This Week in Car Buying: GM's Truck Month, Inventories Down, Subaru Up
If you're in the market for a new pickup truck, then General Motors wants to talk to you. It has dubbed September "Truck Month" and has ramped up a program to offer special deals to consumers and dealers in order to boost its market share in this critical segment. In addition to rebates ranging from $500 to $4,500 on 2014 models and $500 to $2,000 on 2015 HD pickups, GM is paying a $1,300 bonus to dealers for each truck they sell if they hit certain sales targets.
The generous offers are viewed as a way of pre-empting Ford's launch of the redesigned aluminum-bodied 2015 F-150 pickup later this year and to beat back sales gains by Chrysler's Ram division, which has used incentives to increase share to 21.3 from 18.5 percent of the segment. While Ford is not likely to have any deals when the new F-150 bows, according to Automotive News it currently has about 271,000 vehicles on the ground, which equates to a 108-day supply. Ford will want to clear out those stocks of 2014 models just as the new trucks arrive.
Right now there's $500 to $1,750 rebates on 2014 F-150s, those deals might get sweeter if stocks aren't depleted when the new truck launches.
August's scorching sales pace capped by a strong Labor Day Weekend cleared out the lots of many dealerships as indicated by inventory numbers reported by Automotive News. The number, which is expressed in the number of days it would take at current selling rates to retail all the vehicles on the ground, stood at 56 days at the end of August, down from 76 days a month earlier. Manufacturers consider 60 days' supply a normal level.
With tighter supplies and some incentive programs ending, there are still some individual models and brands that have large stocks of vehicles on hand. This is particularly true at Cadillac and Lincoln, and the incentives levels reflect that fact. Cadillac, as a division, now has a 132-day supply of cars on hand. It did reduce that number from 172 days at the beginning of August, but the ATS compact still has a 141-day supply and the larger CTS is at 167 days. Big incentives are being offered to clear out the remaining 2014 models. The CTS, CTS-V and some ATS models carry $3,000 rebates, while the XTS full-size sedan has $5,000 on it and the 2014 Cadillac SRX comes with $2,000 cash back. Meanwhile, over at Lincoln, the MKS sedan has a 106-day supply and the MKT crossover is at 108 days while the Navigator is at 115. The latter is being closed out as a new facelifted version is on its way for the 2015 model year. Lincoln's absolute number of vehicles on the ground is not nearly as high as Cadillac, so most of the incentives on these slower selling models consist of 0-5.9-percent financing offers.
Subaru hot to trot
Clocking in with just a 17-day supply of cars on the ground, Subaru is perhaps the hottest brand on the market today, with its all-new product lineup from Legacy to Outback in high demand. As a result, the automaker has raised its sales estimate for the 2014 calendar year to top 500,000 sales for the first time in its history. That doesn't mean Subaru is immune to spiffs. It's is offering 1.9-7.9 financing on select 2015 models, including the BRZ, Legacy, Outback and Forester, as well as some 0-7.9 percent deals on 2014 models including the departing Tribeca crossover, the XV Crosstrek Hybrid, Impreza, Legacy, Outback and Forester.
The brand's supply will be growing as Toyota moves Camry production out of Subaru's Indiana assembly plant. That extra capacity is part of the plan to sustain the half-million sales level.
Want to buy a Viper?
Speaking of abundant stocks, there are some 600 Vipers in dealers hands and the plant has been off-line since July. With an estimated supply of 434 days based on average sales of just 60 per month, Dodge has taken a bold step to clear out the stocks and jumpstart sales by knocking $15,000 off the car's $100,000 sticker. In addition, the division, which has taken over Viper marketing from the now-defunct SRT performance division, is giving buyers of 2013-14 models (about 1,000 owners) coupons worth $15,000 off the purchase off their next Viper.
Interest rates drop on new car loans, rise on used
After rising slightly following the Labor Day Weekend sales, the average interest rates on new car loans fell slightly after a two-week plateau. According to Bankrate.com, the average rate for a 36-month loan fell from 3.97 to 3.94 percent, 48-month contracts dropped from 3.99 to 3.97, while 60-month loans average 4.02 percent, 4 basis points down from the previous 4.06 percent. Used car loans will be slightly higher, both 36- and 48-month loans edged up a basis point each to respective rates of 4.73 and 4.8 percent.