GM,Chrysler,Hyundai,Nissan,Ford Incentives is Stimulating Buyers

Automotive manufacturers are attempting to stimulate the car-buying market with incentives they hope consumers will find too good to pass up.

Despite the changing shape of the automotive industry, with Chrysler shutting down a quarter of its dealerships and General Motors making similar cuts, dealers are hoping a variety of incentives convince consumers that now is the right time to buy a new car.

Herb Adcox of Herb Adcox Chevrolet in Chattanooga and Jim Gentry of Gentry Chevrolet, Pontiac, Buick in South Pittsburg, said General Motors is offering a number of incentives to boost the auto buying market.

GM is offering a variety of rebates on just about every model, plus GM also is offering zero percent financing, Mr. Adcox said.

On top of that, GM has agreed to make several payments up to $500 each if someone buys a car and then is laid off.

“If you lose your job, we’ll make payments for you,” Mr. Adcox said.

If someone buys a car now and wishes to trade it in two or three years later but owes more than the car is worth, Mr. Gentry said GM will increase the value by up to $5,000.

He said the incentives have been offered for less than 30 days, but they already are having a positive effect.

“They’ve helped some,” Mr. Adcox said. “Any sort of guarantee is certainly good for the customer.”

Mr. Gentry said the incentives have helped business, but the biggest boost has been from customer loyalty.

“I hate to brag, but we have a pretty good customer loyalty and our business is pretty good,” he said. “They know they will be treated fairly and they will get good service. They know we are going to be here no matter what.”

Martin and Suzanne Davis browsed the lot at Herb Adcox Chevrolet last week. Mr. Davis said he would like to put off buying a car until the economy improves, but the deals may be too good to wait.

“This is not a good time to buy a car because nobody knows what is going to happen,” Mr. Davis said. “I’d like to keep our car running a little longer, but they are making some great deals.”

Tommy Nicholas, general manager of the Long Auto Group, said Hyundai also is offering a variety of rebates as well as military and nursing discounts. Hyundai also is giving additional discounts for “valued owners,” or customers who are trading in a Hyundai for another.

He said Hyundai was the first manufacturer to offer the assurance plan, which guarantees negative value on a car if a customer looses their and wishes to return it.

“They are very good,” Mr. Nicholas said of the incentives. “Hyundai is a wonderful product, and it’s been award winning. Throwing the assurance plan in there has certainly boosted consumer confidence. They know that if things get bad and they lose their job, we will be there for them.”

Bill Kile, owner of Kile Dodge Chrysler Jeep, said Chrysler is offering rebates ranging from $1,500 to $6,000 as well as lifetime warranties.

“Now is a great time to buy because the manufacturers are trying to sell,” he said.

Like GM and Hyundai, Chrysler also offers an insurance plan that customers can buy that will protect them if they lose their jobs after purchasing a new car.

Steve Moss, general manager of Moss Motor Co. in South Pittsburg, Tenn., which is a dealer for Chrysler, Dodge, Jeep and Ford, said Ford Motor Co. is offering zero percent financing for up to 72 months on some models, such as the 2009 Fusion and Mustang GT.

There also are rebates up to $4,000 and the Ford Advantage plan, which like some other manufacturer incentives guarantees that Ford will make payments for up to one year if a customer buys a car and is then laid off.

“There are a lot of different (incentives) out there,” Mr. Moss said. “They have been very successful.” His Chrysler, Dodge and Jeep dealership is among those that will continue operating.

Brad Cobb, a manager at Bowers Transportation Group, which owns Village Volkswagen and Audi, Toyota of Cleveland and Cleveland Village Honda, said their manufacturers also are offering rebates up to $4,000 or special financing rates on some models. He said some Toyota models are offering zero percent financing.

Unlike other manufacturers, the car makers Mr. Cobb represents do not offer an insurance plan if a customer loses their job.

“It sounds great, but 91 percent of the people out there still have jobs,” he said. Our manufacturers like they had rather devote themselves to giving a better rate.”

He said the incentives are working, and his dealerships are beginning to see higher traffic levels on their lots.

“Consumers are still in a wait-and-see (mode),” Mr. Cobb said. “There are deals out there on everything in the world. I think if we didn’t have (the incentives), it would be tougher.”

Austin Watson, executive manager of Mountain View Nissan, said Nissan, like just about every other auto manufacturer, is offering a variety of rebates as well as special financing offers. Nissan’s rebates range from $750 to $6,000.

Mr. Watson said used car sales have picked up as new car sales dropped off, but the incentives have convinced consumers to buy new.

“New car sales have been off 50 to 60 percent, but last month we hit 97 percent of last year’s sales,” he said, citing 58 cars sold last month compared to 60 in April 2008.

“It has been very successful,” he said.