Car Buying Report - March 18, 2009
Imports Finally Starting to Step Up Incentives
For many years, import brands have refused to give out large incentives in order to sell cars. We're all familiar with GM, Ford, and Chrysler doling out huge rebates and finance offers, but import brands like Land Rover, Mercedes, and Lexus never really joined the bandwagon.
How times have changed. Now many imports, including the luxury brands, are throwing in the towel and have increased their incentives, some by upwards of 300% compared to a year ago. They really have no choice. Inventory is piling up at dealerships and there are very few buyers.
Mercedes has done the unthinkable by offering incentives on a newly introduced model, the 2010 GLK. They're offering 1.9% financing for up to 66 months. BMW is offering to pay the first 2 months of payments on 18 models. Land Rover is offering a $10,000 dealer cash rebate on the Range Rover.
Even Toyota and Honda are getting in on the incentive war. Honda is offering a $149/month 36-month lease deal on the 2009 Civic DX. Here are the average incentives being offered by select import brands:
Toyota's Residual Values Plummet
For the past 10 years, one of the strongest benefits of owning a Toyota was their resale value. The majority of Toyotas would retain over 50% of their value after 3 years, making cost of ownership lower. Now things have changed.
Automotive Lease Guide is reporting the average Toyota is only retaining 46.5 percent of its value after three years. ALG had originally projected a residual of 50.5% three years ago. This is bad news for potential Toyota buyers since it now makes it more costly to own Toyota (if you intend to sell the car within 5 years).
Particularly hard hit are Toyota trucks. Last year they were retaining 60% of their value. Now they have dropped to 45.4%. The Tundra is hardest hit with resale values of 40% after 3 years. To help offset the decline in residual values, Toyota is offering finance incentives ranging from 1.9 to 3.9 percent APR.
Honda Insight: Most Affordable Hybrid Goes on Sale March 24
The 2010 Honda Insight officially goes on sale in the US beginning March 24th. The base model LX retails for $19,800 (not including destination charge), making it the first hybrid retailing for less than $20,000. The price is more than $2,000 less than the Toyota Prius, its main competitor (Although rumor has it Toyota will probably match the price of the Insight).
Note, however, that the Insight gets lower gas mileage than the Prius. So on a cost basis, does it make more sense to purchase an Insight rather than a Prius? Well, considering the Insight went on sale in Japan last month and has beat sales targets by 300%, it's a good bet the Insight will be in high demand here in the US as well. This means you're probably not going to get a good deal on this car right away. We recommend waiting at least 6 months after the initial introduction before buying.
To see the latest prices and deals being offered by your local dealer Click Here
Dodge Ram Offers Nearly Double the Incentives of Competitors
If you're looking to buy a large truck and save money, you should be considering the Dodge Ram. In the first 2 months of the year, Chrysler has been offering huge incentives on the Dodge Ram in order to gain market share from its competitors.
The average incentive for the 2009 Dodge Ram was $6,730 in February according to edmunds. That's nearly $3,000 more than what GMC, Chevrolet and Ford are offering for their trucks. In addition, Chrysler has been offering dealers incentives of up to $3,000 for the Ram, allowing these dealers to mark down the price considerably. Some dealers were able to advertise the price of a 2009 Dodge Ram for as low as $17,975 (with sticker price of over $31,000). That's nearly 50% off retail.
Unsurprisingly, Chrysler did gain market share. Chrysler is still offering around $5,500 in incentives for the Ram this month through their employee pricing and finance bonuses.
Car Buying Report Archives:
Week of June 18, 2009
Week of June 11, 2009
Week of June 4, 2009
Week of May 28, 2009
Week of May 21, 2009
Week of May 14, 2009
Week of May 6, 2009
Week of April 30, 2009
Week of April 23, 2009
Week of April 16, 2009
- Apr 01, 2009 - GM and Ford Offer Job Loss Incentive...
- Mar 18, 2009 - Imports Finally Join the Incentive Bandwagon...
- Mar 11, 2009 - Plenty of 2008 Models Still Not Sold...
- Mar 04, 2009 - New Tax Credit for Plug-In Cars, February 2009 Sales a Disaster...
- Feb 25, 2009 - Hyundai Offers Assurance Plus, Saab Files for Bankruptcy...
- Feb 18, 2009 - 2009 Car Tax Credit Not as Good as First Hoped...
- Feb 11, 2009 - Tax Credit for Car Buyers in 2009, Rebates up over 12%...
- Feb 04, 2009 - Car Sales Worst in 27 Years, GM May Shut Down Hummer, Saab, and Saturn...
- Jan 28, 2009 - Chrysler Getting Desperate, Great Deals on Small Cars...
- Jan 21, 2009 - Unsold Cars Piling Up, Toyota Offers Cash Rebates...
- Jan 02, 2009 - GM Offers 0% Financing, 2009 Sales Will be Horrible...
- Dec 26, 2008 - Best Time to Buy a Car, Chrysler Offers Deals on Overstock...
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