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Edmunds.com Reports True Cost of Incentives

October 5, 2006

Santa Monica, Calif.—Edmunds.com recently estimated that the average auto manufacturer incentive in the U.S. was $2,587 per vehicle sold in September 2006, up $182, or eight percent, from August 2006, and up $243, or ten percent, from September 2005.

Edmunds.com’s monthly True Cost of Incentives (TCI) report takes into account all manufacturers’ various U.S. incentives programs, including sub vented interest rates and lease programs, as well as cash rebates to consumers and dealers.

The calculations are based on sales volume, including the mix of vehicle makes and models, as well as on the proportion of vehicles for which each type of incentive was used. The industry’s total incentives spending were estimated to have totaled approximately $3.6 billion in September, unchanged from August.

Chrysler, Ford and GM spent a total of $2.6 billion, or 73 percent of the total, Japanese manufacturers spent $613 million, or 17 percent; European manufacturers spent $237 million, or seven percent; and Korean manufacturers spent $111 million, or three percent.

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