U.S. new car sales fell 5% in March, following the trend for the rest of the first quarter, in part due to rising interest rates on loans paired with falling incentives. In short, buyers can’t find a good deal on a new car, truck or sport-utility.
Fortunately, U.S. News & World Report offers up its monthly “best deals” list, and despite the less-than-ideal conditions buyers are currently dealing with, there are some good deals to be found in April, the editors note.
“There are some mixed conditions out there for car shoppers,” said Jamie Page Deaton, executive editor of U.S. News Best Cars.
“Auto sales are softening, but interest rates are rising. We’re seeing fewer low- and no-interest financing offers, but more cash back car deals. Cash back offers are especially good for consumers with credit scores that are too low to qualify for financing deals.”
(Ford unveils 2020 Escape. Click Here for the story.)
Fortunately, most of the best deals are on the much-favored utility vehicles consumers are in the market for these days. According to the magazine, the best deal is on the 2019 Jaguar I-Pace, which includes 0% financing for 60 months.
Other deals they reveal include:
- 2019 Ford Expedition – 0% financing for 60 months
- 2018 Chevrolet Corvette – 0% financing for 72 months
- 2019 BMW X1 – 0.9% financing for 60 months
- 2019 Chrysler Pacifica – 0% financing for 36 months plus up to $3,750 bonus cash, depending upon region; or up to $4,000 cash back, depending upon region
- 2019 Hyundai Tucson – $3,000 cash back
- 2019 GMC Acadia – 0% financing for 72 months plus $1,000 bonus cash
- 2019 Nissan Rogue – 0% financing for up to 60 months plus up to $1,500 bonus cash, depending on region
Edmunds, the car shopping service, noted that shoppers looking to get a break from rising interest rates didn’t find it in March, as the average interest rate on a new vehicle loan hit its highest level in a decade. According to Edmunds, the annual percentage rate on new financed vehicles is expected to average 6.36% in March, compared to 5.66% last year and 4.44% five years ago.
(Click Here for details about Ford Motor Co.’s March sales results.)
“Things just keep getting tougher for new-car shoppers,” said Jessica Caldwell, executive director of industry analysis. “Interest rates have crept up every month so far this year, and new vehicle prices continue to hover near record highs. We’re on the cusp of what could be a pretty dramatic shift in the market, simply because a big chunk of buyers are getting priced out,” Caldwell said.
The weakness in auto sales so far this year has been on the retail side. Incentives remain relatively low and auto loan rates have not improved, so consumers haven’t had a compelling reason to buy. This market looks like it’s heading into a normal, post-peak slowdown that was temporarily disrupted last year by tax reform, noted Jonathan Smoke, chief economist for Cox Automotive.
“The pool of people who can afford to buy a new vehicle is being reduced by higher prices and affordability concerns, and we’re likely seeing signs of that in the sales numbers,” he said.
(To see more about the launch of the new Ford Escape, Click Here.)
“So far this year, average new vehicle loan payments are up 3.5% compared to last year, to $567, and average lease payments are up 2.8% to $500. As a result of multiple years of rate and price inflation, new vehicles payments have become a big hurdle, driving people into used cars, where the average loan payment is $414, up less than 1% from a year ago.”