Discount time - Year-end reduction on new, used vehicles
It is the last Sunday in October and already there are advertisements on radio about Christmas sales and there has even been a New Year's Eve ball announcement. In the business of buying and selling cars, a transaction is not as easy as walking into a clothing or jewellery store, paying the reduced price as advertised, and walking out with the item.
As most motor vehicle purchases are done through loan financing, a considerable amount of time is required to complete a transaction, what with the documents which are required and the checks which financial institutions carry out in vetting prospective purchasers. It is not surprising, then, that year-end sales on motor vehicles should start early.
And they have, but apart from the time required to change a motor vehicle's location from showroom to driveway, another factor driving the discounts. New car dealers are selling 2016 models, as the 2017 models (some of them shape changes or minor upgrades) are coming in. And as financial institutions typically finance motor vehicles up to five years old, the used car dealers are offering lower prices on 2011 models. Also contributing to these discounts is the five-year cut-off point for importing motor cars for non-commercial use into Jamaica.
In a previous interview with Automotives, president of the new car dealers' organisation, the Automobile Dealers Association (ADA), Kent LaCroix, said having these sales is necessary." If one has to try and get rid of inventory based on high cost, then you end up having to have these sales. It's an effective way to move stock, particularly at this time of year. We need to move as much as the previous year's stock or the current year stock," he said.
And Lynvalle Hamilton, president of the Jamaica Used Car Dealers Association previously told Automotives about the year-end discounts that "dealers, at this time, will make some adjustment in prices in order to not allow stock to go over into the new year. You have the gradual decline in the prices from about early October and you see the reduction in about November. This is the time that you will see some reduction in prices." Hamilton said this generally goes up to mid-December.
However, while the reduction naturally helps to boost sales, Hamilton said that dealers have to be cautious and try to have an idea as to what the financial institutions plan to do in the upcoming calendar year. A misstep could mean serious losses.
Among the new car dealers, the Mitsubishi pickups and Suzuki Ertiga offered by Stewart's are among those being offered with lower prices. Hyundai dealers Magna Motors not only offered discounts but also attractive financing options with delayed initial payment across its range of 2016 vehicles.