By Tony Wittkowski | Business Reporter | The Herald-Palladium
BERRIEN COUNTY — Car dealers and car makers are trying to meet end-of-the-year sales goals – and potential car owners are reaping the benefits.
This week is set to be the best time of the year to buy a new car. Manufacturers’ year-end promotions are made to cut deals in order to clear their stock – especially on slow-selling models and last year’s leftover inventory – to end 2015 on a high note and meet annual sales goals.
Mike Leys, general sales manager for Brookfield Chrysler in Benton Township, said makers push dealerships to sell vehicles to clear space for the incoming models. Smaller dealerships have a finite amount of space, which makes this month all the more important.
“The dealership doesn’t want to continue to pay interest on cars that are a year old,” Leys said. “To avoid that, they offer bigger, deeper discounts.”
Leys said Brookfield Chrysler sells between 30 and 40 new cars in December each year. However, 15 to 20 of those will be sold in the coming week. December is known as one of the top three car-selling months for dealerships, along with March and August.
There are lots of incentives to move all the 2015 models off the lot. Business owners often take advantage of tax write-offs for equipment purchases this time of year.
Lou Dominion, who runs Dominion Chevrolet along Red Arrow Highway in Bridgman, said a few local businesses are left with some extra income at the end of the year to spend on a new car.
“Business owners in the area spend quite a bit on pickup trucks,” Dominion said. “Heating and air conditioning (companies) have needed more commercial trucks in their fleets lately. Farmers are always trying to update what they have and capitalize on the tax savings. It’s a part of the small business tax incentive campaign.”
Dominion said the deal seekers are another shot in the arm for dealerships.
The year’s end tends to draw people looking for a new car, rather than used cars, Dominion said.
“It’s a great time to be a buyer,” he said. “The buyer has power this time of year. People won’t have to go far if they are looking for deals.”
Dominion said his make normally includes bonus tags to give the shopper more of an incentive to buy in December. Other sales tactics include zero percent offers and no payments for 90 days or five months.
“They dial up the incentives to close out the year,” Dominion said. “There are all types of hooks that are being cast in the water.”
The luxury brands in particular are making deals, with major ad campaigns that involve the giving away of expensive cars with the large red bows on top.
According to Experian Automotive, more than 10 percent of all luxury vehicle registrations between 2010 and 2014 occurred in December, and this year should be no exception.
At Signature Automotive in Benton Township, General Manager Bill Crowder said incentives for their cars get higher as the model gets older in an attempt to increase year-over-year sales.
“Right now we are holding the Toyotathon, which is our largest sale event,” Crowder said. “There’s also the Hyundai Holidays Sales Event. Every manufacturer will have some sales event. We do things like providing gift cards that come with a car.”
Despite it being a large sales month, Crowder said December is equal to what is sold in the summer months. He was quick to say this week is not the Black Friday equivalent for car dealerships.
“We deal with seasonality in our state,” Crowder said. “When its colder, people spend less time outside.”
The week between Christmas and New Year’s Day is traditionally the period in which shoppers can strike the best new-car deals possible. Analysts say those who shop for cars on New Year’s Eve will likely obtain the best deals of the month, with the next-best days being Dec. 27-30 when few patrons are searching for a new car after Christmas.
However, with this year’s rise in car sales, year-end bargain hunters might not find a diverse inventory from which to choose from. According to Forbes, it’s the unpopular and overstocked models – mostly remaining 2015 inventory models that are being redesigned for 2016 – that tend to be offered with the largest discounts.
(Author’s Note: This article was originally published on Dec. 30, 2015)