As inventories decline and sales continue to accelerate, OEMs will reduce incentive spend. That's just how it works. If you have too much invenotry compared to your competitors, you have a management issue. If the entire brand has too much inventory they will start to later in incentives.

Same situation here. March was the worst month we've had in two years. EV incentives are through the roof (14%+ of ATP from what I'm reading) but we're basically doing fire sales on EVs and watching ICE margins compress at the same time. It's a lose-lose quarter.

The finance side is brutal right now. Rates are better than they were at peak but customer credit profiles have gotten worse. Banks are tightening. We're doing more deals at lower grosses and working harder to get them funded. F&I income is the only thing keeping some stores in the black.

My rep is telling me that May incentives will be stronger. Let's hope so! Tariff pull back killed us late Spring and early Summer last year.

I've been in this business 22 years. The OEMs always find a way to make their numbers by making the dealer's problem worse. I'm not surprised. What I'm watching is whether the big groups push back through NADA or whether they just eat it quietly like usual. I think we eat it quietly.

Our new inventive cycle will start on Friday - already hearing that most models are getting incentive pullback vs. enhancement.

The stores that invested in used car operations are doing better than new car heavy stores right now. Not shocking. Used margins are compressed too but at least you're not fighting factory pricing and OEM mandates at the same time.

To answer the dealer association question directly: it becomes that fight when the inventory and margin data is consistent enough across enough dealers in the network that the association can make a documented case rather than an anecdotal one. One bad quarter is noise. Two consecutive quarters of brand-wide days supply above 70 combined with documented incentive reduction data and narrowing front-end gross is signal. Most dealer associations have the data infrastructure to build that case if they choose to. What usually stops it from escalating is that individual dealers are worried about allocation retaliation from the OEM, which is a real concern and a real leverage imbalance. The association model only works when enough dealers are willing to stand behind the data publicly. That threshold is higher than it should be.

We have been in this exact position for about five months now and what changed for us was getting granular about which specific models were underwater versus which ones were actually moving fine without support. The conversation with our OEM rep shifted when we stopped talking about the store in aggregate and started showing him model-level data on days supply, average transaction price versus MSRP, and what we were discounting out of our own pocket to close deals. Three months later two of the models we flagged got program support.

Honda rep just sent our May 'incentives' and they are a joke. Not competitive and going backwards. Honda wants to grow sales and market share, but not with their network. They are doing it through added fleet (hurting the brand) and less incentive spend.

OEMs are squeezing dealers dry while ignoring the reality of high interest rates.

OEMs are completely ignoring the reality of high interest rates while we take the hit.

It’s the classic OEM squeeze. They talk about "market share" while we’re discounting out of our own pockets just to move inventory. Until the major dealer groups actually leverage NADA and push back, we’re just an unpaid warehouse for the factory. The disconnect from reality is staggering.

This hits home. The disconnect between factory "demand" projections and the reality of high interest rates is staggering. We’re essentially paying to store their inventory while our margins vanish. Unless the major dealer groups actually push back, the OEMs will keep squeezing us to protect their own quarterly numbers.

The OEM sales rep framing of "you have a management issue if your inventory is high" is the kind of answer that lands well on a conference call and means nothing at store level. We do not control allocation, we do not control MSRP, and we do not control what the customer's payment looks like when rates are where they are. The dealer association question is the right one to ask. The problem is most associations move slowly and OEMs know it. The dealers who get traction are the ones in markets where the OEM genuinely cannot afford to lose the volume, and they negotiate quietly and directly rather than through public channels.

I agree with Reply 15—calling this a "management issue" is a slap in the face when rates are this high and MSRPs keep climbing. We’re essentially subsidizing the factory’s balance sheet while our margins vanish. The dealer associations need to stop being toothless and actually push back.