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Rebate wars: Where the deals really are
Car companies are throwing around rebates and free gasoline. Here are the real bargains.
November 22, 2005: 2:55 PM EST
By Peter Valdes-Dapena, staff writer
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• Sport • Sedans
• SUVs • Luxury
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NEW YORK ( - They said they'd back off, but the big automakers just can't help themselves.

The incentives war heated up in earlier this month when General Motors lauched the "Red Tag Sale." Ford followed with "Keep it Simple." Chrysler now has "Miles of Freedom."

Are the deals really all that great?

When evaluating such deals, there is one thing you have to keep in mind. You're buying a car, not a sales gimmick. If the car's not good or if it just isn't right for you, it doesn't matter how good the incentive is.

Some car companies almost never put big incentives on their vehicles, and even these "Big 3" programs come with multiple exceptions. In addition, know that car companies generally put rebates and "free gas" deals on cars because they aren't selling well.

Finally, always remember that what incentives give they also take away. When the time comes to sell or trade in your car, it will be worth less than it would have been had there been no incentive.

The used car market has a very good memory and it won't let you keep that rebate money forever.

Where the deals are now

GM "Red Tag Event" -- General Motors says it's offering its cars at the same price employees of its auto-parts suppliers pay. That's two percent over dealer invoice plus $100, said Jesse Toprak, director of pricing for, which provides data and content for and

The price reduction is done through a combination of rebates, dealer incentives (like rebates, but the money goes to the car dealer rather than the consumer) and actual vehicle price reductions, Toprak said.

In some cases, consumers will save little, if any, more with this incentive package than they could have before by simply negotiating hard or using a buying club or service.

There are some cars, though, for which the price consumers actually pay under this program is substantially less than they would have paid before.

Ford "Keep it Simple" -- No fancy gimmicks here. No bells, bows or tags. Ford is just offering reduced prices on most of its Ford, Lincoln and Mercury cars.

"Most," for the most part, doesn't include cars people are really clamoring to get right now. The Ford Mustang isn't being offered with discounts. Neither are the Ford Fusion, Mercury Milan or Lincoln Zephyr. Those cars just came out and they're getting good reviews. Also, the Ford GT supercar is exempt from these offers.

Otherwise, the Ford plan offers discounts similar to those GM is offering, said Toprak.

Chrysler "Miles of Freedom" -- Is a cash discount too boring for you? How about free gas and free scheduled maintenance and an extended warranty?

Chrysler, Dodge and Jeep buyers can get a Visa debit card with about $2,400 on it. The debit card can be used for any purchases you'd like, but Chrysler advertises it as gas money. Buyers will also get two years of free scheduled maintenance and a longer, 5-year, 60,000-mile warranty.

Of course, all of this translates to cash in your pocket. It's worth about $3,500, to be somewhat precise, said Toprak.

Many Chrysler Group vehicles had $3,500 in cash incentives before this anyway. So, for those vehicles "Miles of Freedom" just means you have less freedom to spend your money as you see fit. You have to use it for gas and maintenance.

In a few cases, this incentive represents a real discount.

See our gallery for some examples.

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