Trouble in Detroit: Finally, all the rebate tricks and discounting has caught up to Ford and General Motors, and it seems as though they’re doing what they need to do to dig themselves out of their self-made canyons. There’s a long way to go, frankly, and the road for these two is fraught with trouble. But it seems as though they are at least starting out right. GM, especially, seems to be on the right track, with large suvs so improved that people are actually buying them -- despite stubborn gas prices. Ford, meanwhile, seems to have caught the fancy of sedan buyers with the new Fusion, though its recent “Poor” safety score from the Insurance Institute of Highway Safety will throw a wet towel on sales. Either way, they’ve stabilized sticker prices and are now, for the most part, selling their vehicles at a price tag that is closer to the actual value of the car. This in itself adds to the confusion, as prices on some GM cars are higher, and some lower, as a result of this sticker price recalibration. Buyers would be wise to understand the difference between 2005/06 and 2007 prices on your local GM dealer lot. For example, the improved Tahoe/Yukon costs less, by the sticker, than the outgoing 2006 model.
Rebates: Ah. But the 2006 model gets a nice, fat rebate, so it’s still a good deal, albeit on an inferior vehicle. And no matter what domestic automakers say about rebates being over, the discounts won’t stop as long as there are too many cars to sell than buyers to buy. Reportedly, GM will introduce a “March Madness” campaign on older new models, in conjunction with the NCAA Basketball Tournament. Ford and Chrysler are expected to follow suit. Automakers will also be discounting 2006 vehicles, because they already have a 2007 model ready to sell. Hungry to boost sales and re-invigorate the car-buying public, automakers push the edge on how soon they can release new models. We’re not even out of the first quarter yet, and there are a number of 2007 models for sale, including GM's large and redesigned SUVs, the Dodge Caliber hatchback, the 2007 Jaguar XK and the 2007 Toyota Camry. This leads to an amazing number of multiple models on the market, a confusing array of cars. So here’s the basics: if there is a 2007 available now, it’s either an all-new model, like the Caliber, or a significantly revised vehicle, such as the Tahoe. This means that dealers will want to broom the last of the 2006 Neons, which the Caliber replaces, and Tahoes from the lot using big incentives, rebates, and other discounts.
2007 models: You can see that significant deals can be made when a dealer still has 2005 and 2006 models available, and is taking delivery of all-new 2007 vehicles. He wants those rusty old buckets off the line, and pronto. The new models also get special attention, usually with an introductory offer. Of course, the best deal about an upgraded model is usually about features and equipment, but one would do well to look carefully at the pricing of new models. The 2007 Camry’s base price, for example, is less than the 2005/06 model, but upper trims cost more. As the older model Camrys begin getting discounts to make way for new models, compare the trim you want in each model year – and the equipment that comes standard, as Toyota, while upping the price for higher-end models, also significantly increased the amount of standard equipment.
On top of the other research shoppers should do –- safety, fuel economy, horsepower, size and dependability -- smart buyers should also take a measure of what they want and compare new or redesigned models to outgoing models trim to trim. From pricing to rebates and equipment, this will reveal the best buy on a given car, one that most people can feel confident is a smart purchase that will give them years of dependable service.