This Week in Car Buying: Tips for Memorial Day shopping; Makers count on sales to bail out May numbers; Buick Verano a goner; Crossover SUVs here to stay
This weekend is one of the three big selling events of the year—the others are the model year clearance sales over Labor Day and the Holiday Sales events that stretch from Thanksgiving into the new year. In order to take advantage of the deals, here are a few things to keep in mind before heading out to your dealer row to shop.
Do your homework
There are more tools than ever before to be an informed car buyer, virtually all of it online. You can compare cars, shop deals, check financing and insurance rates, and get the value of your trade at places like KBB.com, all from the comfort of your home. The first place to start is finding how much your current car is worth, that’s the equity you’ll have to work with. While it’s a great first step, that value is the last piece of the puzzle you want to bring to any deal you’re considering. And with options like the Kelley Blue Book Instant Cash Offer, where you can get a guaranteed trade-in or outright purchase of your vehicle, you have additional leverage when it comes to negotiating your deal.
Past experience should frame your expectations
Your experience with your previous car should frame the decision making process. Maybe your current ride met your needs, was the right size, gave decent fuel economy and had low maintenance costs. A no-brainer would be getting a newer version of that model. Or, is it now time to consider something completely new—maybe your family is larger or the kids are growing. Are you driving more or less miles—that could influence your decision to buy or lease (if you’re driving more, buy; less, lease). You may also want to consider a late model Certified Pre-Owned car instead of a new one, especially if you want to move up to a luxury model. And how long you have had your car will also play a role—there have been tremendous changes in vehicle technology in infotainment and driver assists. A lot of this technology is optional, so a little research can go a long way in finding the right fit. Would you rather have Apple CarPlay or adaptive cruise control?
Information is the key
Having gathered all your information—which should include what type of vehicle you want, whether you will be buying or leasing, new or CPO, having alternative financing lined up and the value of your trade, if any—you’re now ready to approach the dealer. Take time with the test drive and allot plenty of time to make the deal. If you feel you’re not making progress towards the deal you want, don’t feel pressure, remember, you’re in control. There’s no shame in walking out—you can always come back.
Can Memorial Day events save May sales?
The industry will be watching this week’s sales events as a signal of whether or not the market is sustaining its momentum or will slow down this summer. Early estimates show May sales may actually decline 6 percent over a year ago.
“This month’s sales results are set to fall year-over-year with two fewer selling days combined with retail demand that is holding steady, but not growing,” said Tim Fleming, analyst for Kelley Blue Book. “While this year may not bring the growth the industry has become accustomed to, it is important to remember that sales are still at record levels and economic factors point to continued strength in the near future.”
GM’s switch to focusing more on retail than fleet sales and reducing the number of vehicles sent into daily rental are another contributing factor to the lower expectations for May. “General Motors is expected to report one of the largest sales declines of all major manufacturers in May 2016,” said Fleming. “GM has been outspoken about its rental reduction strategy, which accounts for much of the drop in volume and will impact sales totals on the company’s high rental units like the Chevrolet Cruze, Impala and Equinox. GM is keeping the end-game in mind here; by reducing the volume of GM vehicles in rental fleets, the company will eventually see strengthened residual values.”
Buick Verano a goner
After a short 2017 model run, the Buick Verano is slated to be dropped from the division’s lineup this fall, GM announced. Built in near Detroit at the Orion assembly plant, the Verano will see the end of its run in October, even though Buick will continue to build and sell the compact sedan in China.
Coincidently, the division will be ramping up sales of the China-built Envision crossover as it eliminates the Verano. “The decision underscores the changing consumer market dynamics where there is a growing demand for SUVs in North America,” said a GM spokesman in the announcement. The Verano’s high point came in 2013, when more than 45,000 of the sedans were sold, slipping to just under 32,000 last year. The subcompact Encore crossover replaced the Verano as Buick’s biggest seller with more than 60,000 units annually.
Crossover SUVs here to stay
As if the demise of the Verano isn’t proof enough, IHS Automotive released a study showing that 63-percent of crossover SUV owners who are returning to the market are buying another one. Only 53 percent of sedan owners, by comparison, opt for another 4-door. In addition, crossover registrations continue to outpace car registrations during the first quarter with these vehicles accounting for 41.8 percent of the total, up from 35.2 percent in 2011. Car registrations have fallen to 40.9 percent in the first quarter, down from 48.7 percent just five years ago.
“We continue to see the SUV/CUV segment reaching record registration volumes in the U.S. market,” said Tom Libby, manager, loyalty and industry analysis with IHS Automotive. “New designs and OEM marketing initiatives focused on capturing repeat buyers are helping this segment continue its substantial growth.”
The 2016 Mazda CX-9 is all-new and this redesigned 3-row crossover boasts the latest in the Japanese automaker’s Skyactiv powertrain technology. See our First Review here.
If you don’t buy a vehicle this weekend, then check out the crop of new models waiting in the wings with the Class of 2017: New Cars Ready to Roll.
Audi of America announced pricing and equipment changes on its 2017 lineup as it holds increases to just 1 percent on average.
Shopping for a new car? Follow these links for helpful tips in your search and purchase: