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Auto Dealers Add Own Sales Incentives, Deepening Their Losses on Trucks, SUVs
By SHARON TERLEP and JEFF BENNETT
July 14, 2008; Page B1


A 2008 Dodge Ram sells for half the sticker price in Albuquerque, N.M.

Detroit - Some car dealers are reaching deep into their own pockets to extend auto makers' already hefty rebates and other incentives to sell pickup trucks and sports-utility vehicles.

In some parts of the country, additional dealer discounts have cut prices of pickups and SUVs to 50% of the vehicle's original sticker prices. At Zangara Dodge in Albuquerque, N.M., a 2008 Dodge Ram pickup now sells for $15,000, down from a sticker price of about $30,000.

Dealers on average more than doubled their net loss to $136 on every vehicle they sold during the first four months of 2008, compared with $61 a year ago, said Paul Taylor, chief economist for the National Automobile Dealers Association. The stats don't take into account May, June and July, where dealers were squeezed even more.

After trending downward for the last few years, sales of pickups and SUVs began falling at a much steeper rate as gasoline prices hit $4 a gallon this spring, leaving bloated inventories on dealer lots. The problem has forced the Big Three auto makers, Toyota Motor Corp. and Nissan Motor Co. to slash truck production and return to offering fat incentives in hopes of spurring sales.

Ford Motor Co., for example, is now offering its F-150 pickup at the preferred prices it usually gives only to its employees.

In Charlotte, N.C., customers at Independence Hummer can get up to $11,000 off a 2008 Hummer H2 and $10,000 off a smaller H3. The deals essentially wipe out any profit the dealership would make on the vehicles, said salesman Karl Logan.

The intensifying economic pressure is sure to lead more dealers to consider closing.

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Auto Dealers Add Own Sales Incentives, Deepening Their Losses on Trucks, SUVs
By SHARON TERLEP and JEFF BENNETT
July 14, 2008; Page B1


A 2008 Dodge Ram sells for half the sticker price in Albuquerque, N.M.

Detroit - Some car dealers are reaching deep into their own pockets to extend auto makers' already hefty rebates and other incentives to sell pickup trucks and sports-utility vehicles.

In some parts of the country, additional dealer discounts have cut prices of pickups and SUVs to 50% of the vehicle's original sticker prices. At Zangara Dodge in Albuquerque, N.M., a 2008 Dodge Ram pickup now sells for $15,000, down from a sticker price of about $30,000.

Dealers on average more than doubled their net loss to $136 on every vehicle they sold during the first four months of 2008, compared with $61 a year ago, said Paul Taylor, chief economist for the National Automobile Dealers Association. The stats don't take into account May, June and July, where dealers were squeezed even more.

After trending downward for the last few years, sales of pickups and SUVs began falling at a much steeper rate as gasoline prices hit $4 a gallon this spring, leaving bloated inventories on dealer lots. The problem has forced the Big Three auto makers, Toyota Motor Corp. and Nissan Motor Co. to slash truck production and return to offering fat incentives in hopes of spurring sales.

Ford Motor Co., for example, is now offering its F-150 pickup at the preferred prices it usually gives only to its employees.

In Charlotte, N.C., customers at Independence Hummer can get up to $11,000 off a 2008 Hummer H2 and $10,000 off a smaller H3. The deals essentially wipe out any profit the dealership would make on the vehicles, said salesman Karl Logan.

The intensifying economic pressure is sure to lead more dealers to consider closing.

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new trucks and suv are being run thru car auctions and going for 1/2 the sticker price
 

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Not true. I had been to independence hummer for a 2006 H3, they refused to bring the price down by even a dollar off the listed price. New H3's could be bought 7500 off MSRP OR zero percent financing (not both), during the GM 72 Hr sale. I was surprised to see them not budge one bit. You'd think during these hard times they would be giving away trucks to reduce their bloated inventory. Thats just not the case.

Which made me leave the place a little disappointed. Now I have decided to hang on to my yukon until the doors fall off. BOF Suv's are more of a want for me than a need. The h3 was never on my mind. What tempted me was an ad for a 2006 H3 with chrome package for less than 19K dollars. I find 2006 model year POS V6 camcord's priced higher.

Until that day, I kid you not, I never knew hummers came with cloth seats. And I consider myself a car guy.:rolleyes:
 

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We certainly aren't seeing this in Indiana. There isn't a large supply of big SUVs on dealer lots, and while they're willing to sell them at invoice less rebates, there isn't any kind of dealer sweetening that I've found. On top of that, they still want to try to screw you on your trade-in.
 

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More of the same doom and gloom....

Is there a requirement someplace that GMI must post an article about truck & SUV sales being bad at least twice a week? It's getting kind of boring and redundant. This hasn't been news for 4 months. I vote no more redundant posts.
 

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you can buy them at a good price but it's not such a good time to drive one
 

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you are so right my old 97 pontiac montona is about to die. i went to gm and ford and ended up in a certified 08 taures x limited fully loaded for 22. i will close today depending on % rate.
I was hoping to get a super deal from gm or ford. Both could do only rebates or low interest rate---by my calculations it was the same at the end. Either they make their money upfront by keeping their rebate money or they get it back by charging % rate. theres no super low % on new vehicles so ----u end up the same 30 grand+ at the end.
For me the taurus x limeted with 15000miles for 22 will be better than any deal on a new vehicle---even if i wanted to give them a sale on a new one----that leads me to the dealer ---he was set on selling me a cpo since i would get everything i wanted in it --he had 6-8 taurus more than new. I check kelly blue book and saw that if i traded that vehicle in i would only get 18grand for it. So from 18 to 22that im paying a good margin for him to push used.
 

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you can buy them at a good price but it's not such a good time to drive one
It depends on how much you drive it. If you have a short commute it doesn't matter.
I calculated the difference between a Prius and an H3 for my wife's commute to be $70 a year.
 

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More of the same doom and gloom....

Is there a requirement someplace that GMI must post an article about truck & SUV sales being bad at least twice a week? It's getting kind of boring and redundant. This hasn't been news for 4 months. I vote no more redundant posts.
I second that motion....

It's no different than the "If it bleeds, it leads" media selling on fear, panic, gossip and hearsay. That's not why I joined GMInsideNews.com, unlike some people here who feed off of the negativity and outright hatred of the domestic auto industry.
 

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I saw a similar add for a dodge ram around here. I believe they are the only ones. They were advertising 1/2 sticker price as well. Everything else is staying pretty steady it seems. My wife and I have been shopping for a Tahoe for a while and they would come down about 8K but that seems to be about it.
 

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They are only adding to the panic. Truck sales have dropped steeply, but there still is a market for trucks. It may be a sales gimic to offer a truck at 50% off. But I'll tell you there are not any sales deals of that magnitude in the northeast. GM doesn't plan on closing truck plant until next year.

When you compare a 7 passenger truck to another vechile that can move that many passenger. you are only gaining, if any, a few mpg.

I got caught up in the panic and almost sold my SUV, but when you compare gallons per mile, the picture clears. Basicaly how many miles will you drive per year, in my case roughly 12,000. I average city/hwy @ 15 mpg . So for me it adds up to 800 gallons of gas times current cost $4 per gallon equals $3200 year to drive.

Now go to a large car that may get 18 mpg. $2667 per year to drive. That equals a differents of $534 extra to drive a SUV. I'm not going to panic over $534 extra year in fuel expenses.

To make a different a person would have to buy a sub compact at 30 mpg that fit 4 people. Then you would save $1600 a year in fuel expenses. The only vechile that comes close if the Toyota Prius. But the premium price tag on that wipes out any savings.
 

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in suburban chicago we have a ton of trucks. Chevy dealerships will have more trucks & SUV's then all the car models combined. Ford dealerships will very few fusions and foci.
 

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We're fairing well in contrast to the Toyota dealership I pass every day. Their inventory of Tundra's, Sequoia's, FJ Cruisers, and Highlanders is HUGE! Half of their current lot and about 40% of their old lot is filled with 'em. Our inventory (and the inventory of the nearest Chevy dealer) isn't more full with GMT-900's than usual.
 

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The Toyota dealership in Rapid City has so many Tundra's they have them parked in the grass behind the dealership.
 
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