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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:
Make | Average Rebate |
Land Rover | $6,000 |
Infiniti | $5,100 |
BMW | $5,000 |
Mercedes | $4,200 |
Jaguar | $4,100 |
Lexus | $3,400 |
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.
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
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.
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