This Week in Car Buying: Presidents’ Day incentives launch; Online sales coming; Chevy Colorado ZR2, Mazda CX-9 priced; Transaction prices still high
The first batch of Presidents’ Day Sales Event incentives are ramping up with Nissan first out of the box by offering $2,500 on its midsize 2017 Altima. All in, the deal can save up to $4,800 as the make adds an extra $1,000 if the vehicle is financed through Nissan Motor Credit and $1,300 in option package credit. The offer continues through the end of February.
Chrysler is also getting on the Presidents’ Day bandwagon with a $2,000 rebate on its 2017 Pacifica minivan. Chevrolet, on the other hand, has designated February as Truck Month and has a total of $11,185 in incentives on its 1500 Silverado Crew Cab. The package includes $3,000 bonus cash, $2,935 in factory average MSRP reduction, a $2,500 rebate, $2,000 down payment assistance and $750 in optional features. Chevy is also selling down 2017 Equinox SUVs in advance of the 2018 model, which will soon be hitting showrooms. The carryover models can be leased on a 39-month contract for $232 per month with no money down, no security deposit or first month’s payment.
More deals are expected as manufacturers begin to roll out their sales programs not only for the February holiday, but also in anticipation of the spring selling season.
Online sales coming
Manufacturers and dealers alike are beginning to put in systems that will eventually allow buyers to complete vehicle transactions on line without setting foot inside a dealership. That’s the consensus to emerge from the recently concluded National Automobile Dealers Association convention in New Orleans. Speeding up the sales process to match what retailers in other businesses offer online is the goal of the overhaul.
Among the processes under development beyond merely negotiating a price are ways to arrange financing and insurance as well as signing key documents on line, all of which would shorten the time necessary to close a deal on a new vehicle.
"Once you figure out it's a good thing [online sales], it takes off like crazy," Cox Automotive COO Mark O'Neil told the Automotive News Retail Forum held during the convention. Cox Automotive is the corporate parent of Kelley Blue Book. "By the end of 2017, we are going to be leaving the ‘slow growth, bumpy, experiment-with-it phase,' and we're going to start with the very rapid part of growth." He envisions nearly 10 percent of vehicle sales being conducted online as early as 2019.
According to Automotive News, Del Grande Dealer Group in the San Francisco Bay Area is particularly aggressive in its plans to create a way to buy a car online. The group has invested in systems to provide price validation, trade-in offers, car configuration and finance and insurance products through its website. The idea is to offer a similar experience online as if the buyer had visited the dealership.
Chevrolet Colorado ZR2, Mazda CX-9 priced
Pricing for the 2017 Chevrolet Colorado ZR2, a high performance off-road pickup, has been announced with the sticker opening at $40,995 including $940 destination. The ZR2 comes equipped with all-wheel drive and a 308-horsepower 3.6-liter V6. Among the options available is a 2.8-liter Duramax turbodiesel rated at 186 horsepower and 369 lb-ft of torque.
“ZR2 is truly a segment of one and does everything well, from traversing heavy two-track trails to high speed desert running and full-on rock crawling,” said Sandor Piszar, Chevrolet Trucks marketing director. “We you buy a ZR2 at the starting price of $40,995, you are getting all of the significant off-road technologies standard with the vehicle, as well as an 8-speed automatic transmission and a wealth of other features at no additional cost.”
Meanwhile, Mazda announced pricing on the 2017 versions of its sleek CX-9 crossover SUV. The 3-row vehicle returns with the same $31,520 MSRP that it bowed with a year ago. In addition to holding the line on the base price, Mazda added Smart City Brake Support, a feature offered only on its top line Grand Touring and Signature models to its mid-line Touring versions.
The carryover base price is for front-drive versions, while the AWD CX-9 Sport starts at $33,320. The Touring models are $35,970 for FWD and $37,770 for AWD. Grand Touring models are priced at $40,470 for front-drive and $42,270 for all-wheel drive. The range topping all-wheel-drive only Signature edition costs $44,315.
Transaction prices still high
Manufacturers were able to set a sales record last year thanks to heavy incentives. Those offers did exert a slight downward pressure on vehicle average transaction prices, but not enough to push that figure down significantly. According to Kelley Blue Book data, the average transaction price (ATP) stood at $34,968 in January, down from December’s record by $453 (1.3 percent) but up by $1,123 or 3.3 percent over a year ago.
“Industry transaction prices remain at high levels, rising more than 3 percent this month,” observed Tim Fleming, analyst for Kelley Blue Book. “The changing mix of sales in favor of utility vehicles is the primary driver for the year-over-year strength, as average prices in SUV segments climbed modestly, while the prices of subcompact SUVs declined. Demand for subcompact SUVs, one of the hottest segments in 2016 appears to be slowing down, although new models from Ford, Nissan and Toyota could help spark interest in the segment.”
Among makers to see higher ATPs were Ford, a 5.3-percent bump thanks to its new Lincoln Continental; Chrysler climbed 5.1 percent on the strength of the Pacifica minivan; Nissan was up 4.6 percent thanks to a richer mix of crossovers; GM gained 4.4 percent due to strong sales of Cadillac CT6 and XT5, while Honda saw its average go up 3.1 percent with the launch of the Ridgeline.
By segment, the biggest drop came in high performance cars, which saw ATPs drop by 8.1 percent from a $105,386 average a year ago to $96,890. Entry-level luxury cars saw the biggest gain by segment, up 4.8 percent from $39,501 to $41,387 from 2016.
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