Incentives Fall Despite New Model Year On Horizon
Though many dealers are preparing for new models to hit the lot, manufacturers, interestingly enough, didn’t turn to heavy incentives to push new sales this past month.
Although automakers and dealers were most likely pulling out all the stops for Labor Day sales, incentive spending in August was projected to be down 6.2 percent, or $179, from July, according to Cars.com reports.
The average incentive amount for light-vehicles this month came in at $2,704, which shows a 6.8-percent year-over-year increase, though down from the month before.
Cars.com data shows that each of the Big 8 automakers — except for Honda, which increased its spending by 1.9 percent or $34 — cut down on incentive spending last month.
General Motors saw one of the biggest dips. The company’s incentive spending is predicted to drop by 10.6 percent or $391 over July.
This normalization of incentive spending bodes well for the used industry, and according to analysis from Kelley Blue Book, automakers are still being very judicious with incentives.
Transaction prices for new vehicles were also down last month, coming in at an average of $19,670, down 4.6 percent year-over-year and 0.4 percent from July.
“Consumers still prefer well-equipped vehicles, so even though the vehicles they’re buying have lower base prices, they’re buying the more expensive versions, which is positive news for OEM profitability,” said Jesse Toprak, chief analyst at Cars.com. “We expect a significant boost in sales for the truck segment in the fourth quarter, which should result in an increase in ATPs to finish the year."