GM ramps up incentives in October | Auto Finance News | Auto Finance News

GM ramps up incentives in October

General Motors is ramping up the incentives on some 2019 models as yearend approaches. Specifically, GM had announced a $9,276 discount on the 2019 Chevrolet Tahoe this month for current GM owners with a 0% annualized percentage rate for 72 months when consumers finance via GM Financial.

The discount consists of a $4,276 price cut from MSRP, $3,000 cash allowance, and a $2,000 owner loyalty cash discount. The OEM is still offering a $4,276 price reduction and $3,000 customer cash discounts for consumers that are new GM owners. 

The incentives, which are specific to the 2019 Tahoe Premier trim, can bring down the price tag 13.8% to $57,719, according to the company’s website. GM’s 2019 Chevy Tahoe has experienced a sales decrease of 9.13% year over year, according to the OEM’s third-quarter sales results. 

OEMs are providing hefty rebates and 0% APR on 2019 new vehicles to compete with the affordability challenge the industry has faced for the better part of the last two years, said Jonathan Smoke, chief economist at Cox Automotive, during a third-quarter conference call today. 

When you add the incentives, more consumers will find that monthly payment on a brand new vehicle much more attractive compared to used vehicles, especially as interest rates decrease, Smoke noted. “When you combine the rate movement with the incentive movement, that actually detracts from the strength of the used vehicle demand,” he said. 

With “substantial incentives” OEMs could help increase new vehicle sales for prime consumers, Smoke said. “[Super prime] consumers can actually achieve a monthly payment on some very competitive and more affordable [new] vehicles — that becomes more attractive.” However, Smoke is not convinced that the incentive pace will continue over the long term.

Other OEMs offering rebates on their 2019 vehicles include the 2019 Ford Expedition, which reaches a maximum rebate of $9,780 and the 2019 Toyota Mirai at $7,500. 

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