Car Shoppers Find Fewer Zero-Percent Financing Deals in August, According to New Edmunds Analysis

SANTA MONICA, Calif., Sept. 1, 2017 -- Although new vehicles are sitting on dealer lots longer than at any point since July 2009, incentives — particularly tempting zero-percent finance deals — have been slow to materialize in August, according to a new analysis from Edmunds, the leading car shopping and information platform. Though days to turn now averages 77 days — two days more than in July — incentives in August were basically flat compared to last month. Automakers have also been stingy with financing deals; only 10 percent of loans in August had zero-percent APRs, compared to 15 percent of loans last August. The average interest rate on a new-car loan was also up 2 percent in August, compared to July.

"Labor Day weekend usually brings in nearly a third more buyers than the typical first weekend of the month, so this is critical opportunity to make a dent in inventory," said Caldwell. "Given the state of the market, we would usually expect automakers to pull out all the stops to get shoppers into their showrooms, but based on what we saw in August, it's not a sure thing."

Edmunds analysis shows inventory of 2017 model-year vehicles is particularly plentiful on dealer lots, even as 2018 models begin to arrive in showrooms. Edmunds estimates that only 8 percent of new vehicles sold in August will be 2018 models, while in August 2016, 17 percent of vehicles sold were from the new model year.

"Car shoppers now are savvy enough to know that you can get the best deals on outgoing model-year vehicles," Caldwell said. "In many ways it's a buyer's market, and they're not going to purchase if they think there's a chance a better offer could come along in the near future."

More insight into recent auto industry trends can be found in the Edmunds Industry Center at http://www.edmunds.com/industry-center/.

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