Whether you call it a sale or a sales event, what’s going on right now at Colorado car and truck dealerships is big-time discounting, especially on 2011 model-year vehicles. As the Nissan television ad vocalizes, “It’s the most wonderful sale of the year,” at least if you’re in the market for a car or truck.
There’s a lot of pent-up demand. Between high fuel prices and gloomy economic news, consumers have been holding on to their vehicles much longer than they once did. The average age of cars is now more than 10 ½ years. Consumer confidence rose in November to its highest level in more than eight years, according to The Conference Board. Meanwhile, gasoline prices have been dropping. According to AAA, by December 3 the average price for unleaded gasoline declined 18 percent, and is still going down. Colorado’s per-gallon average was $3.18 on December 12, with at least one station offering unleaded for $2.99 per gallon.
Lowest Prices of the Year
Probably the biggest reason to buy or lease now is price. Vehicle prices probably won’t go lower than they are now. One online guide for new car pricing estimates that between now and December 31 buyers will get the best deals and discounts of the year, with the New Year’s Eve discount estimated to average 9.3 percent – average – meaning some vehicles actually will carry much larger discounts.
A major reason prices are low on 2011 models is that when January 1 comes, all 2011 models are considered to be a year old, even if they’ve never been driven off the lot, automatically making them worth less, so manufacturers and dealers are eager to get them sold. Another reason for discounting – on 2011 and 2012 models – is that dealers are trying to hit year-end sales targets.
Best Financing of the Year
Excellent financing, cash rebates, and freebies are available. Financed deals start at zero percent for several brands, including some General Motors, Chrysler, and Ford models, and even some luxury vehicles, such as Jaguar. Other manufacturers are offering 1.9, 2.9 and 3.9 percent financing with the actual percentage depending on the number of months financed.
Cash rebates can start at $500 and go up, depending on the popularity and price of the vehicle. For example, GMC offers up to $5,000 on a Sierra 1500, Chevrolet is offering a cash rebate of up to $4,505 on a 2011 Silverado and Ford is offering cash back on several 2012 models.
If you want a Dodge Charger, you can choose all-wheel drive at no extra cost, instead of a cash rebate. Other Chrysler-made vehicles come with similar offers, including no-cost DVD entertainment system with purchase of new Town & Country minivan.
Leasing Looks Good
Lease deals are equally good. One example is “The Season of Audi” event that offers to waive the first month’s payment and security deposit on select 2012 models. Leases went out of favor for awhile but are finding new popularity with higher residual values, especially for drivers who stay below a mileage cap, want to turn new vehicles more often and/or need to keep monthly payments lower.
Year-end Tax Gifts
Small business owners who dream of a new vehicle for business use can get an attractive tax advantage for buying now. According to Colorado Springs-based accountants Stockman, Kast, Ryan & Co., heavy SUVs (those above 6,000 GVW) bought before January 1, 2012, can generate a bonus depreciation deduction in the year of purchase equal to 100 percent of the vehicle cost. There’s also a $25,000 “Section 179” expensing allowance that can be deducted on used heavy SUVs.
Some Colorado tax credits for alternative fuel cars, fully in effect through December 31, reduce by 25 percent after January 1, 2012. Watch for this column soon for more information.
No matter what you call it – a “Season’s Best” event, “Year-End Wrap Up,” “Red Tag Sale,” “Winter Event,” or something more inventive or melodic, Colorado car dealers are wheeling and dealing and consumers are the winners.