. Audi's A4 received a score of 2, while a pair of large SUVs, the Chevrolet Suburban and Ford Expedition, each got scores of 3.
Analysts noted that the TrueCar Price Flex Score measures how elastic the transaction price is for a particular model. A high Flex Score means a possibility of a great swing (high or low) in the price from MSRP, while a low Flex Score means the price is far less negotiable and that the transaction price range is much narrower.
Moving on to more discussion, the site also shared the top five vehicles with the greatest price drop since April. Leading this category was the 2010 Lexus 460 4WD with a decline of $987.
The other 2010 units TrueCar.com mentioned with price drops of at least $680 were the Mercedes-Benz GL-Class 4MATIC, Toyota Camry, Volkswagen Routan and Cadillac CTS.
When looking at the total amount of incentives — either customer cash rebate or dealer cash — a luxury vehicle led this category followed by a series of SUVs and trucks. Analysts said $12,500 is available for the BMW M6, followed by $6,000 for the Infiniti QX56 and $5,000 each for the GMC Sierra 1500, Chevrolet Silverado 1500 and Ford F-250 Super Duty.
Finally, TrueCar.com determined the new vehicles that have been in dealer inventory the longest. Continuing to pace this category was the Hyundai Sonata, now at 157 days. Six other vehicles have been stuck in dealer inventory for at least 100 days. This cluster included the Ford Mustang, F-250, F-350 and Transit Connect, Mitsubishi Galant and BMW 135i.
TrueCar.com wrapped up its projections by noting Memorial Day, May 31, as the best day to buy a vehicle and June 10 as the worst day during the report time span.
"Memorial Day signals the real beginning of the summer buying season," noted Jesse Toprak, vice president of industry, trends and insights for TrueCar.com.
"Manufacturers and dealers shift their focus to late spring/early summer at the beginning of the year so they can start reaping the benefits as soon as possible," Toprak continued.
"With a continued boost in incentive spending as well as additional sales ‘carrots,' we can expect to see more steady growth in sales," he concluded.