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When demand exceeds supply for any product, sellers have the upper hand. New car incentives dropped even further in the summer of 2022. What does fewer incentives mean for car buyers today? This is what the latest data reveals.
New Car Incentives Down 50% in 12 Months
The pandemic really put a wrench in the typical ebbs and flows of the automotive industry. Gone are the days of gradual change. Following an unprecedented drop in car sales as COVID took hold in 2020, record demand for cars far outpaced supply in 2021 and into 2022. Today, the lingering semiconductor chip shortage continues to greatly reduce new vehicle inventory. Any time there’s a shortage of new cars, used car prices rise too. Will buying a car ever get cheaper? Well, it hasn’t yet. Here’s the latest auto manufacturer incentive data from the analysts at TrueCar:
Q2 2022*
Q1 2022
QoQ change
Q2 2021
YoY change
BMW
$1,206
$2,358
-49%
$4,713
-74%
Daimler
$1,257
$2,012
-38%
$3,574
-65%
Ford
$1,193
$1,824
-35%
$2,567
-54%
General Motors
$1,847
$1,974
-6.40%
$4,399
-58%
Honda
$818
$1,163
-30%
$2,167
-62%
Hyundai
$620
$890
-30%
$2,102
-71%
Kia
$650
$1,260
-48%
$2,549
-75%
Nissan
$1,501
$1,848
-19%
$3,502
-57%
Stellantis
$1,893
$2,413
-22%
$3,522
-46%
Subaru
$753
$901
-17%
$1,339
-44%
Toyota
$803
$1,025
-22%
$2,219
-64%
Volkswagen Group
$1,169
$1,769
-34%
$3,730
-69%
Industry
$1,228
$1,631
-25%
$3,003
-59%
As you can see, new car incentives are at a 10-year low. In the second quarter of 2022, incentives averaged $1,228 industry-wide. That’s a 59% drop year-over-year.
Incentives Won’t Return As Long As Days’ Supply Remains Low
The latest new car inventory numbers are in, and the update brings a mixed bag of news. Overall new car inventory is up, but not nearly to the extent that is required to return normalcy to car sales. Most automakers are seeing incremental improvements.
Automakers with the Lowest Inventory
Subaru with 4 days’ supply (up from 3 days in June)
Mazda with 6 days’ supply (up from 4 days in June)
Hyundai with 7 days’ supply (down from 8 days in June)
Kia with 10 days’ supply (holding steady since June)
Automakers with the Most Inventory
Ford with 51 days’ supply (up from 37 days in June)
Lincoln with 40 days’ supply (up from 28 days in June)
Volvo with 26 days’ supply (some models are extremely limited)
Lexus with 24 days’ supply (up from 23 days in June)
In January of 2020, the industry’s average was 82 days’ supply. By early 2021, that figure had fallen to 66, but it would soon plummet as the chip shortage lasted longer than most expected. In July of 2022, new car inventory is slim with just 21 days’ supply.
Until more cars are sitting on dealer lots, there simply won’t be any reason for manufacturers to offer more new car incentives to buyers.
Lack of Incentives Is Contributing to Record New Car Transaction Prices
Average new vehicle transaction price over time. Source: Cox Automotive
You’re probably not surprised to hear that a new car costs more than ever before. The average transaction price has hovered around $45,000 for much of the past year. Two years ago, it was $38,000. With inflation AND supply chain bottlenecks, it will be a while before prices stabilize.
Monthly payments are on the rise, too. How much is too much? $500 a month? $750 a month? Maybe even a $1,000 car payment? Right now, the average monthly car payment is $712 a month. Five years ago, it surpassed $500/month for the first time. There’s a worrying trend taking hold today, and it’s one that risks spiraling out of control. A new Edmunds survey finds that 12% of car buyers are paying more than $1,000 each month for their car payment. Yes, a new car now costs as much as a home mortgage for those who choose to spend big.
How Does the Loss of Incentives Change the Car Buying Process?
Does Tesla win with lower incentives across the industry?
Other than higher price tags, here are some considerations if you’re in the market for a new car:
Most vehicle purchases are now above MSRP. However, this does NOT mean you must pay the premium – deals are still out there for those who do their homework. Nevertheless, 82% of car buyers paid over MSRP in early 2022.
Direct-to-consumer auto sales bring advantages. Eighty percent of Tesla buyers cite the no-haggle online buying process as a major factor in their decision to buy. Other electric vehicle automakers are selling direct-to-consumer without markups, but also without incentives. These include Rivian, Lucid, Polestar and Fisker.
More car buyers are placing factory orders… and waiting several months for delivery. If you’re looking for a special edition in a specific trim and paint color, chances are you’ll have to place a custom order and wait in line. If you’re more flexible, your chances of getting what you want, with or without incentives, are much higher.
Check back for the latest new car incentives. We’ll be updating this page as new numbers come in. Remember, you can still find a deal out there, but it will take a bit more work on your part. The CarEdge team is here to help you every step of the way. As Ray always says, knowledge is power, and CarEdge’s auto experts empower car buyers every day with the know-how that can save thousands of dollars.
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In 2024, most EVs charge much faster than you’d expect. Although some laggards still take nearly an hour to add 200 miles of range, today’s best-sellers are capable of ultra-fast charging. Unless you’re considering a bargain EV lease for short commutes, you’ll want to make sure that your vehicle is capable of fast charging.
These are the charging times for the fastest charging electric vehicles on the market today. Charge times are reflected as 10% to 80% since charging speeds slow significantly beyond 80% state of charge. You might have noticed that your phone and laptop do the same thing. Let’s dive in.
A new bill in the state of Florida is quite possibly the most confusing and concerning piece of legislation we’ve seen in years as it relates to consumers and car buying. SB 1346: Motor Vehicles in the Florida state Senate was proposed by Senator Tom Wright of Florida’s district 14.
We have contacted Mr. Wright’s office and have not heard back from them.
The bill as proposed would remove the legal requirement for a car dealer or motor home dealer to “obtain certificates of title”. The bill would also remove the requirement that a dealer be required to inform the state about transfers of ownership of a vehicle.
A screenshot from the Florida Senate website.
This is pure craziness, especially amidst the ongoing lawsuit against Carvana that claims the company has not been able to get customers the permanent title and registration for their vehicles. How convenient would it be if the law changed to no longer make that a requirement? Wow.
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Carvana and other startup online car dealers like Vroom and Shift have been plagued with issues. Their Better Business Bureau pages paint a concerning story. Many customers have waited months to get their permanent registration for their vehicle. Without the title and registration you cannot get insurance or legally operate a vehicle. This issue has occurred in many states.
Now, this proposed law in Florida would get rid of that issue by simply removing the law that required Carvana and all dealers to obtain the title of a vehicle. That’s purely insane, as the title is the one document that states who truly owns the property.
SB 1346: Motor Vehicles
Here is the complete language of the bill:
Motor Vehicles; Providing that motor vehicle dealers or mobile home dealers should apply for, rather than are required to obtain, certificates of title in the name of purchasers; providing that certain applications relating to transfers of motor vehicles or mobile homes should, rather than must, be filed within a certain timeframe; revising grounds on which the Department of Highway Safety and Motor Vehicles may deny, suspend, or revoke a motor vehicle dealer license, etc.
We’ll update this page as the bill progresses through the Florida state Senate.
At the beginning of June, U.S. dealerships had about 3 million new vehicles in stock, representing a jump from 2.7 million cars at the start of April.
New vehicle sales saw growth in the spring, but summer is bringing a slowdown to the new car market. According to Cox Automotive, sales rates are rising, and are now 12% higher year-over-year.
Retail sales of new vehicles have followed strong seasonal patterns this year, with consistent weekly gains throughout the spring. A significant spike occurred at the end of March, driven by a rush of buyers responding to an import tariff announcement. In May, inventory increased sharply. This trend is continuing into June.
Here are important definitions that will help you understand and interpret the data below:
Market Day supply: This is the number of days needed to sell all vehicles in inventory, based on the previous month’s daily selling rate. Learn more about MDS.
Inventory: This is the unit count of vehicles on hand at dealerships, factory lots, ports of entry, and in transit.
Cars with the Most and Least Inventory in June 2025
After years of volatility, new car inventories are in line with historical norms. However, a new disruption has emerged in 2025: tariffs. As car buyers rush to purchase before likely price increases, new car inventory is falling this spring season.
As we can see below, Stellantis brands have the most inventory, followed by Nissan and Volkswagen among the mainstream automakers. Toyota and Honda brands have the least inventory, and as a result, the least negotiable prices.
To provide car buyers with additional insights, we’ve pulled the latest inventory data for the best-selling cars in America for top brands. Looking for local data? Check out CarEdge Insights.
Ready to outsmart the dealerships? From negotiating a deal to leasing a car the smart way, it’s all available for instant download. Get your FREE cheat sheets today!
Are you thinking about buying a car in 2021? Understanding how to buy a car goes beyond just a few simple tips. To be successful (and get a fair deal), you’ll need to be aware of current market conditions, know how to find the right car, and understand what to expect during negotiations and at the end of the sale.
Today, we’re going to dive into the details of how to buy a car in 2021. We’ll examine what makes buying a car in 2021 unique, and we’ll teach you exactly how to navigate the entire used and new car buying process. We’ll take you from searching for a vehicle to signing all the paperwork so you can buy a vehicle with confidence unlike ever before. Let’s get moving!
How to Buy a Car: The 2021 Special
There are a few notable trends taking shape in 2021. Each of them will impact your car buying experience, whether you’re buying a used car or buying a new vehicle. Let’s take a look at two distinct trends that you need to be aware of.
The Semiconductor Shortage
Right now, there is a shortage of semiconductors and it’s impacting every industry that manufactures electronics, including the auto industry. Manufacturers are not currently able to keep with demand, which is creating supply chain problems for nearly every automaker. Brands are having to choose which models to build and which ones to put on the back burner.
Forecasts from AutoForecast Solutions project the anticipated loss in production for 2021 to be between 1.5 and 2 million units. Considering that the average number of new units built each year is 16 million, we’re talking about a significant impact to the supply of new vehicles. Semiconductor manufacturers are doing everything that they can to increase production, but there isn’t a “flip of the switch” solution at their disposal — they simply can’t ramp up semiconductor production as quickly as needed.
What does all of this mean for you? It means that people who are buying a new car will have fewer options to choose from. Dealers will have decreased inventory, but the same amount of demand. This will greatly impact your car buying experience, as the relationship between supply and demand has shifted.
What affects the new car market often affects the used car market, and that’s definitely true today. With more people looking at used cars as new cars are becoming harder to find, used car prices are going up. While this makes it a perfect sellers’ market, anyone looking to buy a used car will need to know how to navigate an under-supplied market.
Instead of heading into the dealership expecting them to bow to your requests, you’ll need to be aware that they have plenty of customers to work with. Still, tips for buying a car still apply and you should research, prepare, and practice before heading to the dealer. Understanding how to buy a car in 2021 means that you may just need to adjust your expectations for the experience.
The used market has been highly impacted by the semiconductor shortage on the new market. Surprisingly, we’re seeing some used cars go for similar or even higher prices than the MSRP would be if the cars were brand-new.
What about certified pre-owned (CPO) vehicles? As they are the perfect middle ground between used and new, CPO vehicles will become increasingly in demand. The more thorough inspection process is exactly what many people will want if they can’t buy a new car.
Overall, the semiconductor shortage is the biggest thing that’s affecting the new and used car buying markets this year. It’s a great time to sell your car, but if you’re looking to buy a new one, you need to know how to navigate this unique situation.
The One-Price Marketplace
While this trend has been in motion for a few years, we anticipate that we’ll see “no haggle” and “one-price” dealerships continue to become more popular. These dealerships won’t haggle with you (even if you wanted them to), since they do what’s called market-based pricing. This pricing model doesn’t leave any room for haggling. Instead, you pay the requested price or move on. Simple as that.
Examples of one-price marketplaces are Carvana, Vroom, CarMax, and AutoNation. Each of these dealerships sells used cars that are worth investigating, but you won’t be able to haggle whatsoever with them, at least on the front end. You may still be able to negotiate with them on the back end, referring to finance and insurance.
One of our best car buying tips is that if you’re trading your old car in to a dealership when you buy your used car, obtain quotes for the trade-in. Most “no haggle” marketplaces will provide binding quotes that you can leverage when you’re at your chosen car dealership. It’s a great way to secure more money for your trade-in. For many people, this is an early lesson in learning how to buy a car.
Adjust Your Expectations
Whether you’re buying a new car or a used one, every car buyer needs to reset their expectations for the types of large discounts that they may have heard about before. You should still expect a discount and you still deserve a fair price; it’ll just be harder to secure both this year.
You’ll need to put in plenty of research on the true value of the used car that you’re hoping to buy in order to understand what a fair price might be right now. Many of the price books out there, such as NADA Guides and Edmunds, use historical data to help predict prices. While that’s usually fine, you may see dealerships asking for more than usual due to the unpredictable shortage of semiconductors.
All of this is also true for specialized models that are coming out, such as the new Mustang Mach E. The more specialized the car is, the more people there will be to line up to buy it. If you’re buying an in-demand car this year, it’ll take even more work than usual to land a good deal on the vehicle.
Buying a Car: How to Locate Inventory
Odds are if you’re reading this you know (or at least have a sense of) what vehicle you want to purchase. Scouring CarGurus, Autotrader, or manufacturer websites for hours can be a thankless task. How can you find what you’re looking for at a car dealership? Whether you’re buying new or used, locating the car you want to pursue purchasing can be quite the challenge.
There are other tools that you can use when buying a used car, but we suggest using our Market Price Report to locate inventory at dealerships that are near you. Not only will you find out what they have cars listed for, but you’ll also find out how many days those cars have been on their lot and their “negotiability score.” The “Market Summary” will show you the breakdown of vehicles to examine.
Due to the increased demand for both new and used cars, you may need to expand your search parameters or consider other makes and models. If you’re set on one specific car, you may need to be willing to drive further in order to get it.
Take note that since there is a shortage of used cars, fraud may be on the rise. Make sure to get a pre-purchase inspection, look at every car’s vehicle history, and carefully look over the vehicle’s service records. If you’re looking at CPO options, make sure to check the repair sheet to understand what has been fixed on the vehicle.
Buying a Car in 2021: How to Negotiate
Negotiating is one of the first things you need to learn when you want to know how to buy a car in 2021. While negotiating a used car purchase is always going to be a little challenging, negotiating in a seller’s market will likely be much harder than usual.
You can start off on the right foot by contacting dealerships with our email templates. Within the Market Price Report, after you run a car, you’ll see a section called “Email Templates.” These templates are hand-crafted to help you negotiate the price of the car before you even step foot in the dealership. They’ll help you to come off as someone who knows what they’re doing and set you up for success.
Use our email templates with multiple dealerships. While there is no such thing as two used cars that are exactly the same, obtaining quotes from multiple dealerships will allow you to start a bidding war between these dealerships. Look for comparable cars and request quotes for them.
You will be negotiating what is called an out-the-door price, also known as OTD. Your OTD price is the exact amount that will be financed or paid in cash for the car that you desire. It’s a final figure and should be the only focus of your negotiations.
Once you’ve started things off the right way with our email templates, had multiple car dealerships sending you quotes, and decided that one of them is the clear winner, it’s time to head into the dealership.
You only get to buy a car once every decade or so, whereas the car salesperson gets to sell a car several times per day. This puts them on an uneven playing field with you. You can level the playing field by practicing what you’re going to say while you’re at the dealership. You should also practice how you’ll say it. Stand in front of a mirror and talk to yourself. Rehearse your negotiation skills and you’ll be well-rewarded with a better deal on the car.
Once you’re satisfied, head to the dealership and put that practice to work. Show them that you know exactly how to buy a car. Let the car salesperson know that you’re aware of the semiconductor shortage and its impact on the auto industry. Tell them that you know they are in a position to make a profit and that you’ll gladly pay them the profit that they’re due. You just don’t want to be the one paying them the most profit.
Car Buying Tips: Navigating the F&I Office
After you’ve finished negotiating with the salesperson, you’ll be whisked away to the F&I office. This office is intended to be the place where you finish the paperwork, but it’ll also be the setting of another round of negotiations.
There will be three specific areas of negotiations:
Rate
Term
Product
Negotiating your rate is going to be the most important part. You’re going to want to ask them a series of rate-related questions, which include:
What’s my rate?
How does that rate compare to the buy rate?
Is the rate that you’re charging the best rate available?
Let’s break this down. The first question is clear-cut and the manager will answer the rate that is being offered to you.
The buy rate is the rate at which your loan was offered to the dealership. Dealerships have special agreements with lenders that mean that they’ll be able to buy your loan for a “buy rate” and then mark it up to offer it to you. For example, your buy rate might be 2%, but it might be marked up to 4% when they present it to you.
As such, the second question might be a surprise to the F&I manager. Some managers will not disclose your buy rate and they don’t have to. If they refuse to disclose the buy rate, it might be time to walk. One of our best car buying tips is to walk away from people who are being dishonest when they’re trying to sell you a car.
For the last question, you’ll acknowledge that they need to make a profit and ask if the rate they’ve offered is the best they can do. Remember, you can say no and walk away at any point.
One of the best things that you can do for yourself is to get pre-approved for a loan from your financial institution. Having this pre-approval will mean that you’ll be able to hand the pre-approval offer over to the F&I manager and ask them to beat the offer. The worst-case scenario is that you go with the pre-approval offer.
After the financing is discussed, the dealership will likely go over a suite of product offers. Some of these products include:
Extended warranties
Tire and wheel warranties
GAP insurance
Wear and tear coverage (for leases)
Interior protection
It’s completely fine if you want to buy any of these types of products. In many cases, they’re worth having. However, you should negotiate each individual product one at a time. If you want GAP insurance, ask how much it costs specifically and understand that the price is negotiable (which is true for all of their products).
Be aware that some F&I managers will say that you have to buy the offered products today. This is only true if you are going to be rolling the cost of the product into your financing. If you’re fine with buying them later, you can. You can even obtain quotes for specific products, like vehicle service contracts, and take those in with you.
How to Buy a Car in 2021: Plan Ahead and Be Prepared
A great car deal is usually the result of planning ahead, preparation, and negotiation. Put in the time to reach out to multiple dealers about the used cars that strike your interest. Request quotes and then use those quotes against other dealerships to secure a better price.
Understand what you’re going to say when it comes time to negotiate and practice beforehand. Stand in front of your mirror and negotiate with yourself. This is one of the best ways to learn how to buy a car: Practice negotiating.
After you’ve prepared, you’ll be ready to head into the dealership and put everything into play. Acknowledge that you’re aware of the current market conditions that put you at a disadvantage and say that you’re simply looking for a fair deal.
Next, you’ll head into the F&I office. This is where you’ll really put all of our car buying tips to work. You’ll nail down the details on your used car and negotiate the price of any products that you’re purchasing. You’ll drive away knowing that you got a good deal. How can you know that you got a good deal? If you and the car dealership were both able to leave the transaction feeling good, that’s a win!
CarEdge Insights
