August Market Report

When it comes to cars, there are two worlds. There’s the world of bright and shiny metal, of suggested retail and lower prices, and, always, plentiful availability. In this world, you can find that Chevrolet Malibu with the heated seats, and buying a Toyota Prius is as easy as driving down to your local Toyota dealership.Yep. And then there’s the reality of waiting lists. Of optional equipment that’s either not all that optional, or not all that available. There’s price haggling and increases beyond MSRP on popular models. You set out to buy that hip and popular car that everyone is talking about, and you end up with a white SUV. Don’t ask how it happened. Just take the rebate. A smart shopper, of course, tries to avoid reality as long as possible by researching online and educating themselves about the ins and outs of buying a car. This month and through the summer, car shoppers should acquaint themselves with the concept of inventory, and how dealers have too much of it. As a result, incentives will continue to be a nice thick layer of frosting on the automotive cake – even 0% incentives won’t go away. With domestic automakers running inventories in the 80s and 90s, smart shoppers can get a good deal – if they’re shopping for a car that’s parked nose to tail on the dealer lot. If not, chances are that a deal on the more popular, niche vehicle – say the MINI Cooper – will be harder to come by.

Page 2: Cars & Trucks

Be aware of large rebates on domestic cars – the coming batch of cars from domestics will likely be of better quality. If inventory levels stay high, these vehicles may well also get a more modest rebate. However, with the amount of cash being offered and financing deals, buying now – as long as you’re happy with the vehicle – is a great way to get a car at a discount. If you’re shopping for a truck or SUV, now may well be a good time – mos trucks and SUVs are not scheduled for major changes in the 2005 model year, and automakers have an especially high inventory count of these vehicles.Say Hello, Say Goodbye Buying a car that will soon be confined to the pages of automotive history is either a great idea – imagine the deal you can get – or horrendous, as in the ridicule you’ll suffer when the latest and greatest version rolls by and you’re left with a dated, ugly car. With vehicle production cycles getting shorter and new vehicles being introduced almost every month, this is an area where, with knowledge, car buyers can gain an advantage. Every month we’ll update another batch of planned debuts. For complete coverage, however, please go to our Auto Show coverage.

Page 3: What's New

Honda Odyssey This long-time favorite is one of the only vehicles to maintain its popularity for as long as the production of the vehicle. With a new, larger version due out later this year, you can try to find a good deal on a 2004. But keep in mind that there has been a waiting list for this car since 2001.Ford Taurus To be replaced by the Ford Five Hundred, this is a case of waiting for what’s better down the road. The Taurus is so well past its prime that even a ridiculous discount won’t help soothe the pain of the Great Oval One sitting in your driveway. Acura RL All new later this year, with segment-busting real time traffic alerts and an all-wheel drive system that spreads energy front to back and side to side. This is a much-anticipated vehicle, whereas the old RL is not much anticipated at all anymore. Dodge Dakota A new Dakota is due out this year, which means the old Dakota may soon be discounted, and heavily so.

Page 4: Good Deals

With inventories for domestic automakers at near all time highs, rebates and incentives are the order of the day. A good deal is virtually assured, as long as you don’t mind avoiding the most popular models. Here are some of the best deals we see through the month of August:2004 Cadillac SRX With Sunroof: 0% to 1.9% financing, expires 08/31/2004 2004 Cadillac SRX Without Sunroof: $1,500 cash back or 0% to 1.9% financing, expires 08/31/2004 The Cadillac SRX is one of the best luxury suvs on the road today, and with the over-sized, panorama sunroof, it’s a special vehicle. With special financing or a $1,500 offer, it’s an especially good buy. As a new vehicle, the SRX is not due for a refresh anytime soon. 2004 Chrysler Pacifica: $4,000 cash back or 0.0%, expires 08/31/2004 One of the better family cars on the road just doesn’t seem to resonate with consumers. Maybe it’s because it’s hard to define: Chrysler calls it a sports tourer, but most people don’t know what a sports tourer is, and as a result miss out on a comfortable family vehicle. At $4,000 cash or 0%, the Pacifica makes it on my short list. 2004 Saturn VUE: $3,000 cash back or 0.0% financing, expires 08/31/2004 Another domestic SUV suffers at the hands of inventory…the VUE is surely priced to move without $3,000 cash back, yet with increasing competition and high dealer counts, buyers can get a great deal on this nice little SUV.

Page 5: Kia, Lincoln

2004 Kia All-new Spectra: $1,500 cash back or 0.0% financing, expires 08/02/2004 An excellent entry level vehicle, it’s a shame that Kia feels the need to put a rebate on the only car in its segment with standard side curtain air bags. The all-new Spectra is worth a serious look without the cash back or 0% financing.2004 Lincoln LS V6: $5,000 cash back or 0.0% financing, expires 09/30/2004 2004 Lincoln LS V8 Sport: $7,275 cash back or 0.0% financing, expires 09/30/2004 2004 Lincoln LS V8 Ultimate: $6,000 cash back or 0.0% financing, expires 09/30/2004 Now this is some serious cash back, and on a solid vehicle as well. The LS – which is not that different than the Jaguar X-Type or Ford Thunderbird, seeing as all are built on the same platform – is nearing the end of its days, and Lincoln is motivated to move the metal. A shame, too – most people who own these sporty luxury sedans enjoy the drive. Although Autobytel.com checks regularly with auto manufacturers and their representatives to confirm the accuracy and completeness of the information, it makes no guaranty or warranty, either express or implied, including without limitation any warranty of accuracy, merchantability, or fitness for particular purpose, with respect to the information presented here. All information is subject to change without notice. Cash rebate only available in lieu of special financing, unless otherwise noted.

Page 6: Recalls

While a number of 2004 model year vehicles have been recalled during the past few months, quality scores are generally improved. It is harder to walk into a lemon today, though it can still happen and buyers are strongly encouraged to research recent recalls by automakers. Here is a list of the significant 2004 model year recalls issued by the National Highway Transportation Safety Administration:Volkswagen Touareg: Year: 2004 Number Potentially Involved: 24,269 Dates of Manufacture: April – December 2003 Defect: On certain sport utility vehicles, the rear seat belt latch attachment bolt may have been insufficiently riveted. In the event of a crash, the seat occupant may not be properly restrained, increasing the risk of personal injury. Remedy: Dealers will inspect the belt buckle latch and, if necessary, replace the latch. The manufacturer has reported that owner notification began on June 21, 2004. Owners may contact VW at 1-800-822-8987.

Page 7: Recalls

Honda Odyssey Years: 2002-2004 Honda Pilot Years: 2003-2004 Number Potentially Involved: 600,000 Dates of Manufacture: August 2000 – January 2004 Defect: On some minivans and sport utility vehicles, certain operating conditions can result in heat build-up between the countershaft and secondary shaft second gears in the automatic transmission, eventually leading to gear tooth chipping or gear breakage. Gear failure could result in transmission lockup, increasing the risk of a crash. Remedy: On vehicles with 15,000 miles or less, the dealer will update the transmission with a simple revision to the oil cooler return line to increase lubrication to the second gear. On vehicles with more than 15,000 miles, the dealer will inspect the transmission to identify gears that have already experienced discoloration due to overheating. If discoloration exists, the transmission will be replaced. If discoloration is not present, the dealer will install the change to the oil cooler return line. The manufacturer has reported that owner notification began on May 12, 2004. Owners may contact Honda at 1-800-999-1009.

Page 8: Recalls

Chevrolet Malibu Year: 2004 Number Potentially Involved: 84,474 Dates of Manufacture: May 2003 – May 2004 Defect: On certain passenger vehicles, analysis of a side impact crash test conducted by NHTSA’s New Car Assessment Program (NCAP) indicated that the outboard anchorage of the driver’s seat belt could disconnect because of contact between the seat trim and the anchorage connector when the seat was adjusted to its lowest position. If this were to occur in a crash, the driver could receive greater injuries. Remedy: Dealers will install the retainer on both the driver’s and passenger’s belt anchorages. The manufacturer has reported that owner notification is expected to begin during June 2004. Owners may contact Chevrolet at 1-800-630-2438.Nissan Quest Year: 2004 Number Potentially Involved: 26,000 Dates of Manufacture: March – December 2003 Defect: On certain minivans equipped with power sliding doors, at an ambient temperature below approximately 40 degrees Fahrenheit, the actuator for the power sliding doors may bind due to an out-of-specification condition. In order to open, close or reverse a power sliding door, the shift selector lever must be in “Park.” If the actuator is experiencing binding and the driver shifts the vehicle out of “Park” while a power sliding door is still closing, the door latches may not engage. This can result in the door coming open unexpectedly upon rapid acceleration and an occupant could fall out of the door and be injured. Remedy: Dealers will replace the actuator for the power sliding doors. The manufacturer has reported that owner notification is expected to begin during May 2004. Owners may contact Nissan at 1-800-647-7261.

FAQs

Why to automakers continue to offer incentives, even with interest rates going up? Because of excess vehicle inventory – the automakers have a lot of cars and trucks to sell.Where is the best deal to be had? You can get a great deal on a vehicle coming to the end of its production life, provided that there’s an abundance of these vehicles on the lot – inventory, once again.

What’s the key to a good purchase? Research and timing. Especially on price, and keep in mind that your time is valuable – there’s no need to tramp all over town looking for the best deal when you’ve got the Internet right at your fingertips.

Writer’s Notes

Be aware of large rebates on domestic cars – the coming batch of cars from domestics will likely be of better quality. If inventory levels stay high, these vehicles may well also get a more modest rebate. However, with the amount of cash being offered and financing deals, buying now – as long as you’re happy with the vehicle – is a great way to get a car at a discount. If you’re shopping for a truck or SUV, now may well be a good time – mos trucks and SUVs are not scheduled for major changes in the 2005 model year, and automakers have an especially high inventory count of these vehicles.