 Auto shoppers looking for a new-car bargain can breathe easy.
All those fantastic rebates and incentive offers aren't going anywhere any time soon. Auto industry experts expect widespread and rich incentives on new cars to be around for the rest of the year. For the past two years, the auto industry has enjoyed record sales and rolled out rebate after rebate to spur still more. Sales began to slow toward the end of 2000 but the rebates continued as American automakers moved to clear out overflowing inventories. Sales so far in 2001 are brisk despite all the doom and gloom surrounding the stock market and the economy and incentives are plentiful. "If you're going to be giving away lucrative incentives when times are good, there's no way you're going to stop when the market is plunging and you don't know how far down is," says Paul A. Eisenstein, publisher of the automotive Web site, TheCarConnection.com. No time to pull back
No one knows how long the current economic downturn will last or how much it will affect car sales this year. Manufacturers are reluctant to ease up on incentives for fear of losing sales to competitors with aggressive rebates and incentives.
"The last thing they want to do is stop the incentives and lose momentum just as the market is coming back," Eisenstein says. "Everybody's going to talk about cutting incentives, but nobody's going to be willing to do it." Big incentives seem to be everywhere. Once one manufacturer rolls out a new rebate program, the others follow. Even relatively fast-selling vehicles have been buffed up with rebates so they won't appear overpriced next to their heavily discounted rival vehicles. "There's always somebody doing them. It sort of pressures everybody else," says Michael Flynn, director of the Office of the Study of Automotive Transportation at the University of Michigan. "It's great for you and me as consumers." In March, the average incentive amount on a new auto was $2,503, compared with $1,763 in March 2000, according to CNW Marketing/Research in Bandon, Ore. That's a 42-percent increase. Slowdown as year rolls on
Some auto experts expect rebates and incentives to edge down slightly as the year progresses.
"They'll continue to be there throughout the year, but they probably won't be as generous as the past couple of months when manufacturers had a fire-sale situation and they had to get rid of a lot of vehicles," says Maryann Keller, a longtime auto industry analyst and consultant in Greenwich, Conn. However, any dip in incentives might not occur until late in the year. Summer is coming soon, and a fresh round of new rebates and incentives is likely. The aim of a summer sales blitz is to clear plenty of space on dealer lots for 2002 models arriving in the fall. "Starting in the summer, you'll see a lot more rebates," says George E. Hoffer, an economics professor at Virginia Commonwealth University. "These rebates are really the factories' help in getting rid of 2001 models. The rebates will be higher on slow-selling vehicles." And, because automakers are rolling out new vehicles earlier and earlier in the calendar year, hefty incentives on current-year models have started popping up in the spring. For example, Ford is already busy making room for its 2002 Explorers with rebates as high as $2,000 and discount financing deals as low as 0.9 percent on 2001 models. With interest rates on the way down, several manufacturers have rolled out super-low rate financing deals, and experts expect that trend to continue. There are tons of cash rebates around, as well. Take a trip online
Consumers can stay on top of the latest deals by hopping online.
Autoweb.com,
Edmund's Automobile Buyers Guide,
AutoSite,
Autopedia,
Kelley Blue Book and
CarPrice.com are among the sites offering timely pricing information. Make note of the dates when each rebate is set to expire.
Be sure to visit more than one site. Don't forget to take note of regional incentives in your area. Shop around from dealer to dealer. Make them earn your business. There are plenty of discounted deals to choose from. "There's a bit of a herd mentality when it comes to rebates. Unfortunately, one might describe it as a panic mentality," Eisenstein says. "It's so competitive now." Use it to your advantage. -- Posted: April 2, 2001 |