If you’re planning on buying a Ford this week, you might want to hold off a bit. Reuters reports that Ford will introduce Employee Pricing and cash incentives next week in an effort to turn around flagging sales. The incentive program will be available on most 2008 and 2009 Ford vehicles, with the notable exception of the all-new F150. But Ford isn’t the only struggling automaker trying to boost year-end sales and clear inventories through profit-munching incentives. GM’s “Year End Red Tag Sale” is also trying to squeeze sales from the dried-up American market, although added sales do little to prevent either automakers’ arterial spray of red ink. Toyota and Mazda are both trying aggressively drive sales as well, offering zero-percent financing on many models at a time when a lack of auto financing is dragging sales downwards. Ford’s offer will begin next Wednesday and will run through January 5, according to Reuters’ unnamed sources. If sales stay down, it won’t be a very merry Christmas at all this year.
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Is there any anecdotal evidence of the type of sales drop the industry may be facing in November? I’ve got to guess it will be horrific regardless of incentives.
My mother in law just purchased a new 2009 Buick Lucerne CXL V-6, with Driver Confidence Package. Stickered at $33K, she got it for $28K out the door. Her salesman, who’s been in the business 20+ years, says he’s never seen it this bad.
The Buick dealership here in ATL was empty on a Saturday afternoon, except for some desperate-looking sales guys.
But then again, so was the Acura dealership down the street. I had my TL in for service, and saw maybe two buyers looking at cars all afternoon. They have inventory piling up like cordwood. They had to have 30 new MDX’s gathering dust, and a pile of the new TL’s as well.
BTW, the new TL is seriously ugly, especially from the rear. Very nice interior, but nobody will get to see that after gouging out their eyes.
At the pre-owned Acura store, I spoke to a former sales manager, who’s been put back on the floor because “They told me they couldn’t afford another manager when they have no sales”, that it’s “been crickets in here lately.” I saw NOBODY come into the pre-owned store all afternoon. NOBODY. The poor guy wanted me to take a used RL for a drive, and I’m sure that was so he could say he had a prospect in to look at a car. He’s a nice guy, but I could see he was completely beaten down by this market.
Based on this anecdotal evidence, it’s very bad right now. The buyers are simply not there. I can’t ever recall seeing the Acura dealership so completely dead in the water.
If you want/need to buy a car, now’s the time.
Hmmm, AWD RL’s are selling really cheap right now…
You want anecdotal I got anecdotal.
My wife has been looking to replace her car for a while now and we recently went out to test drive a few models. The Honda dealer seemed to be a little busy, with a few customers, but many more sales guys standing around looking for something to do.
After the test drive we were treated to the hardest sell I have ever seen. The Sales manager practically calling me a moron for not paying less than 10% off the sticker on a 08. He seemed a little peeved that I wouldn’t fall for the 4 square “worksheet” he pulled up for me. As I was walking out he also said that I shouldn’t buy from another maker cause “they’ll be bankrupt in a few months.” I told him we weren’t looking at GM, Ford, or Chrysler. He said that they wouldn’t be the only ones.
I drive past the Local BMW and Lexus Dealerships every day and their lots are filling up quick.
The Lexus SUVs seem to be everywhere on their lots, there have to be around 50 of them just lined up still with the plastic protective wrap on them.
The BMW/MINI dealer just took over the lots and building of a Chevy dealer next door. Their new lot has a ton of cars on it now. It seems like
every time I go past there are some more. The whole front of the dealership is used cars lately though. Including a H2 for the last few days.
It’s anecdotal, but I am starting to think the Honda might be a mistake. “Everyone” knows that Honda and Toyota make good cars that hold their value so if they have to buy they may gravitate that way. I think I will be looking at Acura, Lexus and Infinity and see if enough people are steering away from the “Luxury” makes to help me find a good deal there.
I just received in the mail last friday at my office the following offer from Ford (I used to own an F-150):
“$10,000.00 off any new F-150 F Series (not to mention the other discounts one can take, such as additional monies be belonging to certain organizations etc.) There I could take over $11,000.00 off sticker price. Then, the offer says: “Per Section 179 of the 2008 Federal Economic Stimulus Package, your business can deduct the full purchase price of the truck during the tax year the truck was purchased. You can take the full purchase price from your gross income! Also, tae an additional 50% bonus depreciation and ceiling ca limits have been doubled. Through December 31, 2008”
So, let’s see, if a purchased a truck stickered at $31,000.00, I could get it for aboout $20,000.00. Then take $30,000.00 off my gross income this year (100% dereciation plus a bonus 50% depreciation in same year as purchase). So, if I am at a 35% tax level, the value of the deduction is worth about $10,500.00, leaving me a net cost of the truck at $9,500.00? Do I have that correct? (plus any sales tax and license of course.)
Your basis in the new truck is the costs of acquiring the truck. From there, you have the option of either taking the bonus depreciation of 50%, and/or the Sec. 179 deduction.
Under bonus, you would expense $10,000 immediately, and the other $10,000 would be depreciated over 5 years for light vehicles.
I’m a little foggy on Sec 179, but if you qualify, you can expense the entire $20,000 in year one.
Either way, your total depreciation expense is limited to $20,000, whether all in year one, or spaced out over 5 years.
All these sweet deals on new cars, if only I had any money.
Then again I suppose that’s the point.
taxman100: Thanks for the reply. I read at Section 179.org and again the Ford flyer, it would seem the additional 50% depreciation may also apply, even if over five years. Apparently it was added this year to get business to make purchases of large equipment. Back to my example above, even if just the $20,000.00 were deducted this year(the net price of the truck excluding sales taxes) at a 35% tax rate, that would mean $7,000.00 off taxes, effective cutting the price of the truck to $13,000.00. So, what began as a $31,000.00 vehicle is down to $13,000.00? A 60% cost from sticker?
Too bad Ford is on the ropes, it would be tempting.
Driver Confidence package? So what does that give the driver? Assurance that GM will exist to service their warranty in five years? (j/k)
Don’t like the styling but the car is overall very nice.
joeaverage:
DCP includes “Theft deterrent system with content alarm, remote vehicle starter system, RainSense wipers, Ultrasonic rear park assist and StabiliTrak stability control system with brake assist”.
The Buick wasn’t my choice; she insisted on a GM car so she could use her GM credit card points. I tried to explain that the depreciation hit more than wipes that out, but she wants to “Buy American”.
I give her props for her convictions. She at least puts her money where her mouth is; but judging by the 2001 LeSabre she traded in, quality will still be an issue.
With a 6-speed auto, the Lucerne would be a decent car; not my cup of tea, but a decent car. With the ancient 4-speed in it, it’s merely adequate. For the car’s target market, though, it’s probably OK. It’s light-years ahead of her old LeSabre (which isn’t saying much), and seems well put together. It rides very quietly, but the suspension is very soft. Will probably be an excellent highway cruiser.
It took me about an hour to program all the various choices for the security system, warnings, seats, etc. She would NEVER have figured them all out. I will give GM credit for allowing the owner to program how they want the car set up; it’s very customizable.
As to whether GM will be there to honor the warranty; that’s why I told her to pass on GM’s extended warranty.
I certainly believe that dealerships are now less busy than normal but even during very good times normal dealership sell less than a hunderd cars a week. That is on average two an hour. Add randomness and the fact that some hours are busier than others and you have whole hours in which no cars are sold. Thus one can’t use the anecdote i was at the dealership and it was dead quiet as proof that the carmarket has crashed
If a dealer is not busy on a Saturday afternoon (barring awful weather) it won’t be at any other time.
True, but even than the randomness of clients makes it that you can’t use it as proof