For the last several years, if you wanted to score a deal on a new vehicle, you chose a passenger car, not an SUV or crossover.
Now, the reverse may be true.
Sure, compact cars and sedans are still cheaper than SUVs and crossovers, generally speaking.
But this Memorial Day weekend, you probably won’t get the kind of discount on a passenger car that you would’ve a year or two ago, when sluggish sales of smaller vehicles prompted automakers to offer deals.
Now, there’s less pressure to discount models because Ford and General Motors have stopped making several cars, while other companies have scaled back production. Gone are the Ford Focus and Chevrolet Cruze, for example.
Meanwhile, sales of SUVs and crossovers remain strong. The upside for shoppers is substantially more choice in those segments.
So if you’re shopping for a car or truck this holiday weekend, here are tips to keep in mind:
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1. Look for SUV, crossover deals
SUVs and crossover competition is heating up with new models like the Kia Telluride, Hyundai Palisade and Honda Passport. That means there are SUV deals to be had as automakers jockey for position.
“We expect more discounting in that part of the market,” said Michelle Krebs, auto analyst at car-buying site Autotrader.
According to Kelley Blue Book, the top five SUV offers this month are:
- 2019 Toyota RAV4 for $24,634 (retail price: $26,545)
- 2019 Chevrolet Equinox for $26,723 (retail price: $28,395)
- 2019 Nissan Murano for $31,729 (retail price: $34,015)
- 2019 Lexus RX 350 for $41,459 (retail price: $44,695)
- 2018 Jeep Renegade for $21,594 (retail price: $22,940)
2. But don’t rule out sedans altogether
Look closely: There are still some deals on sedans, but they’re more sporadic.
Edmunds reports that the 2019 Hyundai Elantra is selling for as much as $5,900 off, while the 2019 Acura TLX is selling for as much as $10,850 off.
Think about buying new, too, because used car prices have held up well because there are fewer sedans and compact cars hitting the used market as the SUV boom continues.
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3. Don’t expect a great financing deal
In the wake of the Federal Reserve’s interest rate hikes, borrowing costs have increased. Consequently, there are fewer long-term 0% interest deals out there.
“They still exist but to a lesser degree than they have in the past,” said Jessica Caldwell, auto analyst at Edmunds, a car-buying advice site.
Instead of a 0% loan for five to six years, you might be offered a 0% loan for three years, she said. But few car buyers get loans that short due to the price of vehicles.
4. Prepare to pay up for the best
Looking for the latest and greatest? You might have to dig deep to pay for it.
That’s because automakers are being stingy with discounts on many models, but especially ones that have recently been redesigned. Honda, for example, has resisted heavy discounts on the redesigned Accord, which won the 2018 North American Car of the Year award.
“Automakers are more focused on profitability than they are on sales and market share, so they’ve been very disciplined about incentives,” Krebs said.
Prices averaged $36,718 in April, according to Edmunds. With interest rates averaging 6.28% and an average loan term of 69.4 months, the average new-car payment for a vehicle purchased in April was $553 per month.
5. Consider waiting a few months
Do you really need that new vehicle now? If not, consider waiting until August or September, when discounting picks up as dealers begin selling the next model-year vehicles.
Krebs noted that many dealers simply repackage ongoing deals as Memorial Day promotions for marketing purposes, but many vehicles aren’t truly on sale.
Then again, if you’re concerned that the Trump administration will impose increased tariffs on imported vehicles after a recently adopted six-month delay expires, you might want to buy now.
If those tariffs take effect, experts say the average price of a vehicle, whether made here or elsewhere, could increase by several thousand dollars.
Follow USA TODAY reporter Nathan Bomey on Twitter @NathanBomey.