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How can Dodge dealers offer trucks for 50 percent off of sticker price, as several have done in the past month? Money from the mother ship. Right now, Chrysler is offering up to $5k – $6k rebates to customers buying a Ram 1500. At the same time, ChryCo's kicking-in up to an additional $9.5k in "dealer incentives." The extra cash is a desperate move to clear th decks before the new Ram arrives; helping dealers to do what's got to be done to sell their moribund Rams without going out of business (ostensibly). So when you see a $35K Ram for $17.5K, Chrysler's subsidizing the bulk of the difference to the dealer. Great for generating dealership traffic, great for bargain hunters. Not so great for Chrysler's finances or future.
21 Comments on “Dodge Ram Bargain Basement Prices Explained...”
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Better and better deals for fewer and fewer customers.
Problem is getting the word out. If you have no customers visiting your dealership, how are you communicating the 1/2 price to the masses? I have yet to see any advertising for these deals, at least in my area…
I have an old 90’s era Ram 1500 with about 50k miles on it. I bought it in 2000 or so for towing duty and hay hauling. The livestock is gone now so it sits out by the barn and mostly gathers dust. Handy as hell for dump runs and whatnot. IIRC I only paid about $12k for it, and it was almost new (less than 2k miles on it.)
So here’s my beef: These things are in no way worth $35k to begin with. It’s a damn pickup truck! The most basic form of machine on the road. If you were to compare this to a pickup from the 30s, and compare a car of today from the car of the 30s, the pickups are a lot more alike than different! The cars? Not anything alike. In fact the car or the 30s is closer to the pickup. Ladder frame, leaf springs, etc.
If you paid anywhere over $20k for a pickup truck, EVER… you got ripped off. These “new” prices just prove that.
–chuck
I keep reading about all these discounts. But they are meaningless because these trucks are way overpriced to begin with. These discounts, IMHO, only adjust the price from “Insanely greedy” to “Let’s start negotiating”. $17.5k for a Dodge Ram 1500? That is still too much. Knock off another $5k and we might be in the ball park.
So the plan is to starve Toyota and Nissan out by putting people in Ram trucks instead? Kinda like breaking the other guys hand with your face.
A new campaign is about to launch focused on substantial discounts off of MSRP…a page from the dept store marketing model….50% off is going to be a novel promo.
briandfromo.p. :
July 29th, 2008 at 10:18 am
Problem is getting the word out. If you have no customers visiting your dealership, how are you communicating the 1/2 price to the masses? I have yet to see any advertising for these deals, at least in my area…
That is my concern for Chrysler in general. I haven’t seen a whole of advertising for anything. They do have some relatively fuel efficient vehicles right now, and I don’t see any type of push to move those either.
The concern I have for Chrysler is that a 50% off sale sets up consumer expectations going forward.
Best case for Chrysler is that 6-9 months from now, all the ’08’s are sold, the housing market is back, and there is real, actual demand for ’09’s.
But no one will want to buy an ’09 for a measly $5K off sticker, when they know people were getting $15K off sticker 6 months before.
How do you fix that?
The key phrase here is “up to”.
Now give me $6k + $9.5k off a V-6, 2WD, stickshift model (Base price, $22.5k), and I’ll rush right out and buy one for $7000!
The new merchandising reality is the sale price is the regular price. Savvy consumers buy only at sale prices.
On the flip side, I bought a 1995 Dodge Ram Laramie SLT regular cab with the 318 V8, 1 owner, 140k miles, for $1400.
Even with the auction sales fee it was less than $1500. It comes with power everything, new tires, and even a hands free cell phone system.
I won’t be keeping it though since I don’t have much of a use for a pickup. But right now an older full-sized Dodge pickup is probably an even better deal.
Some have mentioned that the original MSRP for trucks are extremely high for relatively simple vehicles, and I would certainly agree. However, I would (respectfully) disagree with yankinwaoz, chuck, and others that around $20,000 (or a bit less) for a truck with an MSRP of $35k is too much. These trucks have a lot of metal, large engines, (supposedly) robust drivelines, etc that must cost quite a bit. Let’s assume that the manufacturers were making $10k/truck at $35k. With the prices today, they are losing huge amounts of money.
With that said, the market is deflated, supply & demand, etc, so bring on the discounts!
SherbornSean:
Exactly! Any new SUVs, trucks, and even crossovers that attempt to charge reasonable (profitable) prices will be doomed.
This is smart by Chrysler – sell the over produced outgoing generation Ram at the biggest discount ever offered (50% off) so that those dwindling buyers of the new Ram are now out of the market b/c of the 1/2 price Ram they bought now. When will we see 50% off on the new Ram b/c there’s no buyers left?
The incentives game is a losing game – all you do is condition your customers to look for the next deal. They hold off their purchase at normal price until the MFGR becomes desperate again and gives them away.
Hmmm…While pickups aren’t my thing, I wonder how long it is before they offer such a discount on a Caliber SRT-4. I would buy one if it cost $11k.
Chrysler has overstayed its welcome in the auto world. Good night, good bye, only people that are stuck in the past will miss you.
50% off, and if it breaks in half, you get to keep both halves!
So once all the people who have 2008 Dodge Rams get their great truck deals, will there even be anyone left who wants a 2009?
“new Ram arrives”
And how will it be better or sell better then the current model? It’s just more truck and pretty much the same truck. Trucks aren’t in right now; sorry.
If they can offer 50% off and still make a profit it just goes to show how they have been screwing Joe Public for years with excessive over charging
Another idiotic short-sighted move! The only motivation is to get rid of these ’08s at all cost…
Never mind that it’s devaluing the Dodge RAM as a brand.
Forget that it’s knocking another 20% or more off of the already decimated resale value…doubt very many existing RAM owners will be repeat buyers after that kick in the teeth!
It will be hilarious if all would-be RAM buyers snatch up a dirt-cheap ’08 model and, since truck buyers are definitely a more finite bunch these days, there’s no one left to buy the new ’09 model! I get goosebumps just thinking about that prospect (and yes, I really need to get a life).
I just happened to be looking at the Automotive News customer & dealer incentives for another reason(http://www.autonews.com/assets/PDF/CA51387725.PDF), just published today.
The $9,500 dealer cash is on 2007 leftover Rams, not 2008 models. According to the linked PDF (which I believe works for nonsubscribers also), it’s up to $3,000 for 2008 models (plus up to $6,000 in customer rebates), for a total of $9,000 off.
A dealer in Albequerque, NM who spoke with Automotive News for their July 7 piece on the half price Rams said this:
Zangara says he’s not losing money. That’s because there’s now $9,000 in customer and dealer cash on the Ram. Add $9,000 to the $15,000 he’s selling them for and you get $24,000. Where does he make up that $3,000 difference on the $27,000 invoice?
“In service and parts and body shop,” he says.
I’ve been looking pretty hard at these deals and all I can find are 2WD 1500 Quad Cabs with the 50% discounts. Be careful believing the ads. They can be very misleading. Go to the dealer to get the truth. Also, you must finance through Dodge which means an interest rate of over 7% and I would bet, a pre-payment penalty. Therefore, they earn a portion of their discount back to the tune of 2-3% per year in finance charges (or prepayment penalty). The deal ain’t quite as sweet as it sounds, and is worthless to me since I need 4WD.