Incentives down, but expected to climb along with the temperature

In April, incentives were down 13 percent compared to one year ago, due mostly to a 29 percent drop in the money offered on the hoods of passenger cars. Compare this to the mere 2 percent drop in SUV and truck incentives (including a 17 percent increase on the behalf of Asian brands), and the effect of higher fuel prices can be observed.

But, with the dog days of summer approaching, pundits are expecting the blow-out sales to return as we reported yesterday, especially as automakers continue to build more trucks and SUVs than demand would suggest is wise. Something like last summer's employee-discount sale is considered to be unlikely, but with rising interest rates, we could see low-percentage financing deals return to the forefront. Indeed, Chrysler has already been pushing vehicles using zero percent loans, and will continue to do so at least until the Fourth of July holiday.

[Source: The Detroit News]

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