This Week in Car Buying: Big incentive spenders; Chevy Equinox, Alfa Romeo Giulia priced; Used values drop; Ford's changing gameplan
Data comparing the amount of incentives as a percentage of a vehicle’s average transaction price compiled by Kelley Blue Book shows that the big spender on incentives is Volkswagen, as its looks to boost sales and put the diesel emission cheating scandal behind it.
The percentage of incentives to transaction prices of 17.8 percent at VW is a good 3.6 percent more generous than the next-closest brand which is Chrysler. That unit of Fiat Chrysler Automobiles has had big rebates on its slow selling 200 and 300 sedans as well as on outgoing Town & Country minivans it sold down in anticipation of the all-new 2017 Chrysler Pacifica.
FCA’s other divisions, Ram truck and Dodge, were not far behind at respective ratios of 12.0 and 12.4 percent. Third on the list was Nissan, which clocked in at 13.2 percent, while Mitsubishi was fifth at 12.2 percent. The non-luxury segment ratio of incentives to prices was 9.7 percent of a vehicle’s average.
The brand with the lowest percentage of incentives to transaction price was Subaru, which is set to hit another sales record this year and has some of the lowest inventories among manufacturers. It spends just 2.7 percent of the average price on incentives, about half of what its next-closest rival, Honda, spends. The Japanese automaker has an incentive ratio of 5.8 percent followed closely by Mazda at 7.0 percent and Toyota at 7.1 percent.
2018 Chevrolet Equinox priced
Chevrolet has announced pricing on its next generation of the Equinox, which goes on sale next spring as a 2018 model. The completely redesigned 2-row compact crossover SUV will start at $24,495 including destination. Available with a choice of three turbocharged engines — including the segment’s first turbodiesel — the 2018 Equinox will have a standard 1.5-liter 4-cylinder gas engine at launch. Turbocharged 2.0-liter 4-cylinder gas and diesel options will be available in the second quarter of 2017. These engines will be coupled to GM’s new nine-speed automatic transmission.
“In a word, crossover customers want one thing: everything,” said Steve Majoros, director of marketing for Chevrolet cars and crossovers. “From comfort and connectivity to efficient performance and safety, the all-new 2018 Chevrolet Equinox delivers on all counts.” The 2018 Equinox will be available in L, LS, LT and Premier trim levels, in front- or all-wheel drive combinations.
2017 Alfa Romeo Giulia starts at $37,995
Alfa Romeo announced that is 4-door Giulia rear-drive sports sedan will start at well under $40,000 when it goes on sale in January. The $37,995 base price, plus $995 for delivery, is for the standard Giulia sedan equipped with a 280-horsepower turbocharged 4-cylinder engine mated to an 8-speed automatic transmission. The sporty Ti model, which has more features including larger wheels and tires, is priced $2,000 higher. The all-wheel drive Q4 package is available on both the base and Ti models for an additional $2,000.
“The all-new Giulia is the result of our 105 years of passion for Italian style, craftsmanship and performance,” said Reid Bigland, Head of Alfa Romeo. “Crafted in Italy, the Giulia lineup sets an entirely new benchmark for the segment as the world’s fastest 4-door production sedan, featuring class-leading engines, an all-new exclusive architecture, stunning design and state-of-the art technology, available starting from $37,995 MSRP.”
The range-topping rear-drive-only Giulia Quadrifoglio, which is powered by a 505-horsepower twin-turbo 2.9-liter V6, carries a sticker price of $72,000 plus $1,595 delivery. It is currently on sale.
Used Car Values Drop
The big sales push by automakers as the year comes to a close is already affecting the used car market as more pre-owned vehicles crossing the auction block are exerting downward pressure on values, according to data compiled by Manheim Auctions, a Cox Automotive sister company to Kelley Blue Book. The Manheim Used Vehicle Value Index dropped 1 percent in November to 124.7, down from 125.1 a year earlier and an even higher 126 in October of this year.
It is the first year-over-year decline in the index since last April. Tom Webb, Cox Automotive chief economist told Automotive News that it “was a relatively large movement downward. People have been expecting it for some time; prices really held up better than they should have. There was a big jump in the incentive activity.”
With many of the year-end incentive programs coming to a close and high November sales, dealerships are facing a glut of traded-in and off-lease cars. Shoppers may want to check out new car dealers’ pre-owned lots for Certified Pre-Owned and other late-model units with low mileage. With manufacturers looking to trim stocks of new cars, the abundance of used units is ripe for bargain hunting.
Ford’s changing gameplan
Ford may be looking at doing some juggling in its product portfolio as a result of the consumer shift from sedans to crossover SUVs. Hot off the introduction of its new subcompact EcoSport crossover at the Los Angeles Auto Show, the automaker may be looking to add more of these car-based SUV-inspired vehicles to its lineup while trimming production and perhaps even dropping some traditional coupe, sedan and subcompact models.
Among the models showing sales declines, according to Automotive News, are the Fiesta, down 26 percent; Focus, minus 17 percent; Mustang, off 13 percent, while Taurus and Fusion sedans declined 11 and 10 percent respectively.
“If you look at our past, there have been some nameplates that have dropped off and other nameplates have been added,” Joe Hinrichs, Ford president of the Americas, told the trade paper. “Given where the market is going…we’ll continue to look at the total portfolio and see where’s segmentation going and where should we be phasing out.” He promised that “We’re going to invest in growing the SUV portfolio” and that “there will be some pruning over time as there should be.”
Check out the This Week in Car Buying Podcast here.
Starting at $17,845, the 2017 Hyundai Accent Value Edition offers more bang for the buck for this smartly styled subcompact from the Korean automaker.
With winter about ready to get into full swing, there’s no better time to add all-wheel drive to a model range as the 2017 Dodge Challenger GT proves. The AWD version is priced at $34,490 for the V6.
Looking to give EV sales a boost, Ford has increased the range and dropped the price slightly on the 2017 Ford Focus Electric. The bigger battery bumps range from 76 to 115 miles per charge.
In the market for a new car? Explore these useful tips on how to get the best deal: