Car dealerships usually full of buyers in last week of year

By Jayne O'Donnell, USA TODAY
Car dealers are bracing for one of their biggest sales periods of the year this week as many consumers shift their attention from what's under the tree to what's in their garage.

Many dealers do up to 70% of their December business in the week after Christmas, says James O'Sullivan, CEO of Mazda North America. Some don't even bother to advertise much until right before Christmas, recognizing that it would be hard to get most consumers' attention, O'Sullivan says.

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"December is not the biggest selling month of the year," says O'Sullivan, but Dec. 26 to Jan. 1 is the "most intense selling week of the year."

Several factors make the post-Christmas/pre-New Year's period a bountiful one for the car business. Some, including big stock market gains, make it likely this year will be busier than usual. Most important, many people are off work and kids are home from college, so there's time for families to shop.

"In the car business, weekends are our big volume days," says Shaun Del Grande, whose San Jose-based dealership chain sells brands including Honda, Toyota, Subaru and Mazda. This week, "Every day is like a weekend."

There's also pent-up demand among consumers who held back on big-ticket purchases during the recession, says James Bell, executive market analyst at Kelley Blue Book. And many people know that "at the end of the month, dealers are a little more willing to wheel and deal." Those hoping to get a tax deduction for a new model bought or leased for business also may be rushing to buy before the end of the year, Bell says.

People are clearly still in the mood to shop after Christmas. Kathy Grannis, spokeswoman for the National Retail Federation, says Dec. 26 is one of the busiest shopping days of the year, and the week after Christmas can account for up to 15% of holiday sales for non-auto retailers.

Luxury-car sales will likely get the biggest bump for the car business this week, thanks to stock market indicators that hit two-year highs last week, says Paul Taylor, chief economist for the National Automobile Dealers Association. Luxury-car buyers typically own the most stock outside of their retirement programs, Taylor says, and are most likely to feel more confident when the markets are up. Luxury-vehicle sales were already up 21% last month over November 2009.

Don't expect the incredible deals of 2008 and '09. Car dealers don't have to resort to the deep discounting as they did during the recession. Still, there are plenty of zero-percent financing or no-money-down lease deals, even on vehicles such as the Honda Odyssey minivan that are new for 2011.

"It truly is the 'perfect storm,' " Del Grande says. "It's like our version of Black Friday, but we get it for a whole week."