The Industry's Leading Source For F&I, Sales And Technology

Top News

Cash for Clunkers and Production Cuts Help Lower July Incentives, Says

August 4, 2009

SANTA MONICA, Calif. — estimated that the average automotive manufacturer incentive in the U.S. was $2,735 per vehicle sold in July 2009, down $134, or 4.7 percent, from June 2009, and up $90, or 3.4 percent, from July 2008. This represents the fourth consecutive month in which incentives have fallen.

“Comparing June with July, incentives usually increase between $50 and $200 per car sold, but this year they are down $134 per car,” said Jessica Caldwell, manager of pricing and industry analysis for “The Cash for Clunkers frenzy has given automakers the opportunity to reduce their own investment in creating sales momentum, and to maximize profitability in the process.”

According to, combined incentives spending for domestic manufacturers averaged $3,743 per vehicle sold in July 2009, up from $3,727 in June 2009. From June 2009 to July 2009, European automakers increased incentives spending by $282 to $3,504 per vehicle sold; Japanese automakers decreased incentives spending by $153 to $1,591 per vehicle sold; and Korean automakers decreased incentives spending by $136 to $2,927 per vehicle sold.



“Automakers cut production earlier this year to deal with lower sales volumes, not anticipating this sales activity midway through the year,” said Michelle Krebs, Senior Editor of Edmunds’ “Which will run out first — clunker money or the replacement cars people want to buy?”

In July 2009, the industry's aggregate incentive spending is estimated to have totaled approximately $2.6 billion, up 5.6 percent from June 2009. Chrysler, Ford and General Motors spent an aggregate of $1.5 billion, or 56.6 percent of the total; Japanese manufacturers spent $640 million, or 24.5 percent; European manufacturers spent $275 million, or 10.5 percent; and Korean manufacturers spent $217 million, or 8.3 percent.

Among vehicle segments, premium sport cars had the highest average incentives, $7,074 per vehicle sold, followed by premium luxury cars at $4,402. Subcompact cars had the lowest average incentives per vehicle sold, $1,371, followed by compact cars at $1,824. Analysis of incentives expenditures as a percentage of average sticker price for each segment shows large cars averaged the highest, 12.9 percent, followed by large trucks at 12.7 percent of sticker price. Premium luxury cars averaged the lowest with 5.4 percent and sport cars followed with 5.9 percent of sticker price.

Comparing all brands, in July Scion spent $294 followed by smart at $394 per vehicle sold. At the other end of the spectrum, Cadillac spent the most, $6,165, followed by Hummer at $5,891 per vehicle sold. Relative to their vehicle prices, Pontiac and Hyundai spent the most, 18.9 percent and 15.9 percent of sticker price, respectively; while Scion spent 1.7 and Lexus spent 2.7 percent.

Your Comment

Please note that comments may be moderated. 
Leave this field empty:
Your Name:  
Your Email:  



Service Payment Plan Integrates With StoneEagle’s SEcureSalesTool

The StoneEagle Group today announced that Service Payment Plan Inc. (SPP) is integrated with its SEcureSalesTool, which will automate the contract generation and submission process for SPP.