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Car Prices: How Low Can They Go?

December 19, 2005

• Car Prices: How Low Can They Go? • GM, Ford Look to Congress for Help • What Do the New Car Sales Add Up To? • Ford, Chrysler Jump on Car Sale Bandwagon • After a Horrible October, GM Cars and Trucks Go On Sale Again • Ford Extends Employee Discounts Through Sept. 30 • GM Employee Discount Sputters into September • GM Extends Employee Discount Program into August • Look Out! Not All Cars Are On Sale • Ford, Chrysler Join GM in Offering Employee Discounts • GM Gives Employee Discount to Anyone --- • Consumer Comments

While the latest round of price incentives from domestic carmakers are in fact good deals, savvy consumers can get even steeper discounts, according to Consumer Reports' Auto Price Service.

Reeling from poor October sales, General Motors and Ford resurrected incentive plans they were trying to move away from. About 50 models fall under GM's "Red Tag Event" and Ford's "Keep it Simple" plans, which run through January 3, 2006.

Some are priced lower than they were during this summer's employee pricing promotions that helped spur domestic new-car sales to record levels.

However, consumers can get even further discounts -- in some cases approaching 21 percent -- when armed with bottom line price information, available through Consumer Reports' New Car Price Reports at www.consumerreports.org.

The Consumer Reports Bottom Line Price is a close approximation of actual dealer cost including all incentives and holdbacks, which consumers should use as a starting point for negotiations.

For instance, Consumer Reports' Bottom Line Price shows that buyers of a 2006 GMC Sierra 2500HD Regular Cab 4x4 SL should negotiate up from $23,217, which is $3,114 (11.8%) below GM's "Red Tag Event" price.

And buyers of a 2006 Mercury Montego AWD Premier should negotiate up from $20,970, which is $5,663 (21.3%) below Ford's "Keep it Simple" price.

Plan details and a list of eligible vehicles recommended by Consumer Reports, can be found at www.consumerreports.org/redtag.

In reviewing prices for models recommended by Consumer Reports, Auto Price Service analysts found that Red Tag Event figures typically range from 15 to 20 percent off the retail sticker price.

For all eligible vehicles, Consumer Reports says new-car buyers should start negotiating, on average, from 5-6 percent below incentive plan prices.

Not to be left out, the Chrysler Group launched its year-end sales strategy after both GM and Ford, without reducing the transaction price of its vehicles.

The "Miles of Freedom Plan" gives buyers two years' worth of free gasoline, two years' worth of free scheduled maintenance, and a five-year/60,000-mile mechanical warranty. The program applies to all 2005 and 2006 Chrysler, Dodge, and Jeep vehicles, and also runs through January 3, 2006.

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