Dealer Check-up Reveals Widespread Profit Loss

U.S. light-vehicle dealers reported an operating loss for the first time since the National Automobile Dealers Association (NADA) began collecting data in 2009. While everyone continues reporting pretax net profits, concerns are beginning to swell around their dependency on factory incentives, which are not included in operating tabulations.

NADA’s analysis of 2019’s first-quarter auto sales shows that incentive spending is down compared to the same period a year ago. The group expects above-average discipline from automakers in terms of incentive spending throughout the year. According to J.D. Power, average incentive spending per unit was down $119 to $3,821 through March 2019 — with the brunt of that going toward trucks. However, if sales remain low, spending may creep back up to help clear out languishing inventories.

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More Bad News for Passenger Car Buyers

Flat new vehicle sales and an industry that’s far more interested in making crossover lovers’ dreams come true add up to a poor environment for a traditional new car buyer.

We’ve already told you how high demand for a shrinking supply of off-lease sedans and hatchbacks has sent used car prices through the roof compared to just a few years ago. That erased a go-to option for many thrifty buyers. In the new car market, however, automakers’ need to boost profits in a stagnant market means incentive spending is dropping as fast as used car prices are rising.

It’s not just sedans that saw a decline in discounts last month.

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America's Love for Luxury SUVs Is Screwing With Off-lease Sedan Sales

North America’s love affair with SUVs and crossovers arose so suddenly and with such passion that manufacturers were left scrambling to meet demand. Luxury brands certainly aren’t exempt from this but, unlike mainstream marquis, the sudden shift in product demand has thrown those marques a bit of a curveball.

Since prestige brands tend to possess substantially higher leasing rates than their more-affordable contemporaries, luxury automakers are getting stuck with off-lease sedans that nobody seems to want. While that’s terrible news for corporate accountants, it’s good news for anyone looking for a good deal on a used Lexus ES or Audi A4.

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  • El scotto The Horror! The Horror! Former Scirocco owner with VW PTSD. It cost more to maintain than the BMW it got traded for. The BMW cost more to maintain than the Mustang GT ragtop it got traded for.Will a used Jaguar F type ragtop lead to more counseling?
  • El scotto Most of us have radio and phone controls on our steering wheels. I have no problems pressing a button and speaking.
  • MaintenanceCosts This could either be the greatest car you'll ever buy or an exasperating money pit, and you have no way whatsoever to know before you sign on the dotted line.
  • Arthur Dailey In Ontario 'distracted driving rules apply' . In Ontario while driving or stopped in traffic including at a red light or a stop sign it is illegal to i) use a phone or other hand-held wireless communication device to text or dial – you can only touch a device to call 911 in an emergency, ii) use a hand-held electronic entertainment device, such as a tablet or portable gaming console iii) view display screens unrelated to driving, such as watching a video program or a GPS device. In fact, simply holding a phone or other device while driving is against the law. – Government of Ontario website.Other examples of distracted driving may also include: personal grooming, eating or drinking, tending to children or pets. From Campisi LLP.
  • Theflyersfan $25,000 for an out of warranty VW Golf wagon. Make peace with the deity of your choice and do it soon because the world is set to come to an end any minute now.Being hauled on a flatbed doesn't rack up any miles so I guess that explains the 29,000 mile number. But at least it's a stick shift so would someone brave in the greater Columbus area take a chance? Just keep dry towels in the car to mop up all of the water that is bound to make an entrance sometime soon and wreck the interior. And get a AAA membership.