Car Dealers Struggle To Reconcile Incentives With Reality Amid Supply Shortage

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Senior Pricing Analyst

As CarsDirect’s resident pricing analyst, Alex offers must-know analyses of pricing & incentives to those looking to buy or lease a car. His consumer-oriented coverage of the latest trends and breaking news has been featured by The Wall Street Journal, Fox Business, Motor Trend, Automobile Magazine, and more.

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, Senior Pricing Analyst - September 14, 2021

Some new car dealers are struggling to match consumer expectations with reality amid a crippling inventory shortage. While it's no secret that manufacturer incentives are down across much of the industry, some brands are continuing to offer attention-grabbing deals, some of which may actually be too good to be true.

Just last month, Nissan made headlines with an ultra-cheap $89/month lease deal on the 2022 LEAF EV. Our analysis found that this was the cheapest lease in America and quite surprising considering the fact that the automaker recently cut the electric car's base price by nearly $4,300 in a bid to broaden its appeal.

As it turns out, it didn't take long for the deal to be axed. Even though it was scheduled to end after Labor Day, a dealer in the San Francisco Bay Area pointed out that Nissan had already scrubbed any mention of the deal from its website. We also learned that local LEAF prices were going for $3,000 to $4,000 over MSRP.

Manufacturers have often needed to balance their advertising with the needs of their dealers. However, market conditions have made that increasingly difficult. Here in Southern California, Toyota went as far as taking nearly every lease off its website based on dealer feedback, a decision that has stood for over 2 months now.

Not every brand has taken that approach. For example, Chevy is already offering 0% APR for 72 months on the 2022 Traverse, a vehicle that doesn't appear to have even arrived yet at its dealerships. While incentives like these can entice consumers to wait for a 2022 model, they could put dealers in an awkward position.

From a consumer's standpoint, if cars are selling for over MSRP, why would a brand need to offer discounts? Confusingly, we're still seeing 2021 Traverse prices listed at up to $5,000 above sticker. If you're comparing prices and simply looking to get the most for your money, this could seem like a significant disconnect.

At that point, buyers may have a pretty good reason to wait. In some cases, we're literally seeing incentives meant to get buyers to wait. Ford is continuing to offer one of the better deals at the moment with a $1,000 custom order discount. The deal can even be stacked with as much as a $3,500 trade-in assistance bonus.

Most manufacturers have already scaled back incentives. In what could be the most extreme example this month, Lexus eliminated up to $2,000 in rebates on its lineup of luxury vehicles. Based on the latest Lexus incentives, we're also seeing lease payments up to $80/month more expensive than they were in August.

For now, in-market shoppers will likely have to talk to their local dealers to understand just what's happening with prices in their area. Depending on regional market dynamics, some may find the cheapest lease deals to be too good to be true if a manufacturer's advertised deals don't actually end up being based in reality.

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, Senior Pricing Analyst

As CarsDirect’s resident pricing analyst, Alex offers must-know analyses of pricing & incentives to those looking to buy or lease a car. His consumer-oriented coverage of the latest trends and breaking news has been featured by The Wall Street Journal, Fox Business, Motor Trend, Automobile Magazine, and more.

Follow On: Twitter

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