Auto sales have been way down this year because of the recession. But small car sales have seen the most volatility
in price. When fuel prices were high earlier in the year, fuel efficient small cars were going at a premium. But now dealers are slashing prices of small cars to move inventory.
Small-car sales doubled during the first half of the year as gas topped $4 a gallon. By the end of November, sales levels had tumbled 63% from the peak. Even with the drop, the segment is holding up better than others because overall vehicle sales are so weak. "It's surprising," says Ford Motor analyst George Pipas.
No other vehicle segment saw such sales volatility in 2008. First, it was falling gas prices that slowed small-car sales. Now, it's the inability of recent college graduates and other price-conscious drivers to qualify for loans.
"The credit market is squeezing first-time buyers out. They are getting laid off and being exposed to the economy more than others in their careers," says General Motors spokesman John McDonald.
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With the recession making cars harder to afford, automakers are looking to price-cutting to attract buyers.
Nissan struck first in October, offering a new version of its smallest model, the Versa, with a less powerful engine and fewer features. It was priced at $9,990.
It didn't remain the "lowest-priced new car in the U.S.," as Nissan billed it at the time, for long. Hyundai cut the price of its Accent hatchback by $1,775 to $9,970. That's $20 cheaper than the Versa.
If you're in the market for a new car, now is certainly the time to buy. The deals are incredible.
