Over the past few years, we have seen a real shift in the auto industry from cars to SUVs. People like the versatility of an SUV, the ease of getting in and out of it, the visibility, and they have become more fuel-efficient. The majority of people buying SUVs today are trading in small to midsized sedans. So, given this shift, can you get a “real bargain” on one of these new small or midsized cars? In short, yes.
Last month, supplies of small cars were the highest they had been in seven years. Yes, gas prices being low were a factor, but America’s craving for SUVs was the bigger cause. It was only a couple of years ago that car sales were fifty-one percent of all auto sales. Today, trucks and SUVs take the largest share.
Automakers seem to be going in different directions. Some are rushing new cars to the market, like the new Honda Civic that is completely restyled, while others are putting all their resources into SUVs. The car companies who are still doing well with cars are doing so by pouring on heavy consumer incentive; either reduced lease payments or big rebates and zero percent financing.
Toyota continues to subsidize lease payments on Corolla and Camry, Honda has cut-rate lease deals on Civic and Accord, and Ford is offering a couple of thousand dollars cash back plus zero-percent financing on Focus and Fusion. It wasn’t too long ago the Ford offers were rebates OR zero percent, but not both.
Another recent trend is the luxury brands working hard to bring upscale SUVS to market. Lexus, Lincoln, BMW, Land Rover and others have brought out compact luxury SUVs, most topping $40,000 and most selling really well.
As usual, pickup trucks continue to dominate sales numbers with F-150, Silverado, and Ram pulling the top spots so far this year. Toyota Camry is the top selling car, with Nissan Altima not far behind. Camry sales are actually down this year from last year, but you can lease one in most markets for under $200 per month with just the tax, title, and license down.
Looking at SUV sales, Ford Escape is up from a year ago, as are Edge and Explorer. Nissan Rogue is up, almost all the Jeep SUVs are up, and Toyota Highlander has seen sales gains so far this year.
Bottom line, if you are on a tight budget and cannot lease, or prefer not to lease, the bargains out there right now are in the small and midsized sedan segment. As I always say on the radio, cars are like clothes, they come in and out of style all the time. Right now the hot-sellers come in the form of SUVs, but if you want to spend $15,000 to $17,000 on a new vehicle, you can get a pretty nice car in that price range.