Not only were last month's sales the best in over four years, but people bought cars with lots of features. Web-based sales and research firm TrueCar says the average transaction price for light vehicles in the United States was about $30,832 in November, up $335 (or 1.1%) from the month last year and up the same amount from the prior month. The firm said that number constituted an all-time high for the industry.
General Motors spent the most on incentives in November, across its brand lineup -- rising from $2,915 to $3,720 -- while Hyundai spent the least at just $1,586. Chrysler, which led automakers in the amount of incentive money spent to move metal, also enjoyed a 22% drop in incentive spend this November versus last, and a 17.5% drop between October and last month per the firm's estimates. Meanwhile, the automaker’s transaction prices improved 2.2% versus the month last year.
Ford was second for incentive-spend declines, with a 21.1% drop versus last year and an 8.5% drop versus October. Hyundai and Kia spent 29.2% more on incentives versus last year and General Motors spent 20% more versus last November. Toyota enjoyed the largest gain in transaction price, at 3.5%.
Across all automakers, the firm estimated that the average incentive for light-vehicles was $2,764 in November, up $117 (4.4%) from November 2011 and up $447 (19.3%) from October 2012. As widely reported, last month sales lifted 15% versus last year, which meant a huge increase in the month's contributions to total year's sales. Honda, Toyota, Volkswagen and Chrysler led in percentage increases in November sales. TrueCar argues that the aftermath of Sandy contributed a minimum of 30,000 additional sales to November sales totals and those numbers will increase for December sales.
Jesse Toprak, TrueCar.com senior analyst, says December sales will continue to be driven by some 30,000 to 40,000 purchases of replacement vehicles ruined in the storm, year-end deals and great products. Toprak tells Marketing Daily that incentives are down less because of recent strong demand for vehicles than because manufacturers are optimizing their mix of incentives versus financing and leasing, which helps lift the residual value of vehicles being resold. And he adds that the biggest incentive spend was against traditional pickup trucks, which are being sold now with $4,000 on the hood.
Transaction prices are up, per Toprak, because, even though consumers are buying smaller vehicles, they are going for highly contented ones. "Shoppers' attitudes are changing; when you drill down, people are switching, but they don't want to give up the amenities they had in larger vehicles. They will buy a Civic, but load it up."
"Car Salesman from Shutterstock"