By on September 23, 2011

Cash on the hood is on the rise again, says Edmunds, which keeps track of the Total Costs of Incentives (TCI.) Incentives definitely had been coming down from their January and February highs to reach a low in May (there were cars missing from Japan …), but now, manufacturer largesse is getting greater again.

The most generous: The Detroit 3, led by Dodge. If you want a deal, buy American. Full trends in the Excel sheet, courtesy of Edmunds.

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30 Comments on “Looking For Deals? Buy American!...”


  • avatar
    Banger

    Funny that as I was reading this, there were three ads for incentives on Nissan models flashing around. At least Nissan seems to keep incentives pegged pretty close to the industry average, I guess. I know $3,000 isn’t enough to talk me into a $30,000+ Maxima, as much as I do love the Max…but whatev.

    Interesting Ford is right up there. I wonder how the incentives break down. Betting on a lot of truck incentives (in fact, I’ve seen some ads for the trucks, F-150, Super Duty, and even– gasp!– the Ranger online recently). I would guess not so many incentives to be had on the hotter, newer sedans (looking at you, Fiesta/Focus).

    • 0 avatar
      Scoutdude

      I can’t believe how they are giving away Rangers, in my market they are advertising the loaded models with more than 25% off MSRP. I understand it’s a dead duck but on the other hand I don’t see any good reason to clear them off the lot at what appears to be a loss at this point.

      • 0 avatar
        CJinSD

        When I first read your comment, I agreed. What else are Ranger buyers going to do when they need a new one or three for their rent-a-cop operations? Then I noticed that you said loaded. Why did they build loaded Rangers in the first place? A Pinto with Bluetooth and heated leather seats is still a Pinto. Stripper Rangers should be sold at list as they’re needed by people buying for utility, but trying to sell an optioned up Ranger for Tacoma money makes zero sense.

      • 0 avatar
        Educator(of teachers)Dan

        Rent-a-cops in my area drive 4-cyl FWD Escapes.

      • 0 avatar
        CJinSD

        Maybe OSHA has stepped in to get Rangers out of fleet use.

      • 0 avatar
        rudiger

        The Ranger has soldiered on relatively unchanged for decades, meaning any money Ford spent on upgrades was made back years ago. It’s highly unlikely that, even with huge incentives and ‘money on the hood’, any Ranger is sold at a loss.

        So, if you don’t mind driving a vehicle with decades-old driving dynamics and functionality, a dirt-cheap Ranger’s for you. But, hey, even the base models come with a fold-down, center arm-rest. The much more expensive, strippo, bench-seat base Tacoma can’t make that claim.

      • 0 avatar
        Banger

        Scoutdude: “I can’t believe how they are giving away Rangers….”

        I’d like to know where. My local stealership is advertising XLTs at MSRP and above so as not to cannibalize F-150 sales. Funny how there’s always an F-150 XL available for $16990 at said dealer, but an XL Ranger comparably equipped is strictly an MSRP affair and will cost you nearly $20,000. If you’re willing to take the manual trans that you can’t get in an F-150 nowadays (stupid idea on Ford’s part, might I add,) you can get in for just under $19,000.

        Another nearby dealer recently set up a truck in my town (30 miles from their lot) and I got a pic of the window sticker. It was almost a clone of my exact truck, but had an automatic instead of my truck’s manual transmission. Check it out:

        http://i397.photobucket.com/albums/pp54/Bangermusic/DSC02687.jpg

  • avatar
    Robert.Walter

    Total cost of incentives sounds like a fancy way of saying average fleet incentive, but it doesn’t give a very good indication of the distribution.

    Isn’t this data kinda useless unless weighted against average transaction price? To wit Ford’s 2,500 US$ incentive would be a killer if it was all on Fiesta’s, but not so much if it was on F-series.

    • 0 avatar
      morbo

      That’s actually a good point. $2500 in incentives may not hurt the D3 spread across trucks or Lexus with their SuperCamry’s, but that’s gotta be murder on Mazda and Mitsubishi.

      Hmmm…. The Galant may be a piece of crap, but a cheap piece of crap that’s good for 30MPG.

    • 0 avatar
      APaGttH

      Exactly. I was going to post the exact same thing.

      Ford and GM “average fleet” incentives are skewed by massive incentive offers on F-250/F-350/E-150/E-350 and Silverado 2500/3500 series trucks and vans.

      Someone else here did the math by transaction price and GMs incentives were about on parity with Toyota (.2% difference in favor of Toyota). One should be mindful GM I believe has the highest average transaction price of all those makes listed.

      In reality the “good” deal then doesn’t come from GM, it’s only average – at best, compared to the competition.

      • 0 avatar
        alluster

        Aug 2011 Average transaction price:
        GM (Buick, Cadillac, Chevrolet, GMC) – $33,371
        Toyota (Lexus, Scion, Toyota) - $25,691

        Aug 2011 Incentives
        GM (Buick, Cadillac, Chevrolet, GMC) – $3,207
        Toyota (Lexus, Scion, Toyota) - $2,405

        Incentives vs Average Transaction Price
        GM (Buick, Cadillac, Chevrolet, GMC) – 9.6%
        Toyota (Lexus, Scion, Toyota) – 9.4%

        http://blog.truecar.com/2011/09/01/transaction-prices-drop-off-peak-but-stay-high-even-as-incentives-increase-according-to-truecar-com/

  • avatar
    Philosophil

    I see that VW and Subaru are still sticking to their guns. I’m a little surprised that Hyundai is so much lower than Kia.

  • avatar
    Zackman

    I almost wish I was in the market for a car right now. Sounds like a free-for-all. Perhaps the big-ticket manufacturers smell a rat somewhere and are trying to get all they can in the race to the bottom. Wonder who’ll win?

    • 0 avatar
      Educator(of teachers)Dan

      I’m AMAZED at the advertized prices for some new cars. I wonder if it will still be this insane next year? We’re getting to the point where the price of a “just off lease” car is going to be the same as the brand new model.

      • 0 avatar
        CharlesKrome

        It’s already happened. I’m not sure about the situation right now, but I know that in August, there were a number of vehicles, including the Corvette and BMW 3 Series, for which monthly payments were higher on used models than new ones.

  • avatar
    mike978

    Looking at the spreadsheet and by manufacturer both BMW and Mercedes are higher than GM by between $300-500. From the chart posted above Lexus and Mazda are within $100 of Ford so not that much difference. Especially as someone else said with trucks being so profitable (and concentrated on domestic manufacturers) larger discounts (in absolute terms if not % wise) is expected.
    A better metric would be incentives as a % of MSRP (weighted for the sales of the different vehicles). This would even things out since for example Chevy’s product mix is higher on expensive SUV’s and trucks compared to Toyota. Therefore for Chevy to spend $700 more on incentives is not surprising and as a % could even be less than Toyota’s incentives. Absolute $ amounts are only part of the story.

    The data also shows Ford and GM reducing incentive spending and reducing the gap with Toyota etal. That is good news, albeit not in the main text of the article.

  • avatar
    CJinSD

    This chart is pretty misleading. The most generous are Lincoln, Cadillac, Infiniti, Mercedes-Benz, BMW, and Buick. Including Lexus on the list suggests they’re paying more in incentives than their competitors, but they’re actually carrying some of the lowest incentive costs in their class. If this chart was by manufacturer rather than brand, the Detroit 3 would still be paying out less than BMW or Mercedes, even with Mini helping bring BMW’s average down.

    • 0 avatar
      APaGttH

      Ummm, Mini is broken out in the chart above; they have the lowest incentives. Buick has the biggest offers? On what planet?

      Enclave 2011: $1,000 cash back on the hood
      LaCrosse 2011: $2,000 cash back on the hood
      Lucerne leftovers 2011: $3,000 cash back
      Regal 2011: No cash back on the hood

      Enclave 2012: No cash back
      LaCrosse 2012: No cash back
      Regal 2012: No cash back
      Verando 2012: No cash back

      Seeing how an Enclave can tickle $50K, a LaCrosse can be north of $40K – in relation to total transaction price, these rebates are small, and in many states wouldn’t even cover sales tax; let alone represent an adequate down payment for someone with average credit.

      Source of data: Buick.com based on zipcode 77070, metro Houston. Just for giggles I checked 94102 which is San Francisco, where Buick would get ZERO buyer love – the incentives are the same.

      • 0 avatar
        geeber

        That information isn’t entirely accurate, according to Edmunds.com.

        Here is what that site lists as incentives for Buicks in the Houston zip code:

        2011 Enclave: up $2,000 in rebates; financing as low as 3.9 percent.
        2011 LaCrosse: up $1,000 in rebates; financing as low as 0 percent.
        2011 Lucerne: up to $3,000 in rebates; financing as low as 1.9 percent.
        2011 Regal: up to $1,000 in rebates; financing as low as 0 percent.

        2012 Enclave: up to $1,000 in rebates; financing as low as 2.9 percent.
        2012 LaCrosse: up to $1,000 in rebates; financing as low as 2.9 percent.
        2012 Regal: no rebates; financing as low as 2.9 percent.

      • 0 avatar
        APaGttH

        That information isn’t entirely accurate, according to Edmunds.com.

        Touche! The beauty of the internets. I went back to Buick.com and double checked. the Buick offer pages for 2012 have updated, you’re 2012 rebate offers are correct.

        That still doesn’t come close to the statement, “The most generous are Lincoln, Cadillac, Infiniti, Mercedes-Benz, BMW, and Buick.”

        $1K sure ain’t “generous,” it’s pretty class competitive. To compare to Lincoln as an example…

        2011 MKS: $3,000 cash back
        2011 MKT: $1,000 cash back
        2011 MKX: $2,500 cash back
        2011 MXZ: $3,000 cash back
        2011 Navigator: $3,000 cash back
        2011 Town Car: $4,000 cash back

        That is a more generous portfolio of offers

    • 0 avatar
      CJinSD

      APaGttH,

      Look at the linked spreadsheet. Buick has an average TCI of $3,476. That is higher than any brand on the table in this article. No doubt that Mini is broken out on the list, and they pay very little in incentives. If you look at the linked spreadsheet, you’ll see that BMW as a manufacturer has one of the highest per vehicle incentive costs at $3,341. Mini is part of BMW, so Mini isn’t enough to offset what it costs to move cars from the BMW brand($3,785). Try looking at the spreadsheet. Maybe it will clarify the difference between manufacturers and brands, and between TCI and your sampling.

      When it comes to BMWs and Buicks, I wonder if the artificially high residual values used to market leases are counted in TCI.

      • 0 avatar
        APaGttH

        When it comes to BMWs and Buicks, I wonder if the artificially high residual values used to market leases are counted in TCI.

        That is a very good question – and then one has to ponder does this get factored in at Honda and Toyota also; their lease offers on Camry, Accord, Civic and Corolla moving that needle also.

      • 0 avatar
        APaGttH

        Thanks, I didn’t see the link – that is some awesome data with great charts built in.

        Never thought I would see the day where Kia and Hyundai has less incentives than Honda and Toyota.

  • avatar
    Steven02

    Interesting data, but I think better data involves incentives based on the transaction prices of the vehicles.

    If you just want to go off of incentives without regard to total price, then by all means go out and buy Lincoln, Caddy, MB, BMW or the other luxury brands that have high dollar incentives based on the price of that car.

    • 0 avatar
      highdesertcat

      They’re just trying to move unsold iron this late in the model year. But the turnout is not as much as they had hoped for as Sept sales data will reflect. There was a time when high incentives were directly related to increases in sales, but that was before the current economic conditions.

      This is the best time in a long time to buy a new car or truck and use other people’s money to finance it. With APR advertised at 1.99% with 20% down, or 0% for 60 months with no down, why would anyone pay cash? Even so, lack of consumer confidence and fear of what the future has in stock for all of us, have put a damper on sales.

  • avatar

    I’ll agree that incentives are high- Here in the NW, we bought a Ford Flex this month, and got it for a bit more than 10% off MSRP, plus 0% financing… absolutely feel like we made a great deal on it with all the cash on the hood.

    • 0 avatar
      APaGttH

      Ford Flex

      Also know as the worlds largest Scion xB.

      I have to confess the looks of them have grown on me through the years, and the interior is pretty awesome.

      Congrats on the new ride.

  • avatar
    John Horner

    Incentives as a fraction of selling price are a more interesting metric than is simple dollars-per-vehicle. Given that companies are constantly playing the game of increasing the MSRP and then adjusting the incentives, it all gets rather muddy. But, none of it really matters. What matters more is net profit per vehicle when all of the pricing games are over.

    That information can generally be figured out from a company’s quarterly financial reports. Other even more interesting numbers are profits as a fraction of sales and profits as a fraction of total invested capital.

  • avatar
    Rental Man

    End of July got us annoyed with the loaded 2008 Mazda 6 GS I we got used to “Keep” Forever… 18” Wheels, Sport Suspension were a not amazing combo when local roads suck. Steering issues, Breaks needed to be completely done and electric gremlins… Car just did not live up to our needs.
    Got a new Mazda 6. I knew it cannot have the best resell value when I got the car $1000 behind invoice, $1000 Rebate ($500×2) and the 0% for 60 months. Dealership also gave me $500 more then Galves on the trade. Others refused. All that seems to me that Mazda needs to move some product. The 2 is not selling well. The 3 is old. The 6 gets under class 31 MPG rate and CX-7 needs Turbo and better Gas for AWD. WHY??? CX-9 was GR8. Then everyone else stepped up their game. Miata? Whatever. Mazda 5 is niche player and now Dodge Journey wants to claim their few sales as well with bottom feeder new base 7 seat model. RX8 RIP.

  • avatar
    FleetofWheel

    MSRP, ‘cash on the hood’ and ‘spending’ money on incentives.

    These are terms used in the haggling dumb show by car dealerships and self deluded car mfgs everywhere.

    In the plain spoken world, one simply refers to the price being raised or lowered.


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