This Week in Car Buying: Top deals of the month; Upside down loans loom; Honda launches CPO site; Buick Enclave priced; Dodge Grand Caravan iced
Summer is under way and the auto industry is seeing aggressive discounting. Large cash rebates are supplemented by low monthly lease deals. The incentives are attractive across the board, as everything from full-size pickups to crossover SUVs have offers of one kind or another.
Slowing May sales and a buildup of stocks are fueling the discounting, however, as we swing into summer shutdowns, inventories are likely to fall and by the end of summer, the deals may begin to peter out. Still, it will be a good Independence Day for bargain hunters.
“With many of these offers available through the Fourth of July holiday weekend, this month’s list of standout deals provide an even longer opportunity for shoppers to get into the car that best fits their needs,” said Jack R. Nerad, executive editorial director and executive market analyst for Kelley Blue Book. “The top deal is one of KBB.com’s 10 Coolest Cars Under $18,000 for 2017, the Volkswagen Jetta, and also featured is the Ford F-150, a three-time Kelley Blue Book Best Buy Award winner.”
Leading this month’s list is the 2017 Volkswagen Jetta, which is available on a 3-year lease for just $119 per month and only $1,999 down. Prices start at $19,815 on a KBB Fair Purchase Price of $17,231. The Jetta makes an ideal back-to-school ride, especially if your student stays under the 10,000-mile annual mileage cap. In some markets, VW is offering the same deal on the 2017 Passat through July 5 with a 12,000-mile annual cap and similar $1,999 down payment.
While pickups have been selling better than sedans, Ford has announced a lease deal for its successful F-150. A 2017 model is being offered on a 2-year lease at $219 per month. However, the upfront payment is a hefty $4,219 and mileage is capped at 21,000 over the life of the lease. Meanwhile, Acura is offering its ILX compact luxury sedan for $219 per month as well, for 3 years with $2,499 down.
Toyota is continuing its 3-year lease offers on the 2017 Sienna minivan and the 2017 Lexus CT 200h hybrid hatchback. The former goes for $289 per month with $1,999 down, while the Lexus is $249 per month with $1,499 cash due at signing.
The $5,000 rebate on 2017 Jeep Cherokees is also back, along with $4,000 on the 2016 Hyundai Veloster. Other rebates include $3,900 on the 2017 Ford Escape, $3,350 on 2017 Hyundai Sonata and $2,500 cash back on the 2016 Kia Forte.
Upside down loans loom
More buyers with long term 6- or 7-year new-car loans may soon find out that they are upside down (owe more on the car than what it’s worth) sooner than later, and through no fault of their own. This is especially true for those who purchased their cars at least two years ago, before vehicle sales in general and leasing in particular began to boom.
Now, these 2- and 3-year leases are ending and off-lease cars are beginning to flood the used-vehicle market, depressing prices. These lower used-car prices mean that the depreciation of cars currently in hands of owners is accelerating at a rate that may not have been foreseen when taking out the loan.
The best way to protect yourself is to periodically check the value of your car on KBB.com. If you see the value beginning to drop quickly, you may want to consider trading out of your current car sooner than later and look to either move a class down in size, or consider a sedan (which have seen soft sales) or even consider a Certified Pre-Owned replacement as a way to minimize your downside exposure.
A recent survey of 88,874 shoppers for Automotive News conducted by DealerRater showed that more than half had negative equity in their vehicles. A majority (54 percent) rolled that debt into their next vehicle purchase, while nearly 20 percent increased their down payment to offset the loss and only 6 percent chose a different, less expensive vehicle.
2018 Buick Enclave priced
Buick has posted pricing on its redesigned Enclave range, which is due in showrooms later this year. The base model starts at $39,995 plus destination. The Essence trim level starts at $44,215 and the Premium model is priced from $48,015. The flagship Avenir carries an MSRP of $53,415. Power comes from a 302-horsepower 3.6-liter V6 mated to a 9-speed automatic transmission. The 2018 Buick Enclave can be equipped with either front- or all-wheel drive.
Honda launches CPO website
Honda is increasing its efforts to promote its Certified Pre-Owned vehicle program by launching a new website dedicated to those sales. Called HondaCertified.com, the new site concentrates on listing dealer vehicle inventories to make it easier for consumers to shop for one of these pre-owned vehicles. The online experience also includes a new inventory alert feature to give shoppers the most up-to-date vehicle availability information. Among the tools available to users are filters that narrow search to specific features to more quickly find a particular vehicle. Honda has seen its CPO volume grow by 6.8 percent this year.
Dodge Grand Caravan on ice
While FCA plans to keep the Dodge Grand Caravan in its product lineup at least through mid-2019, there won’t be any U.S. models built this fall as the automaker scrambles to update the side impact airbag system to meet stricter standards, according to trade paper reports. Dodge carried over the existing Grand Caravan as an entry level, lower cost alternative to the all-new Chrysler Pacifica. FCA also sells the Grand Caravan to rental fleets instead of the Pacifica, which helps protect the Chrysler model’s residual value.
According to Automotive News, FCA originally planned to end Grand Caravan production before the tighter standards went into effect, but the popularity of the vehicle is keeping the line open. So far this year, the Grand Caravan is Dodge’s best seller with more than 63,000 sold. The minivan will continue to be built to service non-U.S. markets as the new airbag system is readied and phased into production. Currently, Dodge has only a 22-day supply of the vehicles on hand. There are only two trim levels available, a $27,090 SE and a $29,790 SE Plus.
The all-new 2018 Toyota Camry is about to hit U.S. showrooms. We take a turn behind the wheel in this First Review.
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Much attention has been paid to the 2017 Cadillac CT6, but GM’s luxury division has also done a quiet update of its other larger sedan in a refreshed 2018 Cadillac XTS.
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