End of Year Car Deals: What to Expect in 2024

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Summary

In this episode of The Straight Shift, The Car Chick discusses her Thanksgiving experiences and transitions into the topic of Black Friday car deals. She explains the current state of the automotive market, highlighting the inventory surplus and the best deals available for the end of the year. LeeAnn breaks down the types of incentives offered by manufacturers and emphasizes the importance of doing homework before purchasing a vehicle. She also touches on the electric vehicle market and concludes with resources for car buyers.

Takeaways

• 2024 is expected to be a better year for car shopping. • Inventory levels are historically high, leading to better deals. • Manufacturers are offering various incentives to boost sales. • Jeep has significant cash rebates available this December. • Electric vehicles are seeing good deals due to market changes. • Do your research on incentives based on your region.  

LeeAnn Shattuck (00:01) Hey everyone, welcome back to The Straight Shift. I hope you all had a fantastic and safe Thanksgiving holiday. I ended up hosting my family and my husband's family at my house. Fortunately, we have small families, so it wasn't a huge deal. There were only eight people, but it was one of the first times that I cooked everything. The turkey was done early, which gave me time to get the apple pie in the oven, and everything came out at the same time. just as everybody was arriving at two o'clock and everything was good. And I only burned myself twice, which for me is a big deal because I can cook when I put my mind to it, but there's usually some collateral damage because I'm not that graceful in the kitchen or anywhere else for that matter. So I was pretty pleased that I only came away with two minor burns and everything went really, really well. So I hope everyone else had a really good time and most importantly, a safe time. Black Friday, as I'm sitting here recording this, I used to do the whole get up at the butt crack of dawn and be at the front door of the mall at five or six a.m. whenever they opened. It was a tradition that we used to do when we were visiting family up in the Asheville area when I was married to my first husband. And we had so much fun. But I'm just too old and my. Mother-in-law from that marriage is no longer with us, unfortunately. So it's just not something that I do anymore. I mostly spend Black Friday just kind of hiding and not going anywhere and not doing anything. So although this year I did install a new faucet in my mom's kitchen for her. So I did a little bit of shopping, but it wasn't crazy. But I know a lot of people love Black Friday. They love the shopping deals. And a question that I frequently get is, Are there Black Friday shopping deals for cars? And the answer is, well, sort of. My standard answer in the automotive industry, well, sort of. There aren't specific Friday-only dealership opens at 6 a.m. and if you get there between 6 and 7 a.m., you get a special deal. They don't do that. But they do capitalize on the Black Friday shopping frenzy in everyone, just in the mood to spend money. So lot of times they will call their holiday sales events Black Friday deals, even though they're really not, they're good for whatever the month was. This time Black Friday happened to fall at the end of the month. So the dealers were desperately trying to close sales. Finally, for 2024, we are actually gonna have some good holiday end of year car shopping. We have not had that in several years thanks to the inventory shortage created by the COVID-19 pandemic. So the deals the past three, four years just haven't been there because they haven't needed to sell cars. There haven't been cars to sell. This year we have inventory. Sales is actually slower than expected. So the manufacturers and their dealers have more incentives to move cars by the end of the year to make their sales targets. So we are gonna see some deals and that is what we're gonna talk about today on The Straight Shift. What are the deals? Why do we have them this year? And who's got the best ones? So let's get into it. The holiday season is famous for some of the best car deals of the year because the manufacturers are trying to meet their sales goals and the dealers are trying to clear all the previous year inventory off of their lots to make way for the new model year. And the new model year cars start coming in as early as August and September sometimes. But the end of the year is traditionally the time where they are trying to move out that old inventory, clear out the lots, as well as make their sales targets for the end of the calendar year. As I said in the past several years, we haven't had that because of the inventory shortages, but 2024 is going to be different. I'm finally really excited about end of the year car shopping. Why is it going to be better this year? Well, we're no longer in a global pandemic. and they have been getting their inventory, getting their production back up, we're still in something of a chip shortage, especially for the Japanese manufacturers. But overall, the dealers have inventory and between them having more inventory because they've had better production, they've also released a lot of new models over the last year or two, especially in the electric side of the market. But sales have been declining for a lot of manufacturers this year. And that is due to just the frenzy that people had coming out of the pandemic, spending money, getting the deals, maybe their car died. They're just like, I'm out of the house. I want to go somewhere and spend money. That frenzy kind of died out a little bit. And just with the inflation levels that we've seen, people are starting to get a little more conservative in their spending. They can't afford these expensive new cars and new cars are ridiculously expensive these days because of all the technology and just the increased cost to the manufacturers because of the supply chain issues. The average person has to finance $40,000 for a new car and that's average. I mean, that's crazy. We used to be able to get into a new car for 20, $25,000 and that's really, really rare anymore, especially as people are wanting SUVs. They're just more expensive. So not as many people can afford new cars right now and that has slowed the sales. As a result, the inventory has been backing up on the dealer lots. As of November of this year, new vehicle inventory was at about three million across dealer lots, which is historically very, very high. Some of the sales drops have been just kind of crazy. Stellantis, which is the parent corporation of Chrysler, Ram, Jeep, Dodge, Alfa Romeo, they have had a 20 % drop in sales by third quarter of this year. That's huge. So they've got a ton of inventory sitting on their lot. So they desperately need to sell. Nissan has had an oversupply of the Rogues, which are decent little cars. the Frontier little trucks, the Pathfinders. So expect to find those on sale this holiday season as they're trying to get rid of those models. Even Ford has seen some flat sales, which is unusual because the F-150 is always the best selling vehicle on the market. But things have slowed down for them too. So they are going to be a little bit more aggressive this holiday season trying to move inventory off of their lots. The good deal for car buyers is that means we are going to see a lot more competitive pricing, the dealers will actually be competing with each other or they should be and that means that you can get some better bottom line deals. Combine that with incentives from the manufacturers and some better interest rates, some good lease deals and that means that 2024 is going to be a much better holiday shopping year. However, there's always a caveat, right? It's not gonna be on all the brands and it's not even gonna be on all the models within a brand. It might even be specific to certain trim levels of vehicles that they just happen to have excess inventory of those specific trims because they haven't sold as well for some reason. So let's talk about who has the most inventory and who has the least inventory. So we get an idea of who's gonna have the best sales. Again, Stellantis, so all of your Chrysler, Jeep, Dodge, Ram brands, they have the most inventory. GM has a bunch of inventory, Ford has a bunch of inventory. They're all well above average for November, which means they want to get rid of those cars. Volvo and the other luxury brands, with the exception of Lexus, most of them have excess inventory, at least certain vehicles. So we're going to see some good deals. And those brands tend to be more expensive. So people have not been buying them as much, hence they need to sell cars. On the other hand, Lexus, Toyota, Honda, Subaru, have the tightest supply of cars. That's due to them having more of a chip shortage because they don't source their chips from China, if at all possible, and they had some problems in Japan. Plus, just the market for those cars, the demand for them is so much higher. In fact, nine of the 10 fastest selling cars on the market right now are all Toyota or Lexus. So don't expect phenomenal deals on cars from those brands. Another factor that is going to make holiday car shopping so much better in 2024 are interest rates. Fed lowered the federal funds target range by 25 basis points in November. And that was on top of the 50 basis points that they dropped it by in September. So it's now hovering around four and a half to 4.75 % after that November meeting. And that means that the banks are going to be able to borrow money at a lower rate. Now that's going to take a little bit longer to trickle down to auto loan rates at the traditional banks. It usually takes several weeks, even a few months for the banks to adjust auto loan rates. Auto loan rates tend to be a little, what we call stickier. They just hold because the banks don't want them to fluctuate. If their borrowing rate drops, they still hold up the interest rate to consumers so they can make a little more money. But the car manufacturers and their captive finance companies, they have a little more flexibility and they will use that cheaper borrowing rate for them to lower rates for car shoppers. Meaning we are going to get more special low APRs and better lease rates this holiday season. And for the first time in, I can't even remember how long, there are actually some 0% APRs. This year we'd been seeing a special rate of maybe 3.99 or even 2.99, but they were kind of hovering around that 4% range for the special APRs. Well, for December, we are seeing 0% and not just 0% for 36 months, but 0% for 60 and sometimes even for 72 months. So that is phenomenal. And that makes that monthly payment a lot more affordable because the interest rate really can drive it up, especially on a more expensive car. So again, they're trying to make the cars more affordable for consumers so that we will pull that trigger and make that big purchase because we can do it for less. And as I said, it will also generate some better lease deals because good leases are based on the residual value, which the captive finance companies can artificially hold up if they want to to make the lease deals sweeter. But it's also a matter of the money factor that is leasing's equivalent of the interest rate. And I explain all that math and how to convert the money factor to. an equivalent APR that makes more sense to us in my online course. I won't go into that today because I have covered it both in the course and in other podcasts, but it just means that we are starting to see some better lease deals on models that are not moving. And leasing is a way to get a lower monthly payment, even lower than on a purchase financing because of the nature of leasing. However, here we go with my caveats again, and this is what I say, do not lease. just to get that low monthly payment if you're not a good lease candidate because that is a really quick way to get yourself in trouble. And that means you are getting a lower mileage lease but you drive way more miles a year than that lease allows. That will bite you in the butt big time come the end of the lease. So leasing should not be used as a strategy just to get a lower monthly payment. The different types of incentives that the manufacturers are expected to offer are in several categories. One is customer cash or rebates. These are simply cash discounts that can be taken off the price of the car that the manufacturer then reimburses the dealer for so that they can pass it on to you at a lower price. These incentives usually have their own caveats. Buyers typically have to meet certain requirements to get a rebate. Sometimes it's just customer cash, means woohoo, everybody gets it. But sometimes there are qualifications. Sometimes they're just for recent college graduates or military or first responders. Those typically happen throughout the year in their smaller rebates. But hey, if you qualify, every dollar off counts. But not everyone will qualify for them. Sometimes there is loyalty cash or a loyalty bonus, meaning If you own or lease a certain brand of car and you get into another one, you get another thousand dollars or two thousand dollars off. That can be huge. Or sometimes it'll be the opposite and it'll be what's called conquest cash, meaning they are trying to lure buyers of other brands over to their brand. And there's usually a list of vehicles that if you own or lease one of those cars, that's a direct competitor to the model they're offering. And often it's just certain years of the vehicle. They're very specific. There's a lot of fine print, so you have to read that when you're researching the incentives. Sometimes you have to finance through their captive finance company at a higher interest rate in order to get that rebate. And that can be a good thing to do, especially if you were normally planning to just pay cash for the car. If you can get a good rebate for financing through their captive finance company, all you do is wait 30, 60, however many days they require you to wait. It's usually never more than 90 days, and then you just pay it off. So take that rebate, you'll pay a few small bucks in interest for a few months, one, two, three months, who cares? You will still end up a lot better off, you just pay it off then. So that's a good strategy to be able to qualify for a rebate that maybe you weren't planning on doing because you were planning on paying cash. Another thing to note is that the low APRs, which is another type of incentive that they will offer that I talked about, the 0% or maybe 0.9% or 1.99% financing, those usually are not combinable with the rebates. You can take one or you can take the other. They rarely give you both. So again, you have to read the fine print to see how they are structuring these incentives. And then do some math to figure out what is going to give you the best financial deal depending on how you plan to structure your purchase and what's best for your situation. All right, what are the best deals for this December 2024? I am not endorsing any of these vehicles when there is a killer deal out there for a vehicle. It's because they haven't been able to sell them. They're desperately trying to get rid of them. So it's not a bad idea to ask why might that be? It could just be market factors, but it could also be because the vehicle is a piece of crap for some reason, and maybe you don't want it, even if there is a huge incentive. So again, always do your homework. You have to ask why when there's a really good deal on something. So those really good deals fall into several categories. The vehicles that have the lowest APRs, those 0 % or 0.9, Volkswagen has 0 % for 60 months on their Tiguan, which is their small SUV, and they have 0.9 % for 60 months on the larger Atlas. That's their midsize three-row. That's very roomy. Both of those vehicles have their reliability issues, but if you like those cars and especially the roominess of the Atlas, this is a pretty good deal to get low APRs on those. Mazda has a 0.9 for 60 months on their CX-90, which replaced the CX-9 last year. That's a gorgeous vehicle. It's a little bit of a smaller third row. It's a little bit pricier than some of the competitors. And Mazda's just a little more of a niche brand, which is why they haven't sold as many of them. But they are phenomenal vehicles. Really beautiful, really swanky, and they've been reliable. So that's a really good deal if you want an SUV where it's the third row itself isn't as important to you. Ford has 2.9 % for 72 months on the big old Expedition, which can save you money given that it's a $70,000, $80,000 vehicle. That lower interest rate will definitely help. And Ram has 0.9 for 72 months on certain Ram 1500 trucks. It's only on very specific trim levels. But again, when you can get a crazy almost free money for up to 72 months, that's a pretty darn good deal. Even Toyota has some low APRs for 72 months on their Tundras, which they've had some issues with and they haven't been selling as well as Toyota thought they would. And Subaru, despite having low inventory levels as well, They have some good leases on the Ascent 3-row SUV, and they have a 0 % for 72 months on their Soltera electric SUV, which has not been selling as well as they had hoped. It's the same vehicle as the Toyota BZ4X that I hated so much in the last podcast. Subaru never uses cash rebates. but they do frequently have some low APR. So those are definitely worth checking out if you're interested in the Subarus. In terms of the biggest cash rebates, the Jeep brand has the deepest cash rebates across the board right now. They're averaging over $5,000 in rebates over their entire model lineup. Some models are offering more than 10,000 total possible rebates, which means they can't sell them. it's nearly impossible to qualify for all of those rebates, but It's not unreasonable to be able to stack them up and get, you know, four or five, even $6,000 and even more if you're a first responder or military. So if you do like Jeeps, you can get some ridiculous deals on them this December. Ram also has some big rebates on their trucks. Typically you can take that low APR or they've got some significant deep cash rebates on certain models of their trucks. A lot of this is not surprising because these are all Stellantis brands and as I said, they have seen the biggest dip in their sales. They're really, really struggling to the point where they're having to lay off a lot of workers around the globe. Maybe we should support them a little bit and buy some of their cars even though they're not terribly reliable. Volvo also has some decent rebates on their three-row SUV, the XC90, which is a beautiful vehicle They just have a lot of quirks about them. But especially if you own a Volvo already or a Volvo person, if you own or lease one, they have some good loyalty incentives if you want to switch out into a newer model. They also have some good lease deals on them. And hey, Maserati has a $5,000 or more cash rebate, especially on their Quattroporte, which, you know, when you're talking about $140,000 sedan that apparently they can't sell, hey, what's five grand off? But that rebate is on leftover 2022 models. They literally have new cars... from 2022 that they haven't sold. Hmm, we might want to ask why. Now let's talk about deals on electric vehicles. There are some really crazy good deals on electrics right now. And you want to try and get as many of those tax credits as you can now because starting in January, there will be fewer vehicles that qualify because of the way they wrote that Infrastructure Reduction Act law that the EV tax credits fall under. And then once the new administration takes office, we just don't know what's going to happen, but it's very likely that those tax incentives will just vanish entirely. So get them while they're hot. Some of the best EV deals this December are going to be on the Ford Mach-E. I refuse to call it a Mustang. It's the Ford Mach-E little SUV. They've got 0 % for 72 months. And that's good because that is a vehicle that does not qualify for any of the tax rebates anyway because they use parts and their batteries from foreign entities of concern. China. So the dealers are offering deep discounts anyway to offset the fact that you're not getting that tax credit and you've got that 0 % for 72. So that's actually a really good deal and it's actually a pretty cool EV. I like that one a lot. Heck, even Tesla is offering 0 % financing on both the Model 3 and the Model Y. The Model 3 is only for 36 months, but the Model Y, which they've struggled to sell, is for 60 months. So if you want a Tesla, This is an incredible opportunity because they never have specials like this. They never offer low interest rates on their vehicles. So this is definitely a good time to do You do have to have outstanding credit and they require a 20 % down payment, which the other manufacturers when they have a low APR, you generally can finance the whole thing as long as your credit is good. But Tesla is going to make you put 20 % down to get those 0 % APRs. The Kia EV9, which won my best in show in last week's podcast when I reviewed the Charlotte Auto Show, I love the Kia EV9. It's their three-row electric SUV that just kind of is in a niche of its own right now. And they've got 0% for 72 months on that. And it qualifies for some of the tax credits because they're built in Georgia. So if you want a three-row SUV that is purely electric, definitely one to look at, and you can get a killer deal on one. this holiday season. Keep in mind that these incentives do vary by region and every manufacturer has different regions. So for example, Toyota splits the United States into 12 different regions and the incentives will be different depending on how the vehicles are selling in those specific markets. So what you have to do is you need to go on to the manufacturer's website and when you're looking up the incentives it will ask you for your zip code. Put that in and it will give you the incentives that apply in your market area. Yes, sometimes you can get the better incentives by buying out of state and going to a different region. However, the manufacturers have caught on to that trick. So very often they require you to register the car in the state or at least in the region in order to qualify for those incentives. So can't always get away with that, but it doesn't hurt to try, just do your homework. Always do your homework. Most of these incentives are going to be on leftover 2024 models. And a lot of the vehicles out there are already into the '25s. I'm buying Hyundai Palisades like crazy and we're well into the 2025s. There are very, very few 24 models left of those vehicles. So if you're counting on those incentives, again make sure you do your homework and do it online before you waste your time going to a dealer lot, all excited that you're going to get this great deal on a car just to find out they don't have any because there aren't any leftover 24s in your area or at that specific dealership. So look at everybody's inventory, make sure they actually have the car. Call them, see that it's actually on their lot because inventory will move a lot faster right now than it normally does. So if you saw it yesterday on the website, doesn't mean they actually have it on their lot today. Even if it's on their website today, it might not actually be on their lot because they've already sold it. They're working a deal on it. So always verify inventory before you run out to the lot and risk wasting your time. This is the type of homework that I preach about just no matter what time of year you're trying to buy a car. It really doesn't change. The holidays just put a little more stress on it because we're also trying to do so many other things for the holidays. And we do have that end of the year deadline kind of looming. So definitely get a jump on it. Do not wait until after Christmas to start your end of your car shopping. Start it now if you haven't done so already. It is a process if you do it right and you don't want to be disappointed by settling for a color you didn't like or a vehicle you didn't like. You know just to get the incentives. I don't think that's personally worth it but it depends on your situation and how important certain things are to you. You have to have these bells and whistles. Do you really just want this one color combination? When you're very specific about what you want, it can take a little bit more time to find it and just don't get yourself up against the end of the year. Cause the last thing you want to do is spend six, eight hours on New Year's Eve, sitting at a dealership, desperately trying to buy a car when you could be out hailing in the new year. So the good news folks is that 2024 will finally be a good year to shop for cars and to get some crazy good deals, especially on the brands that have not been selling well or the models that they're trying to get rid of. As long as you don't mind a leftover 2024 model, which if you can find one should not be a big deal. There's even some incentives on 2025 models. So if you're looking for the latest and greatest, you may still be able to get a reasonably low APR or some sort of lease deal on those models as well. Because again, they're also trying to meet their overall sales targets, whether it's a sale of a leftover last year model vehicle, or if it's the brand new stuff that's just hitting their lots. They need to make their sales targets for the year. If you want to learn how to get the best deal on a car, no matter what time of year it is, no matter what crazy stuff is going on in the market, that is why I created my online course, the No BS Guide to Buying a Car: Your Inside Track to Getting the Best Deal You can find that on my website, TheCarChick.com or you can go directly to it at CarBuyingCourse.com. And if you ever have any questions for me, you have some suggestions. for topics you wanna hear about on the podcast, you can fill out that contact form on my website. I hope everyone has a great rest of their week. We've got some great topics coming up before the end of the year. I will still be releasing episodes every week through the end of the year. So be sure to subscribe to the show and share it with your community. Thanks so much for tuning in folks. Until next time, I'm out of here. Drive safely.