Looking For Deals? Buy American!
September 23rd, 2011 11:47 AM
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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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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.
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.
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 ($500x2) 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.
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.