Huge auto inventories may trigger large car price discounts, according to 24/7 Wall St.
Inventories of cars at local dealers have reached the highest level in seven years. This likely will trigger substantial sales and financing deals for consumers looking for new cars as dealers try to clear their lots. The late winter and early spring may be one of the best times in recent memory to buy a car or light truck.
New analysis by research firm Kelly Blue Book (KBB) shows:
“inventory levels are rising and days supply is high compared to 2007. If this trend continues, as expected with weather issues, automakers will have to continue to show some discipline instead of pushing incentives on vehicles to sell more cars.”
However, car companies and dealers have very few tools to clear supplies beyond price concessions. And increased discounts and financing deals have become part of what auto manufacturers use to prune inventory.
Normal industry “days to turn,” a measure of the time dealers have cars on their lots, run in the 40 to 50 range. KBB sees a rise in these numbers as probable cause for decades-old practices to lure buyers. Karl Brauer, senior analyst at KBB, said…