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Published: Dec 21, 2022 8 min read
Car Selling Business. Manager Showing Luxury Automobile To Spouses In Automobile Dealership Center.

Turn on the TV these days and it won’t be long before you see an ad for a holiday car sales event.

The offers may seem great at first glance, but the truth is that amid high interest rates and record-high car prices, the latest new car promotions are not nearly as generous as those advertised in past holiday seasons.

Two years ago, many holiday car commercials promoted 0% APR (annual percentage rate) finance deals, while others detailed incentive packages that amounted to thousands of dollars of savings. During this year's sales, 2.9% APR offers are among the more attractive deals, and buyers typically have to agree to shorter-than-normal loan terms to get those.

Most car dealerships likely aren't offering major discounts during this year's holiday sales; in fact, it's become common for buyers to have to pay above the sticker price. According to November data from Kelley Blue Book, new vehicles were selling for an average of $410 above MSRP (manufacturer's suggested retail price).

Average manufacturer incentives, which include cash rebates and other discounts, were just 2.2% of the average transaction price of new vehicles last month. In 2020, meanwhile, the average incentive package was about 10% of the average transaction price.

Why holiday car sales promotions are weak

For many years, the holiday period was a terrific time for finding bargains on new cars. Jennifer Newman, editor-in-chief of Cars.com, says holiday car deals have become more meager lately as the car-buying landscape has shifted from a buyer’s market to a seller’s market.

The main reason for the change is due to a supply problem. The inventory of new vehicles in the U.S. is tight due to production challenges related to shortages of car parts, especially chips, and other manufacturing issues.

“It's all about supply and demand, and right now when it comes to new cars, supply is still limited,” Newman says. “That means that dealers and automakers don't need to offer these sorts of amazing deals, whether that's cash on the hood (cash incentives) or financing deals to get shoppers to write that check and to buy that car.”

While new car deals are more modest during this holiday season, it can still be a decent time for some prospective buyers to purchase. It's all relative, because 2022 in general has historically been a bad year for buying a car if you're hoping to get a good deal.

Many dealerships are selling both 2022 and 2023 models right now, and the lowest financing deals being advertised in holiday sales events are for the prior model year cars. If you can find a 1.9% or 2.9% APR deal on a 2022 model during a holiday sale, Newman says she'd consider that a "good deal" for the current moment.

Those rates are much lower than the average auto loan rate for a new vehicle purchase, which was 6.6% in November, according to Edmunds.

2022 holiday car deals — and how they compare to the past

Understandably, today's buyers may wish they could transport back in time to the days when shopping for a car during holiday sales came with a choice of major discounts and paying little to no interest.

Below are some of the new car deals being advertised in holiday commercials this month, as well as comparisons to sales events from previous years. (Note: Offers can vary by market.)

“Happy Honda Days”

A recent ad for the 2022 Honda Accord promotes a 2.9% APR financing deal for loans of up to 48 months — a deal that’s available to qualifying buyers in about two dozen states.

Last December, a similar ad promoted a 1.9% APR financing deal for the 2021 Accord, which was available for loans of up to 60 months.

Comparing the two ads, buyers were able to get a lower rate for a longer loan term last year. Additionally, the starting MSRP on the Accord increased by $1,750 from the 2021 to the 2022 model. Put all that together and Honda buyers this December are looking at much higher monthly payments.


Toyota’s annual December sales event, Toyotathon, now features a 3.49% APR deal for loans of up to 48 months on many of the company’s 2022 and 2023 models. For buyers shopping for 60-month loans, the company’s website is promoting some 4.29% APR deals.

Similar to other manufacturers’ holiday financing offers, buyers have to get approved for these deals through Toyota Financial Services.

Sure enough, the deals were much better in the past. Last December, a Toyotathon ad for the 2021 RAV4 promoted a 1.9% financing deal for loans of up to 72 months. (Again, a lower rate for a longer loan period.) Back in 2020, some Toyota buyers could get 0% APR 60-month financing deals for cars including the 2020 Camry, or they had the option to take cash incentives of $1,000 or more, depending on the model.

Lexus “December to Remember”

During its 2022 holiday sale event, Lexus is offering 3.49% APR financing offers on select 2023 models, including the ES 350 sedan featured in this ad, and 2.99% APRs for some 2022 models, both for up to 48 months.

Two years ago, Lexus was promoting a 60-month 0% APR financing deal for the 2021 edition of its ES 250 sedan.

Ford “Shine Bright” sales event

Dealership offers for Ford’s holiday sale event vary, but several ads in local markets are promoting 2.9% APR deals for 2022 F-150s, with loan term limits ranging from 36 to 60 months. Similar financing offers are available for other 2022 models and cash incentives are available on certain cars in the range of $500 to $1,500.

Ford is also advertising a 3.9% APR offer for buyers who custom order select 2023 vehicles.

Ford’s December promotion used to be called the “Built for the Holidays” sales event. In December 2020, commercials promoted 0% APR financing offers on some 2020 models for loans as long as 72 months.

One commercial from that year advertised the opportunity to combine manufacturer incentives and dealer discounts to get more than $9,500 in total savings on the 2020 F-150. Car buyers shouldn't expect deals anywhere near this good during the 2022 holidays.

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