Dealers Gone Wild

Edward Niedermeyer
by Edward Niedermeyer
dealers gone wild

The Wall Street Journal reports that (suprise!) transaction prices on new vehicles have fallen over the last six months. The average transaction price for a new vehicle is now $27,941. Why so slumptastic? With American consumers perceived to be in value shopping mode and the automobile industry in disarray, incentives are starting to pile up on new cars. And it’s not just OEMs offering factory cash. Dealer incentives are up as well. The WSJ cites TrueCar data showing that a full quarter of all 2009-model vehicles are being sold below dealer cost. And those aren’t all coming from troubled Chrysler dealers.

TrueCar data shows discount transactions clearing on relatively new hotness like Hyundai’s Genesis ($2,500 off sticker) and Honda’s Insight ($500 off). The Prius is the poster child, having attracted $3-$4K premiums nine months ago and now averaging less than $100 over invoice. High inventory levels plague nearly every dealer and OEM; 100+ day supplys have nearly become industry standard. The verdict: it’s a great time to buy (duh). But don’t jump too quickly. With massive dealer cuts due any day now from Chrysler and GM, the squeeze is just starting to be felt.

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4 of 22 comments
  • MikeyDee MikeyDee on May 14, 2009

    27K plus? OMG! I paid a little pocket change over 12K for my lease buy-back Civic, which trumps any other car out there in build quality, reliability and gas milage (non-hybrid). I got $2500 for my trade-in and put $2K down, so my loan is just south of $7500 for a car with less than 36K miles. Do I sound like I'm bragging? I'm sorry.

  • AJ AJ on May 14, 2009
    Theodore : May 13th, 2009 at 10:43 pm $28K average, and that’s a drop? Good grief - that’s obscene. Why would anybody spend that much money on a depreciating asset? I don’t get people who buy new cars, I really don’t. Because so few people actually take care of their cars. I was shopping for a particular used SUV last fall and I was amazed at how few owners had any proof that they did any maintenance to them. And by the look of many, I was sure they didn't. I may have car payments longer on a new car, but since I take care of them, when it's my used car I know it's still in great shape and not been abused.

  • Blautens Blautens on May 14, 2009

    I'm not sure any loyal TTAC reader is your average consumer. Some of them are in the car business (dwford, Mr. Lang). Some are very wealthy. Some are neither, just ridiculously in love with cars, like me, and average buying one per year over the last 10 years, until the driveway and garage are full (or something else pops up), or the insurance bills just get plain ridiculous. If I'm in love with a car, out (I'm looking at *you*, Mr. 1970 Chevelle - I see you every day parked at that retirement development...your owner can't last forever). I don't even care that you're ugly green vinyl on green with a 307 - I just want that sweet, rust free metal wrapped around it. Or it is very, VERY tough not to try and get in on a fire sale Pontiac G8 GXP after getting in one this weekend (the wife thinks it's a practical car, too!). But I'm hoping that the downward trend continues, and a lightly used one about 18-36 months from now is even a better deal. So being shocked about the average transaction doesn't go far here, I'd imagine. Not sure how many average car buyers are here...

  • VroomVroom2009 VroomVroom2009 on May 18, 2009

    TrueCar has a blog post in the same topic on The Truth