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For new-car buyers, the holidays are a treat - December 12, 2009
Dealers aiming to hit year-end numbers are more likely to make a deal with consumers
Deals are aplenty this holiday season.
Each December, the retail automobile industry ramps up its advertising for the holiday season, with special interest rates, cash rebates and other financial incentives.
Who buys cars during the holiday season? You'd be surprised at how many consumers wait until December to buy or lease a vehicle.
December has become one of the busiest months in the new-car industry, but it wasn't always so. When I first entered the business in the early 1970s, dealerships generally turned into ghost towns in December.
Then, sometime in the early 1980s (I'm guessing), a few dealers decided to promote Boxing Day sales in an effort to drive traffic and sales during this typically slow period.
The strategy worked. Gradually, consumers warmed to the idea of visiting showrooms and purchasing cars during a season better known for its spirit of giving.
Incidentally, many people choose this time of year to purchase a vehicle for a loved one. In fact, every year we accommodate customers who want to surprise their children or spouses with a new set of wheels.
Over the years, Boxing Day sales at new-car dealerships evolved into Boxing Week sales and, today, many dealers and manufacturers extend the holidays savings for the entire month. Some manufacturers even start rolling out their holiday pricing ads in November!
This year, because of the sluggish economy, auto manufacturers have introduced extremely generous rebates and sales programs to encourage customers to visit showrooms and to buy cars.
In last Saturday's Wheels Section, for example, almost every new-car ad carried some type of holiday pricing message.
For anyone looking for a new car these days, it's a great time to be in the market.
Aside from the excellent deals available, there's another reason why automakers (and dealerships) market themselves so aggressively in December.
For dealer principals, sales managers and salespeople, a lot is riding on whether they meet and exceed their yearly sales quotas.
Sales managers and salespeople are motivated to work harder to earn bonuses if they hit their monthly and yearly targets. They are often more prepared to strike even better deals, if it helps them to achieve a year-end bonus.
Bragging rights, too, are up for grabs. Auto executives and dealer principals who outperform the competition can use favourable sales figures in their advertising and marketing campaigns. "Top-selling mid-size sedan" or "fastest-selling sport coupe" carry a lot of weight with potential buyers.
Same goes for manufacturers. Whenever a carmaker earns top sales in a vehicle category, that message gets trumpeted pretty loudly. The automobile industry has always been highly competitive that way.
In addition to bonuses and bragging rights, dealerships are also eager to reduce their inventory levels at the end of the year. That's an extra incentive for buyers who are looking for additional savings.
It's not uncommon for dealers to lower their margins on vehicles that have been sitting on their lots for too long.
It costs money to carry these vehicles, month after month, and besides, dealers need to free up space for the newer models arriving after Jan. 1.
Consumers should read industry reviews and consumer reports on the models they're interested in. Newspapers and Internet sites such as wheels.ca are teeming with information about all types of vehicles, in all categories.
If you're in the market for a new vehicle, take advantage of the special pricing that's available.
If you do your homework, you'll find a great deal.
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