Auto Incentives Fall in May as Inventory Dwindles
Edmunds.com estimated that the average automotive manufacturer incentive in the U.S. was $2,603 per vehicle sold in May 2010, down $28, or 1.1 percent, from April 2010, and down $340, or 11.6 percent, from May 2009.
SANTA MONICA, Calif. — Edmunds.com estimated that the average automotive manufacturer incentive in the U.S. was $2,603 per vehicle sold in May 2010, down $28, or 1.1 percent, from April 2010, and down $340, or 11.6 percent, from May 2009.
"Inventory levels are relatively low, so many automakers have cut back on incentives," stated Jessica Caldwell, director of industry analysis for Edmunds.com. "Bargain-hunters planning to hold out for traditional late summer deals would be wise to start shopping now, since there is a less dramatic need for old model year clearance sales this year and the 2010 inventory is already slim pickings.”
According to Edmunds.com, combined incentives spending for domestic manufacturers averaged $3,366 per vehicle sold in May 2010, up from $3,298 in April 2010. From April 2010 to May 2010, European automakers decreased incentives spending by $211 to $2,300 per vehicle sold; Japanese automakers decreased incentives spending by $148 to $1,913 per vehicle sold; and Korean automakers decreased incentives spending by $29 to $1,738 per vehicle sold.
True Cost of Incentives for the Top Seven Automakers | |||
Automaker | May 2010 | April 2010 | May 2009 |
Chrysler Group | $3,115 | $3,338 | $4,101 |
Ford | $3,042 | $3,232 | $3,611 |
General Motors | $3,739 | $3,301 | $3,678 |
Honda | $1,556 | $1,779 | $1,653 |
Hyundai | $1,738 | $1,767 | $2,785 |
Nissan | $2,321 | $2,474 | $2,678 * |
Toyota | $2,169 | $2,329 | $1,711 |
Industry Average | $2,603 | $2,631 | $2,943 |
*Denotes a record high
In May 2010, the industry's aggregate incentive spending is estimated to have totaled approximately $2.81 billion, up 9.1 percent from April 2010. Chrysler, Ford and General Motors spent an aggregate of $1.7 billion, or 59.7 percent of the total; Japanese manufacturers spent $786 million, or 27.9 percent; European manufacturers spent $208 million, or 7.4 percent; and Korean manufacturers spent $140 million, or 4.9 percent.
"Compared with three years ago, the Japanese automakers have increased their incentives spending by 62 percent while domestic automakers are spending a mere seven percent more," noted Edmunds.com Senior Analyst Michelle Krebs in her report on AutoObserver.com. “In the same period, Japanese market share has only increased by two percent while domestic market share went down by 10 percent.”
Among vehicle segments, large trucks had the highest average incentives, $4,650 per vehicle sold, followed by premium sport car at $3,892. Sport cars had the lowest average incentives per vehicle sold, $1,263, followed by subcompact cars at $1,296. Analysis of incentives expenditures as a percentage of average sticker price for each segment shows large trucks averaged the highest, 12.7 percent, followed by compact cars at 11.5 percent of sticker price. Premium luxury cars averaged the lowest with 2.3 percent and sport cars followed with 3.6 percent of sticker price.
Comparing all brands, in May Scion spent the least, $457 followed by Subaru at $667 per vehicle sold. At the other end of the spectrum, Saab spent the most, $6,813, followed by Lincoln at $4,987 per vehicle sold. Relative to their vehicle prices, Saab and Chrysler spent the most, 17.1 percent and 12.2 percent of sticker price, respectively; while Porsche spent 1.7 and Subaru spent 2.6 percent.
More F&I

AI: Facilitator, Not Fixer, in F&I
The dealerships that thrive in the years ahead will be those that embrace technology while continuing to invest in the people who make customer interactions count.
Read More →
Modern Technology Objection Handling
In this video, Trent White shares how to confidently handle technology-based objections by helping customers understand the value of protection, even with modern vehicle technology.
Read More →
Consistency at Scale: Driving F&I Performance
With 75 rooftops across the Sunshine State, Morgan Auto Group has proven to Floridians that it knows a thing or two about driving performance in a competitive market. But it didn’t start at the top.
Read More →
Gitty Up on GAP
The foundational finance-and-insurance product hasn’t kept up with the latest conditions for auto dealers. Is the time ripe?
Read More →
How AI-Powered Coaching Is Transforming F&I Performance
See how AI-powered coaching can turn F&I customer conversations into actionable insights that support compliance, performance and profitability
Read More →
Sell Value, Build Trust
In this video, Trent White explains why selling on value, not fear, builds lasting customer trust, reduces cancellations, and drives long-term success.
Read More →
F&I Sales Give Dealers First-Half Lift
Product business shored up total profits to avoid an overall revenue tanking as product penetrations held steady, StoneEagle reported.
Read More →
Targeted Training Drives Results
Today’s technology, instead of threatening F&I managers, can actually make them better, according to an industry veteran who’s watched market setbacks roil the unprepared.
Read More →
Double the Change, Double the Chance
When an F&I manager gets a customer refusal, it’s a wise move to tweak more than one thing in the product offering.
Read More →
Just Do It
F&I managers need training, but instead of resisting application or expecting perfection, they should improve by simply acting on what they learn.
Read More →