GM lowers prices (for real this time!)

[member12]

http://www.edmunds.com/comparisoncen...ght/index.html

Check it out!

Trailblazer is over $3,000 cheaper! All models reduced far more than "value" prices of last fall.

They really put the right prices on the car to begin with now, guys. Could this be the end of sales as we know it?

[atomicshark]

Some cars like the Cobalt LS are great bargains, but others like the Impala LTZ seem to be great deals at first until you see that the invoice on the compared Camry is much lower, meaning Toyota would have the edge when negotiating price. The Camry's invoice is under $23,000 while the Impala LTZ's invoice is over $24,000. This effectively renders the Impala's lower sticker price meaningless to the price conscious buyer.

[kenman923]

This should help GM sales. If that doesn't, I don't know what will.

[macphisto]

Yeah, but Toyota usually has large gaps between MSRP and invoice.

Compare the Malibu to the Camry and you'll find the Malibu LT comes in below the competition and the spec numbers are pretty close on both (Camry has more trunk space, but Impala has more trunk space than Camry). Malibu has more rear legroom than Camry.

And the Impala LS also wins against the Camry. The LTZ is the one exception.

The Malibu SS also wins and it's a lot more fun to drive than Accord or Camry.

[Cortazzo]

Remember that Toyota and Honda dealers don't usually give all that great of deals, maybe during their toyotathon or whatever, but you pretty much pay within a few hundred of MSRP. There is a bigger gap b/w MSRP and invoice because toyota makes an s-load on their cars and trucks, people are willing to pay it.

[Buick61]

But look at Chevy's main SUV competitor, the Explorer. The Ford has a higher MSRP, but a lower invoice and a lower True Market Value. So on the surface the TB looks cheaper, but all a customer needs to do is scroll his/her eyes down a touch, and see which is actually cheaper in the real-world.

I still think lowering prices is a good idea. I just don't know if the way they executed it is going to work out.

[asim]

This will help GM very much...but GM still promised that incentives aren't going away.

[awalbert88]

In the TV ad, they are asking consumers to go to the Edmunds web site and compare prices. That's impressive right there. Not only is GM saying, "we're better than the competition, so compare us," they're actually offering the means to do it. I'm starting to think someone at GM gets it.

[sigma]

They are good ads. Now lets see some product specific ads touting Chevy, Pontiac and Buick features. At the end of those ads, do the head to head comparison.

"Don't believe us? Look for yourself at Head2Head on Edmunds.com"

[01cavalier]

The message seems to be that there is real value, and check out the proof, it's right there. They really need to push this hard. Huge incentives are merely annoying, make it more straightforward and it might just make the buying experience that much easier. Well, at least the price part...

[Butz]

I hope the incentives are gone, they really heart GM's image

[XCR440SP]

I think this one is as bad as last fall, if not worse. Most dealers are very upset about it. On most vehicles the actual dealer cost (invoice minus rebates) went up, not down. Most of large cuts were caused by the reduction of markup from invoice to MSRP, and some by reduction of Rebates. The rebates being changed to a price cut is good, it helps residuals and helps slow the deal of the month sales that have been killing resale. However, the margin cut isn't good. It won't really affect transaction price any, but it will hurt sales.

Reason 1, With this reduction of margin it will be harder to get the buyers that are "upside down" in financing with their old vehcile. Most banks will only loan up to MSRP on a new vehicle (and I think in some states this is law, but I'm not sure). Many if not most of current buyers owe more than their trade in is worth) With a large margin you can cover this up and get them financed, without it they can't get financed and won't be able to buy the car (Cars already were low on margin, but Trucks weren't, until now)
--- For example Joe blow goes in to trade his 2003 Silverado, it wholesales at $15000, and the dealer is going to give him that off of invoice. However, he owes $19,000. If the dealer goes up to MSRP (used Edmunds, MSRP 35,935, invoice $32,934) on the new Silverado he can only show $18,000 for the trade, even with rebates factored the dealer can't get him financed so he leaves. He then goes to a Ford dealership (at least until they copy this stupid program, then he'll be stuck in a Dodge). The same truck will have a larger margin from sticker and the dealer will be able to show him (Ford SuperCrew MSRP 37,465, invoice $33,334), The Ford dealer can show him $19,100 for his trade in and get him financed.

Reason 2, Many customers (particularly older, and wealthy customers) are more woried about what their trade in is worth than the price of a new one. Many of these buyers would Give 30,000 for a new vehicle if their's were worth 15,000, but wouldn't buy the same car at $25,000 if their trade were only worth 10,000. Look at Conversion vans, most converters run 100% (or more) markup on conversions for this reason. I know this doesn't make sense to many people, but there are a large group of people that buy this way.

If the competitors don't copy this, I'm afraid GM dealers are going to be know as good places to buy outright, but they won't give anything for your trade so if you're trading trucks, you'll need to go to the Ford/Dodge/whoever dealer

[Jay]

How long is the GMI homepage going to wish me Happy Holidays?

Oh, and yeah lower prices are good.
One question to any car dealers posting on this site: are student discounts available on all models or only on select ones. I was on the GM website and they listed certain vehicles but I'm confused as to why a student discount would be offered on a GMC Sierra but not on an Ion Quad Coupe?

[member12]

New prices will look better when people shop for cars online- increasing number of people do that.

Head to head comparisons on dealers lots will go in Chevy's favor now. The Colorado, Trailblazer, and Silverado are now below competitors prices. I hope GM sticks to this plan.

I have tried to help people car shop- they all are intimidated by GM's high MSRPs- thats why the employee price was so successful. It was low, it was all over the website, and they had it stuck to the actual car on the lot. No pressure.

Now GM is finally pricing these cars right. The Dealers won't have to go down on price as much. Resale value looks better (again, another plus to the new wave of internet research).

The Impala LTZ is about the size of an Avalon- but coast about 4 grand less. The Malibu LT stickers (not on sale) for under 19,000- thats with the upscale cloth trim, cd player, auto transmission, and remote entry. That is a deal, and for women and young men like me who don't know a lot about finance or don't have much credit, its a lot more attractive to simply see the lower price on the sticker. Ford and Toyota will have to have sales to match GM now.

These are close to the market price already, so dealers won't have to take any bigger hit than normal. The buying experience should be easier for both them and the customer. Great idea, GM- keep up the good work. Now your cars can be a little smaller, a little older design, but you should still sell. Mitsubishi used to do this, Hyundai is doing it, and this is how Toyota got where it is now. I am happy this is going on.

Tip: If american troops are comming home over the next two years (100K people), they will need cars and trucks. Most of them sold their vehicles before they went, it would be a very patriotic (in my eyes) if you gave them an even sweeter deal.

As for the trade arguments- well, all they have to do is make a better overall deal on the whole trade. It still looks better- and it gets people on the lot, and makes buying a Chevy an obvious choice over a more expensive Toyota or Honda or Ford. Also, less competition between Chevy dealers, as they won't be able to go down on prices as much. This should encourage a better inventory- which GM is still lacking in the south post katrina, and they have always lacked in less profitable small and midsized cars. Toyota dealers are horrible for trades...its no loss there. I am not even sure that will happen. GM is promoting edmunds on there advertisements, so I am sure they will give pretty close to average trade value shown on that website.

This is almost like buying a Saturn, except there are more choices and better cars to choose from.

I am going to try to build trucks on edmunds and maufactures websites today to see how good these Chevys look head to head with their competitors.

[espo19047]

Originally Posted by atomicshark

Some cars like the Cobalt LS are great bargains, but others like the Impala LTZ seem to be great deals at first until you see that the invoice on the compared Camry is much lower, meaning Toyota would have the edge when negotiating price. The Camry's invoice is under $23,000 while the Impala LTZ's invoice is over $24,000. This effectively renders the Impala's lower sticker price meaningless to the price conscious buyer.

If all they care about is price then the LT will work or maybe an LS.