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Thursday
Dec292011

New Car Sales Warming Up in December

Comstock/Thinkstock(NEW YORK) -- Along with retailers who make 10 to 15 percent of their holiday sales the week after Christmas, car dealers are likely to have one of their busiest weeks too.

Alec Gutierrez, senior market analyst with Kelley Blue Book, said December sales tend to be either the strongest or close to the strongest for car dealers for two reasons.

Many consumers are awaiting for better deals on 2012 models, some of which began selling in September, while others are waiting  for 2011 models to drop in price.  Meanwhile, dealers and manufacturers are not only trying to meet their monthly goals but also trying to sell their cars from 2011 to make room for the new models.

“So if they’re running short of their goals, they will add additional incentives to sell their products,” such as increased cash incentives or cash rebates with attractive financing," Gutierrez said.  "Dealers will try to get a better price and negotiate with manufacturers for new cars also.”

Car deals in December of 2011 differ from those last year because supplies are slightly tighter in part because of supply disruption after Japan’s earthquake and tsunami. “There isn’t necessarily a limited capacity, but manufacturers and dealers do not have the excess numbers that they’ve had to unload in previous years,” Gutierrez said.

While Gutierrez said he has not seen as many cash incentives and rebates this year, especially for Japanese cars, he said financing -- often at zero percent -- is widely available and will continue to be offered through 2013.

Car sales will likely exceed 1.2 million units this month, putting December on pace to be the strongest month of the year, according to Gutierrez.  December was the strongest month last year as well.  In 2010, sales in December totaled 1.15 million units, he said.

Copyright 2011 ABC News Radio

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