New car buyers are getting a heads-up from an established industry news source: don’t expect the same kinds of big deals this spring that you found last winter.
According to new data in a May 3 press release from TrueCar.com, a recognized provider of information on auto purchase and financing trends, transaction prices for many new vehicles in April were significantly up from previous numbers last year. In plain English, that means customers are paying slightly higher prices for the same new cars in 2011.
Some of the reasons for the uptick have to do with the reduction of those mammoth inventories that had dealers scrambling through the colder months. In its April report, TrueCar cites a slackening of the tremendous manufacturer discounts and dealer incentives that new car buyers were getting in the 2010 market.
But lest you fear that the higher prices are only coming from miserly dealers and spendthrift auto makers, take a look at another point made in this report: some of the higher sale prices are also based on “consumer preference for better-equipped vehicles” according to TrueCar. That means some families are shoveling their way out of debt or financial scarcity suffered under the depression/recession fiasco of the last few years, and are opting for more features and extra packages.
However, the actual numbers paint a picture of car and truck manufacturers cutting off some of that incentive and rebate money across the board. There’s a one-month projected decrease (April 2011-March 2011) in discounting of about 4% industry-wide, and an annual discounting decline in the double digits for many auto makers. Transaction prices for new cars in 2011 are forecasted to continue a rise seen in April that ranged from .2-2.2% among top manufacturers for the American market.
There are a lot more numbers in this report, but what it all adds up to is that customers can’t rely on the same deals that have been popping up through the beginning of 2011. What you can bank on is that, with prime lending rates still near zero, your overall interest rate shouldn’t be anything unwieldy, given a decent credit rating. Some finance experts expect interest rates to start rising this year and to continue to get bigger over time. For now, relatively low interest rates can help families get more affordable new car deals. Also, some car makers are still offering some pretty good incentives, especially for some of the car models, like the 2011 Kia Sorento and 2011 Kia Sportage as well as the 2011 Nissan Juke, that have some of the lowest starting MSRPs in their market segments. So even though you may not get the winter deals, spring is still promising some presentable options, especially if you are willing to investigate your own credit alternatives before making a trip to the dealer’s lot.