Fire Sale Pricing: Fact Or Fiction

June 9, 2009

The law of supply and demand is what's at work here, folks. As auto sales continue at subterranean levels compared to a few years ago, there are deals to be had in the new car market. The bankruptcies and dealer closings at General Motors and Chrysler have only added more downward pricing on vehicles.

But how good are these deals that are supposedly out there?

Today, the Wheels blog from The New York Times ran a piece on potential deals. However, the Wheels story didn't actually refer to any examples of great deals ... it was just speculation.

We've already read plenty of speculation, but would like to know if there are genuinely deals out there for consumers to benefit from. What do you, readers know? Have any of you snagged great deals from local dealers? Tell us about it in the comments section below.

In an effort to discover whether there is truth behind the assumption that "deals are everywhere," we contacted two Detroit area dealers to ask them about deals on their lots. What we found was that you can't expect to find Pontiacs or Chryslers for five cents on the dollar. The reality of supply and demand prevents such a thing from happening.

Selected as one of the nearly 800 Chrysler dealers scheduled to close, Detroit's Lochmoor Chrysler-Jeep is selling their last retail vehicles today. Lochmoor sales manager Mike Fafferty, told us, "We have marked down vehicles to sell to customers, but nothing that we'd consider a fire sale because another dealer will buy them for more. Other Chrysler dealers have taken most of our stock."

Jeff Laethem, President at Detroit's Ray Laethem Buick-GMC-Pontiac told us this during another phone interview today, "Right now, the best deal on our lots are the G6s. They have the most factory incentives on them." Laethem noted that G6s with factory incentives are now priced almost as low as a 2009 G3. "Believe me," Laethem said, "When somebody sees that they can drive a G6 for the price of a G3 - which don't have big incentives right now - they take the G6 every time. It's so much more car for the money." Laethem added, "The Solstice goes out of production at the end of July, but most Pontiac dealers aren't getting any more units because of their wind down agreement with General Motors. This means that we just don't have many Solstice models on the lot, and Pontiac doesn't have huge incentives on the model. Same for the G8. As a matter of fact, I'm sold out of G8 GXP models, and most of mine when close to sticker."

The fact is that neither dealer is figuratively giving away cars or trucks. No Virginia, there is no such thing as a free lunch.

Editors at TheCarConnection have already made their opinions known about their favorite picks. Check out what I wrote a few weeks ago about Instant Classics. Focusing on Pontiac, I'd also point out the vehicles to avoid unless the deal is too good pass up;

  • 2009 Pontiac Torrent (much better crossovers exist, like the Saturn Vue)
  • 2009 Pontiac G5 (still a Chevy Cobalt and no SS version to make it entertaining)
  • 2009 Pontiac G3 (sources say Pontiac has a two-year supply on hand at current sales rates)

General Motors and Chrysler are not currently offering any clearance-type incentives, so it seems that most deals are negotiated face to face. But everybody likes to know about good deal, so remember to comment on what you've found out or heard about great deals in the comments section below.

[Wheels Blog]

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