Thinking About Buying a New Car? There’s Good Incentive to Wait

Sales incentives from car markers are at their lowest levels in years, and the average buyer can expect to pay more at the dealership for months to come.

Edmunds.com reports that the average customer buying a new car in April received $2,118 off the sticker price from automaker incentives. That’s $515 less—a drop of nearly 20%—than the average incentive in April 2010.

It’s also the lowest average incentive since the site began tracking the True Cost of Incentives—which “takes into account all automakers’ various U.S. incentives programs, including subvented interest rates and lease programs, as well as cash rebates to consumers and dealers”—in 2005.

Breaking down the deals by automaker, Edmunds shows that Ford and Chrysler were offering nearly $1,000 more in incentives in April 2010 compared to April 2011 ($3,232 vs. $2,421 for Ford, $3,338 vs. $2,455 for Chrysler). The average incentive for a new Toyota was $2,329 in April 2010, $1,968 in March 2011, and $1,687 in April 2011. This trend, in which car buyers are more likely to pay closer to the sticker price, is expected to continue in the months to come, while demand for cars remains relatively high and supplies are hampered at least partly by the recent disaster in Japan.

A USA Today story, citing data from TrueCar.com, corroborates the case, with info that the actual price paid in April for the average light vehicle was $29,583, up $305 from the month before.

As with so many business transactions, the main reason automakers and car dealers are being stingy with the deals is that thus far, car buyers seem willing to pay higher prices. The USA Today story explains:

The industry appears to be testing how far it can go with pricing and solidifying profits before buyers who need a new car or want one with higher mpg’s start to hold out for a better deal.

That last bit would be my advice: If you don’t have immediately pressing needs, bide your time and hold out for a better deal.

MORE:
The New New Cars That Are Priced Like Used Cars
Why Does Buying a New Car Still Have To Be So Painful?

The Growing Debate Over Prepaid Debit Cards

At an event in Durham, N.C. on Wednesday, Consumer Financial Protection Bureau director Richard Cordray announced that the agency is “decid[ing] how we should go about regulating prepaid cards to better protect consumers and to provide clear rules for prepaid providers.”

The rapidly growing prepaid market is attracting both banks and non-banks, and more Americans, especially those classified as “unbanked” or “underbanked” are using these cards as de facto checking accounts.