According to online automotive resource Edmunds.com, incentives designed to bolster new vehicle sales in the U.S. fell to their lowest level in nearly seven years last month.
Edmunds reports that the average True Cost of Incentives in April was $2,701 per vehicle, the lowest amount since October 2005, when the average was $1,962. In terms of percentages, April’s average represents a 2.2 per cent decline from March 2012 and a drop in 1.8 per cent compared with April last year.
According to Edmunds.com senior analyst Jessica Caldwell, the drop in auto incentives is “the clearest indication yet that consumer motivation is high and that automakers feel little pressure to rely on incentives to keep sales churning. We’ll likely see incentives linger at these low levels until auto sales off the torrid pace we’ve seen so far in 2012.”
The most notable changes in spending on incentives month over month came from Nissan, which dropped it’s rate by 13.0 per cent; Ford Motor Company was close behind, reducing spending on incentives by 12.6 per cent.
What’s also been interesting is that fuel prices have risen; dealers have kept a tighter grip on incentives for smaller, fuel efficient cars, reserving the biggest discounts for larger models, along with trucks and SUVs; in April, discounts off MSRPs on large cars amounted to an average of 13.2 per cent, on sub compact cars it was just 2.2 per cent.
