It’s no secret that automakers and dealerships typically climb over each other to offer the best incentives before the year ends. But this year’s sales season is expected to be particularly competitive, with slowing sales translating to greater urgency to clear inventory.
According to research from Kelley Blue Book, the respected vehicle-valuation firm, overall incentives on new vehicle sales were up by 60% in October compared to the previous year.
And the trend is likely to continue.
“‘Tis the season for automakers to make their final push for 2024 sales,” says Cox Automotive analyst Erin Keating. “While some automakers focus on managing production, many will likely maintain or even increase their seasonal incentives to attract buyers.”
In October, eight automakers offered average incentive packages that amounted to more than 10% of the average transaction price (ATP). And all four of Stellantis’ U.S. brands – Chrysler, Dodge, Jeep and Ram – offered incentive packages above the industry average.
Stellantis has intensified efforts to clear inventory as sales have stumbled this year.
On the other hand, Porsche, Toyota, Land Rover and Cadillac continue to have the lowest incentive spend, Kelley Blue Book says.
Meanwhile, incentives on electric vehicle (EV) incentives were much higher in October 2024 compared to the previous October, helping make electric vehicles more affordable for consumers.
The average incentive package offered on an EV, including government incentives when applicable, was 13.7% of the average transaction price, up from 11.6% in September, and more than double the year-earlier level, when incentives were 5.6% of ATP.
On average, EV incentives have averaged near 11% of ATP this year, well above the industry average.
But year-end deals aren’t necessarily limited to new vehicles, or even to incentives, for that matter.
Car rental company Hertz, which has been trying to get rid of a surplus inventory of 30,000 used EVs, has been slashing prices on popular models such as Teslas, Chevrolet Bolt EVs, and Hyundai Kona electric SUVs.
The clock also still appears to be ticking on the federal tax incentives applicable to the purchase of an EV: $7,500 for a new vehicle and $4,000 for a used one.
