This 4th of July Holiday Car Shoppers will find many surprises on dealerships lots. Most will not be the fun kind, as dealers struggle with a tremendous lack of inventory. The exceptions are domestic brands: Ford, GM and Chrysler. While consumers get daily doses of the GM recall debacle, GM, Cadillac, Chevy dealers report a notable drop in pre-weekend shoppers. Pre-holiday shopping typically occurs the two weekends prior to the holiday blitz. Ford reported solid end of month sales which will carry over to the holiday, as their incentives include up to $1500.00 in rebates AND low interest rates of .09% and 1.9% on most models. Chrysler & Jeep dealers note hot models are in short supply but big rebates on truck hoods make this an uneven summer start.
Lack of Inventory hits import brands hardest.
The old adage: Supply vs. Demand, has never been truer than this year. We are coming off a 2013 MY industry prediction of 15 million cars sold, to the reality of a record-breaking actual volume 15.9 million cars sold. This year suppliers of raw materials and car manufacturers struggled to accurately produce enough of the most popular models. Long gone are the days of surplus manufacturing when cars sat at port or in farmers fields, waiting to ship. Porsche, Lexus, BMW, Land Rover, Mercedes, Acura and Audi all report clients having to purchase from inbound stock lists or ordering specific configurations only to wait up to four months for delivery. Most dealerships are out of 2014 models and the 2015’s are getting scooped up fast. Hence the lack of big incentives, rebates and low interest rate combinations from the import car brands.JD POWER Awards mean: Top Quality comes at a price.
Never more than today, have the issues of quality and safety been more important than color, style and price. Not only what the car costs today, but the lasting effect of trade-in or resale value in 5+ years, and the cost of repairs and aggravation during the ownership cycle, all play into the car shoppers mind as they web surf 4th of July deals. The pressure to provide a top notch consumer-friendly buying experience, positive “YELP’ review and higher industry standards for product knowledge, have led to dealerships recognizing the VALUE of their product and showroom performance. The luxury brands: Porsche, Jaguar are quick to point to consecutive years at the top 1 & 2 spots, as justification for a MSRP tag on the most highly sought cars in a class of their own.
Meanwhile Audi, MB, BMW flounder with a similar lack of inventory and the consumers skepticism that their personal economy has not caught up to the price and demand.
FACTORS in the 2015 CAR SHOPPING MARKETPLACE.
Raw materials like steel, aluminum, earth minerals all go into making a car. These components are in high demand from the few global suppliers which produce for the auto, aerospace, rail and housing markets. Economic rebounds across all continents has put tremendous pressure on these factories to meet growing demand, and the USA is not MAKING any of these components today. Parts and finishes must be ordered on projection of future sales, up to 18 months in advance. Hence, any attempt to increase manufacturing lines and employ more workers would simply mean a potential quality control problem, along with limited supplies of core components. We see the result of this in the latest recall by GM of over 20 million faulty ignition switches (13 fatal accidents) used by over 25 different models spanning ten years. Add to this; a failing fleet of aging cars on our roads. In the past, a car owner kept his/her vehicle 4.5 years. Leasing often shortened that window to 3.2 years. Post 2008 economic recession here in the USA and abroad, our cars now average 9 years old and the cost of repair far outweighs the value of the sum of its parts. LET’S GO CAR SHOPPING. You and all your neighbors will be out to buy a new or pre-owned car this weekend. It is the best and last time you will find a deal this year. Rebates and incentives are the highest on remaining 2014 inventory. If you can find what you want, GET FLEXIBLE on color and options.Trade-in values are at an all-time high right now.
Why? Lack of new cars puts demand on late model pre-owned and Certified used cars. Lack of new car sales means fewer trade-ins, hence a lack of used cars in some sectors. USED CPO-Certified Pre-Owned deals on LUXURY MODELS.
The bright spot in this story is late model, LOW mileage LUXURY cars. Owners of one to three year old Porsche, Jaguar, Audi, BMW, Lexus and MB have turned their cars over with relish this year. As many of these car enthusiasts have multiple rides at their disposal, the mileage is lower, the cars are in garage perfect condition, and those on the west cast have rarely seen rain.
Look to these “hot spots” for your deals.
More tomorrow on JULY 4th Used car deals, Incentives and rebates by brand.
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Sarah Lee is an automotive writer, personal car concierge and commercial fleet manager. If you need free advice on your car problem, question, issue, contact her at sarahlee@mycarlady.com,mvides422@gmail.com,carlady@cox.net for a confidential conversation.
She has over 25+ years of experience. She writes about Cars, and is a staunch consumer advocate on car related subjects.
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