Where are the Deals Now That "Cash for Clunkers" Has Ended?
A total of 700,000 vehicles have been sold under the program, with the Ford Escape, Ford Focus, Toyota Corolla, and Honda Civic leading the way. Dealers have depleted much of their inventory on these specific models and currently have the upper-hand when it comes to negotiating.
Car shoppers interested in these models who didn't have a "cash for clunkers" trade-in are in a difficult spot right now. The huge artificial demand caused supplies to dwindle at a time when end-of-year clearance sales usually start taking place.
The 2010 Toyota Corolla, 2010 Ford Focus, and 2010 Ford Escape have all already hit showrooms so they're currently competing with the leftover 2009 models. Dealers tend to make a better profit on the newer models since demand is higher, which means they don't want any leftover 2009 models competing. This creates an opportunity to get a good deal on the 2009 model.
The 2010 Honda Civic won't be hitting showrooms until probably October so dealers don't have as much urgency to sell the 2009 model. In fact, some dealers are completely out of stock on the Civic and have to wait until 2010s arrive.
For the 2009 models, there are only about 1,000 Toyota Corollas left, around 3,000 Ford Focus', and 2,500 Ford Escapes. With no more 2009 production on the way, these models should be completely depleted in the next month or two. If you're wanting to buy one, your best bet may be to act soon while supplies last and you'll have more options to choose from. Remember to use our Car Buying Strategy to get the best deal.
As for the 2009 Honda Civic, there are about 15,000 models left on dealer lots. Honda has likely ended production on the 2009 model which means this is all that's left until the 2010s arrive. If you're still interested in the Civic, you could take a chance and wait until the 2010s arrive to get a better deal, but you risk the chance that 2009 supplies will be very limited and you may not get the options or colors you desire.
One other car you might want to consider is the Nissan Sentra. It hasn't been selling as well as the other small sedans and Nissan is offering up to $2,000 cash back or finance rates of 0% for up to 36 months on some models.
One thing is for sure: demand for all cars will drop sharply now that the "cash for clunkers" program has ended. At the same time, car makers have increased production on models that were depleted, setting the stage for an oversupply of vehicles near the end of the year. If you're wanting a 2010 model, your best bet may be to wait until then. Car makers will probably also increase incentives to try to keep demand high now that the program has ended. Another consequence of the "cash for clunkers" program has been the increase in used car prices. 700,000 used vehicles were sent to the scrap yard instead of being resold. This has caused an artificial depletion in the supply of less-expensive used cars.
The segment hardest hit with price increases has been SUVs and pickups priced $4,500 and lower. 83% of the trade-ins under the program were SUVs and pickup trucks. The supply of these vehicles has been reduced substantially and prices for the remaining ones have increased by up to 10%.
Used car prices may head down later this year as car makers increase incentives on new cars to keep the momentum going. We'll keep you updated as usual.
My Recommendation for Car ShoppersTrueCar No-Haggle, CarsDirect, and NADAGuides are the quickest way to see the lowest car prices in your area. These sites show you no-haggle prices from dealers closest to you - and the deals are usually really good. This should be the first step you take when negotiating your car price. Follow this up with my checklist to make sure you squeeze out every last bit of savings.
- Gregg Fidan
Each week, I'll keep you up-to-date on the latest car deals and news that might affect your purchase. This includes...
- Best Rebates, Incentives, and Lease Deals
- Latest Car Buying Scams and Tricks
- The Best & Worst Time to Buy a Car
- Which Cars You Should Avoid