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- Phokaioglaukos - 07-14-2008
Auto Dealers Add Own Sales Incentives, Deepening Their Losses on Trucks, SUVs
By SHARON TERLEP and JEFF BENNETT
July 14, 2008; Page B1
Detroit
Some car dealers are reaching deep into their own pockets to extend auto makers' already hefty rebates and other incentives to sell pickup trucks and sports-utility vehicles.
In some parts of the country, additional dealer discounts have cut prices of pickups and SUVs to 50% of the vehicle's original sticker prices. At Zangara Dodge in Albuquerque, N.M., a 2008 Dodge Ram pickup now sells for $15,000, down from a sticker price of about $30,000.
![[Image: MK-AQ624_CARSAL_20080713151031.jpg]](http://s.wsj.net/public/resources/images/MK-AQ624_CARSAL_20080713151031.jpg)
Chrysler LLC
A 2008 Dodge Ram sells for half the sticker price in Albuquerque, N.M.
Dealers on average more than doubled their net loss to $136 on every vehicle they sold during the first four months of 2008, compared with $61 a year ago, said Paul Taylor, chief economist for the National Automobile Dealers Association. The stats don't take into account May, June and July, where dealers were squeezed even more.
After trending downward for the last few years, sales of pickups and SUVs began falling at a much steeper rate as gasoline prices hit $4 a gallon this spring, leaving bloated inventories on dealer lots. The problem has forced the Big Three auto makers, Toyota Motor Corp. and Nissan Motor Co. to slash truck production and return to offering fat incentives in hopes of spurring sales.
Ford Motor Co., for example, is now offering its F-150 pickup at the preferred prices it usually gives only to its employees.
In Charlotte, N.C., customers at Independence Hummer can get up to $11,000 off a 2008 Hummer H2 and $10,000 off a smaller H3. The deals essentially wipe out any profit the dealership would make on the vehicles, said salesman Karl Logan.
The intensifying economic pressure is sure to lead more dealers to consider closing.
Ford, GM and Chrysler are running programs aimed at reducing their dealership network by weeding out underperforming sites while bolstering profitability potential for those who remain. The auto makers are kicking in cash to help dealers buy out one another or exit the business.
Chrysler has been the most aggressive as it looks to have more of its dealers offer all three brands -- Chrysler, Dodge and Jeep -- under one roof.
The discounts are hurting manufacturers' margins, too. Full-size trucks are generally the most lucrative models Ford, General Motors Corp. and Chrysler LLC offer.
- ccm911 - 07-14-2008
Chris: If you are not set on new, then I would call Dave Coughlin. I was just reading that a Ford Expedition that would have sold at auction for $26K six months ago is now fetching $16K. If that logic follows for tow vehicles, then I would imagine that you could get Dave to get you a really nice, low mileage vehicle at auction for a really good deal.
- Phokaioglaukos - 07-14-2008
Thanks, Chris. If I get to the point of actually buying, I'll go through Dave. Used makes huge sense for an occaisional use vehicle. Last weekend I borrowed a Dodge 2500 diesel to tow a steel open trailer with the Miata on it. Huge overkill, but it also towed like a dream. I was thinking 24' bumper pull trailer, but now I'm thinking small 24' gooseneck! The family would prefer NO pickup at all and would tolerate a SUV and an open trailer better.
All in all, I'm probably looking at next spring at the earliest. Just hard to sit by and watch the pickup prices tumble. If fuel costs are in a bubble (which in my heart I do NOT believe), now is a good time to buy!
- ccm911 - 07-14-2008
Chris, you make me laugh. In a good way.
If your family will dislike a Pickup in the driveway, how will they react to a trailer?
- Phokaioglaukos - 07-14-2008
ccm911 wrote:
Quote:Chris, you make me laugh. In a good way.Always happy to amuse. The trailer will live in the back yard with access from another street (our lot runs from one street to another). We have a landscape architect's plan to build a gravel bed for the trailer to sit on and plantings to hide it. The family is not too happy about it, but I think it could be ok. I could fit a 24' bumper pull back there, but thinking of a baby gooseneck now.
If your family will dislike a Pickup in the driveway, how will they react to a trailer?
- Tony356993 - 07-14-2008
Used is the way to go. You are correct - they are giving them away. Even the local dealers out here in Amish country won't even give you a real number on a trade in of a big truck - the don't want them.
Couldn't you tow the Miata with another Miata?