People who have been waiting to buy a new car may be able to find good deals on 2023 model-year cars over the Memorial Day weekend. This is especially true for some domestic cars, where affordability issues have caused inventory to build up.
The average discount this month for a car from the year 2023 is $4,147. It was $1,919 on average for a 2022 model-year vehicle last year, according to a new study by the car-buying site Edmunds.
“Discounts on vehicles from the last model year this Memorial Day weekend are a bright spot for consumers in an otherwise tough market,” said Jessica Caldwell, head of insights at Edmunds. The report from Edmunds said that brands from Detroit automakers “are seeing the greatest buildup of inventory on dealer lots and could offer the biggest discounts for car shoppers this holiday weekend.”
Cox Automotive says that the number of new cars on the market at the beginning of the month was 2.84 million, which is 51% more than a year ago. Cox wrote in a report that this weekend will likely be the busiest Memorial Day sale for fashion in a long time.
It’s not clear if these discounts will be enough to get people to buy. Cox says that because the average price of a new car is now more than $47,000, it is still not as affordable as it was before the pandemic. For most new car loans, the monthly payment is more than $750, but 40% of American households can only afford a $400 monthly payment.
By the difference between the average manufacturer suggested retail price and the average dealer listing price, Dodge ($6,753), Chrysler STLA (+1.78%), Jeep ($6,160), Infiniti NSANY (+1.56%), Volvo GELYF (+0.80%), and Volkswagen VOW3 (+1.22%) all have 2023 cars that are cheaper than the average dealer listing price.
Brian Moody, executive editor at Autotrader and Kelley Blue Book, said in a statement that deals will be better on models that don’t sell as well, like sedans and hatchbacks, as well as electric cars. He also thinks that dealers will still be able to get the full price for popular models like small SUVs.
Edmunds says that buyers interested in popular Japanese brands like Toyota (7203, +1.68%), Subaru (7270, +1.51%), and Honda 7267, +0.63%—which don’t have as many cars on hand—will find smaller discounts of $1,337 for 2023 model-year Toyotas, $1,450 for 2023 model-year Subarus, and $786 for 2023 model-year Hondas.
