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March Car Sales Indicate Good News for Buyers

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author photo by Michelle Krebs April 2016

March car sales disappointed automakers as they missed analysts' forecasts, but the silver lining for car buyers is they can get better deals than they have in some time.

Incentives are Trending

March car sales rose only three percent from a year ago. Automakers had to offer richer incentives to achieve those sales, a trend expected to continue as they strive for another record sales year, which is good news for consumers.

A year ago, average transaction prices on vehicles were climbing, outpacing incentives. Now, the reverse is beginning to occur. Prices have flattened in the past couple of months, and incentives are rising. The average incentive is now about $3,100 per vehicle, which is 14 percent higher than a year ago.

That's not to say that incentives and the ability to wheel and deal is equal across the board. The savvy car shopper has to select the right road for the best deals.

The Road Less Traveled

For car shoppers looking for the best deals, the advice is always to go where the others aren't -- the road less taken.

Sport utilities are in fashion right now so, generally, incentives are lower and negotiating room is less. Higher incentives and more negotiating room is available in vehicle categories that utility buyers spurn.

Subcompact cars are the cheapest new vehicles available. And in March, their prices got even lower and their incentives got even higher. For instance, incentives on fuel-sipping subcompacts such as the Ford Fiesta and Chevrolet Sonic hit $2,000 a car in March. The Honda Fit was an exception with a puny incentive of $364.

Slightly bigger compact cars, such as the Ford Focus and Chevrolet Cruze, are seeing flat prices and beefy incentives, as well. Again, an exception is the brand new Honda Civic, which is selling like gangbusters with little incentives and negotiating room.

The same goes for midsize sedans such as the Toyota Camry, Nissan Altima and Ford Fusion, which posted higher sales in March by being boosted by heftier incentives running at more than $3,000 a vehicle on average.

Good Alternatives

Minivans offer a great alternative to a 3-row sport-utility vehicle. Average minivan prices dipped from last year as incentives climbed up to $3,000 to $5,500. FIAT Chrysler is selling out -- and discounting heavily -- its Chrysler Town & Country, which is being replaced with the all-new Chrysler Pacifica. Incentives on the Honda Odyssey, Toyota Sienna and Kia Sedona got a bump up in March, as well.

Buyers who are looking at luxury on a budget should consider a luxury car instead of a sport utility. Competition is intense in the luxury car market, with incentives high and prices softening.

As for trucks, the Ford F-Series had a huge sales month in March with relatively small discounting. Similarly, smaller trucks, such as the Toyota Tacoma, Chevrolet Colorado, GMC Canyon and Honda Ridgeline, are hot with discounts that are almost non-existent. Alternatively, bargain hunters might consider the more heavily discounted Chevrolet Silverado and RAM 1500.

This image is a stock photo and is not an exact representation of any vehicle offered for sale. Advertised vehicles of this model may have styling, trim levels, colors and optional equipment that differ from the stock photo.
March Car Sales Indicate Good News for Buyers - Autotrader