CHICAGO (MarketWatch)—Car buyers, you have been warned: General Motors’s unconventional money-back guarantee and haggle-free pricing mark the dawn of a new era in the annual summer inventory clearance race.
“Car manufacturers don’t want to go back to that bad habit of giving cars away,” said Jesse Toprak, vice president of market intelligence at TrueCar.com, an automotive research site. “If the product is good enough, you shouldn’t have to discount it.”
That’s true for iPhones, Coach bags and Tiffany jewelry, but has rarely been the case for cars, the prices of which are deeply discounted when it’s time to clear out the old models to make room for the new. That’s typically in late summer and early winter.
But GM’s (US:GM) sales-incentive program as well as Chrysler’s “no payments for 90 days” promotion—both unveiled in commercials during Major League Baseball’s annual All-Star Game—signal that the sales success car dealers have found in recent months will keep them from slashing prices to the bone. Instead, they will be more innovative in how they lure you onto their showroom floors.
New perks
“This whole incentive game has really changed recently,” said Jessica Caldwell, senior analyst at Edmunds.com.
“The amount of cash offers is not as high as it was a few years ago,” she said. “There’s a lot more financing and leasing deals because credit is so cheap now.”
So don’t expect big price slashing, employee-pricing deals or buy-a-car-get-free-insurance this year. Even cash rebates, which are still available, will be limited.
GM’s “love it or return it” program gives consumers up to 60 days to return any 2012 or 2013 Chevy car they bought at a participating dealer. There must not be more than 4,000 miles on the odometer or more than $300 in damage, which is basically a scrape or dent.
The “total confidence pricing” deal is the no-haggle pricing on 2012 vehicles that significantly cuts the cost from manufacturer’s suggested retail price to the supplier pricing, which is the same price you would get if you worked for one of the car maker’s suppliers. Both deals expire Sept. 4.
Chrysler’s gimmick is a “no payments for 90 days” campaign on Chrysler, Jeep, Dodge, Ram Truck and Fiat models through the end of August. The vehicles must be financed through Ally Financial.
Car makers are in a rare sweet spot now after years of having sales clobbered by the recession, fluctuating gas prices and a mostly lackluster lineup of new car models.
Consumers are buying
In June, the industry’s U.S. sales blew the doors off expectations by jumping 22% to post the best sales month since 2007. Even truck and SUV sales ran well, perhaps because of falling gas prices.
