The sluggish economy has impacted auto dealers enough to nudge - actually, push - them toward very special deals.
A used car dealer in Bakersfield, California, is mailing an offer of a used car for just $26 down. Why just $26? Who knows.
In Columbus, Ohio, cash rebates up to $6,500, plus no-interest financing rates, were offered for car sales depending on the model. Additionally there, General Motors Corp. one month offered a rebate up to $3,000 and financing deals starting at 1.9 percent.
Multi-thousand-dollar rebates were unheard of in the middle of this decade, when the economy was running on all cylinders.
Other dealers are promoting cheap wheels, zero down, and more.
Decent, relatively new used cars can be purchased for a few thousand dollars. Dealers want to move inventory, and great prices are out there for the taking if you look.
Driving Traffic into Showrooms
Dealers and auto centers are looking for cheap ways to drive traffic into their showrooms or onto their lots. Incentives aren’t the only option.
For example, to increase market share in a shrinking industry, some car stores are getting smarter in marketing, targeting previous car buyers, or touting service and parts.
Customer satisfaction has surfaced as a priority. Referrals are very effective for sales, and some dealers are thinking long-term.
The Internet also is tapped more in an economic downturn. Car dealers are developing interest in social networking sites.
Dealers also know that unhappy customers can tap the Internet to express their views to thousands of recipients. Protecting the online reputation is vital to a dealer’s brand and business.
Car sellers also are quick to drop models not fit for the times. Obviously sports utility vehicles and large gas-guzzlers are not on the forefront of marketing or promotional campaigns, considering gas prices.
Buyers more and more are magnetized by small vehicles with the greatest fuel efficiency. Premium and luxury cars are out. The Fusion and Focus are in.
As are used cars. Automotive industry experts are saying that typically in a down economy, buyers lean toward used vehicles versus brand new models. Additionally, car owners tend to spend more to repair what they have instead of buying a different car.
Pricing, Leasing, and More
So new-car sellers have to work that much harder. Aside from incentives like multi-thousand-dollar rebates, some are chipping away at pricing, or presenting new financing options.
The National Automobile Dealers Association recently reported that dealer profits are the lowest in a decade.
Some deales are shifting focus to leasing. With gas prices so high, motorists are driving less to save money, making a leased car with a limitation on miles driven that much more attractive.
For used cars, whereas historically prices have risen during warmer summer weather, that is no longer the case according to the Automobile Dealers Association. Only prices for passenger cars has remained steady, the Association reported.
Basically, demand has dropped. As stated before, people are hanging onto their cars and choosing more repairs over buying another car.
Most industry experts predict a slow economy and softened prices well into 2009.
But the last downturn was not long ago and was not prolonged. There were steep price reductions just back in 2002.
