Average Auto Incentives Hit Lowest Levels Since 2005, Reports Edmunds.com


Average Auto Incentives Hit Lowest Levels Since 2005, Reports Edmunds.com

SANTA MONICA, Calif. — May 1, 2012 — Incentive spending on new car sales in April hit its lowest level in almost seven years, says Edmunds.com, the premier online resource for automotive information. Edmunds.com reports that the average True Cost of Incentives® (TCISM) per vehicle in April was $2,071, the lowest average spend since automakers spent an average of $1,962 in October 2005. April's average TCISM is down 2.2 percent from March, and down 1.8 percent from April of last year.

"This is the clearest indication yet that consumer motivation is high and that automakers feel little pressure to rely on incentives in order to keep sales churning," said Edmunds.com Senior Analyst Jessica Caldwell. "We'll likely see incentives linger at these low levels until auto sales ease off the torrid pace we've seen so far in 2012."

Average True Cost of Incentives® (TCISM) by Car Manufacturer
Manufacturer 12-Apr 12-Mar 11-Apr Apr 2012 vs Mar 2012 Apr 2012 vs Apr 2011
Chrysler $2,495 $2,486 $2,401 0.4% 3.9%
Ford $2,360 $2,701 $2,341 -12.6% 0.8%
GM $3,446 $3,258 $3,015 5.8% 14.3%
Honda $992 $991 $1,679 0.1% -40.9%
Nissan $2,136 $2,455 $1,836 -13.0% 16.3%
Toyota $1,388 $1,371 $1,730 1.2% -19.8%
Industry $2,071 $2,118 $2,109 -2.2% -1.8%

The most notable shift in spending among the Big Six automakers came from Nissan, whose spending fell 13.0 percent month over month and even as it rose 16.3 percent year over year. Ford was the only other major manufacturer to drop its incentive spending in April. Its average TCISM per vehicle fell 12.6 percent month to month, but ticked up 0.8 percent year over year.

Even as gas prices started to decline in April, car buyers still found some of the best April deals in less fuel-efficient segments. The large car segment, for example, offered the highest discounts, on average, at 13.2 percent off MSRP, which was up from 12.2 percent off MSRP in March. Dealers, however, kept a tighter incentives grip on smaller fuel-efficient vehicles. The discount on subcompact vehicles was 2.2 percent off MSRP in April – down from an average of 2.5 percent in March. And the discount off compact cars in April fell to 4.5 percent off MSRP in April, down from 5.2 percent in March.

Shoppers can always find the vehicles with the most compelling deals on Edmunds.com's True Market Value® Deals of the Month page.

Edmunds.com's monthly True Cost of Incentives® (TCISM) report takes into account all automakers' various U.S. incentives programs, including subvented interest rates and lease programs, as well as cash rebates to consumers and dealers. To ensure the greatest possible accuracy, Edmunds.com bases its calculations on sales volume, including the mix of vehicle makes and models for each month, as well as on the proportion of vehicles for which each type of incentive was used.

About Edmunds.com, Inc. (http://www.edmunds.com/help/about/index.html)

Edmunds.com, the premier online resource for automotive information, launched in 1995 as the first automotive information Web site. Its acclaimed mobile site, Edmunds.com Android App and five-star Edmunds iPhone and iPad apps make car pricing and other research tools available for car shoppers at dealerships and on the go. Its automotive enthusiast web site, InsideLine.com, is the most-read car publication of its kind. Its highly regarded mobile site and iPhone app features the wireless Web's most comprehensive gallery of automotive photos and videos. Edmunds.com Inc. is headquartered in Santa Monica, California, and maintains a satellite office in suburban Detroit. Follow Edmunds.com on Twitter@edmunds and fan Edmunds.com on Facebook.

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