Kelley Blue Book predicted 17.4 million vehicle sales for 2015, the most since 2000. What’s driving the market? Pent-up demand. The average car on the road is 11.5 years old. Low fuel prices also make people feel as if they have more spending power. You have a good set of cars and trucks to choose from, with trucks bringing people back into showrooms. There is a rebirth in demand for SUVs. Smaller ones, like the Mazda CX-3 and Jeep Renegade, are appealing because they fit into a sweet zone of fuel efficiency, functionality and cost.
Are low interest rates a factor? If you have a high credit score, it’s common to be offered 0% interest. But even if you don’t, a fair number of financing companies will figure out a way to work with you. There are a lot of six- or seven-year loans out there, so you can get a new car for relatively cheap monthly payments. Leasing is at record levels, too, at a recent average of 26% of all retail car sales.
Any other sweeteners? Besides low-rate financing, expect to get thousands of dollars off the sticker price. There are lots of deals on cars, especially fuel-efficient models like the Toyota Prius. Those models are struggling because trucks are so popular and gas is inexpensive. As for incentives, Ford is offering a “Friends & Neighbors” deal through January 4 on almost everything, with aggressive price-cutting–$275 over invoice, and more incentives can bring the price even lower. The other two U.S. makers are likely to jump in with similar deals.
What’s your outlook for cars that drive themselves? We’ll see autonomous vehicles [that could be driven hands-free in certain circumstances] on freeways in the next two years. Cars that can be autonomous off the freeway will show up a year or two after that. In five years, you’ll start to see widespread availability of autonomous veA hicles going anywhere, in any weather. Autonomous technology will show up on the most expensive vehicles first. But you’ll be able to buy a cheaper car, then add the technology for a relatively low price. For example, Cadillac’s 2017 CT6, a $75,000-plus car, will have Super Cruise, which will make it essentially capable of autonomous driving on freeways. But for $1,000, you can add Honda’s Sensing package to any trim level on most new Hondas. It includes smart cruise control, lane-keeping assist and more.
(Source: Tribune Content Agency, LLC)