December could be a great time to buy a new car
Susan Tompor, Detroit Free Press
Shoppers who missed out on Black Friday sales can hit a restart button when it comes to sweet car deals in December.
The ads might be labeled as a “Year-End Sales Event,” “Holiday Sale” or “December to Remember,” instead of Black Friday.
But many rebates and special incentives are at their best levels of the year now and some regional incentives could be added before Dec. 31, according to Brad Korner, general manager of Cox Automotive Rates & Incentives in Ann Arbor. Cox owns car-shopping websites including Kelley Blue Book and AutoTrader.
“You’re going to see a lot of these go away in January,” predicted Korner.
Shoppers who think the end of the month is a great time to buy a car have grown accustomed to anticipating even better prices at the end of the year, too.
“It’s like buying Christmas paper in January,” said James Dollinger, a Flint-area auto dealer known as The Buickman.
“Traditionally, my biggest months have always been the month of December,” Dollinger said.
Car companies are concerned about clearing out inventories — and holding onto market share. U.S. auto sales are likely to be down for 2017, the first declining year since 2009 when both General Motors and Chrysler ended up in bankruptcy.
Demand remains relatively healthy, though. Some are forecasting U.S. sales above 17.1 million cars and light trucks in 2017 — down from a record 17.54 million in 2016.
December shoppers should expect:
Generous rebates and cash incentives
Carmakers cranked out plenty of incentives for December to unload outgoing 2017 models. Many 2018 models have rebates, but the better deals tend to be on the older inventories.
Chevrolet, for example, has added “Employee Pricing for All” in December — the best incentives of the year for all Chevy vehicles in inventory, Korner said.
In December, bigger rebates are likely to be on slow-selling luxury cars, sedans, hybrids and electric vehicles.
A 2017 Ford Taurus, for example, has up to $6,750 in incentives for those who qualify. That includes a $4,000 cash incentive in December plus $1,250 in bonus cash — and a $1,500 bonus for a customer who is financing through Ford Credit.
In addition, some customers could qualify for another $500 military bonus or a $500 bonus for college students and recent graduates.
Many car companies offer extra, conditional incentives for college grads, military experience, union members — even Uber drivers.
Overall, industry incentives are estimated to average $3,371 in November, compared with the record $3,557 in October, according to Edmunds.com.
“Luxury brands, especially cars, are really highly discounted,” Korner said.
Brands such as Jaguar and Volvo are offering incentives of $20,000 to $30,000 on select high end models.
SUVs have incentives but they’re typically not as generous as rebates on some slower selling cars.
Tip: Before heading to a dealership, research incentives and rebates online at sites such as Kelley Blue Book at www.kbb.com and Edmunds at www.edmunds.com. Plugging your ZIP code into a site can give you a more accurate picture of the incentives in a given market. Deals can vary geographically — even in big cities.
Incentives can apply to specific models, too. Unlike years past, incentives aren’t across the board.
Automakers track data carefully and are much better prepared to put incentive money where it needs to go to sell cars and trucks.
“These things are very regional,” said Matt Jones, senior consumer advice editor for Edmunds.com in Santa Monica.
Take a Ford F-150 SuperCrew truck. About $10,500 in rebates, incentives and dealer cash is available on the four-door F-150 in metro Detroit, Jones said. But only $8,500 in discounts would be available in the Chicago area.
By contrast, about $3,100 in rebates and other discounts are available on a Nissan Rogue in metro Detroit, compared with $8,300 in Tampa, he said.
Federal Reserve policymakers are likely to raise rates at the next meeting Dec. 12-13. But most experts anticipate that 0% financing will continue to be offered through the automakers.
Some promotions, such as most 2018 Chevy Cruz models, are limiting 0% financing to 60 months.
Ford has 0% for 72 months on many 2017 models.
Many people who do not have excellent credit will not qualify for 0%. Typically, consumers need a credit score around 710 to 720 to qualify for 0%, Jones said.
Some exceptions apply.
Some shoppers — such as someone with a lower credit score but an excellent car payment history with the company offering the 0% financing — might qualify for the super low rate, he said.
Consumers should get preapproval on a car loan before heading to a dealership in order to compare financing options. It’s a good idea to get a free copy of your annual credit report at www.annualcreditreport.com to catch any signs of identity theft before you apply for a car loan.
Do what you can in advance — research what you might get for a trade-in, know what incentives exist — in order to save time and negotiate your best deal.
Lease deals and lease pull-ahead programs
Mark Montante, general manager for Taylor Chevrolet, said Chevy’s lease loyalty program more than doubled to up to $3,500 on many vehicles in December, compared with last month’s discount that was up to $1,500. The discount is used toward the down payment.
To qualify, a buyer must currently lease a Chevrolet, Buick, Cadillac, GMC car or light duty truck. This incentive is transferable within the same household. The lease loyalty program can apply to some 2017 and some 2018 models.
In November, carmakers offered more lease-pull-ahead-type incentives, as used-vehicle values continue to be very strong.
Consumers who have lease terms close to maturing are being given strong incentives to get back into the market earlier, too.Some hot deals the week after Christmas
“That last week of the year, it can be a sales monster,” said Jones, of Edmunds.com.
Most shoppers, though, would be wise to do a test drive and research the features before waiting until the last week of December. You want to make sure the car and the deal are right for you.
“We do get caught up in sale hysteria at some times,” Jones said.
Contact Susan Tompor: firstname.lastname@example.org or 313-222-8876. Follow Susan on Twitter @Tompor.
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