A
GMC
pickup
truck
is
displayed
for
sale
on
a
lot
at
a
General
Motors
dealership
in
Austin,
Texas,
on
Jan.
5,
2023.
Brandon
Bell
|
Getty
Images
Car
shoppers
should
have
an
easier
time
finding
good
deals
this
Memorial
Day
weekend
than
last.
Dealerships
are
sitting
on
a
glut
of
2023
vehicles,
leading
to
steeper
discounts
and
lower
interest
rates
than
usual,
the
auto
research
firm
Edmunds
said
Wednesday.
The
share
of
’23
models
available
at
dealerships
nationwide has
reached
6.8%,
up
from
5.4%
last
year
for
2022
models,
it
found.
Faced
with
higher
inventories,
automakers
and
dealers
are
offering
an
average
discount
of
$4,147
on
last
year’s
models,
Edmunds
said
—
more
than
double
the
$1,919
average
for
’22
models
a
year
ago.
The
promotions
could
bring
some
relief
to
consumers pummeled
by
the
higher
overall
costs
of
car
ownership,
including
from
insurance
and
maintenance.
Those
expenses rose
to
an
average
of
$12,182
for
new
vehicles,
up
from
$10,728
in
2022,
according
to
AAA
—
squeezing
buyers
long
after
driving
off
the
lot.
The
2022-23
market
“was
one
of
the
absolute
worst
times
to
buy
a
vehicle,”
said
Ivan
Drury,
director
of
insights
at
Edmunds.
“There
was
no
inventory.
People
were
paying
heavy
premiums
and
there
were
no
incentives
on
them.”
Many
drivers
held
on
to
their
existing
rides
longer
as
a
result.
The
age
of
the
average
vehicle
on
U.S.
roads hit
a
new
record
of
12.6
years this
year,
S&P
Global
Mobility
said
Wednesday.
But
now,
Drury
said,
“we
are
back
on
track.”
The
current
wave
of
discounting
adds
to
signs
that
the
market
is
returning
to
normal
after
pandemic
supply-chain
issues
scrambled
vehicle
prices,
he
said.
The
price
cuts
aren’t
across
the
board,
though.
For
buyers
who’ve
held
off
snagging
their
ideal
vehicle
—
say,
an
SUV
tricked
out
with
entertainment
features
for
a
big
family
—
Memorial
Day
deals
might
make
for
an
ideal
time
to
pull
the
trigger,
Drury
said.
On
the
other
hand,
those
looking
for
more
stripped-down,
“point
A
to
point
B”
vehicles,
such
as
’23
sedans
under
$35,000,
might
see
fewer
options
because
they’re
being
bought
up
so
quickly.
“We
are
definitely
seeing
a
return
to
the
old
car
business,”
especially
surrounding
holiday
sales
weekends,
said
Scott
Kunes,
chief
operating
officer
at
Kunes
Auto
and
RV
Group,
which
operates
a
network
of
more
than
40
dealerships
in
the
Midwest.
“This
market
has
flipped
from
a
seller’s
market
to
a
buyer’s
market,
where
not
only
are
manufacturers
incentivizing
vehicles,
but
we
as
dealers
are
trying
to
find
ways
to
incentivize
vehicles
moving
off
the
lot
quicker,”
he
said.
Kunes
said
his
dealerships
averaged
a
64-day
supply
of
vehicles
in
April
2023.
That
inventory
metric
surged
to
135
days
as
of
last
month.
As
the
Kunes
network
looks
to
clear
out
overstuffed
lots,
heavy
discounts
are
piling
up
in
two
areas,
he
said:
Big
Three
autos
—
those
from
Ford,
General
Motors
and
Jeep
maker
Stellantis
—
and
electric
vehicles.
Stellantis
had
the
largest
share
of
’23
vehicles
on
lots
as
well
as
the
deepest
average
discount
on
those
models,
Edmunds
found.
Buyers
can
take
advantage
of
the
automaker’s Memorial
Day
deal on
the
’23
Dodge
Challenger
SXT,
which
offers
a
$3,750
cash
rebate.
(California
residents
can
combine
that
with
local
incentives,
bringing
savings
up
to
$6,750.)
As
for
EVs,
“we’re
having
a
very
difficult
time”
selling
them,
Kunes
said,
as demand
has
slowed.
That’s
frustrating
for
dealers,
but
it
could
give
buyers
a
prime
opportunity
to
combine
manufacturer
and
dealer
discounts
with
federal
tax
credits
to
take
advantage
of some
of
the
lowest
EV
prices ever
seen.
There
are
plenty
of
generous
EV leasing
options as
well,
Kunes
added.
On
the
used
car
front,
gone
are the
pandemic-era
days when
they
cost
as
much
as
or
more
than
new
models
—
which
had
encouraged
some
drivers
to
trade
in
2-year-old
cars
at
inventory-starved
dealerships
for
even
newer,
shinier
sets
of
wheels.
Used
vehicle
prices
fell
more
steeply
than
nearly
any
other
category
in
April’s
consumer
price
index, falling
6.9%
from
April
2023
to
last
month,
behind
only
transportation
services
(11%)
and
hospital
services
(7.7%).
New
vehicle
costs
have
mostly
held
steady,
inching
down
only
0.4%
year
over
year
in
April.
Factoring
in
auto
loan
rates,
the
average
monthly
payment
for
a
new
vehicle
actually
increased
1.8%
to
$762,
according
to
Cox
Automotive.
Though
the
average
auto
loan
rate
improved
last
month
to
10.22%
—
a
nine-month
low
—
Cox
found
the
average
transaction
price
jumped
by
2.2%
to
$48,150
after
three
straight
months
of
declines.
That’s
why
it’s
crucial
for
buyers
to
do
their
homework,
said
Drury:
Reach
out
to
dealerships
to
find
out
about
discounts
and
incentives
ahead
of
time,
and
calculate
any
monthly
payments
before
signing
on
the
dotted
line.
After
the
industry
resolved
most
of
its
supply
chain
issues,
he
said,
“now
we
have
the
parts,
but
the
problem
is
the
price
to
finance
these
vehicles.”
Many
auto
manufacturers
are
turning
to
incentivized
financing
to
help
dealers
move
vehicles,
said
Kunes.
He
pointed
to
Ford’s
Flex
Buy
program,
which
lowers
qualified
buyers’
monthly
payments
by
up
to
18%
for
the
first
three
years
and
then
increases
them
to
satisfy
the
balance.
“Incentivized
rates
are
a
great
thing
for
consumers
to
look
for,
especially
in
this
high-interest
climate,”
said
Kunes.
“It
can
save
you
more
money
over
the
term
of
the
loan
than
maybe
another
model
that
has
a
$1,000
rebate.”
But
experts
caution
buyers
who
like
to
switch
vehicles
often:
Even
with
the
best
holiday
deal,
that
recent
’23
model
will
still
depreciate
faster
than
a
current-year
car,
leaving
you
with
low
residual
value
at
trade-in.
“If
you
are
not
someone
who
really
drives
it
till
the
wheels
fall
off,
do
not
buy
that
2023,”
said
Drury.
“You
can’t
drive
your
car
another
5,000
miles
and
the
value
goes
up.
Those
days
are
done.”
