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Best Car Deals To Be Found This Time Of Year

Dec 31, 2012

Transcript

STEVE INSKEEP, HOST:

We are in a great season to buy a car. Automakers and dealers are offering lots of incentives. And those incentives are just one of the factors in what may end up as the best year for the auto industry since 2007, before the height of the financial crisis. So why has it been a good year? Well, when millions of people hold off on their car purchases for years, that pent up demand, along with cheap credit, will eventually drive stronger sales.

Here's NPR's Sonari Glinton.

SONARI GLINTON, BYLINE: For a while now the holiday season has been a good time to buy a car. The car companies have worked hard to piggy-back on the Christmas buying season. Like Lexus with those commercials where the family is opening presents and outside there's a car wrapped in a giant red bow.

(SOUNDBITE OF LEXUS ADVERTISEMENT)

UNIDENTIFIED MAN: A bow, for instance, like the big red one you may find atop a Lexus this December.

GLINTON: Have you every wondered, does anyone really ever do that?

TONY PAPE: Believe it or not, some people do buy them as Christmas presents. My name is Tony Pape. I'm the sales manager at McGarth Lexus of Chicago.

GLINTON: Do people actually have them delivered with the bows on?

PAPE: I probably get one or two every year. The bows cost us about $150, so we'll let them use the bow and then ask if they can bring it back later.

(LAUGHTER)

GLINTON: Hold on. I think you can bring bow - you can bring the car with the bow but you're going to take it back.

PAPE: Yeah, we ask them if we can take it back. Some people are like are really saying, oh, you know, you need it - really nostalgic like if I can keep the bow. Then we'll give them the bow. But, you know, we ask if it's just going to sit in the garage or they're going to throw it away, if they can bring it back.

GLINTON: Pape says on dealer level December is probably his best month, which is true for many luxury car dealers and makers. They load up on the deals to lure the last of the buyers. But the fact that there are deals to be had during the holidays might be good for you the average car buyer, or even the car dealers. The carmakers, eh, not so much.

Jack Nerad is a market analyst with Kelley Blue Book.

JACK NERAD: Well, one thing that really bedevils the top executives of the car companies is that it's just too much production capacity for the number of new car buyers out there - globally and in the United States.

GLINTON: Nerad says the car companies have gotten a lot better in the last few years, especially since the economic collapse. But he says they're still chasing too few customers.

NERAD: It's basically not a bad thing for the consumer because the consumer finds the car companies competing tooth and nail for their business. But to try and operate businesses successfully, it becomes very, very difficult. And, frankly, over time some are not going to survive.

GLINTON: The average age of a car on the road keeps getting older and older. Nerad says one of the new virtues of the auto industry is actually hurting it a bit - cars have gotten, well, really good.

NERAD: I don't think people are excited about new cars or feel they need a new car as often as they used to. And a lot of people are getting comfortable with having cars that are much older than anybody would have thought people would be comfortable with.

GLINTON: Car sales keep increasing but certainly not to the point where the industry wants them to be. Jeremy Anwyl is vice chairman of Edmunds.com, the automotive website. He says the other thing that is boosting the market for cars is the opening of credit.

JEREMY ANWYL: And that's been the case pretty much all year. And what I mean by that is that the finance companies are now willing to finance people with perhaps a little bit shakier credit than they were even last year. And obviously that opens up the market to people that been waiting to buy and just couldn't get financing to do so.

GLINTON: Credit analysts say repossessions and car loan defaults are falling, a sign that buyers are handling their credit better. But Anwyl says, while consumers are handling credit better, the car companies still have perfected their inventories.

ANWYL: So for consumers that can generally mean if you're not too picky, there's deals to be found. And that's certainly the case in the car industry today.

GLINTON: And even if it's slight, Anwyl says the advantage is with car buyers for now.

Sonari Glinton, NPR News.

(SOUNDBITE OF MUSIC)

INSKEEP: This is NPR News. Transcript provided by NPR, Copyright NPR.