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Auto Manufacturer Price War Benefits Car Shopping Consumers

Auto Manufacturer Price War Benefits Car Shopping Consumers

Auto Manufacturer Price War Benefits Car Shopping Consumers

By Matthew Keegan

The biggest news at the 2011 Chicago Auto Show wasn’t the new products introduced or the raging blizzard gripping the Windy City. What created the largest buzz was the pronouncement by Hyundai Motors America chief John Krafcik that a price war has broken out between car manufacturers. Krafcik shared his thoughts informally with members of the press while at the auto show, sparking widespread interest as news filtered down to the masses.

GM Discounting

Krafcik’s comments solidified what others have been recently been examining: unusually high incentives are being offered by some manufacturers in a bid to increase sales and grab additional market share. Notably, GM is leading the way, averaging $3,762 off of the price every vehicle sold in the United States in January 2011 according to Automotive News. What’s more, that amount is significantly higher with some brands including Cadillac, which is averaging just over $5,600 off of the price of its models.

Although Krafcik noted that GM started the most recent round of price cutting and those cuts were matched by Toyota, Ford and Chrysler have discounted their cars significantly too. Honda and Nissan are playing the discount game too, which means that each of the Big Six manufacturers are working the incentives angle hard.

Camry Savings

For consumers, discounting is a boon, particularly for the car shopper who isn’t loyal to one brand. But, loyalty seems to present some advantages for new car buyers too as most manufacturers are luring customers back to the brand, by extending loyalty rebates on top of already generous offers. Toyota, for example, is offering Camry owners an extra $500 rebate for buying a new Camry reports Auto Trends Magazine. Customers can also get a rebate or choose low rate financing when they buy new.

Some of current rebate offers aren’t much of a surprise including the $4,000 discount GM is giving for buyers of the 2011 Buick Lucerne. That model is aged, a slow seller and is likely a year or two away from being discontinued. Still. deep discounting so early in the year is unusual, suggesting that further price drops will be in the offing especially if competing brands fight back.

Hyundai Incentives

Hyundai offers some of the lowest discounting in the country, averaging just $1,200 per vehicle. The brand’s cars are usually priced five to 10 percent lower than competing models and are routinely better equipped. Thus, discounting after the fact hasn’t been a Hyundai staple because the Korean car company keeps its sticker prices low.

If you are a car shopper, the a price war can save you hundreds perhaps thousands of dollars off the price of a new car. War also means that there are winners and losers, with the latter likely to be car manufacturers who can’t or won’t match today’s juicy incentives.

Matthew C. Keegan is a freelance writer who resides in North Carolina. Matt is a contributing writer for Andy’s Auto Sport an aftermarket supplier of quality parts including carbon fiber trunks and coilovers.

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Note from Sunahara Insurance Agency: Buying new sometimes actually lowers your car insurance rate! Be sure to call your Agent if you are thinking about buying a new car and have him/her quote you the different cars you are shopping.

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