The true cost of auto incentives

The big auto manufacturers’ incentive programs totaled $2,648 per car sold in the U.S. in October. The industry’s aggregate incentive spending in October is estimated to have totaled approximately $2.3 billion, down 17.4 percent from September 2008.

Edmunds.com, a closely watched online resource for automotive data, said the October numbers was down 8.7 percent from September, but up 21.6 percent from October 2007.

“Automakers have to do what they can to stimulate sales while still being fiscally responsible during these shaky economic times,” said Jesse Toprak, executive director of industry analysis for Edmunds.com. “The industry is still far below the record average incentive of $3,146, which was reached in September 2004.”

Combined incentives spending for domestic manufacturers averaged $3,718 per vehicle sold in October 2008, down from $4,041 in September 2008. From September 2008 to October 2008, European automakers increased incentives spending by $93 to $2,866 per vehicle sold; Japanese automakers increased incentives spending by $107 to $1,495 per vehicle sold; and Korean automakers increased incentives spending by $101 to $2,417 per vehicle sold.

Among vehicle segments, premium luxury cars had the highest average incentives, $8,344 per vehicle sold, followed by large trucks at $5,764. Subcompact cars had the lowest average incentives per vehicle sold, $393, followed by compact cars at $879.