Hyundai Lifts Limits On Advertising Ultra-Low Prices

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Senior Pricing Analyst

As CarsDirect’s resident pricing analyst, Alex offers must-know analysis 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 in publications such as Car and Driver, Motor Trend, Automobile Magazine and Autoblog.

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, Senior Pricing Analyst - March 4, 2021

Hyundai is giving its dealers free rein to discount its cars to any degree necessary in an unusual move that could create a headache for competitors. The decision temporarily suspends a longstanding restriction that limits the discounts dealers are allowed to advertise. As a result, consumers could see unusually low prices from their local Hyundai dealers on a wide range of vehicles.

The automaker laid out its rationale in stark terms in a letter sent Tuesday to dealers, stating "HMA recognizes the retail challenges the industry is currently facing, with the continuation of COVID-19 compounded with the recent severe weather impacting most of the country. With this commitment, HMA is suspending the Minimum Allowable Advertised Price (MAAP) requirement."

MAAP is an industry term that refers to the lowest price a brand will allow dealers to advertise and still receive subsidies. While the provision is largely meant to protect a brand's perceived value, dealers are still allowed to sell cars at whatever price they deem necessary. The downside is that consumers often need to begin negotiations to see the best prices possible in a given area.

By removing that restriction, Hyundai has apparently thrown caution to the wind. The decision could disrupt competition but also create a headache for dealers by potentially stoking a "race to the bottom." While that could prove beneficial for consumers, we've seen no evidence of similar moves from other brands. Companies that use a MAAP include Toyota, Subaru, Nissan, and VW.

So should you expect to get a killer discount on a Palisade? Not so fast. Hyundai is limiting the scope of this change to the following models: the 2021 Accent, Elantra, Elantra Hybrid, Veloster, Sonata, Sonata Hybrid, Venue, Kona, Kona Electric, Tucson, Ioniq Hybrid, Ioniq Plug-In Hybrid, and Ioniq Electric. The Santa Fe and popular Palisade are excluded from this new change.

Still, this represents a unique opportunity that could allow buyers to more easily see a dealer's best price. In one of the most extreme cases we've seen near us in Los Angeles, a dealer in Anaheim is advertising a 2021 Sonata SE with an MSRP of $25,179 for just $19,500. We estimate that this translates to a $4,650 discount below the invoice price after a $2,000 manufacturer rebate.

We think this month's change could give Hyundai a competitive advantage among online car shoppers. Hyundai is also offering a slew of new promos, including Sign & Drive lease deals and a rare 0% APR deal on the sporty Veloster N. We recommend comparing your options carefully to ensure you get the best deal possible. Current Hyundai offers are set to end on March 31, 2021.

Explore This Month's Top Lease Deals »

, Senior Pricing Analyst

As CarsDirect’s resident pricing analyst, Alex offers must-know analysis 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 in publications such as Car and Driver, Motor Trend, Automobile Magazine and Autoblog.

Follow On: Twitter

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