Looks like it might be a good time to buy a car if you're in the market for a new one. http://www.usatoday.com/money/autos/2004-07-07-auto-incentives_x.htm By Ed Garsten and Brett Clanton, The Detroit News DETROIT — General Motors (GM) and Ford Motor (F) are boosting incentives to spark demand and clear out excess inventories after U.S. car and truck sales tanked in June. GM, whose sales declined 12% last month, is dangling cash rebates of up to $5,000 on most remaining 2004 models and as much as $2,000 on some 2005 models. Ford is also enhancing deals — including interest-free loans for 60 months — after reporting an 8% drop in sales last month. "Reports of the demise of zero-percent financing are greatly exaggerated," Ford spokesman Jim Cain said. Raising incentives is hugely expensive and carves into automakers' already thin profit margins, but could help GM and Ford stem troubling market share declines. (Related: June auto sales hit brakes, drop 2% from last year) Beginning today, the highest rebates are being offered on midsize and full-size sport-utility vehicles, with $5,000 available on 2004 Buick Rendezvous and Rainier and Chevrolet Tahoe, Trailblazer and Suburban models. GM and its dealers ended June with 222,000 excess trucks on hand. "Everybody wants to clean their slate," said Ed Springs, general sales manager at Suburban Cadillac-Buick-Oldsmobile-Hummer in Troy, Mich.. GM also is offering no-interest financing on many 2004 models for loans as long as five years. "I sold 52 Corvettes last month," said Scott Montgomery, sales manager at Les Stanford Chevrolet in Dearborn. "Zero for 60 should clean out the last of them." GM customers with leases that don't expire until the end of March 2005 can also terminate the contract early without penalty if they buy or lease a new GM model. GM is excluding some models, suchs the the Cadillac CTS-V and XLR, Chevrolet SSR and Hummer H2. No-interest financing will be available on most Ford cars, trucks and SUVs, with the exception of some specialty products, such as the F-150 Super Crew pickup, the Thunderbird and the SVT Mustang, Cain said. Ford also will increase customer cash levels by $500 to $1,000 on select vehicles, including the 2004 Ford Explorer, which already carries a $3,000 rebate. During the first six days of July, Ford offered F-150 truck buyers a $1,000 cash bonus in addition to other incentives. DaimlerChrysler's (DCX) Chrysler Group, which posted a 5% gain in sales last month, is extending current discounts two months, according to spokesman Kevin McCormick. Rebates on the 2004 Pacifica crossover vehicle have been bumped to $4,000 from $3,500, McCormick said. Cash incentives on other Chrysler products range from $1,000 to $4,000. Zero percent interest financing remains available on most of Chrysler's lineup. Automakers traditionally lay on discounts at the end of the model year to make room for the new model years. The latest round of generous rebates are needed to trim inventory levels after industry sales fell 2% last month from June 2003. At the end of June, U.S. dealers had enough cars and trucks to last 73 days, according to a report released Tuesday by Merrill Lynch analyst John Casesa. That's 24% above the historical June average of 59 days, Casesa said. With 1.35 million vehicles on the ground, GM has the biggest unsold supply. Ford has an 87-day supply on dealer lots, or 33% higher than average for June, and dealers selling Chrysler, Dodge and Jeep vehicles have a 72-day supply, or 15% higher than average, Casesa said. Despite the glut of unsold cars and trucks, Detroit automakers don't have plans to cut production, heightening the need to boost sales. "Given largely steady production schedules, we expect big incentives," Casesa wrote in a report released July 2. The average new car and truck discount increased last month $112 to $2,979 from $2,867, according to Autodata. Asian automakers are also getting more aggressive with discounts, a move that is helping sales. Honda Motor (HMC) more than doubled its average discount in June, from $559 to $1,148, and saw its sales jump 5%. Nissan Motor (NSANY) sales rose 5.6% after the automaker hiked its average discount from $1,411 per vehicle to $1,958. Rochester Pontiac-Buick dealer Russ Shelton advises customers to get in while the incentives are generous. He's not thrilled with the rising discounts, but is resigned to competitive reality. "It's part of doing business," Shelton said. "It seems to be the only way we're able to sell cars." .
