Car deals: Just $58 a month
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[12/28/2005] Chrysler employee offers set the stage as automakers scramble for a strong finish to '05.
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It's a good time to buy a new car if you didn't take advantage of the industry's employee-discounts-for all deals last summer.
Automakers are hiking rebates again and dealers are touting special year-end sales with an advertising blitz to ratchet up December sales and boost yearly results during the final days of 2005.
In Metro Detroit, select consumers can lease a sport utility vehicle for as low as $58 a month and about $1,000 down.
After blistering summer sales fueled by employee-style discounts for all comers, General Motors Corp. and other automakers tried to woo shoppers in the fall by lowering prices on many 2006 models. But demand fell in October and November, setting the stage for the year-end sales battle.
While the deals may be great, they eat into profits as GM and Ford are struggling to get out of the red.
And they are unlikely to go away. Analysts expect industry sales this month to fall from robust December 2004 levels, and the outlook for 2006 sales is cloudy.
"The consumer spending environment since midsummer has softened," Goldman Sachs analyst Robert Barry said in a recent report to investors. "Our initial estimate is for 2006 sales of 16.8 million units, but we expect aggressive pricing will be needed to achieve that given a weakening consumer."
Nationwide, the average discount per model peaked this year at $3,269 in June and fell to a low of $2,204 in October. But the typical discount climbed to $2,363 last month and is expected to increase to $2,410 this month, according to Edmunds.com and Autodata.
"The war is on," said dealer Alan Helfman of River Oaks Chrysler Jeep in Houston, where rebates have reached $4,000 on certain vehicles this month.
At Southfield Chrysler-Jeep, all 32 sales people are working this week and the dealership is open three extra hours some days this month to handle extra traffic, said Dan Frost, Southfield Chrysler Jeep president.
Chrysler employees can lease a 2006 Liberty Sport 4X4 priced at $16,684 for $58.54 for 24 months, with $1,059 down. Employees who live in Michigan can pay a lump sum of $1,669 plus the sales tax. Eligible nonemployees can get a monthly payment as low as $246 with $2,000 down, or $280 with zero down.
GM and Ford have also sweetened deals, with rebates on minivans as high as $6,000 and slow-selling large and mid-size SUVs discounted by as much as $5,000 through Jan. 3.
Still, Merrill Lynch analyst John Murphy says December sales will slip 5 percent for a seasonally adjusted annual rate of 16.9 million units, compared to a December 2004 sales rate of 17.9 million.
Detroit automakers are particularly anxious to boost sales and help reduce stockpiles. Merrill Lynch estimates GM will end the month with 1.02 million unsold cars and trucks, down 50,000 units from November, but 3 percent below its average for the month.
Ford Motor Co. and its dealers are expected to have 742,000 cars and trucks on hand at the end of the month, or 10 percent above average.
Chrysler's sales are expected to drop about 5 percent this month. Last month, the automaker, faced with mounting inventory at storage lots, offered dealers up to $750 for every extra vehicle they ordered.
Edmunds.com, a car buyers' research Web site that collects monthly incentive data, says Big Three sales have increased slightly in December compared to November. The reason: Better deals.
Factoring in the two years of free gas it is offering new buyers, Chrysler is leading the charge with $4,006 in discounts per vehicle this month, compared to $3,325 last year. Ford's incentive spending is up a few dollars at $3,016, while the average GM rebate is down to $3,207.
Japanese automakers have raised discounts slightly this month to about $1,077 a model, Edmunds says.
Jo-Jo Logan, who operates the largest GM dealership in Mississippi, said he's spending more on advertising this month to help clear out models.
In Texas, Helfman said he's "going as hard as I can."
"I bought half-page newspaper ads every day of this week and full-page ads for the weekend," he said. "I've got the radio and TV cranking like crazy. And I'm cutting deals as slim as I can cut them."
Automakers are hiking rebates again and dealers are touting special year-end sales with an advertising blitz to ratchet up December sales and boost yearly results during the final days of 2005.
In Metro Detroit, select consumers can lease a sport utility vehicle for as low as $58 a month and about $1,000 down.
After blistering summer sales fueled by employee-style discounts for all comers, General Motors Corp. and other automakers tried to woo shoppers in the fall by lowering prices on many 2006 models. But demand fell in October and November, setting the stage for the year-end sales battle.
While the deals may be great, they eat into profits as GM and Ford are struggling to get out of the red.
And they are unlikely to go away. Analysts expect industry sales this month to fall from robust December 2004 levels, and the outlook for 2006 sales is cloudy.
"The consumer spending environment since midsummer has softened," Goldman Sachs analyst Robert Barry said in a recent report to investors. "Our initial estimate is for 2006 sales of 16.8 million units, but we expect aggressive pricing will be needed to achieve that given a weakening consumer."
Nationwide, the average discount per model peaked this year at $3,269 in June and fell to a low of $2,204 in October. But the typical discount climbed to $2,363 last month and is expected to increase to $2,410 this month, according to Edmunds.com and Autodata.
"The war is on," said dealer Alan Helfman of River Oaks Chrysler Jeep in Houston, where rebates have reached $4,000 on certain vehicles this month.
At Southfield Chrysler-Jeep, all 32 sales people are working this week and the dealership is open three extra hours some days this month to handle extra traffic, said Dan Frost, Southfield Chrysler Jeep president.
Chrysler employees can lease a 2006 Liberty Sport 4X4 priced at $16,684 for $58.54 for 24 months, with $1,059 down. Employees who live in Michigan can pay a lump sum of $1,669 plus the sales tax. Eligible nonemployees can get a monthly payment as low as $246 with $2,000 down, or $280 with zero down.
GM and Ford have also sweetened deals, with rebates on minivans as high as $6,000 and slow-selling large and mid-size SUVs discounted by as much as $5,000 through Jan. 3.
Still, Merrill Lynch analyst John Murphy says December sales will slip 5 percent for a seasonally adjusted annual rate of 16.9 million units, compared to a December 2004 sales rate of 17.9 million.
Detroit automakers are particularly anxious to boost sales and help reduce stockpiles. Merrill Lynch estimates GM will end the month with 1.02 million unsold cars and trucks, down 50,000 units from November, but 3 percent below its average for the month.
Ford Motor Co. and its dealers are expected to have 742,000 cars and trucks on hand at the end of the month, or 10 percent above average.
Chrysler's sales are expected to drop about 5 percent this month. Last month, the automaker, faced with mounting inventory at storage lots, offered dealers up to $750 for every extra vehicle they ordered.
Edmunds.com, a car buyers' research Web site that collects monthly incentive data, says Big Three sales have increased slightly in December compared to November. The reason: Better deals.
Factoring in the two years of free gas it is offering new buyers, Chrysler is leading the charge with $4,006 in discounts per vehicle this month, compared to $3,325 last year. Ford's incentive spending is up a few dollars at $3,016, while the average GM rebate is down to $3,207.
Japanese automakers have raised discounts slightly this month to about $1,077 a model, Edmunds says.
Jo-Jo Logan, who operates the largest GM dealership in Mississippi, said he's spending more on advertising this month to help clear out models.
In Texas, Helfman said he's "going as hard as I can."
"I bought half-page newspaper ads every day of this week and full-page ads for the weekend," he said. "I've got the radio and TV cranking like crazy. And I'm cutting deals as slim as I can cut them."
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