Bargain Season

The game is about the same every year. Around August, the auto ads push a little harder and run more frequently. "Get a red-hot Buick at a red-hot price." Or: "The same performance. The same luxury. The same Chrysler. But at a final clearance price." Carmakers offer trips to Hawaii or Puerto Rico for the most successful salesmen and their wives; the salesmen smile more and persist longer with customers. That is what happens during the annual automobile "cleanup, when automen are anxious to get rid of last year's cars and prepare the public for the coming year's models.

This summer's "year-end" clearance is more intense than usual. New car sales, though strong over the year, fell 12% below their 1968 pace in July and during the first ten days of August. General Motors sold 411,000 autos, off 17% from last year's level. Chrysler dropped 20%, from 166,000 to 132,000, and American Motors 12%, from 26,000 to 23,000. Only Ford bucked the trend, with sales of 251,000, up 2% over the comparable 1968 period. The industry's inventory of 1969 models increased substantially during July, to nearly 1,500,000 cars, enough for 58 days of sales at current rates.

Detroit's plans for the October introduction of 1970 models only add to the pressure on dealers to dispose of '69 cars. Next year's models will include a wide selection of new specialty sports cars and compacts. Chrysler, for example, will introduce its Challenger to do battle with Ford's still highly successful Mustang. Last week President William Luneburg announced that next year American Motors will bring out a Volkswagen-size car called the Gremlin.

Only Right. Carmakers grant rebates to dealers on autos sold during the cleanup. The average rebate is $200, but it can run much higher on expensive models. This bonus is what enables dealers to pare prices in late summer. It is only right that the buyer pay a lower price than usual because a car sold late in the model year has already suffered a good deal of depreciation; in a few weeks it will be "last year's car," worth about $700 less for a compact and $2,000 less for some luxury models. During the next few weeks and months, the alert consumer can drive some hard bargains. The bargains may never live up to their billing as "the best deal yet," but there are certain guides to saving money:

> Only the naive agree to pay the window-sticker price for U.S.-made autos. The factory list price is merely the point at which bargaining can begin.

> Whatever customers agree to pay, they should beware of signing blank contracts; they are apt to find that their "bargain price" has been hiked. Last week Michigan's secretary of state suspended the license of a Detroit dealer after a buyer complained that he had been victimized. The buyer signed a blank contract after agreeing orally to pay $5,505 for his auto, only to find later that the price had been filled in as $6,256.

> One usually good buy is a demonstration car, which is driven by auto salesmen for test runs and sold late in the year. These cars, ordinarily well cared for and loaded with optional equipment, are generally the last to be sold, but they often go at prices well below the cleanup levels. Most dealers get a 50 rebate from the manufacturer for every mile shown on the speedometers of their demonstration cars, and they may be willing to pass on the saving to the customer. A $3,100 Chevrolet Impala with 5,000 miles, for example, may cost the dealer only $2,075, since he gets a $250 allowance for the mileage on top of his usual $775 discount on the car. One possible drawback to buying demonstration cars is that the warranty coverage has been shortened by several months while the dealer has been using it.

>Smart shoppers may also save by declining a dealer's offer to make arrangements for "on-the-spot financing." Chances are that the bank pays the dealer what amounts to a "finder's fee" for lining up the loan. The fee often amounts to $100 on three-year loans, or enough to compensate the dealer for some cuts in the price of the auto. Buyers aware of such special ties between dealers and their banks may be able to bargain for a better sales price or simply make their own loan arrangements.

> A customer with a used car may do better by selling it privately instead of trading it in for a new car. No matter how sound the condition of the used car, dealers generally pay only rock-bottom prices, which are set at wholesale auctions. If a car's wholesale value is $800, a dealer may offer his customer a trade-in of $1,000. In fact, he will usually make up the difference by tacking $200 onto the price of the new car.

> Local conditions vary considerably, but on a national basis, Chrysler and American Motors face the biggest cleanup problem. Their supply of unsold new cars, compared with the recent rate of sales, is substantially larger than that of either General Motors or Ford. Chrysler, for instance, is overstocked with both standard and top-of-the-line Plymouths and Dodges partly because G.M. has made inroads into Chrysler's share of the market among taxi and car-rental companies.

At any time of year, car buying is one of the last big bargaining battles left for consumers. Armed with the knowledge that dealers have extra flexibility at the end of model years, the auto buyer may not necessarily clean up, but he can do quite well.

This file is automatically generated by a robot program, so reader's discretion is required.