Small car price war reignites for April

17 April 2016
, CarsGuide

April is the slowest month of the year for car sales, which means dealers are desperate to move metal. Here's how to grab a bargain.

A perfect storm is brewing for big savings on small cars.

Discounts are sharper than usual because April is the slowest month of the year for car sales, so prices are slashed to keep showroom traffic moving.

Adding to price pressure, sister brands Hyundai and Kia have shocked the industry by introducing two bargain buys at the same time -- each with savings of more than $7000 off the full RRP.

This month the Kia Cerato hatch and sedan are available for $18,990 drive-away with automatic transmission -- once a $1000 cashback offer on the already discounted $19,990 price is taken into account.

Kia buyers have the choice of taking the $1000 gift voucher or $1000 off the $19,990 drive-away price. Dealers say nine out of 10 buyers leave the gift voucher behind.

The extra saving on the Kia's already discounted price represents a whopping $7000 off the full RRP.

The Hyundai i30 hatch has returned to its discount price of $19,990 drive-away with automatic transmission -- a saving of $7500 off the full RRP.

The $19,990 drive-away deal has seen the Hyundai i30 become Australia's top-selling car each month it is offered. So far, the Hyundai i30 has topped the charts three times in the past 10 months.

A "drive-away" price is exactly that. You pay not a dollar more.

Hyundai and Kia are able to limbo to such low prices because both models are nearing the end of their model cycles.

An all-new Hyundai i30 is due next year and an updated Kia Cerato is expected in showrooms in the middle of this year.

Discounts on Australia's two top-selling cars remain relatively modest because they are still in the early to middle stages of their model cycles.

The Toyota Corolla -- Australia's favourite car for the past three years, but ranked second so far this year behind the Mazda3 -- is available for $23,990 drive-away with automatic transmission, saving $2700 off the full RRP.

But Mazda is not advertising drive-away prices on its small sedan and hatch, instead offering "free on-roads".

According to Mazda's website the price of the Mazda3 automatic is $26,055 drive-away, a saving of zero dollars from the full RRP.

That's because "free on-roads" does not include dealer delivery charges, which vary from $1500 to $2500 at the dealer's discretion.

A "free on-roads" offer -- which only covers registration and basic third party insurance -- means some buyers will get a better deal than others, depending on how hard they haggle over the dealer delivery charge.

Contrary to popular belief, the dealer delivery charge does not cover the cost of transporting a vehicle to the dealership; that is already covered in the dealer's invoice cost. It is a profit stream added to the price of the car to get it ready for sale.

However, a "drive-away" price is exactly that. You pay not a dollar more.

The small-car segment is the most competitive part of the market.

Experts warn buyers to check that their deal includes the cost of automatic transmission, which customarily adds at least $2000 to the price of small cars.

Some companies, such as Nissan, advertise only the discounted drive-away price on a manual transmission car, not the automatic which represents the overwhelming majority of sales.

The cost of metallic paint has also crept up in recent years, to offset heavy discounting.

Three years ago metallic paint cost as little as $285 but now brands such as Holden and Mitsubishi charge $550; most others charge between $450 and $520 for premium paint.

Consumer groups say buyers may be attracted to a car because of its cheap advertised price, but they need to double check if that includes popular options such as automatic transmission and metallic paint.

"It is vital you check exactly what the drive-away price includes before you sign the deal," said National Roads and Motorists' Association spokesman Peter Khoury.

"If you're not happy, shop around because you'll get a better deal somewhere else. The small-car segment is the most competitive part of the market."

Small car best buys: drive-away deals versus RRP

Kia Cerato automatic
$18,990 drive-away when $1000 cashsback is used ($7000 off)

Hyundai i30 automatic
$19,990 drive-away ($7500 off)

Holden Cruze automatic
$20,990 drive-away ($3000 off)

Mitsubishi Lancer automatic
$22,990 drive-away ($1000 off)

Toyota Corolla Ascent sedan automatic
$23,990 drive-away ($2700 off)

Nissan Pulsar automatic
$25,405 drive-away ($0 off)

Mazda3 automatic
$26,055 drive-away ($0 off)

Source: Manufacturer websites.

Metallic paint prices

Holden $550
Mitsubishi $550
Nissan $510
Kia $520
Toyota $450
Hyundai $495
Mazda (no charge, except Soul Red: $250)

Source: Manufacturer websites.

What do you think is the best small car deal this April? Tell us in the comments below.