The U.S. new car market finished 2012 with an unexpected sales surge and industry pundits predict demand will grow again this year. That may be great news for shareholders but not so much so for shoppers looking for a good deal.
Transaction prices – what the average new vehicle buyer actually pays after options and incentives are worked in – rose to a record high while those givebacks dipped sharply. But that doesn’t mean there aren’t some good deals out there, according to those who track the numbers on a daily basis.
In fact, if you’re willing to opt for a product that might not be your first pick you could be in for some substantial savings. And there are some particularly good deals in select market niches. In some instances, you’ll find the bargains best when you’re willing to purchase the vehicle up-front. Other hot deals are available, however, on leases.
Some of the best bargains can be found in the battery and hybrid segment. Recent declines in gasoline prices have had a negative impact on sales of many of those high-mileage vehicles, though the deals are hit or miss. You’ll find relatively little room to bargain for one of the new Toyota Prius “family,” such as the big Prius V and compact Prius C, by far the best-selling hybrids on the market.
On the other hand, a peek at the Ford website reveals it has upped the incentives on its slow-selling Focus EV to as much as $10,500 on a three-year lease. It has also cut the price by $2,000 for those purchasing the battery-electric vehicle.
The numbers can be a bit misleading on the Focus EV and other battery models that qualify for federal and, possibly, state or local incentives. The lease price rolls in the federal $7,500 tax credit while that incentive isn’t included in the price for cash (or finance) customers purchasing the Ford Focus EV outright.
One of the other great deals comes on the luxury front where the average discount is running $7,487 off the $62,295 MSRP for the BMW 5-Series ActiveHybrid, notes auto data tracking firm TrueCar.com.
That works out to a cool 12% off the list price for the Bavarian sedan – the same price for the 2013 Chevrolet Silverado 1500. TrueCar says the dealers who supply it with data are reporting an average $3,438 discount on the truck. That’s no surprise. Chevy is getting ready to replace the full-size pickup with an all-new model for 2014, and that’s normally a move that triggers sharp discounting. The maker also was forced to up incentives on the Silverado and similarly sized GMC Sierra because it over-built the trucks and then failed to match the givebacks on competitors’ pickups as 2012 came to an end.
In general, industry-watchers suggest that full-size trucks make up one segment where deals currently abound.
Don’t be surprised to get a good price on full-sized SUVs, either. In fact, TrueCar’s monthly “Best New Car Deals” list ranks the 2013 Nissan Armada at the top of the chart. It carries a $42,285 MSRP but dealers report it’s going out the door for an average $35,812, a $6,473 – or 12% — savings.
Curiously, it seems like luxury vehicles are a good place to find great incentives this month, reports TrueCar, which also includes the Infiniti G37 and the Mercedes-Benz E350 in its best-deal list. Again, no surprise as Mercedes is readying an all-new replacement for the popular E-Class line-up, every sedan, coupe and convertible. And the G37 and other Infiniti G-models will be updated for 2014, as well.
While it’s not always the case, a general rule of thumb suggests that good deals can be had in the final months of a vehicle line’s lifecycle. But you may also see a slight dip in residual – or trade-in values – which should be considered when working out the long-term cost of ownership, rather than the up-front price.
In recent years, many manufacturers have tried to move away from the traditional cash-back rebate deal. In many cases, they’re pushing low-interest loan programs, and TrueCar.com lists some real attractive offerings here.
Leftover 2012 Toyota RAV4 crossovers and the 2013 Dodge Durango are now carrying 0% financing. while you can get a loan for as little as 0.9% on the Volkswagen Jetta. In some cases, makers will offer a choice of rebate or cut-rate loan. It’s always a good idea to check with your bank or credit union to see what they’re offering as that could determine which is the better deal.
Prior to the economic crash of 2008, automakers put a heavy push into cut-rate leases, as well. Most of those vanished during the recession; in fact, leasing all but dried up for several years. It’s beginning to regain momentum, however, and some of the lease deals now offered are too attractive to ignore. That includes $199 a month, 24-month packages on both the 2013 Buick Verano and Nissan Altima, and a $159 deal over 36 months with the Mazda3.
The new 2013 Cadillac ATS is a surprise entry into the best-lease list. Though it was just named North American Car of the Year during the Detroit Auto Show, you can lease the sporty compact luxury sedan for as little as $299 for 36 months. That’s the same deal Nissan is offering for the 2013 Pathfinder.
So, while incentives may have tumbled 9.0% last month, according to TrueCar, while average transaction prices, or ATPs, rose 1.8%, to a record $31,228, you can still find some good bargains in most market segments if you keep your eye out and are willing to opt for the manufacturer offering the best deal.
Tags: Ford Focus EV, auto incentives, auto news, auto rebates, auto rebates.low-interest auto loans, auto sales, best new car deals, car news, car sales, cheap car loans, good auto deals, paul a. eisenstein, paul eisenstein, thedetroitbureau