In today’s market, finding the right SUV at a reasonable price can feel like an uphill battle. With nearly 2 million vehicles waiting for buyers, dealers are under pressure to clear their lots.
Our article sheds light on this inventory challenge and provides essential tips for seizing lucrative deals. Dive in for insider knowledge that could lead you to your next vehicle at an unbeatable price!
Key Takeaways
- Dealers have a surplus of 2023 SUVs, so they’re cutting prices and offering deals.
- Ford is selling more electric vehicles while others like Stellantis face sales challenges.
- Buyers can save on new and used cars now with better trade – in values and incentives.
- High financing rates affect how much you pay for auto loans over time.
- Experts say if an SUV deal fits your needs, consider buying it but check all the details first.
The Situation of Unsold 2023 SUVs
Dealerships across the nation are grappling with an excess inventory of 2023 SUVs, a reality that compels them to consider liquidation as a viable strategy. This surplus presents challenges and opportunities in the automotive market that affect both dealers and consumers alike.
Understanding the Inventory Surplus
Car dealerships are overflowing with new 2023 SUVs. Almost 800,000 brand-new vehicles are just sitting on lots as of February. This surplus means there are too many cars and not enough buyers.
Dealers face tough choices because they can’t keep all these unsold SUVs.
They have to get rid of extra stock fast. Some cars might get sold at lower prices or become loaner vehicles for service customers. With so many unsold vehicles, around 2 million in total, dealerships are eager to make deals happen.
That’s why you might see big discounts on the latest models right now.
Impact on Dealers
Dealers face tough choices with unsold 2023 SUVs. They can’t send these cars back to the makers for refunds. Instead, they must cut prices or find other ways to sell them. This means dealers are working harder to make deals and move inventory.
High interest rates and a weaker economy make it hard for dealers right now. Deals have to appeal to you so that they can sell their large cars and luxury SUVs. Prices may drop as they try to avoid losses from those unsold vehicles.
The Role of Major Automakers
Major automakers are pivotal in this scenario, as their production decisions and incentives directly influence dealer inventory levels and the broader market dynamics. Companies like Ford, Stellantis, and General Motors must navigate the delicate balance between supply and demand to mitigate mounting pressures from unsold 2023 SUVs.
Ford
Ford is making changes to its plans. They have stopped their 2023 forecast and are delaying big investments in new electric vehicle (EV) and battery plants. Still, Ford’s EV sales are going strong.
In the last quarter of the year, they sold nearly 26,000 electric vehicles. This was a big leap from the previous quarter with a 24 percent increase.
Their popular Mustang Mach-E is leading the way in these sales. Despite pulling back on some future projects, Ford shows that drivers are excited about their current electric models like the Mustang Mach-E and F-150 Lightning.
Dealers may need to adjust prices on unsold SUVs, but Ford’s commitment to EVs seems sure as they continue selling more each quarter.
Stellantis
Stellantis faced tough times with too many unsold cars. Chrysler and Dodge had over 160 days’ worth of vehicles waiting for buyers, double what is normal. They even stopped sending gas-powered cars to 14 states including California because of new clean air rules.
This made their sales drop a little in the last part of 2023.
Jeep and Ram trucks did better than other Stellantis brands though. But strikes hurt their profits by 10% in the second half of the year. To improve things, Stellantis launched Pro One for their commercial vehicles, hoping to sell more vans and trucks.
General Motors
General Motors is changing fast. The company has cut its Buick dealers in the U.S. almost in half. This move comes as GM shifts towards electric cars and aims for an all-electric future.
They want to sell more cars like the GMC Acadia and Chevrolet Traverse, which are gas models today but may be electric tomorrow.
Dealers felt pressure when GM ended franchises for over 1,100 locations back in 2009. Now, strikes at parts centers could hit sales hard again. If parts run low, it will affect both dealers and you as customers looking for repairs or new vehicles.
With these challenges, General Motors looks to keep its business strong while moving towards a future with more charging stations and less range anxiety for drivers of electric vehicles.
Negotiating the Best Deals
In this competitive market, dealerships are adopting innovative strategies to liquidate their surplus inventory of 2023 SUVs, presenting a unique opportunity for savvy buyers to negotiate favorable terms.
This section will explore the techniques being used and how you can capitalize on them for the best possible deal.
How Dealerships are Liquidating Inventory
Dealerships are taking big steps to sell their unsold 2023 SUVs. They need to clear out old models to make space for the new ones.
- Slashing prices: Dealers cut down the sticker prices. They make deals more attractive for you.
- Advertising sales: You might see ads with huge discounts. Dealerships do their best to catch your eye.
- Offering incentives: From low financing rates to extended warranties, incentives are on the table.
- Talking with lenders: Dealers work with banks and credit companies. They help you get a loan that fits your budget.
- Hosting events: Some dealers host special sale events. They invite you to enjoy great deals over a weekend.
- Partnering online: Dealerships use websites like Kelley Blue Book. This helps them reach more buyers.
- Auctioning vehicles: Sometimes, dealers send cars to auto auctions. This is often their last resort.
- Trading in favorably: Dealers might offer more value for your trade-in car. This makes buying a new SUV easier for you.
Opportunities for Buyers
You have a chance to make the most of the current car market. Dealers need to sell unsold 2023 SUVs, and that creates opportunities for you.
- Get a brand-new car for less: Since dealers are trying to clear their lots, you might not have to pay the manufacturer’s suggested retail price (MSRP) for a new SUV.
- Save on used cars: Prices for pre-owned vehicles are falling. Look for deals on models like the Toyota Highlander or Chevrolet Traverses.
- Better trade-in value: If you’re trading in your current vehicle, dealers might offer more to close the deal on an unsold SUV.
- More room to negotiate: With many crossovers waiting for buyers, you have power to negotiate better terms and prices.
- Explore financing options: Even if lending rates increase, you can still find favorable auto loans or refinance options with good credit scores.
- Consider certified pre-owned: These vehicles undergo thorough inspections and often come with extended warranties, offering peace of mind at lower costs than new models.
- Take advantage of incentives: Automakers like Ford or Subaru may offer special deals such as rebates, low-interest financing, or additional warranty coverage to move 2023 stock.
- Look into leasing benefits: Flexible lease agreements can provide lower monthly payments and allow you to drive a newer car more often.
The Future of the Car Market
As the automotive industry continues to evolve, understanding potential market shifts becomes paramount for consumers and dealers alike. The trajectory of auto sales, influenced by trends such as increasing interest rates and new technology adoption, will shape purchasing options in the coming year.
Predictions for 2024
Prices for new cars could drop in 2024. Dealers might offer more deals to clear out high inventories. You may see lower prices, especially on SUVs and sports utility vehicles like the Toyota RAV4 or the Honda Passport.
Buyers will likely have an advantage in 2024.
The used-car market is also changing. Sales of pre-owned vehicles, including compact cars and convertibles, may only see small increases. If you’re considering a Buick Envision or a luxury Mercedes-Benz C-Class, there could be better pricing ahead as well.
Keep an eye on financing rates—they will affect how good your deal really is.
Impact of Increasing Financing Rates
Higher financing rates mean you pay more for car loans now. Dealers feel this pinch too as they finance their unsold SUVs and other cars. Their costs go up, which can lead to cutting prices to sell these vehicles faster.
This situation puts pressure on dealers to clear out current stock, especially the 2023 models sitting on lots.
You might see deals popping up as dealers try to avoid high finance charges over time. They have to move cars like Ford’s Mustang Mach-Es or Ram 1500 trucks off their lots quickly.
If you’re looking at coupes or sports cars, now could be a good time. Yet, remember that while loan terms are still often 5-7 years, higher rates add up over time, making overall costs steeper even if monthly payments seem manageable.
Keep an eye on this trend if you’re planning to buy soon; it could save you money in the long run.
FAQs
1. Why are dealers liquidating unsold 2023 SUVs?
Dealers are facing pressures from the U.S. economy and need to sell off 2023 SUVs, including popular models like Ford’s F-150 Lightnings and Hyundai’s Santa Fe, to make space for new inventory.
2. What types of vehicles might I find at reduced prices?
You can expect a variety of hybrid cars, minivans such as the Volkswagen line-up, and luxury models like the Mercedes C-Class among the discounted vehicles.
3. Are there benefits for buyers in this situation?
Yes, buyers can take advantage of lower prices on 2023 SUVs as automobile dealers aim to clear out their current stock quickly.
4. Will financing options be affected by these liquidation sales?
Dealers may offer attractive financing deals where loans can be secured with favorable terms due to the urgency of selling these assets.
5. Are trade-ins or leases still an option during liquidation events?
Absolutely! Dealers typically continue to welcome trade-ins from lessees and work with used-car dealers during sales events to provide customers with a range of options for obtaining new vehicles.
Source Links
- https://www.carscoops.com/2023/07/inventory-levels-soar-as-2-million-cars-sit-unsold-at-dealer-lots-including-many-evs/
- https://www.jdpower.com/cars/shopping-guides/what-happens-to-new-cars-that-dont-sell
- https://www.teslarati.com/fisker-unsold-vehicles-2023/
- https://www.rd.com/article/cars-that-dont-get-sold/
- https://www.coxautoinc.com/market-insights/new-vehicle-inventory-november-2023/
- https://www.washingtonpost.com/climate-solutions/2023/11/09/car-dealerships-ev-sales/
- https://www.chase.com/personal/auto/education/buying/what-happens-to-unsold-cars
