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Posted on Thu. Sep. 04, 2014 - 12:01 am EDT

SUV gains spark car discounts

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DETROIT – The seismic shift in American car-buying toward trucks and crossover SUVs is creating great deals on compact and midsize cars.

The shift, which has been going on for more than a year, is hurting car sales so much that automakers are offering bigger discounts to keep moving metal.

The change became even more pronounced in August, with companies such as General Motors and Chrysler reporting that truck sales, including crossover SUVS, were up while car sales fell.

The increasing SUV and truck popularity, and discount-fueled sales of some midsize cars, helped U.S. auto industry to its best August in 11 years last month, with sales rising 5.4 percent from a year ago to 1.58 million, according to Ward's Automotive. While prices remain high for trucks and SUVs, they're either falling or rising only slightly on cars, and that means good deals for consumers.

“It's definitely a good time to buy a midsize car,” says Jessica Caldwell, senior analyst at the Edmunds.com. Every midsize sedan is comfortable, looks good and performs well, so price is nearly the only differentiator, she says.

Automakers spent an average of $1,841 a car to discount compacts last month, up 7 percent from a year ago, while prices fell 1.2 percent, according to Edmunds. On midsize cars, companies spent an average of $2,344 on discounts, up 4 percent. Average sales price rose slightly as buyers added features.

Yet for some brands, deals brought out car buyers. Honda reported record sales of its Accord midsize car in August, up 33 percent to more than 51,000. Nissan reported an August record for its Altima midsize car, with sales up 4 percent. And Ford's Fusion also did well, with sales up nearly 20 percent. Accord sales were so high that it again unseated Toyota's midsize Camry as the top-selling car in the U.S. for the month. Camry sales fell 1.5 percent to 44,000.

Caldwell theorized that Accord, Fusion and Altima sales were aided by discounts that brought owners with older versions of the cars off the sidelines. “All of those vehicles have pretty large customer bases,” she said. “They see some of the deals that are out there.”

Discounts by model weren't available for August, but in July, Honda spent $2,196 a car on Accord discounts, up 82 percent from a year ago; Altima discounts were just over $3,000, up 38 percent.


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