Struggling auto industry offering deep discounts
By Chris Woodyard
USA Today
As the worst sales year in more than a decade fades into the rearview mirror, auto dealers are sweetening deals in hopes of unloading acres of cars.
Cash back, 0 percent interest rates and even wackier deals, such as buy-one-get-one-free, are being tried to squeeze out a few last sales.
"For bargain hunters, it's probably the best time in the last 10 years at least," says Philip Reed, senior consumer advice editor for www.Edmunds.com.
General Motors added a last-minute inducement last week by offering 0 percent to 4.9 percent financing through today on some remaining 2008 models. Financing arm GMAC said the loans were made possible by a $6 billion infusion from the federal government's bank rescue fund.
In another move toward normalcy, GMAC said it will extend its low-rate loans to those with less-than-perfect credit.
The widespread deals result from pressure on automakers to move inventory.
New vehicles are averaging an "exceptionally high" three months at dealerships before selling, the longest for a December since Power Information Network started keeping track in 2002, analyst Tom Libby says. "It's a buyer's market," he adds.
The backlog is so deep that major automakers, including import brands, are cutting production this month and next to try to let demand catch up to supply.
Ford Motor analyst George Pipas says too many would-be buyers still are being kept out of the market by tight credit. Many can't get a loan even as Ford runs an employee-pricing promotion, through today, that Pipas says offers the deepest discounts of the year.
Besides low interest, GM is offering incentives up to $10,000 on some remaining 2008 models.