The news keeps telling consumers that car dealers are desperate to sell cars. This is true to a certain extent. At Darrell Waltrip Honda-Volvo-Subaru, sales are currently at about 70% of what they were last year. When a dealership advertises a sale and offers special pricing and interest rates it means they have support from the manufacturer.
In June, Honda had a cash sales incentive of $2,500 on the Odyssey, $1,500 on the Pilot and $2,500 on the Ridgeline. The Accord and Civic had as much as $1,500 and a special interest rate of 3.9% APR for 60 months. That meant for every one of those models Honda would send the dealer a check for the appropriate amount of money.
July has seen a drastic change in the incentives from Honda. There is NO dealer cash on the Ridgeline, Pilot or Odyssey. The Accord and Civic still have some incentives available but the customer now has to chose between the incentive cash OR the finance rate. Customers with good credit should take the cash incentive since rates are still very good at most banks and credit unions.
Honda is not the only manufacturer to reduce incentives. According to Edmunds the Nissan Altima, Chevy Malibu, Kia Amanti and Ford Focus also now have the restriction of either cash OR low financing rates. Toyota Camry now only has cash rebates since they have discontinued the 0% financing interest rate.
For the last several months, almost all of these manufacturers had big money combined with rates and the market has still slid, which may be one of the reasons the carmakers have decided to pull back on the incentives.
Another reason for the incentive changes may be in part to the new CARS bill. All of these cars are midsized very fuel-efficient sedans. These vehicles will be in high demand for the next two months or until the $1 billion runs out.