Driving a bargain
If you need new wheels, it's a buyer's market. Here's how to get the most car for your money.
(Fortune Magazine) -- Given the ongoing state of the economy, hearing about automotive bargains may be cold comfort. But if you are in the position to pick up some new sheet metal, there has never been a better time.
Manufacturers are flooding the marketplace with multiple incentives - 14 different brands were offering low financing, cash back, and lengthened payment terms in the first quarter (most come-ons are released on a quarterly basis). Chrysler led the bargain charge, but others weren't far behind; Mazda is letting buyers drive off without making a payment for three months, and Hyundai is allowing new owners to return a car if they lose their job within a year of purchase - and will even kick in a couple of payments.
In the luxury realm, waiting lists for hot cars are growing shorter. "The economy has helped weed out the less serious buyers," Ferrari chairman Luca di Montezemolo told me. The Prancing Horse's year-to-date sales are down 50% from the first quarter of 2008 - even with the hot new V-8 California on order. (Other ultra-high-end brands are down as much as 80%.)
One tactic for landing a great luxurymobile is to buy a model that's about to be rendered outmoded as the all-new version arrives. Take, for example, the 2008 BMW 7 Series sedan, which is dripping with technology, luxury, and usability. Dealers are all but dancing to get the last-generation car off their lots before the arrival of the new 7 this month. Right now base price is $76,800, but average transaction prices, according to Edmunds.com, are as low as $64,467, with financing at 2.9% APR for up to 60 months.
In a similar vein, Land Rovers are a great deal at the moment (one L.A. dealer, Hornburg Santa Monica, is offering $14,000 off the LR3), as are Saabs and Volvos (uncertainty about their futures is suppressing demand).
Another surprisingly good bargain: the Hyundai Genesis sedan. The 375-horsepower V-8 rivals its luxury four-door competition at a fraction of the cost. The going rate is $35,116, vs. a MSRP of $38,000 (expect to pay a minimum of $15,000 more for a similarly equipped Lexus GS, Mercedes E-Class, or BMW 5 Series). The Genesis feels powerful, handles beautifully, and is loaded with all the proper kit - leather seats, 14-speaker sound system, navigation with real-time traffic alerts, backup camera, sophisticated electronics, yawningly large trunk, five-star crash ratings, and so on.
In the sports car realm, the same bright minds that created the rocketlike $76,840 Nissan GT-R have just entirely revamped the entry-level 370Z. The successor to the 350Z (which was Carlos Ghosn's first big product launch as CEO back in 2002) sets a new standard by combining an affordable price with the chops of a serious sports car. Though the MSRP runs as high as the low $40,000s, you can probably snag one for as little as $30,625.
Not only did Nissan fix the flaws from the original bulkier car, but the 370Z achieves zero to 60 in under five seconds, holds the road with a superglue-like grip, agilely dances through corners, and gets 21 mpg on average (18 city/26 highway). Then there are the brakes, which stand up to any sports car's - and which nearly got me back-ended when an unsuspecting Mercedes behind me couldn't match my stopping patch.
On a cost-per-horsepower basis, the 370Z is about the best bargain in the sports car realm: $90 per. A base Corvette is about $114/hp, a Mazda MX5 Miata is $128/hp, and even the highly desirable and inexpensive Mini Cooper calculates to $163/hp. After all, there's more to a bargain than just sticker price.