In the same press release in which General Motors revealed its 45 percent October sales hit, The General announced that it had brought forward its [now] annual Red Tag Sale. “We’ll do our part to continue fighting against these significant economic headwinds by bringing consumers the highest quality, most fuel efficient and affordable cars, trucks and crossovers that we can,” GM Marketing Maven Mark LaNeve wrote. [How reassuring is that— given GM’s product development freeze.] “To that end, LaNeve announced that GM’s no-haggle Red Tag Event… will provide great deals on most new vehicles in GM’s portfolio by offering a special Red Tag vehicle price and customer cash back. In addition, GM’s recently announced ‘Financing That Fits’ program enables consumers to find financing at affordable rates from GMAC and thousands of other banks, credit unions and financing institutions.” That’s it? No haggle plus the usual blizzard of incentives, special offers, discounts, rebates, trade-in allowance, finance offers and $2k-off coupons? GM must not have read Steven Lang’s “MSRP RIP.” Meanwhile, The Detroit News reports that Toyota’s extended its “Saved by Zero” zero percent finance offers on 11 vehicles ’til December first. Guess who’s gonna win this one? [make the jump for examples of GM Toe Taggers]
Red Tag Event Examples (tax, title and license fees are extra):
2008 GMC Yukon Denali AWD $56,315 MSRP
Red Tag Price $51,830
Cash Back Offers -$5,000
Red Tag Price after cash back $46,830 or less
($9,485 value compared to MSRP)
2008 Chevy Silverado 1500 4WD $29,480 MSRP
Red Tag Price $27,397
Cash Back Offers -$5,500
Red Tag Price after cash back $21,897 or less
($7,583 value compared to MSRP)
2008 Buick Lucerne $31,880 MSRP
Red Tag Price $30,446
Cash Back Offers -$3,750
Red Tag Price after cash back $26,696 or less
($5,184 value compared to MSRP)
2009 Saturn Vue XE $23,745 MSRP
Red Tag Price $22,675
Cash Back Offers -$1,000
Red Tag Price after cash back $21,675 or less
($2,070 value compared to MSRP)
I’m guessing that Toyota is going to win.
Toyota always wins.
On this, the most high holy day of American politics, I will also cast my vote for Toyota in this race. (Although as a future part-owner of GM by virtue of my taxpaying status, I guess I should feel conflicted by my vote.)
I wonder what the difference in price would be between similarily a equipped Pontiac Vibe and Toyota Matrix ?.
wait a minute…GM has a ZERO, it’s the guy in charge of marketing.
Wow, not a single car on that list I’d want to buy.
Maybe that says something…
@Usta Bee – According to truedelta, the base model of the Vibe is 1600 less then the base model of the Matrix (same options).
miked: And if you ask me, the Vibe looks 10x better than the Matrix.
Still, buying one has never crossed my mind.
Maybe I am just getting to old. But I can’t get my mind around these prices. Even the discount prices. How can the average American expect to pay that much for a car? $22-$50k for a car. That is $600 to $1500 a month in car payments alone, if you don’t have $25k laying around to pay cash with.
I dunno. Perhaps I’ve been out of the new car market too long. I just don’t see enough people with wages being high enough to afford that much for a car.
The last time I had car payments was 20 years ago, and I thought $350 a month was insane. Now that seems like pocket change compared to these prices.
Toyota approach: 0% financing
-lowers long-term cost of ownership
-profit loss only to finance division
-little to no effect on resale costs
GM approach: huge discounts
-lowers initial cost of ownership
-profit loss on every vehicle
-tremendous negative effect on resale costs
Are those bozos in the RenCen ever going to get it??!
Well… it’s kind of hard to offer financing incentives if your finance arm is all but bankrupt.
That said, deep discounts off of price combined with a reasonable interest rate will often get you lower monthly payments than 0% interest on a car that is only slightly discounted. The buyer actually often comes out on top with rebates.
And what is this touting the virtues of 0% financing. I should pull up some of the conversations in July when people were skewering GM and Ford for offering 0% on some vehicles. But I suppose it is Toyota…
So that annoying Toyota ad is going to keep running for four more weeks?
Fuck. It’s gonna be a long time before I’ll be able to enjoy listening to The Fixx again…
The customer is always better off with a lower price than a lower interest rate. He is also better off paying cash or buying something else in almost all cases. The exception right now would be buying a used truck because in many cases you are better off borrowing a few thousand to get a new one rather than paying the price that a rational seller would want for his truck.
No thanks. I’ll spend a few hundred to make my 11 year old car last another year.
“Toyota approach: 0% financing
-profit loss only to finance division”
Er, wrong on that one. Toyota Motor subsidizes the difference between actual Toyota Motor Credit buy rate and zero percent. My guess on a Sequoia customer financing maximum term with B credit rating could cost Toyota Motor in the vicinity of $5,000 a contract.
Wow, lots to read…The deal I was offered on a Pontiac G6, 22,810 MSRP, Red Tagged to 19733, then another 3000 off cuz i am a lease customer to 16,733 seemed great but you guys are making me pause…thoughts folks?
mbeds,
Are you paying cash?
Do you have enough savings to cover reasonably likely repairs in case the warranty is voided due to bankruptcy? (I believe you would ultimately get warranty coverage, but bad timing during a bankruptcy could mean you have to front the cash and wait for reimbursement or forego the repair). Will you really keep the car a long time, or be trying to flip it in 3 or 4 years?
If Yes to the above, you are in good shape IMO.
I can’t pay cash but I would have $$ to pay for repairs. I would certainly keep it beyond the loan period. Might not be worth much by that time though. I wonder if I am better off with a slightly used Accord or something that keeps its value. A 2 year old Accord would be about the same price. Why can’t the American companies build a ****** car that competes with Honda and Toyota? I just don’t get it. I want to support GM but this is ridiculous.
I am a big fan of paying cash because it keeps people from spending too much on cars. Not having debt has a financial return which goes way beyond the interest cost. Of all the people who I know well enough to have a good idea of their finances, income does not correlate nearly as well with net worth as does debt avoidance.
When it comes to cars, you can make a spreadsheet using information from Edmunds and other sources to help you decide the actual cost of a car. Once you look at that equation, you will find that in almost all cases, finance cost and depreciation are what are really adding up on you.
You can get rid of finance cost buy paying cash. Depreciation has become really hard to predict, but it’s hard to argue against a 2 year old Accord. OTOH, given what you might pay for some GM cars right now, the actual depreciation off of sales price might actually compare.
That one is up to you.