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Automakers rev up discounts to beat coronavirus sales blues

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might be some good news for those in a market for a new vehicle.

 

Automakers rev up discounts to beat coronavirus sales blues

 

 

Quote

On a per vehicle basis, spending on discounts was at record levels for June at about $4,441 per unit, a significant 12% increase from $3,966 per unit for June 2019, according to automotive consultancy firm J.D. Power.

 

the not so good news...

Quote

“Before COVID, only 7% of all sales represented loan terms for 84 months. That metric shot up to 21% during the peak,”

 

Edited by hegemony

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Even though it's financial suicide the 84 month part makes sense from the standpoint that manufacturers are pushing the 0% 84 month loans. 

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27 minutes ago, tomforr said:

Even though it's financial suicide the 84 month part makes sense from the standpoint that manufacturers are pushing the 0% 84 month loans. 

true but 84% even at 0% is terrible for 99.44% of consumers. It often means they buy a lot more car than they can afford, are upside down for years, and eventually have payments on a card >6 years old.

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34 minutes ago, hegemony said:

true but 84% even at 0% is terrible for 99.44% of consumers. It often means they buy a lot more car than they can afford, are upside down for years, and eventually have payments on a card >6 years old.

Oh, I wasn't justifying an 84 month loan. Just commenting on the correlation of manufacturers pushing the term made sense why it spiked. Even at 0% I can't see justification for a term that long. 

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15 hours ago, MarvBear said:

Manheim's used vehicle price index (adjusted for product mix, seasonality and everything else you can think of) as of mid-June was on target to hit its highest level in history.

 

General demand decrease for new vehicles has been more than offset by inventory constraints, so most manufacturers have eliminated volume incentives for dealers, and dealers are holding onto more gross.

 

The premise of the article in the first post is completely disconnected from the macro trends in the industry right now.  There are fewer bargains to be found, not more.

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