Historically, December was the time to buy a new car. Nowadays, more and more automakers are getting into the Black Friday promotions game. They’re trying to get consumers to pull the trigger on that big purchase a little earlier. Tim Fleming, Kelley Blue Book analyst, said automakers are simply reacting to the market.
“You always talk about manufacturers producing to demand,” he said. “But when sales are so hot right now, you’re seeing everyone start to spend a little more to try to get in while consumers are feeling good about the economy.”
Consumers are feeling good partly because unemployment is hovering around 5 percent and interest rates are still low. Depending on what the Federal Reserve decides to do next month, that’s one factor that could change. Michelle Krebs, senior analyst at Autotrader, doesn’t think a rate hike will affect car sales much.
“It’s such a small impact on monthly payment and that is what people look at,” she said. “People focus on the monthly payment.”
Krebs thinks a rise in interest rates might entice automakers to offer even more incentives as they hope to keep buyers coming back while the market is hot.
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