This Week in Car Buying: Inventories rise, LA Auto Show
The number of vehicles on the ground at new car dealers rose about 8 percent as of Nov. 1, according to trade journal Automotive News, which could mean that dealers are stocking up for a big sales push fueled by their "Holiday Sales Events".
Just to update, some of these incentive programs, which are in place until the end of the year, are playing off the "Black Friday" theme of retailers who count on day-after-Thanksgiving sales to push their bottom lines into the black (hence the term Black Friday). At the LA Show, Chevrolet global marketing chief Tim Mahoney joked that after Chevy concludes their Black Friday sales event, "I'm pushing for a Cyber Monday program" referencing the uptick in consumer gift buying at work the Monday after the Thanksgiving weekend.
Most of the rising stocks of cars are at the Detroit-based brands, though imports like Mitsubishi, Mazda, Hyundai and Kia have seen growth in inventories. Right now, the industry overall has a 76-day supply, not terribly high over the 60-day figure that is considered normal. And it's one day less than a year earlier.
Among the new models with great availability, the all-new 2015 Chrysler 200 stands out at 129 days, up from 106 a month ago. Chrysler has cash back of up to $2,500 on that model. Likewise, Ford is seeing the days' supply on its Fiesta climb from 110 to 158 over the past month, although the division only has a $1,000 spiff on the car at this point.
Over at Toyota, with the facelifted 2015 Camry and Sienna minivan finally finding their way into showrooms, the Japanese automaker, as part of its aforementioned Black Friday sale, is offering up to $2,500 on 2014 models of the minivan and up to $2,000 on the sedan (including the hybrid model).
Shopping the auto show
Auto shows are a great place to get a head start on shopping for a new car because you get to compare all different models in a fairly compact and inviting environment. The Los Angeles Auto Show kicks off the round of major U.S. shows this week and while the value for real world car buyers comes on public days, our early access to the show allows for some tire kicking on several new models and provides a glimpse into what you will be seeing at showrooms throughout the coming calendar year. In some cases, it may be best to find a solid deal on a carryover vehicle. However, changes are coming in certain developing segments that will not only give you more options, but also might put pressure on existing competitors to deal more aggressively.
A case in point is the emerging subcompact crossover SUV class. Right now, there are only a few of these mighty mites on the market, chief among them are the 2015 Buick Encore, BMW X1, Nissan Juke and vehicles like the 2015 Kia Soul or Scion xB/xD, which sort of defy classification. However, the next model up in the class will be the Encore's sibling, the new 2015 Chevrolet Trax. It will be followed in fairly short order by the 2016 Honda HR-V, which is built off the Fit platform, and the 2016 Mazda CX-3, which is based on the new Mazda2. If you're in the market for a subcompact crossover, a visit to an auto show in your area is a good opportunity to check these new vehicles out.
Bank rates on the move
After a few weeks of relative stability, loan rates are again on the move up, increasing for both new and used vehicles, according to www.bankrate.com.
According to the website, "The average rate for a 60-month new car loan went up 2 basis points to 4.06 percent. The average 36-month new car loan increased 2 basis points to 3.98 percent. The average 48-month new car loan rose 1 basis point to 4 percent. A basis point is one-hundredth of 1 percent."
Meanwhile rates on used car loans jumped 2 basis points to 4.92 percent for a 36-month contract, while the average 48-month used car loan climbed 1 basis point to 4.99 percent.