This Week in Car Buying: Ford Ranger appearance packages hot; Subaru offers CPO incentive; Hyundai offers student loan deal; Sales soften, transaction prices up
Already popular with buyers, the 2019 Ford Ranger has also found that it has a hit on its hands with new appearance packages. The company says more than two-thirds of the Rangers sold have appearance packages that include Sport, Chrome and now Black exterior appointments to differentiate the vehicles from stock. The Sport Appearance Package features unique wheels and Magnetic Gray accents, while the Chrome package has bright chrome wheels and exterior trim.
The new Black Appearance Package is the latest to be added to the mix and includes black-painted grille, bumpers, running boards, spray-in bed liner, fender vent surround, mirrors, sill plate and high-gloss black 18-inch wheels. Also available on the FX4 Off-Road Package is a black skid plate.
“Like the rest of their gear, Ranger customers are choosing the option that best fits their adventures,” said Todd Eckert, Ford truck group marketing manager. “Having the right gear matters and so does the right look. The Black Appearance Package adds aggressive style to the adventures our customers embark on.” He added that the new Black Appearance Package is available with any exterior color. The option is priced at $1,995 and is available for order now with the first deliveries starting this summer.
Subaru offers CPO incentive
While Subaru may have some of the lowest incentives by manufacturers on new vehicles, it has begun to push a low interest rate program on its certified pre-owned models. The Japanese automaker has what it calls the Subaru Love Strikes Twice Event which offers a 0.99-percent finance rate on eligible CPO vehicles in dealer stock.
The CPO program at Subaru includes a factory-backed 7-year/100,000-mile powertrain warranty, 24/7 roadside assistance and a $500 owner loyalty coupon for those trading in a Subaru. The program runs until the end of the month.
Hyundai offers student loan deal
The Korean automaker is looking to make it easier for debt-saddled students to get into a new Hyundai with its new Student Assurance program, which will give qualified buyers up to $900 to apply toward their student loans. The program is being pilot-tested in California and the Phoenix area before an eventual national roll-out.
The idea came from a pool of 118 suggestions from Hyundai employees as part of an effort to use their input to boost sales, provide new revenue or improve the brand’s quality, efficiency and product. In submitting the idea, Martha Mejia, who is in quality data analytics at Hyundai along with Samantha Recchia, an associate in public relations, said their goal was aimed at helping their peers deal with the student debt crisis. Education loans far outstrip the debt incurred by younger buyers for new car loans and leases. According to TransUnion, borrowers between the ages of 20 and 25 hold more than $89 billion in student loan debt compared to the $33 billion owed on vehicles.
Sales soften, transaction prices up
The new vehicle market saw softer sales in March, but that downturn is not creating pressure so far to push incentives as manufacturers look for ways to align supplies with actual demand. And while the numbers were down some 3 percent compared to a year ago, the underlying strength of the economy came through in the seasonally adjusted sales rate, which popped back up over 17 million after slipping below that level for the first two months of the year.
Among the major manufacturers showing sales declines were GM at 8.3 percent, Fiat Chrysler Automobiles 7.3 percent and Ford with 5.2 percent. Among imports, Nissan was off 7.2 percent, Toyota dropped 3.5 percent and Jaguar Land Rover was off 7.5 percent.
March sales gains were experienced by Honda, up 4.3 percent, Volkswagen Group, 8.5 percent and Hyundai-Kia, 5.6 percent.
Trucks continue to grow in sales, with much of the decline in overall volume attributed to a decrease in traditional car sales. Ford, for instance, saw its car sales decline 27 percent over its year-ago numbers primarily due to its decision to focus more on truck and SUV segments. Ram continues to help sustain FCA with a 15-percent growth in volume.
Incentives have been moderating, with J.D. Power reporting that the average spiff for a new vehicle was $3,689, down from $3,903 a year earlier. J.D. Power also estimated that the average time a vehicle spent on a dealer’s lot before being sold rose 5 days to 74.
Even though sales are soft, transaction prices remain firm. According to Kelley Blue Book data, the estimated average transaction price for a light vehicle was $36,733, a healthy bump up of $824 or 2.3 percent year-over-year. Month-to-month, average prices remain fairly stable decreasing only $174 or 0.5 percent from February to March.
“Prices climbed more than 2 percent year-over-year in March, led by full-size trucks, where half of the models are new,” said Tim Fleming, analyst for Kelley Blue Book. “While a 2 percent increase doesn’t sound like much, factoring in higher interest rates this year and tighter incentives means average monthly payments are up about $30 from a year ago – an increase closer to 6 percent. This sharp increase is likely contributing to the slower sales pace in the first quarter. We will have to see if automakers respond with greater incentives later in the year, if sluggish sales continue.”
FCA experienced the greatest transaction price growth, posting a 5 percent increase primarily due to Ram. The truck division’s prices were up nearly 7 percent, thanks to its new half-ton pickup, which also posted impressive sales gains recently. Meanwhile, Jeep climbed 2 percent on the strength of the Wrangler, which was up 9 percent.
Also notable for March 2019, Subaru had another strong month as its average transaction price rose 4 percent, with the new 3-row Ascent helping the brand most, transacting close to $40,000. In addition, the redesigned Forester posted a 3 percent year-over-year improvement.
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Ford may have cut back on its car output, but it is heavily invested in a new generation of crossover SUVs as the 2020 Ford Escape attests. It’s set for a New York Debut.
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