Edmunds.com predicts strong new-car sales Memorial Day weekend

(May 18, 2010) SANTA MONICA, Calif. — May 17, 2010 — Edmunds.com expects that Memorial Day weekend car sales will be especially strong this year.

New car sales have been relatively weak so far this month, suggesting that in May SAAR may drop slightly from April's 11.2 million. However, Memorial Day weekend is traditionally a great opportunity for discounts, and buyers have become conditioned to expect them.

"Over the past week we've seen a notable uptick in the online activity linked to purchase intent," explained Edmunds.com CEO Jeremy Anwyl. "Given the bargain-hunting behavior we've witnessed throughout the recession, I'm guessing that demand is building for anticipated Memorial Day sales events."

So far in May, the average incentive is down about $200 per vehicle sold compared with April, but it is not unusual for automakers to launch holiday weekend deals at the eleventh hour.

"Ironically, car shoppers motivated by the expectation of discounts don't always pay less for their cars," noted Edmunds.com Senior Analyst Ray Zhou. "During the Chrysler and GM bankruptcies, the Toyota recall crisis and other significant periods when one would expect discounts to be rampant, we actually saw transaction prices for new cars rise. On those occasions, it is likely that many people didn't do as much research or negotiation as they could have."