Edmunds.com: May Incentives Move Higher After Recent Low Point

Only a month after incentives fell to what was the lowest level in nearly seven years,  Edmunds.com discovered that automakers raised incentives in May, and believes it could be a gradual rise going forward.

According to Edmunds.com’s True Cost of Incentives, the industry spent $2,135 per vehicle in May, up 3.9 percent from April, and 0.6 percent higher than the same month a year ago.

“It’s likely that incentives will continue a slow but steady rise in the coming months,” Edmunds.com senior analyst Jessica Caldwell projected.

“There will be bigger discounts available on 2012 models through the summer to help dealers clear the way for incoming 2013 models. In fact, 2013 models already account for about 6.5 percent of new-car sales,” Caldwell continued.

Among the six largest manufacturers, analysts found Ford increased its spending the most last month, upping its incentives 9.3 percent above April.

The site indicated Nissan followed behind with a month-over-month incentives increase of 9.0 percent.

Edmunds.com says that both increases are corrective measures after both automakers slashed incentive spending in April and took hits to their market shares seemingly as a result.

Among brands, analysts noted Chevrolet had the biggest discounts this month, offering an average of 10.7 percent off MSRP in May (compared to 11.0 percent in April).

Analysts added one brand that stood out this month for stepping back its discounts was Mazda.

In April, the Japanese automaker offered the fourth highest discount (9.3 percent off MSRP) of any badge. But in May, Mazda fell to the 12th spot with average discounts at just 7.2 percent off MSRP.

Edmunds.com reiterated that its monthly True Cost of Incentives report takes into account all automakers’ various U.S. incentives programs, including subvented interest rates and lease programs, as well as cash rebates to consumers and dealers.

“To ensure the greatest possible accuracy, Edmunds.com bases its calculations on sales volume, including the mix of vehicle makes and models for each month, as well as on the proportion of vehicles for which each type of incentive was used,” the site concluded.