Where the summer car deals are
There are no incentive wars on the horizon, but good deals are there if you look hard.
By Peter Valdes-Dapena, CNNMoney.com staff writer

NEW YORK (CNNMoney.com) -- In the heat of summer, it's still a long time to New Year's Day. But for car companies next year is already here.

With the new model year's vehicles starting to trickle into dealerships, car companies need to clear out 2006 and even 2005 models that are still sitting on dealer lots.

2006 Chrysler PT Cruiser
Some Chrysler models, like the PT Cruiser, may not really cost less under Chrysler's current incentive program.

That can mean bargains for car shoppers if they know where to look.

A few caveats up front, though.

  • You're shopping for a car, not a deal. Even if you find a great deal on a car, take it only if you really want that car. You'll get that deal just once, but in four years you'll still be driving the car every day.
  • When choosing between a 2006 and 2007 model that are identical in every respect, take the 2006 only if the savings are substantial. Otherwise, the reduced resale value for the car that's one year "older" will eat up any savings.
  • When choosing between a 2006 and redesigned 2007 model, it almost always pays to buy the '07 even if the 2006 costs less. Because of the redesign, the 2006 will immediately look "out of date" and its value will plummet. Also, redesigns will usually include big improvements. You could be passing up better safety equipment, better ride and handling, more engine power and even better fuel economy with the newer model.
Big Three Round-up

So far, the big incentive war hasn't started and it may not.

General Motors, which led things off last year, has some zero-percent financing and cash-rebate incentives but nothing like last year's across-the-board "Employee Pricing" discounts.

Few deals for Chrysler, Dodge and Jeep This year, it was DaimlerChrysler's Chrysler Group, makers of Chrysler, Dodge and Jeep vehicles, that went that route. Chrysler "Employee Pricing Plus" program is scheduled to run for just this month. In a few cases, it has created great deals on cars that would have cost you thousands more without it.

However, some less popular models are actually costing customers more with "Employee Pricing Plus" than they were under incentive programs in place just before the program started, said Alex Rosten, manager of pricing and market analysis for the automotive Web site Edmunds.com.

"We found that, in terms of a cash purchase price, almost all the prices went up," he said.

That analysis does not factor in savings from the zero-percent financing that is also part of the deal, however. "Zero percent financing will save you thousands of dollars over the years," said Rosten.

Good time to buy the SRT-8 That means the deals could be good, but not amazing, on most Chrysler, Dodge and Jeep vehicles. But if you're considering one of the Chrysler Group's high-performance SRT-8 vehicles, this would be a great time to buy it, assuming you can find one on a dealer lot.

SRT-8 vehicles, such as the Chrysler 300 SRT-8 and the Dodge Magnum SRT-8, have been selling for full-sticker price or more, so "Employee Pricing" represents a unique chance to get one at a substantially reduced price. (SRT versions of the Dodge Viper sports car and Ram truck are excluded from the program.)

Chrysler is also offering a 30-day "money back" satisfaction guarantee. There's no up-front financial benefit to that, but it should at least give you some peace of mind (though you do lose some fees if you return a car).

Ford offers good financing and free gas Ford is fighting back with its own "Drive On Us" program, which offers customers zero-percent financing and a prepaid debit card good for as much as $1,100 worth of gasoline. (Customers can also elect to take cash rebates in place of either one of those incentives.)

GM's quieter incentives may be worth more

General Motors is offering incentives on specific vehicles and in specific markets. Sticking to its vow last year to stay away from big, splashy incentive programs, GM is keeping its incentives quiet and targeted to specific models.

Nevertheless, GM's quiet incentive push has actually created some of the best potential bargains around, according to Consumer Reports magazine.

The magazine looks at incentives of various types, including unadvertised manufacturer-to-dealer incentives, to calculate the "Consumer Reports Bottom Line Price." That's the price that the vehicle actually costs the dealer and it's often thousands less than the "invoice price" you commonly see on automotive Web sites.

That's not the price you should expect to pay, but it reveals how much room for negotiation there really is.

On a 2006 Cadillac STS with all-wheel-drive, for example, the difference between the car's sticker price and Consumer Reports "Bottom Line Price" is a little more than $10,000.

Other vehicles on Consumer Reports "Best Deals" list for this month are the 2006 Buick Rendezvous CX AWD, with potential savings of almost $7,000; the 2006 Chevrolet Monte Carlo LT, with potential savings of about $3,000; and, from Chrysler, the 2006 Jeep Liberty Sport V6 4WD with potential savings of about $4,000.

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Most stock quote data provided by BATS. Market indices are shown in real time, except for the DJIA, which is delayed by two minutes. All times are ET. Disclaimer.

Morningstar: © 2014 Morningstar, Inc. All Rights Reserved.

Factset: FactSet Research Systems Inc. 2014. All rights reserved.

Chicago Mercantile Association: Certain market data is the property of Chicago Mercantile Exchange Inc. and its licensors. All rights reserved.

Dow Jones: The Dow Jones branded indices are proprietary to and are calculated, distributed and marketed by DJI Opco, a subsidiary of S&P Dow Jones Indices LLC and have been licensed for use to S&P Opco, LLC and CNN. Standard & Poor's and S&P are registered trademarks of Standard & Poor’s Financial Services LLC and Dow Jones is a registered trademark of Dow Jones Trademark Holdings LLC. All content of the Dow Jones branded indices © S&P Dow Jones Indices LLC 2014 and/or its affiliates.