Car Buying Report - April 1, 2009
GM and Ford Offer Incentives for Those Fearing Job Loss
One of the reasons people aren't buying cars is because they're worried they may lose their jobs and be unable to make car payments. Hyundai solved this problem by offering a job-loss protection incentive where they buy the car back if you lose your job within a year of purchase.
After seeing Hyundai's success, GM and Ford are jumping on that bandwagon. GM will now provide 9 months of payment protection up to $500 per month as part of their GM Total Confidence Program. Ford is now providing up to 12 months of payment protection if you lose your job.
If you've been on the fence about buying a new car due to fear of job loss, this is a good incentive for you. But on the other hand, if you're really worried about your job, buying a new car isn't very sensible.
Buying a Brand New Car Can Be Cheaper Than Buying Used
It sounds illogical, but a recent study by Edmunds.com has discovered several cars that come out to be cheaper if you buy brand new versus a one year old used model.
How is this possible? It all depends on whether you qualify for special low interest finance rates (only about 18% of consumers qualify). The study also assumes you take out a 60 month loan.
For example, a brand new BMW 328i sedan can be purchased with a 60 month 0.9% loan. Typical monthly payments would come out to about $560. If you were to buy a 1 year old used 318i sedan, you're looking at paying 10.5% interest on that loan. Even though the price of the used car is lower, your monthly payments would come out to around $630 (more than $100 per month higher than if you purchased new).
If you're considering buying a slightly used car, it's worth it to see if the manufacturer is offering low interest financing for new cars and do some number crunching.
March 2009 Auto Sales Horrible (Again)
As expected, sales of new vehicles during the month of March were horrible. GM led the decline with a 45% drop in sales compared to the year ago period. Ford, Chrysler, Toyota and Honda weren't far behind with drops around 40%.
Again, this is good news for car buyers. It just means manufacturers and dealers are desperate to sell cars. They're willing to negotiate some great deals and we should continue to see some great incentives in the coming months.
There was a small uptick in sales from February to March. This doesn't necessarily mean car sales have bottomed, but we may indeed be seeing a bottom. Either way, now is a great time to be a new car buyer.
To see the latest prices and deals being offered by your local dealer Click Here
Government Guarantees GM and Chrysler Warranties
It's looking more likely that GM and Chrysler will have to file for bankruptcy. This worries a lot of car buyers, resulting in a drop in sales (making bankruptcy more likely). It's a vicious cycle, which is why the government has announced they will pay for any warranty repairs if GM or Chrysler go out of business.
This is usually a big issue for car buyers considering GM or Chrysler brand vehicles. Now they can worry a bit less. But there's still a big stigma with cars where the manufacturer has gone bankrupt. Used car prices will probably be effected so keep that in mind before jumping in. On the other hand, you're sure to get a great deal.
Car Buying Report Archives:
Week of June 18, 2009
Week of June 11, 2009
Week of June 4, 2009
Week of May 28, 2009
Week of May 21, 2009
Week of May 14, 2009
Week of May 6, 2009
Week of April 30, 2009
Week of April 23, 2009
Week of April 16, 2009
- Apr 01, 2009 - GM and Ford Offer Job Loss Incentive...
- Mar 18, 2009 - Imports Finally Join the Incentive Bandwagon...
- Mar 11, 2009 - Plenty of 2008 Models Still Not Sold...
- Mar 04, 2009 - New Tax Credit for Plug-In Cars, February 2009 Sales a Disaster...
- Feb 25, 2009 - Hyundai Offers Assurance Plus, Saab Files for Bankruptcy...
- Feb 18, 2009 - 2009 Car Tax Credit Not as Good as First Hoped...
- Feb 11, 2009 - Tax Credit for Car Buyers in 2009, Rebates up over 12%...
- Feb 04, 2009 - Car Sales Worst in 27 Years, GM May Shut Down Hummer, Saab, and Saturn...
- Jan 28, 2009 - Chrysler Getting Desperate, Great Deals on Small Cars...
- Jan 21, 2009 - Unsold Cars Piling Up, Toyota Offers Cash Rebates...
- Jan 02, 2009 - GM Offers 0% Financing, 2009 Sales Will be Horrible...
- Dec 26, 2008 - Best Time to Buy a Car, Chrysler Offers Deals on Overstock...
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