As Sales Drop, Is Gas Going To Take The Place Of Cash Incentives?

Gas prices are having a profound effect on the psychology of car-buyers, so we expect that automaker and dealer marketing tactics may include free gasoline programs this summer.

Meanwhile Edmonds.com estimated Thursday that the average automaker incentive in the U.S. in April was $2,449 per vehicle sold, up $13 from March, 2008 and up $39 from April 2007.

Combined incentives spending for domestics averaged $3,377 per vehicle sold in April, up from $3,366 in March. From March 2008 to April 2008, European carmakers decreased incentive spending by $305 to $2,647 per vehicle sold. Japanese automakers increased incentives by $22 to $1,288, and Korean automakers decreased incentives by $44 to $2,079 per vehicle sold.

Most automakers are doing everything they can to keep incentives down and keep supply in line with demand in this challenging environment. Thats why automakers like GM are slashing production of large trucks and SUVs.

It may very well be time for the automakers to come up with a combination of cash and "free gas" to drive customers back to their dealerships.