Cash Rebates Losing Steam in Car Purchase Decisions: Study
Incentives and rebates are losing their umpf when it comes to influencing consumer decisions when buying a new car.
While the average size of the cash rebates and incentives and the percentage of customers receiving them have both grown 10% year-over-year since 2002, consumers are blasé about the promotions and manufacturers seem to be getting fewer long-term benefits, a new Maritz automotive research study has found.
The biggest jump in incentive size came from domestic manufacturers who increased incentives and rebates from about $2,000 in 2002 to close to $2,800 this year.
Only 30% of customers in 2004 said that incentives or rebates influenced the timing of their purchase, down from 40% in 2002. Satisfaction levels were about the same for those that did receive a rebate or incentive and those that did not, resulting in manufacturers getting little long-term benefit from the use of incentives, the study said.
“Auto manufacturers are stuck in neutral,” said Mike House, VP and director of Maritz’ automotive market analysis group. “Rebates and incentives are not having the same dramatic impact on purchasing as they once had. There is concern that as interest rates rise and as manufacturers commit substantial dollars in the form of rebates and cash incentives, there will be minimal long-term impact on market share.”
The 2004 Maritz New Vehicle Customer Study had 90,000 respondents who acquired their new vehicles from October 2003 through March 2004.
