The time to buy a Christmas present — for yourself or someone else — is almost over. We’re counting the hours now.
But if you want to go big with your gift giving, you could consider an automobile.
Many auto dealerships are loaded with sedans, trucks and SUV’s. There are deals to be had, experts and dealers say.
And many of those deals will last through the end of the month as dealers push to make year-end sales goals.
The industry’s optimism has led to increased inventories, which has led to more deals, said George E. Hoffer, a transportation economic professor at the University of Richmond who follows the auto industry.
“All the second half of this year, car sales have been high,” Hoffer said. “But at the same time, car production has been even faster. That’s the problem. For the first time in almost a decade, there is an oversupply of cars on the lot.”
The average dealer had 77 days worth of new unsold vehicles as of Dec. 1, Hoffer said, citing a report by industry publication Automotive News. That’s about 30 percent higher than what is considered the ideal inventory.
A year ago, Hoffer said, the average inventory was 69 days.
“And that means the factories are offering better deals,” he said.
So most dealers have abundant supplies of 2013 models, and 2014s are arriving as automakers keep factories humming. Since dealers pay interest on money borrowed to buy the cars, they’re probably eager to sell them soon.
Some end-of-the-year sales started last month as automakers tried to get a piece of Black Friday sales with ad campaigns targeted for the day after Thanksgiving.
Normally, customers can get a deal for 5 percent to 6 percent off the sticker price, but this month a buyer of a new car, truck or SUV can look for a discount as deep as 10 percent, said Alec Gutierrez, senior analyst for Kelley Blue Book.
For example, a 2014 Chevy Malibu 1LT with a sticker price of $23,510 could be sold for as much as $2,351 off.
Hoffer pointed to a culture change in the way manufacturers and dealers approach the end of the year.
“Used to be, car dealers would pretty nearly shut down after the second week of November,” he said. “Dealerships were as dead as could be, and purposely so.
“You had Thanksgiving and Christmas coming,” Hoffer said. “Your sales staff took vacations and spent time with the family.”
Then Lexus tried something different.
“They started their ‘December to Remember’ commercials,” he said. “Buying a car became a Christmas event. And they were successful. The other manufacturers were forced to follow their lead.”
Tom Flood, general manager for Lexus of Richmond at 9703 Midlothian Turnpike in Chesterfield County, was part of that new advertising tactic in 1998.
He was working for Lexus’ advertising agency, Los Angeles-based Team One Advertising, a division of Saatchi & Saatchi.
“Toyota had its ‘Toyotathon,’ ” he said, “but it didn’t even look like winter. Lexus had been having a big August event and we decided to have another one for the holidays. We came up with ‘December to Remember’ and started with the big red bows. And it worked.
“Now everybody does it,” Flood said.
George Whitlow, president of Lexus of Richmond, said that before the marketing change, dealers would write off the first three weeks of December. “The week after Christmas was what some of us called our ‘13th month.’ That was when we did all our December business.”
Flood said Lexus’ inventory isn’t as high as the industry average. “There are a couple of models that are sold out,” he said, “but there are others that we have plenty of. We have incentives from Lexus — good APR (on loans), good prices, good leasing terms.”
Some manufacturers’ ad campaigns poke fun at the Lexus approach, using over-the-top versions of the holiday-themed commercial.
This year, Honda’s “Happy Honda Days” ads feature balladeer Michael Bolton, who doesn’t mind a little humor at his own expense, delivering heartfelt lyrics. Snowflakes swirl around him and the sedans he’s selling as customers look on, some taken aback by the extravagant production.
U.S. sales are expected to reach 15.6 million vehicles this year, compared with just 10.4 million in 2009. And the latest retail sales figures from the government show that steady hiring and rising household wealth are encouraging more big-ticket purchases.
The bargains, dealers say, depend a lot on which car, SUV or truck you want to buy. The best deals now are in small and midsize cars.
Ford dealers nationwide have about a 90-day supply of Fusion midsize cars, Kelley Blue Book’s Gutierrez said, while other manufacturers’ dealers have 75-80 days of midsize car inventory.
There also are some good deals on pickup trucks.
Ford, which has the oldest big truck in the market, offers discounts and forces other automakers to follow, Gutierrez said. Ford is offering up to $8,500 off a 2013 Ford F-150 XLT Super Cab with a sticker price of around $30,000.
Gutierrez said some of the hotter segments, such as small crossover SUVs like the Honda CR-V and Ford Escape, also offer good deals. But some SUVs, such as the Jeep Grand Cherokee, aren’t selling at much of a discount.
In addition to the high inventory, there are other factors in consumers’ favor: Interest rates are low and used-car values are still close to record highs, making trade-ins worth more money.
Also, automakers still are offering sweet lease deals, with leases running at about 25 percent of sales, near a record high, Gutierrez said.
Electric car lease deals are especially good, he said. Some dealers are offering the electric Nissan Leaf for $199 per month for 36 months with $2,000 down.
If you wait until next year you run some risks. Interest rates may rise and trade-in values are likely to drop a bit, Gutierrez said.
Barry Moore, general manager at Haley Buick GMC at 9831 Midlothian Turnpike, said pent-up demand also is driving the market.
“People have been holding off a couple of years,” Moore said. “Now, when they’re looking at the bill to fix a car, customers are thinking of using that money for a down payment on a new car instead.
“This is also a good time for a trade-in,” he said. “There’s a shortage of used cars, and dealers have those customers, too. They want used cars on the lot.”
Moore said the Internet has created knowledgeable customers.
“They come in and they know a lot about the car,” he said. “The main thing is to find a deal that fits their budget. This is a good time for that. A dealer can find a way.”
The Associated Press contributed to this report.
Article taken from Richmond Times Dispatch, End of year shapes up to be prime car-buying time. Posted: Sunday, December 22, 2013 12:00 am | Updated: 9:44 am, Mon Dec 23, 2013. BY RANDY HALLMAN Richmond Times-Dispatch.