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October 02, 2021

Great recessionary car deals? Yeah, those might be gone

If there was one benefit to this lousy recession, it’s that deals on new cars were all over the place.

Should you have had the money, a jaw-dropping bargain on an auto was about as easy to find as a Paul Walker movie that sucked. Dealers couldn’t give the things away.

But there was a reason incentives were through the roof, and that’s because – among other things – manufacturers spat cars out at a rate simply too quick for dealers.

Inventory piled up, sales slumped and then, all of a sudden, Hey, guys, we’re losing a s***load of money here! 

So what happened? Factories were shuttered, good people were laid-off and dealers felt the corporate foot on their necks. Get rid of these cars or get rid of yourself.

Yet that was then, and now, thanks to a major slow in production, output now comes much closer to matching demand. And what does that mean?

Say goodbye to those car deals.

Domestic automakers have snatched up their profit-sapping incentives at an incredible pace, Bloomberg reports, finally “weaning themselves” off the dependence of having to sell their product at a fraction of its usual retail rate.

“Incentives on GM, Ford and Chrysler Group LLC auto plunged 26% to US$3,278 in August from a March peak, while discounts industrywide fell 22% to US$2,474,” writes Bloomberg.

“The U.S. automakers’ vehicles sold for an average of US$2,000 more in the second quarter (of 2009) than a year earlier, said researcher J.D. Power and Associates.”

It might strike you as odd it took a financial meltdown – not seen since the days of this and this – for the Big Three automakers to realize it might not be a good idea to pump out cars by the thousand when they weren’t really selling so great to begin with.

But, such is life, and while now’s not the worst  time to buy a car, don’t be surprised if those one-in-a-million bargains aren’t there to greet you next time you pass through the dealership.

“As we suffered through the worst automotive recession of our lifetimes, the lesson automakers learned was to stay under control and not bloat inventory, which you have to follow with huge incentives to move the metal,” J.D. Power analyst Jeff Schuster tells Bloomberg.

“From now on, we’re going to see a more cautious approach to incentives.”

By Jason Buckland, MSN Money



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Gordon PowersGordon Powers

A long-time fund company executive, Gordon Powers now heads up the Affinity Group, a financial services consulting firm. Gordon was a personal finance columnist for the Globe & Mail for many years, has taught retirement planning...

James HaversJames Havers

James is the senior editor of MSN Money living in Toronto. He has worked for the Nikkei Shimbun (Tokyo),,, Canadian Business and other publications. Havers turned to journalism after teaching overseas.

Jason BucklandJason Buckland

The modern-day MC Hammer of money, Jason can often be seen spending cash that isn’t his with the efficiency of a Wilt Chamberlain first date. After cutting his teeth as a reporter for the Toronto Sun, he joined the MSN Money team with...