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Hey everyone,
Earlier this week, I told you all I was looking for the “Brian Johnson of Automotive”
In other words: the healthiest person in auto retail. Since then, I’ve received a ton of suggestions - thanks to everyone who took the time to send a note.
Stay tuned!
— CDG
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6.4%: That’s incentive spend as a share of average transaction price in July, the lowest level since January and down from 7.3% a year ago.
$3,200: Average incentive per new vehicle in July, down from 7% of ATP in June, marking a second straight month of declines.
19.5%: Share of new-vehicle loans booked under 3% APR in July, up 3.4 percentage points year over year, including 4.1% booked at 0%.
(Source: Cox Automotive / KBB / Erin Keating / Dave Thomas / CarEdge)
New-vehicle incentive spend is tracking lower year-over-year, but remains elevated in a handful of segments.
Incentives fell in July, just as they did in June, to about 6.4% of average transaction prices, or $3,200 per unit, according to Cox Automotive and Kelley Blue Book.
If we’re comparing:
This is the lowest level of discounting by OEMs since January.
It’s down from 7.3% a year ago.
And it’s lower than the 7% reading in June.
Here’s a segment comparison:
Even with lower incentives overall, the same Aug. 11 report explains that a handful of segments (shown above) are carrying higher discounts than the industry average right now.
NOTE TO DEALERS:
An OEM “incentive war” is pretty unlikely right now given that inventories are “generally healthier than they were a few years ago,” per Cox Automotive’s Executive Analyst Erin Keating.
That said: “Dealers should expect incentive activity to gradually increase as more 2027 model-year vehicles reach lots,” she told CDG News.
August is shaping up as a month of 0% APR financing offers.
Of the discounts out there, OEMs are pushing more 0% APR deals as they look to move select 2026 inventory as 2027s begin arriving.
Looking at 2026 models, CarEdge’s August incentive scan shows the brands with the most 0% APR offerings:
Within those brands, here’s where the 0% offers are currently showing up on 2026 models:
Mazda: CX-30, CX-5, CX-50, CX-50 Hybrid, CX-70, CX-70 PHEV, CX-90, CX-90 PHEV and Mazda3
Ford: Bronco, Escape, Explorer, F-150, Mustang, Mustang Mach-E, Ranger, F-250 Super Duty and F-350 Super Duty
Nissan: Rogue, Rogue Plug-in Hybrid, Pathfinder, Murano and Frontier
Kia: Sportage, Sorento, Niro EV, EV6 and EV9
Hyundai: Tucson, Santa Fe, IONIQ 5 and IONIQ 9
Jeep: Wrangler, Grand Cherokee and Gladiator
Lincoln: Aviator, Nautilus and Navigator
Subaru: Solterra, Uncharted and Trailseeker
Toyota: bZ and bZ Woodland
Dave Thomas, director of content marketing at CDK Global, says this makes sense, all things considered.
“I expect as dealers and OEMs look to clear out 2026 leftovers, they will opt for a low or zero APR incentive rather than cash back language,” he said. “The majority of car buyers are laser-focused on the monthly payment rather than the out-the-door price.”
WHY IT MATTERS:
The offerings seem to be working to an extent, because Keating shared that in July, 4.1% of loans were booked at 0% APR financing, according to Cox Automotive Dealertrack finance and insurance data.
She said another 15.4% booked at a rate under 3%, putting total new-vehicle loans booked under 3% at nearly 20% in July.
That’s up 3.4% vs. last year.
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Thomas and Keating also shared a few other thoughts on what dealers can expect from incentives, and how they should view them.
Here are their thoughts, framed as Dos and Don’ts.
Do: Know how generational financing expectations shape what "deal" even means.
Thomas points out that Millennials came of age entirely in a low-rate environment, which undoubtedly changes what they compare an offer to.
“This is the largest group of potential buyers today and they’re the ones most accustomed to lower monthly payments. If you want to reach this group, you’re going to have to focus on the monthly payment.”
Dave Thomas
Put another way, a buyer who's never really shopped in a higher-rate environment will see 0% as a "back to normal" scenario more than a discount, which makes wording key to how well it lands.
Do: Expect incentive activity to stay targeted, not spread into a broad incentive war.
As it stands, Keating said dealers are currently carrying only about half the MY27 inventory that’s to come, calling it a “slow roll,” that follows a “relative dry spell for any new model launches for the last few years and moving into 2027/2028.”
Even so: "The market doesn't look set up for a major incentive war. Inventories are generally healthier than they were a few years ago, and automakers remain disciplined about production. That means incentives will likely be targeted toward specific vehicles, inventory pockets, and model-year transitions rather than applied broadly across an entire lineup.”
Erin Keating
Don’t: Ignore how the K-shaped economy splits who qualifies from who thinks they qualify.
Thomas also mentioned that super prime buyers (781+ credit) now make up close to 40% of the market, even as the national average credit score has ticked down, per TransUnion and Experian.
Which means: Leaning too hard on advertising "0% available" risks setting up disappointment for the customers least equipped to absorb it.
Dealers obviously can’t fully control what OEMs are incentivizing, why, or how well it will actually move inventory.
That’s why, as Thomas flagged to us, the questions are now:
“What type of shopper is out there right now? And can dealers communicate the benefit of buying a 2026 model with 0%?”
