In a normal year, September is a good time to buy a car. New car prices tend to drop as cold weather arrives, and dealers compete for your attention with Labor Day specials.
Not this year.
Incentives played a role in fewer new car sales in September than any month in more than four years.
Fewer New Cars for Sale
New car shoppers are finding near-empty showrooms. According to Cox Automotive, nationwide new car inventory in August sat 57% lower than just one year before. Cox Automotive is the parent company of Kelley Blue Book.
A global shortage of microchips is limiting the production of many new cars, after a spring in which more Americans sought to buy new cars as COVID-19-related travel restrictions began to ease.
Dealers Have Little Reason to Discount
Dealers see little reason to discount cars in such a seller’s market.
In August, the average incentive package amounted to only 5.6% of the new-vehicle average transaction price. In August 2019, the last comparable pre-pandemic month, the average incentive package was more than 10% of the sale price.
“The near-empty, new-vehicle lots are a tough reality for dealers and consumers alike right now,” said Brian Finkelmeyer, senior director of new vehicle solutions at Cox Automotive.
Buyers Staying Away, Prices Still Climbing
High demand and low supply mean high prices The average price of a new car hit an all-time high for the fifth consecutive month in August, with September results expected to follow suit.
The high prices – the average new car sold for $43,335 in August – have driven many buyers from the market entirely. Kelley Blue Book research shows that nearly half of new car shoppers are now willing to delay their purchase for up to a year in an attempt to wait out price spikes.
Buyers may have to wait even longer to see a day when dealers need to discount cars to sell them. Analysts expect the microchip shortage to continue into late 2022.
“It was reported recently that Lexus is still considering a ‘December to Remember’ year-end sales program. Considering current conditions, 2021 is likely to be remembered as the year without incentives.”
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October 01, 2021 at 10:36PM
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With New Cars Scarce, Discounts are Disappearing - Kelley Blue Book
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