American car dealers are bracing for winter sales, offering substantial incentives and discounts to clear older vehicle stocks in preparation for the new year. This comes as demand from consumers remains strong, driving the need for dealers to make room for new models.
Over the past four years, automakers have limited discounts during year-end sales, allowing them to capitalize on new vehicle demand while helping dealers manage inventory. However, the average transaction price (ATP) for new vehicles fell by 1.5% to $48,247 in November 2023 compared to the previous year. This decline reflects a shift in the market and an indication of the need to spur sales.
Inventory levels are currently at their highest since early 2021, prompting automakers to offer incentives and lower transaction prices to attract buyers. In fact, new-vehicle sales incentives were up 136% year over year in November, signaling a shift to a buyer’s market. The average incentive currently hovers around $2,500, providing opportunities for buyers to save on new vehicle purchases.
Jeep, a division of Stellantis, is among the brands with the highest inventory, offering discounts on vehicles like the Gladiator truck and Compass crossover. Other brands, including Kia, General Motors’ Chevrolet, Mercedes, and Hyundai, have also begun offering holiday season discounts to attract buyers.
In recent years, new vehicle prices have reached all-time highs, leading some consumers to consider used options. However, high prices have contributed to substantial profits for automotive retailers and carmakers, despite fewer units sold.
As dealers and automakers gear up for winter sales, consumers can expect to find attractive deals and incentives as the industry prepares for the arrival of new models in the new year.
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