The Hunt for Holiday Bargains Won't Be Easy for Car Shoppers this Black Friday, According to Edmunds
SANTA MONICA, Calif., Nov. 19, 2020 /PRNewswire/ -- Shoppers seeking Black Friday bargains on new cars will likely need to do some extra research ahead of the holiday weekend, according to the car shopping experts at Edmunds. Edmunds analysts note that automakers have pulled back on incentives for the holiday due to shortages in inventory created by the coronavirus pandemic.
"Get ahead of the holiday weekend by starting your research online now" -Ivan Drury, Edmunds' senior manager of insights
According to Edmunds data, the average days to turn (DTT) for new vehicles dropped to 56 days for the industry in October, nearly a 27% decrease from the same time last year and the lowest Edmunds has on record since June 2012. The average discount from MSRP for new vehicles dropped to $2,046 in October, nearly a 23% decrease compared to last year's number. Edmunds analysts also predict that more than 50% of cars sold in November will be 2021 model year vehicles, an increase compared to last year when 40% of cars sold in November were 2020 model year vehicles.
"This Black Friday is looking much different in terms of sales compared to the blowout bargain events promoted in years past," said Jessica Caldwell, dmunds' executive director of insights. "Although automakers are doing a good job of broadcasting a 'buy now' message to shoppers with holiday advertising campaigns, they're mostly just hype. The reality is that the transition phase between model years has been essentially cut short and, for the first time in a long time, dealers and automakers aren't facing the overwhelming pressure to sweeten deals to clear out their lots."
Despite fewer available discounts, Edmunds experts expect to see healthy retail sales over the holiday weekend thanks to demand from higher-earning consumers looking to direct their spending toward a new vehicle after months in quarantine.
"Consumers who haven't been financially affected by the pandemic might be feeling the itch to make a big car purchase, especially if stricter quarantine lockdowns prohibit spending on a big vacation or other holiday expenses, like nights out, parties or gifts," said Caldwell. "Interest rates remain low, and Americans with the ability to take advantage of them are doing so to upgrade to larger trucks and SUVs."
To help consumers jump start their research ahead of the Black Friday weekend, Edmunds experts took a look at inventory levels for popular vehicle segments in November to identify where shoppers might find the best selection. According to Edmunds data, luxury SUVs saw the largest lift in inventory (18%) compared to October, followed by compact cars (15%), compact SUVs (7%), midsize SUVs (7%) and luxury cars (6%). Large SUVs saw the greatest decrease in inventory levels (-8%) compared to October, followed by large trucks (-3%) and midsize cars (-1%).
"If you're in the market for a new car and have your heart set on a specific 2020 model year vehicle, now is the time to pull the trigger because you won't find many of these cars sitting on lots come January," said Ivan Drury, Edmunds' senior manager of insights. "Get ahead of the holiday weekend by starting your research online now, and consider expanding your search radius to help find the particular vehicle you want. Even with heightened quarantine restrictions, the good news is that dealers are prepared to help you complete pretty much the entire shopping process from home."
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