This Week in Car Buying: Deals of the month; What the rich drive; Dealer expands no-haggle pricing; Longer-range EVs coming
As we reported last week, incentives are beginning to surface on crossover SUVs, a trend picked up in Kelley Blue Book’s deals of the month. In addition to spiffs on these all-wheel-drive people movers, continued weakness among family sedans is also contributing to a plethora of rebates and lease deals in an effort by automakers to pump some life into a moribund segment.
“As winter weather grips many parts of the country, new-car shoppers will find some great deals on popular all-wheel-drive and SUV models like the Subaru Outback and Jeep Cherokee,” said Jack R. Nerad, executive editorial director and executive market analyst for Kelley Blue Book. “Shoppers can take advantage of slow foot-traffic at dealerships during the cold, forbidding winter and can capitalize on the overflow of still-brand-new 2016 model-year vehicles on dealer lots to get an enviable deal this month. Traditionally this month is a tough one for car dealers.”
Particularly attractive is the continuing $4,500 cash rebate on the 2017 Jeep Cherokee, a considerable amount on a vehicle that carries an MSRP of $26,540 and nets out at a KBB Fair Purchase Price of $25,048. Subaru, which has been on a roll and surpassed 600,000 sales last year for the first time, has a lease deal on its popular 2017 Outback wagon. The contract is for three years at $229 per month with just $1,729 down.
In the midsize sedan category, Hyundai is looking to clear out stocks of 2016 Sonata models with a $179 per month lease over three years with $1,449 up front, while Nissan hopes to move newer 2017 Altimas with $1,000 cash back and 0 percent financing. The larger 2016 Kia Cadenza can be leased for $299 per month over 39 months with $1,499 down. Buyers of a more traditional rear-drive family sedan will find a $3,000 rebate and 0 percent financing on the 2016 Chrysler 300. Also in the people-moving realm, the 2017 Toyota Sienna minivan has a $269 per month, three-year lease on it with $1,999 cash up front.
Small cars are also among the month’s top deals, including the continuing $4,000 rebate on the 2016 Hyundai Veloster, $1,000 cash back and 0 percent financing on the tiny 2016 Chevrolet Spark, and a $169 per month 3-year lease with $1,999 down on the Toyota Corolla.
What the rich drive
While most of us can only dream of hitting the lottery and then fantasizing what sort of exotic luxury vehicles would grace our newly-bought mansion’s garage, the reality is that most of America’s well-heeled population prefers more prosaic transportation. A study conducted by MaritzCX of the buying habits of wealthy Americans with incomes exceeding $200,000 per year for the 2016 year found that the most popular purchase was a Ford F-150 pickup truck.
In fact, the rich seem to like trucks and SUVs -- the next three vehicles on the list are the Jeep Grand Cherokee, Honda Pilot and Jeep Wrangler. The fifth and perhaps most surprising was the Honda Civic.
Although these high-income earners' tastes seem to be shifting more toward cars and trucks, the presence of a Civic on the list does not necessarily mean the rich are suddenly on a thrift kick. The list of top cars among those making more than $400,000 per year still includes the Civic, but is topped by the Lexus RX and Tesla Model S. And those making a half-million or more like the F-150 as their top choice, followed by two Land Rovers, BMW’s X5 and the Lexus RX.
Still, even though pickup trucks are used for work, they are like blue jeans in that they can also be a very expensive fashion statement in their own right. The top Ford F-150 trim level, a 4-wheel-drive Limited SuperCrew carries a base MSRP of $64,220.
Dealer expands no-haggle pricing
Last month, we reported that Penske Automotive Group had given up on a no-haggle pricing pilot program at a new store in the Phoenix area. Underscoring the different philosophy on best practices is a report that RFJ Auto Partners, a Texas-based dealer group with stores located across the nation, is expanding its no-negotiation sales model called Hassle Free Buying. According to Automotive News, the chain currently uses the format at nine of its 25 locations and over the next three years is looking to extend the program to all of them. The approach reportedly has resulted in higher sales volume, higher customer service scores and lower employee turnover.
The Hassle Free Buying program is primarily internet-based and uses salespersons, finance managers and delivery specialists. In addition to no negotiating on price, the trade-in allowance is also fixed. Employees are paid a commission on vehicle volume rather than the gross margin on an individual sale.
A Quick Poll on KBB.com shows that such a program may resonate with some buyers. According to the survey, 35 percent of the respondents said they are not at all comfortable negotiating prices at a new car dealership, while 33 percent are mostly or completely comfortable. That split preference among consumers indicates that nothing will be settled soon as dealers will continue to either rely on the traditional negotiation model or experiment with the no-dicker sticker approach.
Longer-range EVs coming
Lost in the publicity over more affordable EVs like the 2017 Chevrolet Bolt and the upcoming Tesla Model 3 breaking the 200-mile barrier on range is that other manufacturers are slowly and steadily increasing the distance between charges on their electrics. While these vehicles are still anywhere from 80 to 100 miles short of the Bolt’s 238-mile capability, the longer they go between plug-ins is increasing their utility and may have an impact on the fledgling EV market.
The latest to announce longer range is the 2017 Volkswagen e-Golf, which has a new, more powerful 35.8 kWh lithium ion battery that lifts its range from 83 to 125 miles. A 7.2 kW on-board charger allows it to be replenished in less than six hours at 240 volts. DC fast charging can give an 80-percent charge in less than an hour. Nissan is expected to introduce a new Leaf that may offer greater range than the e-Golf, but not quite as much as the Tesla or Bolt. Aggressive EV pricing, quicker charging and longer range may finally begin to move the needle on sales of these vehicles.
Check out the This Week in Car Buying Podcast here.
While the wealthy may like the Ford F-150, they may also might want to take a look at the 2017 GMC Sierra Denali HD. We recently took the wheel in this First Review.
An all-new 2019 Ford Focus is headed our way with what appears to be a larger footprint. We have the latest spy photos and information here.
If you’re looking for a more expressive take on a German 2-seat roadster, look no further than these special editions of the Mercedes-Benz SL and SLC.
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