Inventory Spike Sends Car Prices Plunging, See How Far
DETROIT — New vehicle prices have dropped $500 on average in the past year, mainly because Japanese automakers have restocked dealers after car shortages in 2011, according to the Kelley Blue Book auto pricing service.
Models from Japanese automakers such as the Toyota Prius and Honda Accord have seen the biggest declines, while Detroit's models haven't dropped quite as much, KBB said Wednesday.
Toyota, Honda and smaller Japanese automakers ran short of cars after an earthquake and tsunami hit Japan in March of 2011, knocking out power and hampering auto assembly and parts production. The shortages weren't fully resolved until a few months ago. With few cars to sell last summer, Toyota and Honda dealers had little reason to offer discounts.
But now that they're fully restocked, the discounts are back. KBB said that the average price paid for a Honda model is almost $1,200 less than it was at this time last year, while Subaru, Mazda and Toyota models are down $700 to $800. Ford, Chrysler and General Motors have seen much smaller drops, less than $500.
The average price paid for a Toyota Prius gas-electric hybrid is down $2,500 from June of 2011, while the Accord price is down $1,450, according to KBB.
"Although conditions in the global economy continue to deteriorate, consumers who are willing to pull the trigger on a new vehicle will find that there are plenty of deals available," said Alec Gutierrez, senior market analyst for KBB.
[The Associated Press]