Fierce competition in the luxury car market is driving down prices

We are not luxury car nation here in Canada, despite the fact that luxury vehicle sales are way up over the last decade.

No, we are luxury utility nation. As DesRosiers Automotive Consultants reports in a note to clients, almost all the growth in the luxury market since 2005 has been in utility vehicles.

"Indeed, of the approximately 50,000-unit gain in the luxury market in the past 10 years, more than 70 per cent is attributable to this one segment," notes DesRosiers.

Rigs such as the Lincoln MKC, BMW's X1, the Infiniti QX50 and Mercedes-Benz' GLA-Class are now the darlings of upscale buyers. Luxury cars? Not so much.

Sales of luxury cars were in fact higher in 2014 than a decade ago, notes the industry consultant; two of the three passenger car luxury segments have dropped in that span.

This despite the fact luxury vehicle sales surged to 187,786 in 2014 from 135,464 in 2005. How hot is luxury overall? DesRosiers reports that as of July this year, luxury vehicles comprised 10.8 per cent of total new vehicle sales, versus 8.6 per cent in 2005. At present trends, 2015 luxury sales will easily out-pace 2014.

The new and growing tidal wave of luxury utilities has captured the fancy of premium buyers. Light truck luxury accounts for half of all luxury sales today, versus about one in five in 2005. A massive shift in consumer tastes.

To meet demand, manufacturers are rolling out more and more new luxury utilities. The GLA is one that arrived in for 2015 as an all-new model, the Lincoln MKC another.

Shiny and new as they are, the competition is fierce. This means deals. The GLA, for example, here in the dog days of August is wearing some $3,000 or so in combined incentives. Likewise, the MKC – also new as a 2015 model – is on offer with nearly $3,000 in factory/dealer discounts thanks to Ford of Canada's ongoing Employee Pricing program.

To stay in the game, models further away from their last significant redesign are wearing even larger sales sweeteners. The BMW X1, for instance, is available with more than $4,000 in combined discounts. An all-new X1 goes on sale later this year in Europe and will likely show up in Canada next year.

The story is similar for the Infiniti QX50, which is in play with discounts totaling nearly $6,000. In both instances, the discounts put a shiny gloss on aging models.

In luxury utility nation, buyers are advised to keep track of the deals.

Deals of the Week consulted with www.unhaggle.com, Car Help Canada, www.carcostcanada.com, and other sources on these offers. As usual, pricing information here is subject to change and dealer discounts vary, so consult your dealer for all the final details, including expiry dates for all offers.

Reuters/MARK BLINCH

2016 Lincoln MKC Select AWD:

· MSRP: $42,800

· Freight, dealer prep, air conditioning tax: $1,935

· Total dealer and factory discount: $2,812 (Includes both factory and dealer discounts based on Ford's Employee Pricing promotion.)

· Taxable subtotal: $41,923

· Total price with 13% HST: $47,372.99

· Employee Pricing is available with a 4.4% finance rate for 48 or 60 months, or a 5.0% lease rate for 48 months.

BMW

2015 BMW X1 xDrive28i

· MSRP: $36,990

· Freight, dealer prep, fees and air conditioning tax: $2,230

· Dealer discount (estimated): $1,760

· Factory discount: $1,500 (manufacturer incentive)

· Loyalty incentive: $1,000

· Taxable subtotal: $34,960

· Total price with 13% HST: $39,504.80

· All incentives are available with 0.90% financing for 48 or 60 months, 4.99% for 84 months, or a 0.90% lease rate for 48 months. Loyalty rate reduction of 0.75% available for finance and lease rates.

Infiniti

2015 Infiniti QX50 AWD 7AT w/Journey Package:

· MSRP: $37,950

· Freight, dealer prep, air conditioning tax: $2,130

· Dealer discount (estimated): $2,181

· Factory discount: $3,500 (manufacturer incentive)

· Taxable subtotal: $34,399

· Total price with 13% HST: $38,870.87

· A $500 factory incentive and all dealer incentives are available with 0.90% financing for 48 or 60 months, or a 2.90% lease rate for 48 months. Loyalty rate reduction of 1.00% available for finance and lease rates.

Mercedes-Benz

2015 Mercedes-Benz GLA-Class GLA 250 4MATIC

· MSRP: $37,200

· Freight, dealer prep, fees and air conditioning tax: $2,210

· Dealer discount (estimated): $1,848

· Factory discount: $1,000 (manufacturer incentive)

· Taxable subtotal: $36,562

· Total price with 13% HST: $41,315.06

· All incentives are available with 1.90% financing for 48 or 60 months, or a 3.90% lease rate for 39 or 45 months.

Pricing information source: unhaggle.com and carcostcanada.com. Calculations based on Ontario customers. Please note that while the information above is accurate at the time of publication, incentives are given at the discretion of individual dealers, and may be changed or discontinued at any time. Where noted, “dealer discounts” are negotiated with the customer on a case-by-case basis. Unhaggle Savings are actual discounts received by Unhaggle customers.

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