Jonathan Banks Notes Shift in Incentive Spending


NADAguides - October 15, 2012

Industry watchers know excessive manufacturer subvention of new vehicle prices was one of the most corrosive factors affecting used vehicle prices during the last decade.

Jonathan Banks of NADA Used Car Guide observes changes.

Says Banks: Production today is more in line with demand and the quality and desirability of new product has improved dramatically over the past few years. I’ve been in this industry for a long time now, and the depth and breadth of product for each manufacturer has never been better. It’s not even close.

Per Autodata, since the end of the recession in 2009 the average amount spent per unit has fallen by some $300, or 10%. Multiply that by the number of units produced each year and the savings quickly add up. In large part, these savings go right back into making better product. This allows new vehicle prices to increase and associated downward pressure on used prices is minimized.