Where to find the best summer deals on new cars
(MoneyWatch) Ah, summer: sun, sand, road trips... and deals on a new car. Although shoppers this year will find the price cuts a little stingier than usual, bargains are still to be had if you know where to look.
Strong auto sales this year, headed for a full-year total of around 14 million, have made car dealers less desperate to offer huge discounts to move out the inventory. And auto companies -- partly as the result of revised union rules -- have not overbuilt as massively as in past years, also mitigating the need for big discounts.
But as in any market, there is always a deal somewhere. Chevrolet kicked off its summer promotion with a promise that anyone who doesn't love their new Chevy can return it within 60 days for a refund. The offer runs until just after Labor Day.
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In addition, extremely low interest rates and high used car values have made it easier for auto companies to field attractive promotional lease deals. And a wide swath of models, including the midsize Chevy Malibu, are being redesigned for 2013, so remaining 2012 versions of those cars, trucks, and SUVs are discounted.
You won't find many rebates or discounts with certain brands, notes Jessica Caldwell, senior analyst for Edmunds.com. The reason: Companies like Hyundai already have more than half their current sales in new 2013 models, where they have little motivation to discount.
Here is a closer look at some of the best areas to find bargains on cars:
Lease deals. Leases have three major components: the interest rate, the projected value of the used car when it is returned, and the length of the lease. Two of those factors are now at near ideal levels for lease customers. Used car values have risen sharply the last two years, with the result that the so-called residual value of the new car being leased is very high. Interest rates are historically low. You do have to come up with relatively high up-front payments on these leases. But if you like to lease or want to try it, shop for low payments. Among the best lease deals are the 2012 Volkswagen Passat, at $209 a month for 36 months with $1,999 due at signing. Other good leases include the Chevrolet Cruze, at $159 a month for 24 months with $1,999 due at signing, and the Cadillac CTS at $299 a month for 36 months with $1,999 down.
Redesigned 2012 models. Several vehicle models that typically are among sales leaders are getting a makeover for 2013, in some cases with those new models already on sale. For instance, the midsize 2012 Nissan Altima has a $1,500 rebate from the manufacturer and is discounted from a list price of $23,770 on the SE version to an available $20,300, according to Kelley Blue Book. The 2012 Ford Escape small SUV carries a $2,500 rebate and is selling for roughly $19,000 instead of the list price at $22,265, according to Edmunds.com.
Low-rate financing. The same low rates that make leasing attractive also work for buyers looking for financing. The interest rate on the typical 48-month new-car loan is 3.18 percent. But many models, including the Nissan Altima and Ford Escape above, are offering promotional zero percent financing for up to 36 months to buyers with a top credit rating. If you qualify, use the auto loan calculator at Bankrate.com to see if that is a better deal than taking the rebate.
Wherever you decide to shop, here's to finding a summer bargain on a car you really want.
