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Do you remember what you did last summer, oh car buyers of the United States? Those were glory days for those seeking new wheels. Cash for Clunkers was only the best-known of the myriad incentive programs made available to those purchasing new cars. Last summer was the climax of years of fancy deals made available to those buying new autos – employee discounts, rebates, and plenty of discounts to go around were all considered de rigueur. All good things have to come to an end, however, and the reign of car buying incentives is one of those things. In a recent article by the Associated Press, it was reported that automakers trying to remain frugal and profitable have made the decision to almost completely chop out incentives and discounts for car buyers across the board.

According to trade website Edmunds.com, auto manufacturers across the board were offering a full thousand dollars less in incentives and rebates per car than they were a year ago. The government has no apparent plans to offer fat discounts a la Cash for Clunkers this year, either. That means that your next car is likely to be discount-free. J.D. Power and Associates executive director Jeff Schuster was recently overheard to comment that the current environment may “be as good as it gets.”

The overall result has been an American auto industry that exists at a virtual standstill, as would-be buyers sit back and wait for deals that apparently are never coming. It’s believed that this month will close out as the worst August for car sales in eighteen years, and that barely a million cars and trucks will be sold in America by the end of today’s business day. Truecar.com, an auto sales trend tracker, estimated that sales will likely fall around three percent from July’s numbers. August has historically been strong in the American auto market, as dealers clear out model year-end units and prepare for next year’s cars to roll into the lots. August 2007, a banner year for the industry right on the brink of recession, celebrated the sale of almost one and a half million new cars and trucks. Last year, with sales at a threatened thirty-year low, the government swooped in like an angel with Cash for Clunkers, the incentive program which offered as much as a forty-five hundred dollar credit for trading in old and non-fuel efficient autos in the interest of getting leaner, greener cars on the road. Sales for last August hit one point two million units. This year, however, the government is staying out of things.

Industry analysts warn that sales figures will stay anorexic through the end of the year unless dealers and manufacturers cave a little on discounts. It’s not just that buyers are conditioned to expect perks for buying cars – although they are, there’s no doubt – but also that consumers are more frugal than ever before. Many have dealt with job losses, the threat of foreclosure, and the pain of bills getting higher and higher while incomes stay stagnant at best. Their homes are worth much less, and so they feel insecure about their net worth and ability to spare extra dollars on a car payment. Everyone wants a deal. It’s a simple matter of buyer confidence, or lack thereof. TrueCar’s vice president of industry trends and analysis, Jesse Toprak, believes that, short of government intervention or concessions on the part of auto sellers, consumers will remain stubborn on the issue of not buying cars. Toprak said that the industry needs a “catalyst to take [it] up to a higher level,” and to lift sales numbers out of the wretched funk in which they’ve stagnated for months.

The auto industry, however, argues that a return to incentives is not the answer, and that the economy needs to rebound for sales numbers to get better. Sounds like nothing so much as a “chicken or egg” debate to me, but what can you do? Ford’s highest-ranking American sales analyst, George Pipas, stated that “an improved consumer outlook” on economic and not dealers giving lower prices, would be the answer. He and other company representatives have sworn that they are serious about not caving on the issue of incentives. The domestic automakers have been especially strict on the issue, owing to the fact that they’ve knocked on the door of bankruptcy and had to reinvent themselves for modern times. That means closed plants, laying off tens of thousands of workers, and scaling back production to meet the anemic industry demand. Consequently, there isn’t exactly a massive surplus of cars needing to be cleared out at fire-sale prices as was the case in the past. Foreign automaking competitors have cut back production on more modest scales, but still aren’t bursting at the seams with extra cars like they were in the past.

It’s believed that around fourteen million new cars and trucks sold annually is the “natural level for annual U.S. sales, based on population, the rate people scrap used cars and other factors,” according to J.D. Power and Associates. Auto makers have taken that figure and run with it, trying to make it so there is not a huge surplus of extra inventory. They’d rather there be a healthy demand for their products than have an unwanted supply. It’s emblematic of new attitudes meant to keep these companies running leaner and more profitable, and it’s a process that has been in the works for a long time. According to analysis by Citi Investment Research, the past six years have seen worldwide car manufacturers chopping their North American production capacity by no less than eighteen production plants and two million vehicles annually. In July 2008, nationwide dealerships had an estimated sixty-nine days’ worth of units on hand to sell. Compare that to July 2010’s estimate of just fifty two days’ worth of vehicles. New wisdom posits that anything above a sixty-day supply of new cars and trucks sitting on dealer lots is simply too much, and in excess of the “cushion” needed to ensure that there is always ample product to offer customers. It’s interesting to note that the boom days before the recession saw sales of some seventeen million cars a year, but that number was grossly inflated by lavish incentives stemming from huge oversupply. It was a smart move on the part of domestic car companies to scale back production when they did, or else this current industry slump would be nothing short of a nightmare. Amazingly, however, both Ford and GM have made money this year and stand to continue turning a profit in months to come. They’ll be doing extremely well for themselves if and when the market rebounds.

Some experts have suggested that car manufacturers are going about it all wrong, and that there are promotions that would get customers in the doors of the dealership without them giving away piles of money in costly incentives. Dealers just need to look at customers’ big picture, the experts say. For example, the average American consumer is terrified about his job security, and what will become of his bills if he should happen to be laid off. Car companies could probably make a killing by offering to buy back customers’ cars in the event of job loss, it’s been suggested. Hyundai has had great success with that gimmick, gaining a positive market share of thirty-eight percent since it unveiled it’s no-risk “Hyundai Assurance” program in the beginning of last year. Consumers like the feeling that they are insured against the ravages of joblessness.

Others have posited that government intervention in the form of car loan guarantees would definitely stimulate the auto industry to work more with buyers. If the government would act as an insurance company and charge every new car buyer a marginal premium to cover the cost of potential future defaults, perhaps manufacturers and lenders would stop being so worried about possible financial issues. A second round of the exceedingly-popular Cash for Clunkers program would not be unwelcome either, of course.

It’s not that there are no deals at all to be had out there. I’ve heard several ads on the radio for one of my local Hyundai dealerships promoting their blowout Labor Day sale, and historically-generous GM is still putting on a summer incentive promotion… albeit one that is around three hundred dollars less generous than those in years past. Toyota, suffering a tarnished reputation after months of mounting safety recalls, is another manufacturer to watch for frequent promotions.

Meanwhile, many would-be car buyers stand resolute on the fact that they will simply refuse to buy a new car unless they are tempted with much better deals than manufacturers are currently willing to provide. There are people out there who admit that they would buy a car right now if the price was agreeable. Of course, their idea of “agreeable” is quite a bit different than that of car manufacturers’. If you are considering buying a new car, consumer experts advise you to grab hold of any possible incentives and run with them, attempting to play dealerships off one another based on discounts on comparable vehicles. Hey, in this economy a consumer needs to be a little aggressive if they are going to get what they want!