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Ford, GM Try to Clear Year-End Inventory

By Joe Benton
ConsumerAffairs.com

November 17, 2006

• GM Cuts Prices for February • Toyota Sales for 2007 May Surpass GM • New GM Sale May Challenge Bargain Hunters • GM Hangs on as World's No. 1 Automaker • Saturn Outlook Gets High Marks from Consumer Reports • Summer Car Sales Start to Sizzle • Consumer Reports Lists Best New Car Deals • Chrysler Dumps Remaining 2006 Inventory on Used Car Market --- • More about Auto Sales ...

General Motors and Ford are trying to stimulate sales as the year's end approaches, using discounts, rebates and no-interest loans.

GM

General Motors will try to unload cars and trucks sitting on dealer lots starting this weekend with a year-end "Red Tag Sale" that will last until January 2.

Everything goes on sale except the good stuff. Cadillac, Hummer, Chevrolet Corvette and Pontiac Solstice are not included.

GM has just over 1 million 2006 and 2007 vehicles in its inventory but 80 percent are 2007 models.

The company has set aside roughly $250 million to cover the cost of the year end "Red Tag Sale" incentives. The company will offer up to $2,000 in discounts on many vehicles but is leaving the exact amount of any incentive up to individual dealers.

The GM program gives dealers $250 for every vehicle on their lot that is part of the incentive program. The dealer can then distribute the discounts as he or she wishes, up to $2,000 for any particular vehicle. A red tag hanging in the windshield will advertise the discount.

The GM sale also includes most existing incentives on vehicles, so a vehicle could end up with more than $2,000 of incentives on it.

According to Edmunds.com, GM spent an average of $2,797 per vehicle on incentives in October, which is down 13 percent from September but up 3.5 percent from October of last year.

GM is touting the "Red Tag" event as "See some red, save some green." GM plans to advertise the sale aggressively in print and on TV, radio and the Internet.

Ford

Ford Motor Co. plans to extend no-interest loans for 2006 models as well as some cash-back and low interest financing offers on 2007 models between now and the end of the year.

Ford will add cash rebates to a handful of models including the Fusion sedan, F-series Super Duty pickup, Escape SUV, Five Hundred sedan and Freestyle crossover.

The $1,000 cash rebate also applies to the 2006 Ford Five Hundred and Freestyle.

The $1,000 bonus is on top of existing rebates, pushing the total discount to as high as $3,000 on some models.

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