In response to Covid-19's impact on the automotive marketplace, automakers stepped in with cheap financing deals to get people into the showrooms. Now that things are slowly starting to normalize, automakers are dialing back some of their special offers.
According to a report from Automotive News, brands like FCA and Hyundai, which have been especially aggressive with zero percent financing and deferred payment programs, are starting to adjust these deals based on the market.
From the report:
Fiat Chrysler Automobiles went in strong on 0 percent for 84 months on certain models, including some Ram pickups, but pulled back in May to 72 months on its most-attractive financing offers. At Hyundai, some 0 percent/84-month financing deals also were reduced to 72 months in May. Other offers remained, but with first-payment deferrals cut to 90 days from 120 days.
These programs were able to energize the car market to some extent and encourage shopping. Even though some of the special financing programs might be adjusted in the coming months, most industry analysts expect factory rebates to be strong through the summer while the country manages its economic recovery. In normal circumstances, manufacturers want to clear out previous model-year inventory in the summer to make room for the newer cars that typically land in the fall.
However, the availability of cheap financing may not always translate into a “deal” when looking at the total transaction price. In my conversations with dozens of dealers throughout the country, many of them are hoping for a flood of buyers into the market once the stay-at-home restrictions are eased on a wider level. This influx of buyers, combined with the fact that many factories have been shut down, may tip the supply-and-demand balance back in favor of the dealerships because there won’t be dramatic amount of new inventory arriving on the lots for some time.
We are already starting to see this happen with the pickup truck segment that has remained fairly strong during the downturn. I’ve been telling consumers that if they risk waiting too long to time the market, they may actually miss out on a deal.