SANTA MONICA, Calif. -- Edmunds.com estimated today that the average automotive manufacturer incentive in the U.S. was $2,714 per vehicle sold in January 2009, down $148, or 5.2 percent, from December 2008, and up $301, or a dramatic 12.5 percent, from January 2008.

"Automakers need to clear out leftover inventory from the 2008 model year, and that effort is boosting the average incentive cost for the industry," noted Jesse Toprak, executive director of industry analysis for Edmunds.com. "

Last month, 27 percent of all new vehicles sold were from the 2008 model year, while in January 2008 only 12 percent of new vehicle sales were from the previous model year’s inventory."

According to Edmunds.com, combined incentives spending for domestic manufacturers averaged $3,438 per vehicle sold in January 2009, down from $3,709 in December 2008. From December 2008 to January 2009, European automakers increased incentives spending by $329 to $3,297 per vehicle sold; Japanese automakers increased incentives spending by $27 to $1,775 per vehicle sold; and Korean automakers increased incentives spending by $197 to $2,963 per vehicle sold.

True Cost of Incentives for the "Big Six" Automakers

Automaker          January 2009          December 2008           January 2008

Chrysler Group              $4,196                        $3,681                     $3,616

Ford                              $3,574                         $3,985                     $3,055

General Motors             $2,992                         $3,554                     $3,322

Honda                           $1,349                         $1,209                       $ 988

Nissan                           $2,270                         $2,167                     $2,129

Toyota                           $1,973                         $2,071*                   $1,031

Industry Average           $2,714                         $2,862                     $2,413

(*Denotes a monthly record for the indicated automaker.)

In January 2009, the industry's aggregate incentive spending is estimated to have totaled approximately $1.9 billion, down 22.4 percent from December 2008. Chrysler, Ford and General Motors spent an aggregate of $1.1 billion, or 57.5 percent of the total; Japanese manufacturers spent $532 million, or 26.8 percent; European manufacturers spent $203 million, or 10.3 percent; and Korean manufacturers spent $108 million, or 5.5 percent.

"Incentives will be quite high until 2008 inventory is gone, likely by the end of March," reported Edmunds' AutoObserver.com senior editor Michelle Krebs. "Between now and then, bargain-hunters have a great opportunity to pick up an especially good deal.”

Among vehicle segments, premium sport cars had the highest average incentives, $5,297 per vehicle sold, followed by premium luxury cars at $5,213. Subcompact cars had the lowest average incentives per vehicle sold, $501, followed by compact cars at $1,422. Analysis of incentives expenditures as a percentage of average sticker price for each segment shows large trucks averaged the highest, 13.7 percent, followed by large cars at 11.9 percent of sticker price. Subcompact cars averaged the lowest with 3.0 percent and sport cars followed with 4.8 percent of sticker price.

Comparing all brands, in January MINI spent virtually nothing followed by Scion at $74 per vehicle sold. At the other end of the spectrum, Lincoln spent the most, $5,594, followed by BMW at $4,965 per vehicle sold. Relative to their vehicle prices, Kia and Mercury spent the most, 16.9 percent and 14.9 percent of sticker price, respectively; while MINI spent virtually nothing and Scion spent 0.4 percent.