Shoppers flock to auto dealerships for year
A decorated showroom advertising a year-end Toyotathon in Southfield, Mich. / Andre J. Jackson, Detroit Free PressDETROIT - For both auto dealerships and car shoppers, December can be one of the best times of the year to get a good deal.
Just about every automaker has a special year-end sales event, and most will use it as they try to boost December's sales tally.
Chrysler is touting its Big Finish event, Ford is telling customers to Dream Big, Toyota has its Toyotathon sales event, and Hyundai is pushing its Sonata midsize sedan with Hyundai Holidays. Even BMW has its Happier New Year Event, to counter Mercedes-Benz's Winter Event.
For the past four years, automakers have sold more vehicles in December than any other month of the year.
'We've been looking for the last four to five months and, as far as pricing goes, right now it seems like this is the best time to buy,' said Rich Torossian, 34, of Canton on a recent afternoon at Southfield Dodge Chrysler Jeep Ram.
Torossian, who was trading in his white Chevrolet Silverado in favor of a black Ram Bighorn pickup, was just one of a flurry of customers in a dealership buzzing with activity about a week before Christmas.
In December 2012, the average incentive on a new car or truck hit $2,381 - the highest point of the year, according to Edmunds.com. Since then, incentives have continued to slowly but steadily creep upward. This year, December's incentives also are likely to again hit the highest point of the year.
'The sales will be as aggressive at the end of this month than probably at any time of the year, if not more so,' said Bob Page, owner of Page Toyota in Southfield.
The average incentive numbers can be slightly deceiving, said Jessica Caldwell, senior analyst for Edmunds.com. That's because automakers in December sell a higher percentage of pickups than in other months. Pickups normally sell for a higher average price than cars, often with big incentives on them.
Manufacturers and auto dealers spent about 10% of their total ad dollars in December 2012, making it one of the biggest months for marketing for the year, said Jon Swallen, chief research officer for Kantar Media.
'December is an above-average month for auto advertising, especially for the Dealer Association groups,' Swallen said.
Ford sales analyst Erich Merkle said automakers increase incentives and boost advertising because consumers have more time to shop between Christmas and New Year's.
'There a lot of people that may make the decision to buy a new car â?¦ but they are not able to actually act upon it until they have some vacation time,' said Merkle.
Also, truck sales are higher in December than other months because business owners take advantage of tax write-offs for equipment purchases.
Torossian said incentives on his new Ram, combined with a credit he got for turning in his Silverado before its lease expired, allowed him to cut his monthly payment from about $450 to $300.
Across town, at Suburban Buick in Troy, Bob Breitman was shopping for a new Buick LaCrosse. There is nothing wrong with his 2011 LaCrosse, but he came into the dealership because of the special holiday deals. Last week, General Motors began adding an additional $500 off of three models - Enclave, LaCrosse and Regal.
'If the deals are not good enough, I am going to keep my car,' Breitman said. 'It is really that simple.'
At Page Toyota, Kamal Gupta of Bloomfield Hills bought his daughter a black Toyota Camry Hybrid for about $30,000 as a Christmas gift.
'She is now working as a doctor, and I wanted to give her a present,' Gupta said. 'I am very proud of her.'
Even with the year-end frenzy, automakers will have a hard time topping last year's December sales. That's because incentives were higher than usual in November.
In addition, a number of snowstorms and colder than average weather may also freeze customers out of the car shopping mood.
TrueCar.com, an automotive pricing website, predicts December sales will top 1.4 million new vehicles. That would be a 4% increase over last December, but less than the 1.5 million sales in August, when Labor Day weekend started at the end of the month.
But in certain segments, especially at the luxury end, bragging rights are at stake.
For example, Mercedes-Benz had a 7,610 edge over BMW through November to be the nation's best-selling luxury brand. BMW is offering a a holiday credit of up to $4,500 on select 2013 models and up to $2,000 on select 2014 models.
Meanwhile, Chevrolet has sold 75,552 Camaros, putting it 4,093 ahead of the Ford Mustang for the year.
'Auto geeks are rejoicing when you get to this time of the year,' said Jeff Schuster, vice president of forecasting for LMC Automotive.
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