2008-05-12

Poor Economy May Make It A Good Time To Buy A New Car

Forbes and Kiplinger’s are both featuring articles this month on how to save money on the purchase of new cars—Forbes in “America’s Best New Car Deals” and Kiplinger’s in the Mark Solheim column, “Save Big on New Cars,” in its June 2008 issue (hard copy). They both note that gas prices are on the rise, new car sales are down, and car manufacturers are under pressure to move cars. So dealers are offering incentives and may be more willing to negotiate.

Here is a list of cash rebates for the cars on the “Best Incentives” list in the Forbes article:

NEW CAR CASH REBATES

(Source: Forbes)

Base MSRP

Cash Rebate

Nissan Altima (hybrid)

$25,070

$1,262

Mitsubishi Galant

$19,999

$2,900

Hyundai Elantra

$14,625

$1,727

Hyundai Sonata

$18,870

$2,621

Subaru Outback Wagon

$21,995

$1,249

Chevrolet HHR

$16,820

$1,528

Dodge Journey (2009)

$19,985

$1,087

Jeep Patriot

$15,475

$2,439

Ford Edge

$26,735

$2,199

Ford Escape

$20,140

$2,025


These numbers are from the online “sidebars” linked from the article—though the main text of the article notes the rebate for the Altima averaged $1,249. It also notes a federal tax credit for the Altima of $2,350, for being a new hybrid to the market.

Chrysler is even offering a “$2,99 Gas Guarantee” program, packaging some of its cars with a card that will only charge you $2.99 per gallon of gas for the next three years, no matter what retail is.

Kiplinger’s said incentives are on the rise generally, noting GM is spending $3,300 per car, compared to $2,800 per car a year ago.

Both Forbes and Kiplinger’s said luxury cars have more room for negotiation than in the past. Kiplinger’s pointed specifically to there being room to negotiate on the Acura TL, the BMW 7 series, and the Infiniti EX35—with manufacturers supplying dealers with money on those models to use in incentives or otherwise, however they like.

Now none of this helps determine whether it’s time for you to buy a car, whether you can afford a new car, or whether you ought to buy a new car versus a used car. Here a couple of links to articles more along those lines: Is It Better/Cheaper to Lease a Car? (at Free Money Finance); Auto Leases (at The Simple Dollar); How Big Should My Car Down Payment Be (at The Simple Dollar); and Depreciation on New Cars Can be Very High (at Free Money Finance) (though noting his preference to buy new).

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