The New York Post did an investigative report to see whether car dealers get the dire situation they're facing. Which dealers would give them the best deals? Chevy and Ford dealers clearly aren't getting the memo, even as Toyota, VW, and Honda all see the benefit of moving cars off their lots.
The Post recently haggled at five city dealerships -- GM, Ford, Toyota, Honda and VW -- looking to land the best deal for a fully loaded, mid-size sedan.Zero percent financing isn't sufficient to make a good car deal, not when Toyota or Honda are willing to take thousands off the sticker price and offer 3.9% financing. Not only do they have better resale values, but they're going to hold up against depreciation far better than automakers who may not be in the same shape just a few months from now.
In each case, there was an offer to put $5,000 down, with the understanding that the buyer had excellent credit and wanted to finance the vehicle for five years.
At the domestic dealerships, there was plenty of "Buy American" rhetoric -- with some dealers sounding more like they were running for office than revving their engines for a sale.
"We need to keep jobs in America -- especially in this economy," said a saleswoman at a Brooklyn Chevrolet dealership.
"If you want to give GM a chance -- if you want to give America a chance -- the Chevy Malibu is the car to do it."
The saleswoman -- who spoke with increasing degrees of desperation as the negotiations went on -- said Detroit was getting a bad rap.
"Honda and Toyota are struggling financially just as much as GM. They are as much in danger as we are," she insisted.
"GM has made a lot of mistakes, no question, but we're here to stay."
Still, when it came right down to it, she and her counterparts were hardly ready to give away merchandise, making hunting for a new car no less murky or unpleasant than it has been.
GM is offering zero percent financing for up to five years and extended power-train warranties, the saleswoman said.
But after touting the Malibu's V6 engine and design "with a family in mind," she insisted she could not afford to take more than $889 off the $27,665 sticker price without "losing money" on the deal.
By comparison, at the Queens Honda dealership, there was less sales pitch -- and more price slashing.
The salesman offered to cut $4,075 off the price of a $27,075 Accord, and even with a 3.9 percent interest rate, it seemed a far better deal than the Malibu.
At a Manhattan Ford dealer, a salesman tried steering us from the Taurus to a 2009 Mercury Sable.
This chart doesn't totally tell the picture. What you need to know is the full cost of the vehicle after all costs and the down payments are figured in.
The Mercury Sable will cost $33,140 after figuring the down payment plus the 60 month term.
The Honda Accord comes in at $26,960 after figuring the down payment plus the 60 month term. The Passat was $29,000. The Chevy Malibu came in at $29,000. The Camry came in at $30,680. Clearly, the Sable is the biggest loser of the bunch, as why would anyone want to spend that kind of money when they could get an Accord for nearly $6,000 less. The Malibu actually makes a respectable showing here based on this metric. The problem is that the Passat, Toyota, and Honda are all typically found for thousands more. That the Malibu is competing directly in this fashion leads to unflattering comparisons.
If you're going to choose between a Toyota Camry or a Malibu, what do you think people are going to do? They're going to choose the vehicle that they think is the better bargain; the Accord or the Passat.
Dealers are in a real bad position since they're going to be stuck with inventory that isn't moving, so they've got to figure out a way to move their inventories. It seems that the foreign automaker dealerships have decided that aggressively trimming prices is the way to go. The zero percent financing isn't having the intended effect.
Labels: automobiles, business, economics
