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By Keith Naughton
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Forget about bargain hunting in the wreckage of the stock market. The best deals these days are on new-car lots. That might sound like some car-dealer come-on, but as the auto industry closes out its 2002 model year, rebates, cut-rate financing and lease deals have never been better. Car sales remained strong during the recession thanks to the zero percent financing offers that began last fall, and buyers are hooked: when Detroit tried to back away from cut-rate loans this spring, sales tanked. So the Big Three brought back zero percent and dialed up rebates to record levels. In the first half of August, auto incentives averaged $3,200 per car, up 26 percent from last year, according to CNW Marketing Research. "This is a much better fire sale than you usually have at the end of a model year," says CNW analyst Art Spinella. "It's not a question of getting a good deal; it's whether you can get a great deal."
The best way to move from good to great is to look beyond the nationally advertised discounts. Ask your dealer what else he can offer you to close the sale. Dealers sometimes have secret rebates--known as dealer incentives--on certain models. And auto companies offer special regional deals, like lower lease rates or additional cash back, in areas where a model is selling slowly. What's more, the carmakers' finance arms can sweeten deals with an extra $500 rebate, for example, or better financing terms.
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But these days the terms are pretty good on just about everything. Even a hot seller like the GMC Envoy SUV comes with a $2,500 rebate or zero percent financing. GM is offering the best deals, with an average of $3,400 on the hood of each of its models. Ford announced new deals on Friday that raise its rebates to $3,500 on some models. Chrysler is offering $2,700 per car and recently expanded its warranty to seven years or 70,000 miles. But it's not just Detroit that's dealing. BMW just started offering cut-rate financing on its popular 3-series sedans. Porsche has financing deals on all its models. The Saab 9-5 is offering a $339-a-month lease deal. Toyota's incentives average $2,175 per car, including regional lease deals on its popular Camry sedan and cut-rate financing on some Lexus models. Even Honda, known for being very stingy, has given its dealers $1,250 in rebate money to clear out the '02 Accord to make way for a redesigned version this fall.
When will the good deals stop rolling? Until the economy picks up, they won't go away entirely. Carmakers desperate to keep sales rising can't abandon incentives. But analysts expect the fire sale to die down considerably with the arrival of the 2003 models at the end of September. "The deals on the '03s are going to be less generous," warns Spinella. That means the car buyers' market of 2002 is hitting high gear right now.
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