Wednesday, August 15, 2012

Car prices rise as incentives disappear

Car prices rise as incentives disappear

Shi TOU / Reuters file

The prices of new cars are back on the rise.

By Paul A. Eisenstein, the Detroit Bureau
Yes, will probably pay more for the new car, truck or crossover, which looked at you have been, have. With U.S. sales rising and factories often stretched to the limit were manufacturer incentives curb and pushed prices higher, according to industry analysts.

The good news is that everything you buy your next new vehicle expected to be clearly equipped as the product that it replaced, reports, J.D. power and associates.

Who could just the Olympic Games the impression this is a good time to buy, at least if a lower price tag the target. Chevrolet, in particular heavily promotes his program "total confidence pricing", which means that all buyers get a particularly low number. Other automakers have low-interest loans and other Givebacks shopper in showrooms were to pitching.

But the deals are not as good as she might first appear, according to Jesse Toprak, senior analyst at "Also if automakers the impression that they are incentives, the issues..." Are ramps can give (them) increasingly of the financial incentives and pushing financing and leasing programs move, "he said."

The market research company underlines the trend data. Only a handful of manufacturers - including Honda, Nissan and Volkswagen - incentives are greater than a year ago. VW Givebacks rose by 38.1 percent in July compared with the year before, Nissan 22.4 percent and Honda 12.8 percent. Most car manufacturers severely restricted Givebacks - Toyota to whopping 22.5% on the previous year. The industry fell overall incentive spending by 3.7 percent.

It is not surprising when you consider that the US car market has seen a strong recovery in recent months. Despite the overall has malaise of the American economy, most analysts and automakers have their full year 2012 forecasts revised upward to as much as 14.50 million, the best numbers of the industry since well before the car market recession led collapse seen.

In turn the most car manufacturers - for all of the Detroit big three - rations capacity during the economic downturn, close a number of plants such as decision makers to fight to ensure that the remaining facilities were operating at maximum capacity. Now however they demand fight as sales faster than originally expected to revive. And that means that it is more of a seller's market than in previous years.

Hyundai - has the lowest incentives in the market at $1.181 per vehicle - market share warning in this year it will likely lose, because it cannot keep with Coupe and Veloster Turbo with the demand for new products such as the Azera, Genesis.

The average Giveback in July for all automakers was $2.480, with Nissan leading the way at $3.205 - before the normal Giveback from General Motors, leader at $3.015 and Chrysler, $3.132.

But incentives tell only part of the story. Automakers are also higher prices - part on the cost of new content is steadily increasing, but also to the urge to raise prices during the recession held back have catching up to do.

Higher prices and lower incentives in customers pay more for the typical vehicle translate - although exactly how much prices up are a question of the interpretation is.

"There is still a lot of affordability in the market," said Bill Fay, the new Toyota division general manager, although he admitted that wind customers can pay up for "a lot of innovation, which is to bring the industry to the market."

JD Power and associates found from 2008 to 2011 average sales prices jumped from $25.505 for the typical U.S. vehicle to $28.337. TrueCar, meanwhile said its agents tracking data give the average vehicle price went up to $30.369 in July, a 1.6 percent increase compared to the same month last year. Due to different as the figures calculated are reported there is a gap between the numbers of the two companies - and power shows a slightly lower surge in prices in 2012 - but most observers believe the trend to higher selling prices is clear.

Other reasons for rising prices include a general rise in vehicle equipment and technology "in the House", according to David Sargent, automotive operations at j.d. power. This is at a time when buyers in large numbers "Downsizing" are significant. On the positive side, he said, "is the average supermini today as well as the medium-sized car that could now be a person in the trade." But the smaller car price might be closer to what was paid in the past for the larger vehicle.

Industry planners still recognize that there is a classical link between prices and demand, said Jim Hall, an automotive consultant with located Analytics.But they have demand no other choice than to more. There are not only the higher levels but the reality that even everyday objects, such as steel and rubber, sharp price in the last few years have seen increases.

"It is inevitable," which costs, are passed, Hall said. The question is whether this will result in lower sales of new vehicles. To a lesser extent, increases effect of the market, he added, "but there are other issues," including the broader State of the economy. "Job fears are more likely, buyers of the new car market as a 1.6 percent jump in average purchase price of the vehicle."

There is also the reality that today's cars are more sustainable. Several new reports show the typical car new customer can wait now as long as 10 years before the trade in - and most are between 125,000 and 150,000 miles on the speedometer until then, according to a study by the black book vehicle pricing guide speed.

Need to wait with buyers expected to be longer, the trade even more reason, some observers think with car manufacturers, want to maximize profits on each sale.

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