Don’t believe the hype that all you have to do is walk into a U.S. car dealership and they’ll practically pay you to walk out with the car.
After courting Honda dealerships for an Accord for weeks, getting every song in the car-salesman book, from a sermon mocking U.S. auto makers to a demand of “What’s in it for me?,” my husband and I bit the bullet and went to a General Motors dealership.
It was clear that Honda was the pretty girl at school and she wasn’t going to give us the time of day. If we wanted a date to this recession dance, we were going to have to go to a U.S. dealership and GM was going to be our best chance to score.
For sure, it was a risky move: If GM went out of business, we could be screwed. But the Chevy Malibu was rated top of its class and the possibility of a dirt-cheap deal made us salivate like hungry wolves at the scent of fresh meat.
We chose our strike date carefully: Easter Sunday.
We were the only ones at the dealership in the New York City borough of Queens, a stark contrast to the bustling Honda dealerships we'd visited. We let the salesman know that we had been around the block a few times and we were ready to make a deal—today.
He went to consult with his manager and came back with his best “Easter Sunday Special,” which was essentially the invoice price, and $2,000 more than the best price we got on a comparable Accord.
We asked about the Internet prices we’d found, which were also listed in that day’s newspaper and confirmed over the phone, that were $5,000 to $7,000 less than his so-called Easter special amid a slew of rebates.
The salesman whipped out a Sharpie and scribbled his price and the Internet price on a piece of paper, then listed all the charges—not rebates—that made up the difference, including two that appeared to be different ways of saying “destination charge.”
We inquired about leasing options, only to be met with a tirade about the ridiculousness of leasing.
“Everyone knows leasing is stupid!” he roared. “No one wants to lease. You want to own!”
We explained that we didn’t think it was so silly—with GM’s future so uncertain, we would be committing to GM for three years, not forever.
“GM isn’t going anywhere!” he snapped, then refused to even consider leasing a GM car to us. The only thing he was willing to sell us was a loaded model on the showroom floor, but clarified we’d have to pay a little more for it.
It seems we weren’t the only ones: In a forum on Edmunds.com about buying a Chevy Malibu, one Michigan car buyer, “greatlakesjr,” said he, too, was willing to help out a U.S. auto maker, albeit with a “substantial discount” for his risk, but that the salesmen “don’t appear too flexible at this time.”
- What was your experience? Email it to firstname.lastname@example.org
The reason you may not find killer deals on U.S. autos right now is that the sales slump has been going on so long that dealers have pared down their inventories accordingly, said Maryann Keller, an independent auto analyst. Plus, this is the spring selling season, when there are fewer discounts offered, she said.
As for why the salesman wouldn’t even consider leasing us a car, Keller said the problem is that no one is going to write a lease on a GM car.
“GMAC can’t write a lease today because GMAC doesn’t have the money and is not going to take the risk. They’re not owned by GM anymore,” she explained. “And no bank is going to write a lease on a GM car.”
But that’s not exclusive to GM, Keller said. “Banks have gotten out of the leasing business,” she explained. “They don’t even want to offer a lease on a Toyota.”
“The amount of money financial institutions have lost is staggering,” Keller said. “So, while [leasing] may make sense for the consumer, it will never make sense for financial institutions.”
Check Out These CNBC.com Slideshows:
- 2009 New York Auto Show
- Top 10 Gas-Sipping Cars
The other mistake we made was picking a popular car, the Chevy Malibu. Keller said if we’d sought out a deal on a pickup truck or midsize SUV, we probably would’ve had better luck.
The deals are out there, Keller said, noting that some of the best cash-back incentives have come from Chrysler, Hyundai and Kia. So, if you’re picking a popular manufacturer like Honda or Toyota, or a popular model like the Chevy Malibu, don’t expect as good of a deal. Sales may be down more than 30 percent but they’re not throwing the baby out with the bath water.
As we got up to leave the GM dealership, we asked the Chevy salesman if we could take the Sharpie-scribbled paper with us to discuss the offer at home.
“Sorry,” he replied as he flipped it over. “I wrote it on the back of someone else’s application.”
We bought a Honda Accord and vowed to do better next recession.
If you’re in the market for a car now, the pros say you might be best to wait it out through the spring selling season and consider buying a car in the summer, when dealers are clearing out their 2009 inventory to make way for the new 2010 models. And, buy at the end of the month—or end of the quarter—when they're looking for a few last-minute Hail Mary sales. You may not get the color you want but you're likely to get a great deal.
And, if you live in big city like we do, go on the Internet and see what you can find in nearby cities and towns where there are fewer dealerships—and buyers.
No matter where you're buying, go online and talk to the dealer first, Keller advises. “They expect that today,” she said.
You just wait until the next recession, Schenectady—I’m coming for you! What's your e-mail address?
Click on Ticker to Track Corporate News:
- Ford Motor (NYSE: F)
- General Motors (NYSE: GM)
- Toyota Motor (NYSE: tm)
- Nissan (NASDAQ: NSANY)
- Honda Motor (NYSE: HMC)
More From CNBC.com:
- Crash Videos: The Perils of Micro Cars
- Marchionne's Message to Chrysler: Shape Up
- Drum Beats to GM Bankruptcy
- Wal-Mart CEO Doesn't See Quick End to Recession
- Personalities of the Recession: Your Guides to the Crisis
- Making Ends Meet With Raccoon Meat
- Recession Fueling These Cheap Eats
Questions? Comments? Write to email@example.com.
For more stories from CNBC, go to cnbc.com.