Car dealers’ brake on breaks

Car shoppers hoping for Labor Day bargains may be in for a big surprise: This year, it seems, everything doesn’t have to go.

Dealers this year are unlikely to offer the kind of blowout discounts typical of the holiday weekend, when they often seek to clear out older inventory to make way for the incoming model year, analysts and dealers say.

Overall automobile sales have been off sharply during the pandemic, but in a reversal of what’s happened in most slowdowns, prices have climbed to new highs, thanks to a combination of limited stock, cheap financing and low fuel prices that have consumers gravitating to bigger, more expensive trucks and SUVs.

The average new vehicle sold in August cost a record $35,420, according to research firm J.D. Power, capping a surge in prices that began before the pandemic hit the US. This weekend could offer some reprieve from those highs, analysts say, but without the kind of big discounts dealers typically offer.

Longer-term auto loans are also helping car shoppers purchase higherpriced vehicles with relatively low monthly payments.

The auto industry is following a trajectory similar to the housing market, where low interest rates and a shortage of available homes have propelled prices higher.

For customers having to make emergency purchases, like Dana Pluck, whose 13-year-old Mazda broke down in June, the new car lot can be daunting. The 51-year-old San Francisco resident says a lack of deals and negotiating power led her to pay more than she expected.

“It’s not like I got a very fancy luxury car. I got what fit my needs,” Pluck said. “But I took on a higher payment than I’m comfortable with.”Dow