Rebates & Incentives typically work by the manufacturer jacking up the price of a car or truck, then offering to give that money back. The result is $28,000 Impalas going for $21,000, or $38,000 Avalanches going for $29,000 or so.

Chrysler is attempting to ween itself off of high incentives by "Value Pricing" their vehicles. Instead of asking $38,000 and getting $30,000 for the 300C or $28,000 settling on $23,000 for the base 300 after rebates & incentives, Chrysler is charging a straight $32,000 on the C and $23K on the base and letting Chrysler Finance give a $1000 back for using them to finance your Chrysler car.

Chrysler will be moving this pricing strategy to all new cars as they are introduced in the near future as long as it proves successful (as it seems to have been on the LX cars).

What's your take on this?

Related story:
http://www.autoweek.com/cat_content...._code=00720658

 

I'd rather just have lower MSRP's... that way you aren't dependant on what rebates the manufacturer feels like offering at the time you are shopping...

That said, when the rebate game started , it was the clear way to go.

 

I'll tell you what, huge rebates don't exactly do much for the reputation of the vehicles you're offering either. I can't tell you how many times I've heard "yeah, the Big 3 need to offer huge rebates because no one wants to buy their junk without them" or something to that effect. Basically, keeping a low MSRP makes the customer feel like they got a great value; offering a high MSRP with a huge discount makes the customer kind of feel like they bought the Blue Light special.

 

There is a definitely large disadvantage to rebates. My friend bought brand new Chrysler Sebring sedan. It was optioned at around $30-32K CDN, but he got it for some $26,000. Got zero depreciation insurance, too.

Just a few weeks ago the car got totalled. Insurance company has a choice of replacing the car with the same one (even same new car), giving the full money back, and something else, WHICHEVER IS LESS. Now the rebates changed, and the same car can no longer be had for 26,000. The best deal he was able to find was for $28,000. The insurance refuses to buy it, and instead told him that he can either pay the difference or get the money he paid for his car back in full.

so incentives are not bad, but they are only as good as the manufacturer makes them. MSRP, on the other hand, is a solid, steady, fixed price you could say, plus you can usually get a few hundred to a thousand less if you try.

 

Lower price is better for the rep of the manufactorer. I lok of people that window shop see $36K for a TrailBlazer and think "damn that is expensive, I can get a Import XXX for less than that". A perfect example is the Impala SS, I have heard people here compare it to the 300C, when in fact the real price Impala SS is actually a pretty good value and is the same as the base 190HP 300 at $23K.

GM cars alway seem to get bashed in the auto mags too when they do comparison test because the use the MSRP.

Consumers will not let go of rebates, so I'd like to see a mix of both, lower price and smaller rebates of say $1000.

 

I would much rather see a lower MSPR than a big "incentive". It always seems like when you want to buy a car the rebates aren't there. And just after you buy it, they come out. But if the price was lower with out rebates, it wouldn't have to wait for rebates. Butthats what the car companies whant to do, they want to be able to controll when they sell cars. If they are ahving a bad month, thwey can through out rebates, and make it LOOK like your saving money.

 

Rebates work better for a number of reasons. First of all it isn't just the auto industry that does this. Do you think computers have rebates because they like giving money away? No it is built into the selling price. Also by having rebates the consumer can feel like they got a good deal. How many people come out of buying a car and say "Yes I paid MSRP!"? None, everyone expects a deal. If you do your research you will see the reabtes are almost the same everywhere but if you aren't into cars and you just get a $10K deal on your new Silverado then you feel like you just got the deal of a lifetime but in reality it is still built into the price.

 

I hate rebates on everything.

Just tell me the damn price and stop jerking me around.

 

What jawzforlife said.

In addition, the "incentive game" makes it virtually impossible to order a vehicle around here as the dealers insist that the "programs" in effect at delivery are what get applied.

We're due to replace the Envoy next May. This time around I'll be fully prepared to play the game, and will have the luxury of being able to wait. It'll also be the first time in my life that I'll be taking a real serious look at vehicles other than GM.

 

Not only do I not have to pay the sales tax, I don't have to pay for the company and dealership to administer the rebate program.

Value pricing all the way!

 

GM's system of astronomic rebates and laughably high MSRPs has the appearance of a shell-game. Of course, I'd probably play the game if GM had a single competive product (other than the last 2004 C5 'Vettes), but the selection at my local "GM market leader" dealership is grim, as is the service.

Kudos to Chrysler for putting a realistic price on the 300C.

I'll reserve a "one-finger salute" for the morons that decided on a nearly $64,000 MSRP for a loaded 2005 STS.

 

Wow. Something I actually agree with you on.

Considering the BMW 5-series tops out at more than that ($65k+) I don't think that it is out of line at all...

 

What about when the price is lower then the rest of the cars in its group, yet still offers the same quality and functions found in the other cars, yet still does not sell without incentives? The Malibu is a good example. Good quality materials, many neat features that Accord and Camry have, and for thousands less then an equaly equiped Accord and Camry....yet no one wants it? Dont say design, because both the Accord and Camry are ugly and boring, respectivly. The Malibu actualy beat out the Camry in a Motor Trend comparison! The big 3 will always have to help out there cars as long as the majority of America thinks that imports are better then domestics. Only time we see a domestic selling well is with some sort of gimmick, i.e. 300C's "Bently" like look.

 

While I'd rather have a "no haggle price".....rebates do offer the option of being able to afford the taxes and license fees when buying a new car w/o a trade or sufficient down payment.

I'd guess that 90% of the buying public looks more toward monthly payments than bottom line pricing.....hence 72 month+ terms. Problem is severe depreciation forces you to keep the car instead of being able to afford to trade up every 3-5 years.

 

I'd rather see lower no haggle prices combined with some sort of loyalty incentive. It doesn't have to be the $4-6k off they're offering now. But if I have a car from a certain dealer, which I have owned for five years and which I have him perform all my services on it; something in the area of free oil changes and tire rotations (i.e. FREE service) for the first 3 years would be a nice incentive to buy from him again.