Dealers Having Trouble Getting Rid of 2008 Models

May 13th, 2009

Cars Piling UpWith car sales in the dumps, many dealers say last year’s models have piled up on the lots and they’re having a hard time selling them.

For some dealers, more than 50% of their inventory is left-over 2008 models that never sold.  Dealers ordered too many cars from the factory before the economy tanked late last year.  Now they’re stuck with them and losing money each day they sit on the lot.

Incentives on these leftover models are already high and seem to be going higher.  For example, the 2008 Chevrolet Suburban currently has a $7,000 rebate.  The 2009 model has a rebate of only $1,000.

In some cases, the rebates on a brand new 2008 model are so high, it actually costs less to buy new vs. used.  GM and Chrysler in particular have the most leftover inventory.

If you’re looking to buy and want to save a bundle, you should consider getting a leftover model.  As long as you keep the car for 5 years or longer, you stand to do well.

To see the latest rebates for 2008 leftover models in your area, get a price quote here.

Larger Down Payments Needed to Purchase Chrysler Vehicles

May 13th, 2009

piggybankAs if getting a loan for a new car wasn’t already hard enough, buyers of Chrysler will, in many cases, be expected to put up much larger down payments.

Lenders are worried that values of Chrysler vehicles will drop drastically, leaving them with a liabilty if they need to reposses the car.  Their worries are justified, especially considering Automotive Lease Guide just dropped residual values by 6% on 2009 Chryslers.

If you’re looking to buy a Chysler, don’t be surprised if you need to put up a down payment of up to $8,000.

Of course, if this isn’t a problem, you’re in a better position to negotiate a good deal. Fewer buyers will be able to afford large down payments which means dealers will be more desperate.

California Town Giving $500 Gift Cards to Car Buyers

May 13th, 2009

500If you’re looking to buy a car and happen to live near the town of Tracy,  California, you’re in for a nice surprise.   The city has agreed to give the first 800 new car buyers a gift card worth $500 towards the purchase of a car.

The town is suffering because a lot of its tax revenue comes from car sales.  They figure this will spur sales and increase  tax collections.

Some large cities near Tracy include San Francisco, Sacramento, and San Jose.   If you’re in the market for a new car and you live within 100 miles of Tracy, we recommend you contact dealers there as part of your buying strategy.

Just follow our Car Buying Guide and be sure to include Tracy dealers.

Chrysler Residual Values Drop 6% Due to Bankruptcy

May 13th, 2009

2008-chrysler-300Shortly after filing for bankruptcy, the residual values of 2009 Chrysler vehicles dropped 6% according to Automotive Lease Guide, the leading publisher of residual values.

This means the typical 2009 Chrysler sold today will only be worth 31% of its original sticker price after only 3 years.

This is a big reason why consumers tend to stay away from purchasing a new car from a bankrupt manufacturer.

The 6% residual drop means a $30,000 Chrysler will be worth $1,800 less due to the bankruptcy. Of course, to counteract this, Chrysler is offering more incentives. These incentives, coupled with government-backed warranties, make it a pretty good time to negotiate a deal.

To see the latest prices and rebates on Chrysler vehicles, get a price quote here.

Chrysler Offers Up to $6,000 in Incentives

May 6th, 2009

chryslerAfter declaring bankruptcy and seeing sales dive 50% last month, Chrysler is now offering $4,000 cash rebates on 2009 vehicles.

On top of that, they’re offering $1,000 cash if you’re a current Chrysler owner and up to $1,000 for financing through a participating credit union.

Chrysler is worried consumers won’t buy from a bankrupt company. Many car buyers think the warranties won’t be honored, but the US government has reassured they will honor all Chrysler warranties.

If you’ve been thinking about buying a Chrysler, this is a good time. Dealers are really worried right now and are ready to negotiate. To see the prices dealers are offering in your area, get a price quote here.

Cash for Guzzlers Law Could Give Car Buyers $4,500

May 6th, 2009

moneyDemocratic lawmakers have proposed a new cash-for-guzzlers bill that will provide vouchers of up to $4,500 for new car buyers who trade in cars that are less fuel efficient.

Here are the details: Car buyers would get $3,500 if they trade in a car that gets less than 18 mpg for a new car that gets at least 22 mpg.

To qualify for a $4,500 voucher, you need to buy a new car that gets at least 10 mpg more than your old car. It doesn’t look like there are any limitations on how old the car has to be.

This bill seems to be separate than the cash for clunkers proposal. Neither law has passed, but it looks almost certain one will.

This might be a good opportunity to take advantage of the Car Buying Hacks

Used Car Prices Going Up

May 6th, 2009

usedcarsUsed cars from model years 2005 thru 2008 have gone up in price drastically in the last 45 days. 

Surprisingly, Chrysler vehicles are leading the way.  Prices  of Jeep vehicles at auction have gone up a whopping 10% since February.

Ford and Toyota have gone up around 5%.  There’s a couple of reasons for the price increases.  First, demand for used cars has gone up since consumers aren’t purchasing many new cars.

Also, Chrylser reduced its sales to rental car companies thus reducing the number of late model year vehicles going on sale.

If you’re looking to buy a used car soon, you should consider getting one that is at least 4 years old.  This will maximize your savings since most of the depreciation has already occurred, plus there’s less demand for older cars.

2010 Mercedes Benz E class Price Falls Nearly $5,000

May 6th, 2009

2010eclassCar buyers who’ve patiently waited for the new 2010 Mercedes E class got a nice surprise.  Mercedes announced the price will be $4,600 BELOW the current year’s model.

Mercedes usually doesn’t provide rebates but they realize something needed to be done to sell the cars.  In lieu of rebates they tend to price cars close to actual transaction prices.

The 2010 Mercedes E class goes on sale next month with a base price of $49,475.

GM and Chrysler Stop Production

May 6th, 2009

Chrysler has shut down all production until it emerges from bankruptcy. This is expected to take at least 1 to 2 months. Meanwhile, GM has stopped production at most North American plants for 9 months starting May 4.

Chrysler was forced to stop production while GM is simply constipated. There are too many cars backing up at the ports and not enough sales.

So what does this mean for car buyers? GM is trying to reduce their supply to meet demand. Typically, car manufacturers either reduce supply or offer more incentives to accomplish this. Incentives have failed so GM is trying production cuts.

We probably won’t see great incentives from GM over the next couple of months, but after they start production again, if sales haven’t improved, expect to see more rebates.

As for Chrysler, they’re simply in a mess right now. Nobody wants to buy a car from a bankrupt manufacturer. At this point, a production stop by Chrysler isn’t going to make a huge impact on prices. In fact, Chrysler just announced rebates of up to $6,000 on their 2009 models.

Toyota and Nissan Post Terrible Sales for April

May 1st, 2009

Car companies today reported their sales figures for April.  Sales of Ford, Honda and GM were inline with forecasts, but Toyota and Nissan did a lot worse than expected.

Toyota sales were down nearly 42% compared to the year ago period while Nissan sales were down 37.8%.   These are simply awful figures, especially for Toyota since they had recentely surpassed GM to be the number one automaker in the world.  This, of course, is good news for Toyota and Nissan buyers.  We can expect these automakers to continue or expand their rebates and incentives in the coming months to make up for the sales declines.

Chrysler, which filed for bankruptcy this week, saw sales fall nearly 50%.  This dismill  figure was probably due to consumers not wanting to buy from a manufacturer on the brink of bankruptcy.

Analysts are predicting an uptick in sales in the 2nd half of the year.  We’re not so sure about that.  The economy is still losing upwards of 600,000 jobs per month.  We predict sales will be ho-hum through the rest of the year, with some spikes due to ridicolous rebates and incentives.   If you’re looking to buy a car, now IS a good time, but there probably isn’t too much of a rush at this point.

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