NADA: Incentives and Declining Used-Car Prices to Boost Auto Sales



MCLEAN, Va. — New-vehicle incentives and rebates as well as declining prices on used vehicles are a couple of factors pointing to steady auto sales as the summer months come to a close.

"The end of summer is typically a good time of the year to shop for new and used vehicles," said Jonathan Banks, senior analyst with the National Automobile Dealers Association (NADA) Used Car Guide.

"Dealers and manufacturers are offering incentives and rebates to sell remaining inventory at dealerships and to make room for new model year vehicles arriving this fall," Banks added.

For consumers shopping in the used-vehicle market, average retail-prices for used cars and light trucks up to five-years-old experienced the greatest monthly decline this year, dropping 3.8% in August, says the NADA Used Car Guide.

"Over the next few months, we expect to see an acceleration in the decline of used-vehicle prices that usually begins as the summer season winds down," said Banks, in the August edition of Guidelines , a monthly report that analyzes trends and pricing information on both the new- and used-vehicle markets.

"New-vehicle incentives and discounts are another seasonal factor that typically results in used-vehicle price declines in late August and September," he added.

The NADA Used Car Guide is predicting used-vehicle prices on average will drop between 3% and 3.5% in September. In monetary terms, a used car worth $12,000 today will drop by more than $400 by the end of the third quarter.

Despite the declines of used-vehicle prices throughout the remainder of the year, prices are still at historically high levels, Banks added.

"While steady price declines are making many late-model used vehicles more affordable to purchase, it's important to note that higher-than-average trade-in values are still providing consumers with built-in equity to get better deals on either a new or used car or truck," he said.

Most Popular

  1. Exclusive: Downtown Royal Oak Draws Four Restaurants, Including B Spot Burgers
    Four new restaurants are coming to downtown Royal Oak, including a B Spot Burgers by Iron Chef...
  2. Hat Trick
    Three stadiums north of downtown Detroit, including a new $450-million arena for the Detroit Red...
  3. It’s Your Party, Detroit: Area Organizations Celebrate the City’s 313th
    Thursday marks the 313th anniversary of Detroit’s founding by the French explorer Antoine de la...
  4. Midtown and Northwest Detroit Draw New Apartments, Businesses, Expansions
    Business is booming in Midtown and northwest Detroit, where several stores and restaurants are...
  5. ‘Hell’s Kitchen’ Heads to Southfield for First-Ever Michigan Casting Call
    The Great Lakes Culinary Center in Southfield may be best known for its cooking classes,...
  6. GM’s Mary Barra: Connectivity of Cars Will Save Lives, Protect Environment
    General Motors CEO Mary Barra will discuss changes in the transportation environment, as well as...