December 6, 2020

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  • Instead of offering the steep discounts to clear out older inventory, many automakers are having a hard time resupplying dealer lots with enough inventory.
  • Edmunds estimates the average discount on a new vehicle in October was $2,046, about 23% lower than last year.
  • That trend is expected to continue in November as dealers are reporting record profits on new vehicles due to tighter inventory levels.



a person driving a car: A car dealer shows a vehicle to customers at a dealership in Jersey City, New Jersey.


© Provided by CNBC
A car dealer shows a vehicle to customers at a dealership in Jersey City, New Jersey.

The coronavirus pandemic is ending yet another annual holiday tradition for shoppers in 2020: Black Friday deals on new cars.

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Instead of offering the steep discounts to clear out older inventory, many automakers are having a hard time resupplying dealer lots with enough inventory after shutting down factories earlier the year to try to curb the outbreak this spring. That’s left a backlog of pent up demand, especially for hot-selling SUVs and pickup trucks.

“In terms of deals, there’s not pressure on automakers to clear inventory,” Jessica Caldwell, executive director of insights for auto research firm Edmunds, told CNBC. “During the holidays, when they usually focus on model-year sell-down, we’re not in that position because a lot of that has already been done.”

Edmunds estimates the average discount on a new vehicle in October was $2,046, about 23% lower than last year. That trend is expected to continue in November as dealers report record profits on new vehicles due to tighter inventory levels. It’s a simple case of supply and demand, Caldwell said.

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When the coronavirus pandemic caused the U.S. economy to shutter at the end of the first quarter, automakers offered discounts and lucrative 0% financing offers for 84 months. It was an attempt to salvage double-digit sales losses after states imposed shelter-in-place orders that closed dealerships and crippled sales.

But consumer demand remained relatively healthy following significant declines in late-March or early-April during the depths of the first wave of Covid-19. That led to lower inventory levels that automakers such as General Motors are still attempting to replenish.

“If you’re comparing deals for this year versus last year, it probably won’t be as great,” Caldwell said, adding Edmunds still expects to see healthy retail sales over the holiday weekend thanks to demand from higher-earning consumers looking to direct their spending toward a new vehicle after months in quarantine.

Cox Automotive says there are 650,000 fewer 2020 model-year vehicles than what was expected prior to the pandemic. That has led to a roughly $800 decline in discounts per vehicle from March, according to Brian Finkelmeyer, Cox senior director of new car solutions.

“Due to the inventory shortage in the industry, there’s just going to be less available units with the big incentives,” Finkelmeyer said, adding the number of discount programs are down 15% from a year ago.

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The Massachusetts Bay Transportation Authority is seeking input and feedback on proposed service changes in its Forging Ahead initiative, a plan to define and protect core essential services for those who depend most critically on the MBTA for frequent and reliable service by reducing primarily nonessential services.

All MBTA services will be affected, including bus, subway, commuter rail and ferry. Public comments on the service changes are due by Dec. 4, with the MBTA Fiscal Management and Control Board expected to vote on the proposed changes on Dec. 7. The board’s meeting agenda will be posted at https://bit.ly/3krXbow, and residents can register to attend.

The MBTA is holding 11 virtual public meetings in November about these proposed service changes.

Due to the COVID-19 pandemic, public transportation ridership has dropped significantly and has not rebounded yet. According to the MBTA, in 2019 MBTA riders took 1.26 million daily trips. This October, riders took around 330,000 daily trips — or 26% of daily ridership compared to 2019. The MBTA has continued to run service at 2019 levels, even though it does not match current demand. In order to protect essential service for those who depend upon it, the MBTA is proposing to reduce service where there are fewer riders. The proposed changes to service would be phased in over the course of early- to mid-2021. The MBTA notes that most service changes are not intended to be permanent, and they will bring back higher levels of service when demand and travel patterns change and there is durable revenue to support it.

MBTA bus service in Arlington will be significantly affected by the MBTA’s current proposal. The following changes are proposed:

• Eliminate Route 79 (Arlington Heights to Alewife Station).

• Eliminate Route 80 (Arlington Center to Lechmere Station), contingent upon completion of the Green Line Extension.

• Consolidate Routes 78 and 84 (Arlmont Village to Harvard Station and Arlmont Village to Alewife Station).

• Consolidate Routes 62 and 76 (Bedford VA Hospital to Alewife Station and Hanscom Air Force Base to Alewife Station).

• The remaining bus routes within Arlington may operate below baseline service levels: 67, 77, 87, 95 and 350.

Systemwide changes to bus service proposed include:

• Stop all service after midnight (early service will continue on essential bus routes).

• Reduce frequency on essential routes by systemwide average of 5% (will vary by route, high ridership will not be changed).

• Reduce frequency on nonessential routes systemwide by 20% (will vary by route based on ridership).

• Consolidate or restructure approximately 10 routes.

• Eliminate approximately 25 routes that served less than 0.5% of pre-COVID riders (about 1,700).

The proposed changes to bus service are expected to become implemented in summer 2021.

There are also proposed changes to subway service and commuter rail service. Starting in spring 2021, the plan calls for stopping all service at midnight and reducing frequency by 20% across all lines. Commuter rail changes proposed including stopping all service

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