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The new auto models are coming in. At the same time, inventories at many dealerships are high. That means the squeeze is on and the car deals are getting better.
While you'll have trouble finding any discounts at all on popular 2005 models, such as Chrysler's new 300C, real purchasing costs for 2004 model-year vehicles, especially less popular models, are dropping fast. Large sport/utility vehicles and pick-up trucks, in particular, are going cheap as manufacturers pile on incentives.
Good deals can also be found in passenger cars. For example, the 2004 Lincoln LS Sport AT, a mid-size luxury sedan, tops Consumer Reports "Best New Car Deals" survey for this month.
That car has a sticker price of $40,605, according to the magazine, but it could be had for as much as 25 percent less, if a customer negotiated the lowest possible price on the LS, then took the $6,000 rebate Ford Motor Co. is currently offering. Even without super negotiating, a consumer could save about $8,000 off the sticker price, said Rob Gentile, associate director for autos products at Consumer Reports.
SUVs moving out
Generally, SUVs are where the big bargains are right now.
GM is offering a $4,500 on most 2004 sport/utility vehicles and $3,500 on most 2004 passengar cars. GM is also offering $1,000 cash back on most 2005 models.
Additionally, buyers who finance their vehicle through GMAC, General Motors' financing arm, can get an additional $500 to $1,500 rebate. Rebates are available on vehicles from "traditional" GM brands such as Buick and Chevrolet. No rebates are being offered, however, on Cadillacs.
Other automakers are also offering considerable incentives on SUVs.
DaimlerChrysler is offering a $3,500 rebate on the 2004 Jeep Grand Cherokee. Ford is offering $4,500 on its Lincoln Aviator SUV. And while Japanese manufacturers don't typically offer large rebates, Nissan is now offering $1,000 on its full-sized Titan pick-up and $3,500 on its 2004 Pathfinder SUV (which will soon be replaced by a redesigned 2005 version).
Besides customer cash, some manufacturers are offering dealer incentives on some of their vehicles. Dealer incentives are not usually advertised and manufactures do not like to discuss them publicly. But in concept, they're the same as a customer rebate except that the money goes to the auto dealership rather than car buyer.
Such incentives can benefit consumers by allowing the to car dealer sell the car at a lower price, sometimes even below the published "dealer cost." Autos Website Edmunds.com publishes some information on dealer incentives and auto shopping service CarBargains.com publishes a monthly newsletter with information on dealer incentives.
Minivans look exciting
Minivans, in many ways a more practical alternative to SUVs, are another market segment where deals currently abound. Some tough new competitors have entered the minivan market and a major new entrant is on the way. So the incentive race is on.
There are currently no customer incentives on the 2004 Honda Odyssey. But with the 2005 Odyssey on the way -- a redesign that will replace what is already a very popular product -- and a $500 dealer incentive, the '04 Honda minivans are now selling at prices close to published dealer cost in many parts of the country, according to several sources.
Including a $1,000 customer rebate, minivan shoppers are also negotiating below-cost deals on Chrysler's Town & Country. With 2005 Ford Freestar minivans already available on dealers lots, and a $5,000 customer cash incentive, buyers are now getting 2004 Freestars at net prices far below "dealer cost," according to information from Edmunds.com.
Getting your deal
When shopping for a car, there is one thing to remember above all else: You are shopping for a car, not a bargain. The price you pay is just part of the equation and it's not the most important part.
The most important part is the car. Is it a safe and does it suit my needs? Will I be happy with it? Will I enjoy driving it?
Next come issues of cost. Can I afford to buy this car? Can I afford to keep this car? Five-year cost of ownership data is available from various automotive Web sites, including IntelliChoice.com. Don't forget to check the cost of insuring any car you're considering.
Consumers should also beware of relying on incentives when deciding to buy. For one thing, rebates push down the eventual re-sale value of a car. That's true whether you take the rebate on the car you purchase or not. Even rebates offered later on a model you've already purchased will impact the resale value of your car, said Raj Sunduram, president of Automotive Lease Guide, a company that tracks and predicts used car values.
Only after you've narrowed down your choices should you start looking at incentives. And remember, don't just compare incentives. Look at the actual final prices vehicles are selling for, including the incentives.
"The key is to negotiate the deal even further," said Gentile of Consumer Reports.
When negotiating the price of the car, remember to negotiate the price without the incentive. Incentives can be added in once a final price is settled on. Also, always start from the dealer's cost for the car and go up, don't negotiate from the sticker price.
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| | Make and model | | Sticker price | | CR Wholesale Price | | Potential savings | | Expires | | '04 Lincoln LS V8 Sport AT | $40,605 | $30,469 | $10,136 | September 30, 2004 | | '04 Mazda Tribute LX V6 2WD | $22,772 | $16,872 | $5,900 | September 6, 2004 | | '04 Ford Escape XLT 4X4 | $24,895 | $19,843 | $5,052 | September 30, 2004 | | '04 Dodge Stratus R/T Sedan | $22,075 | $17,321 | $4,754 | August 31, 2004 | | '04 Chysler Sebring Touring Sedan | $20,520 | $16,000 | $4,520 | August 31, 2004 |
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* CR Wholesale Price is the dealer's cost for vehicle, including holdback and dealer incentives, minus consumer incentives. | Source: Consumer Reports |
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