New Vehicle Discounting Returns This Memorial Day Weekend Holiday, According to Edmunds Experts
May 22 2024 - 9:03AM
Good news for car shoppers seeking a reprieve from scorching new
vehicle costs this summer: Outgoing model year (2023MY) inventory
available on dealer lots across the country means that discounts
should be easier to find this Memorial Day weekend. According to
May data[1] from the car shopping experts at Edmunds, 2023MY
vehicles are:
- Sitting on
dealer lots at pre-pandemic levels. The share of 2023MY
vehicles on dealer lots nationwide climbed to 6.8%. In May of 2023,
the share of 2022MY vehicles on dealer lots was 5.4%, and in May of
2022, the share of 2021MY vehicles was 3.7%. In May of 2019, the
share of 2018MY vehicles was 6.7%.
- Being listed
for thousands of dollars below MSRP on average. The average
discount for a 2023MY vehicle was $4,147[2], compared to $1,741 for
a 2024MY vehicle. In 2023, the average discount for a 2022MY
vehicle was $1,919. In 2022, the average discount for a 2021MY
vehicle was $357, and in 2019, the average discount for a 2018MY
vehicle was $4,600.
- More likely
to command lower interest rates when financed by qualified
shoppers. More than 1 in 4 (26.9%) purchases of 2023MY vehicles
financed at dealerships commanded an average annual percentage rate
(APR) of 1.99% or less, compared to just 4.1% of financed 2024MY
vehicle purchases.
“Supply chain disruptions and limited inventory left little to
be excited about in summer holiday car shopping the past few years,
but discounts on outgoing model year vehicles this Memorial Day
weekend are a bright spot for consumers in an otherwise challenging
market,” said Jessica Caldwell, Edmunds’ head of insights. “For
dealers and automakers, the trend serves as a moment of caution
surrounding the old habits of overproduction and inventory glut.
It’s also a reminder that the expensive vehicles now being
discounted were strong sellers one to two years ago, showing just
how significant high interest rates are in today’s market.”
Domestic Brands Offer Consumers the Best Chance of Discounts
This Holiday WeekendEdmunds analysts note that brands from
Detroit automakers are seeing the greatest buildup of inventory on
dealer lots and therefore could offer the biggest discounts for car
shoppers this holiday weekend. According to Edmunds data from May,
Dodge, Chrysler and Buick topped the list of makes with the highest
concentration of 2023MY vehicle listings nationwide at 52.6%, 38.4%
and 17.6%, respectively. These brands listed for an average
discount of $6,753, $6,252 and $4,256, respectively, for their
2023MY vehicles. Japanese automakers Toyota, Subaru and Honda
topped the list of makes with the smallest share of 2023MY vehicle
listings nationwide, at 0.8%, 0.8% and 0.6%, and commanded average
discounts of $1,337, $1,450 and $786, respectively.
Makes Ranked by Highest Share of Outgoing
Model Year (2023MY) Vehicle Listings on Edmunds
|
Make |
Share
of 2023MY Vehicles |
Average
Discount for 2023MY Vehicles (difference between average MSRP and
average dealer listing price) |
| Dodge |
52.6% |
$6,753 |
|
Chrysler |
38.4% |
$6,252 |
| Buick |
17.6% |
$4,256 |
| Ford |
14.7% |
$3,149 |
|
Lincoln |
12.9% |
$4,625 |
| Ram |
8.9% |
$4,171 |
| Jeep |
8.5% |
$6,160 |
|
Mercedes-Benz |
8.2% |
$316 |
|
Jaguar |
7.6% |
$4,185 |
|
Genesis |
6.6% |
$3,131 |
| Land
Rover |
5.7% |
$1,046 |
|
Mitsubishi |
4.5% |
$2,677 |
|
Nissan |
4.2% |
$3,745 |
|
INFINITI |
3.7% |
$5,781 |
| GMC |
3.4% |
$3,068 |
|
Volkswagen |
3.2% |
$5,221 |
| Volvo |
3.1% |
$5,354 |
|
Hyundai |
3.0% |
$2,499 |
|
Porsche |
2.5% |
$1,416 |
|
Chevrolet |
2.4% |
$1,347 |
| Kia |
2.4% |
$2,568 |
| Acura |
1.8% |
$559 |
| Audi |
1.6% |
$2,251 |
| Lexus |
1.6% |
$664 |
| BMW |
1.3% |
$285 |
|
Cadillac |
0.9% |
$2,574 |
| MINI |
0.9% |
$683 |
| Mazda |
0.8% |
$1,025 |
|
Toyota |
0.8% |
$1,337 |
|
Subaru |
0.8% |
$1,450 |
| Honda |
0.6% |
$786 |
Outgoing New Models Are Enticing, But They’re Not for
Everyone“Research is critical when considering outgoing model
year new vehicles as they can represent notable savings and in some
cases don’t sacrifice on vehicle features when compared to current
model year models, leaving funds for peace-of-mind products like
extended warranties and wheel/tire protection,” said Ivan Drury,
Edmunds’ director of insights. “That said, while purchasing a prior
model year vehicle can offer an opportunity to lock in a discount,
it might not be an ideal investment for all shopper types.
Consumers who prefer to swap their vehicles every few years may
want to look elsewhere as these new outgoing models experience
heavier immediate depreciation compared to new vehicles from the
current model year.”
For more general tips on how to shop for a car on a holiday
weekend, Edmunds experts have put together a helpful guide that can
be found here. Car shoppers can start their search for new vehicles
at local dealerships on Edmunds here.
About EdmundsEdmunds guides car shoppers online from
research to purchase. With in-depth reviews of every new vehicle,
shopping tips from an in-house team of experts, plus a wealth of
consumer and automotive market insights, Edmunds helps millions of
shoppers each month select, price and buy a car with confidence.
Regarded as one of America's best workplaces by Newsweek, Fortune,
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[1] Data pulled from Edmunds’ database of dealer partners,
reflective of available inventory on May 19, 2024 [2] Average
discount was calculated as the difference between the average MSRP
and average dealer listing price for all vehicles
Talia James-Armand
Edmunds
310-491-8738
pr@edmunds.com