After the worst year for auto sales in decades, you’d think automakers would be practically giving away cars just to make a sale. Nope.
Blame “cash for clunkers.” The program spiked car sales in July and August and replaced nearly 700,000 clunkers with vehicles averaging 58% better fuel efficiency. And it sapped inventory in a serious way.
Supply is at levels not seen since the not-so-go-go early 1980s, says Erich Merkle, president of Autoconomy.com, an auto-industry consulting firm. Merkle says a hangover period is normal following any type of incentive program.
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The 2009 cars popular with buyers trading in their clunkers, such as the Honda Civic, Toyota Prius and Ford Escape, are toughest to find. Jesse Toprak, of TrueCar[truecar.com], an automotive-data company that tracks transaction prices, says that low inventory is erasing discounts on small cars and crossovers. Popular hybrids, such as the Toyota Prius and Honda Insight, will be priced close to sticker, or even higher, as long as gas prices are at or above $3 a gallon, he says.
Where the deals are
Incentives on 2009 models are still available, even on cars that supposedly ran out because of the clunkers program, says Jessica Caldwell, of Edmunds.com. “The reality is, there are lots of programs being offered, but you may not be able to find these vehicles. Manufacturers will discount regardless of supply because they want to move out the 2009s to make room for 2010s.”
You can track down new cars (as well as used) at sites such as AutoTrader.com. Among the hot deals are Hyundai’s $3,000 rebate for the 2009 Sonata and $2,000 rebate on the 2009 Santa Fe (through September 30). And if you missed cash for clunkers, Hyundai is offering an additional $1,000 for any vehicle that would have qualified for the program on top of its trade-in value, which you negotiate with the dealer.
Ford is offering incentives of up to $2,500 on the 2009 Escape. And the most popular purchase through the clunkers program, the Toyota Corolla, is among TrueCar’s “most flexible” models — meaning the range of transaction prices is large and you’ll likely be able to negotiate a good deal.
On midsize vehicles, besides the Sonata, we found generous incentives listed on Edmunds.com for a number of 2009 models — particularly from the domestic brands. The best deals include the Pontiac G6 ($3,500), Buick LaCrosse ($2,500), Ford Fusion ($2,000) and Cadillac CTS ($2,000).
Large cars and traditional SUVs are still available in spades. On TrueCar’s list of the most-discounted 2009 models are the Chevrolet Silverado 1500 and Jeep Commander, both selling at 21% below the manufacturer’s suggested retail price. The 2010 Toyota Avalon is selling for 10% below sticker.
As icing on the cake, the “new” General Motors recently introduced a new offer – a 60-day satisfaction guarantee. If you buy a 2009 or 2010 Chevrolet, Buick, GMC or Cadillac, you can return your vehicle to the dealer between 31 to 60 days after the purchase and get a refund.
Don’t count on used
If you think that a used car might be a better deal because the clunkers program shifted demand to new vehicles, think again. Alec Gutierrez, of Kelley Blue Book, says the used market stayed strong throughout the government program because buyers who were turned down looked to the used market instead. Even on large trucks and SUVs, prices are up 33% this year.
Manufacturers are gearing up production of the 2010 models, and more of them should start trickling in to dealers soon. With inventory up, more-generous incentives should return by the end of the year, says Merkle.