Edmunds.com has identified an automotive sales trend: an increasing number of previous model year vehicles remain on dealer lots well after the new model year vehicles have arrived.
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“As a rule, the longer a vehicle sits at a dealership, the better the deal a savvy consumer can get for that vehicle,” said a spokesman for the US online buyers’ guide.
Previous model year vehicles are making up an increasingly high percentage of new vehicle sales late in the calendar year. In October 2004, 54% of new vehicles sold were 2004 models compared with 45% 2003 models in October 2003 and 31% 2002 models in October 2002.
The average days-to-turn, which measures how many days on average it takes to sell vehicles after they arrive at dealerships, was 114 days for 2004 model year vehicles and 29 days for 2005 model year vehicles in October 2004.
The average days-to-turn overall was 75 days, compared to 82 in September 2004 and 69 in October 2003. Of all brands, Isuzu had the longest days-to-turn, 141 days, followed by Mitsubishi, 127 days. Mini enjoyed the quickest inventory turnaround, averaging 14 days, followed closely by Lexus at 19 days.
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By GlobalDataLast month, the sales-weighted average new vehicle sticker price was $US30,371, $268 higher than in September 2004 and $704 higher than in October 2003. The sales-weighted average net price was $25,750, $933 higher than in September 2004 and $518 higher than in October 2003. Average discount from MSRP to net price was $4,621 or 15.2%, down from $5,287 in September 2004.
In October 2004, average discount from MSRP to net price for the 2004 model year vehicles was $5,970. In October 2003, average discount from MSRP to net price for the 2003 model year vehicles was $5,489. This means that consumers averaged $481 more savings for the previous model year vehicles last month than they did in the same period last year.
Conversely, consumers are now receiving smaller discounts for new model year vehicles than they did a year ago. The discount for 2004 model year vehicles sold in October 2003 was $3,589, while the discount for 2005 model year vehicles sold in October 2004 was $3,017, indicating that consumers averaged $572 less savings this year for new model year vehicles.
