Two in every five people want an SUV at some point in their lives. The only thing preventing them is the price of an SUV can be on the high side. However, what is unknown to most people is that dealerships are always ready to offer mouthwatering deals for people who want a new SUV at a reduced price.
Below are the reasons why the prices dropped and why the deals are desirable
There are too many unsold SUVs
When you get to a dealership lot, you will see a few cars lined up for sale. Dealers are cautious when it comes to the number of vehicles at their lots. If there are too many cars, it makes it difficult for them to sell.
Recently, auto dealers have noticed that several vehicles have not been sold. The irony is that new cars enter their lots daily, but customers have stopped buying, making their inventory unbalanced.
For SUVs, the cost increases every year. In 2019, according to the Drive reports, the price of a standard SUV was pegged at $60,437. Now, that same SUV goes for $62,437. And the high costs of these SUVs are scaring drivers away.
According to reports from three years back, the auto total sales was 17.55 million. Now, sales are predicted to be below 17 million.
Because of the reduced sales, dealerships are putting in extra effort to sell their SUVs. But, these efforts are watered down with the production of new SUVs, which leaves the dealership with additional cars than they can offload.
According to The News Wheel, as of January 2019, about 4 million vehicles were still at the dealerships. And the downside for dealerships is, if sales do not pick up, they will lose big profits.
The lease period on most SUVs is ending
In addition to the problem of dealerships unable to handle the enormous influx of SUVs coming in, another problem is new SUVs whose lease period has ended. The Detroit Free Press explained that some years back, many lovers of SUVs preferred to lease instead of buying. And with the low per month payments, it became conceivable to fund the lease payment.
It is much anticipated that there will be a massive influx of SUVs off-lease, and according to Detroit Free Press, it is expected to continue for the next few years.
These SUVs arriving off lease are similar to the new models at the dealerships. A good number of them would have state-of-the-art features, they will be in top-notch condition, and they will have low mileage. With the expected colossal influx of SUVs, sales deals are going to be more challenging for dealerships.
The Morning call also cited that having a big inventory is more expensive for dealers than storage and interest expenses. And dealers are not ready to lose any money. They are keen on making a profit, but it can only be done by increasing sales.
The pressure is mounting higher on dealerships to sell SUVs, and if their monthly target is missed, it adds to the pressure on the ground.
What does any of this mean for someone who wants a New SUV?
Because of the additional inventory, dealerships in the United States are eager to sell off their cars. And this is an excellent chance for anybody who wants a new SUV.
Experts have reported that the additional pressure and excess inventory have made SUV prices fall considerably. According to the Detroit Free Press, they predicted that dealerships would offer more deals and excellent prices for brand new SUVs that are off-lease.
Drivers will have an increased variety of choices than before because of the increase in SUVs. And this implies that auto companies and dealerships are in a battle for your cash. Hence, dealerships will be forced to reduce their prices, give significant discounts and incentives to make good sales.
The Morning Call reports that these incentives and discounts are already emerging. For instance, GM offered significant discounts for some months, and Nissan offered drivers over $5000 worth of incentives on some particular models.
These deals and incentives will get juicer because these SUVs have remained unsold for a long time. If you want to take advantage of these mouthwatering deals, you need to make your research well.
With dealerships and automakers striving to have a larger share of the market, you need to take ample time to compare the incentives and prices that would help you save cash.