Revving Up: Automakers Offer Incentives to Attract Shoppers as Prices Finally Show Signs of Cooling Off

Car buyers who have been struggling with high prices during the pandemic may have some good news. Some automakers are bringing back incentives, such as rebates and lease deals, to attract shoppers as inventory levels improve. While incentives remain historically low, there are still deals to be found. In January, according to a report by Insider on March 1, 2023, incentives rose slightly to 2.8% of a vehicle’s average sale price, up from 2.7% in December.

Some categories of vehicles, such as compact SUVs and midsize cars, have incentives higher than the industry average. However, shoppers shouldn’t expect discounts on minivans or EVs. Incentives are typically offered regionally and vary by brand and model, with some brands currently offering relatively high incentives.

Before starting to shop, buyers should check their credit score, which can affect their negotiating power amid rising interest rates. Based on a report by USA Today on March 3, 2023, the average sale price of a new vehicle fell slightly to $49,388 in January, and prices are no longer increasing like they were a year ago.

While prices are still above the manufacturer’s suggested retail price, there may be opportunities to score a deal at the end of the month, end of the calendar year, holiday weekends, or at the end of the model year. December typically offers the best discounts, with the biggest bargains on New Year’s Eve.