Would you like free insurance with that?
If you're buying a GM car in Washington or Oregon these days, you might hear those exact words from your dealer.
It's part of a new crop of aggressive incentives that also includes Hyundai's trade-in guarantee and Chrysler's no-payments-for-90-days plan.
Experts say we're seeing these incentives now because the marketplace has become so competitive, and cash back or special financing offers no longer resonate with buyers.
"That's an old message. That's a tired message that a lot of companies have been doing for a long time, since Lee Iacocca said 'buy a car, get a check'," said Joe Kyriakoza, general manager of automotive for Colorado-based Datalogix, which offers data and analysis on a number of industries.
In fact, traditional incentives have gone down this year. Kyriakoza said incentives have gone down in March, April, May and June, and June's levels were the lowest since October 2005, citing data from the data-tracking website TrueCar(truecar.com).
Philip Reed of Edmunds.com said that has happened in part because inventory has been down due to the major earthquake earlier this year in Japan.
"It's not been a typical summer," said Reed, senior consumer advice editor at Edmunds.com.
We are also seeing the more aggressive incentives now because sales have not been strong, said Reed. U.S. sales were at almost 7.4 million through July, which meant they were running about 10 percent higher than in 2010 but still below historically high levels.
Whatever the reason, we've read the fine print on four programs that may help you.
HYUNDAI TRADE-IN GUARANTEE
How it works: Depending on which car you buy, Hyundai gives you a percentage of the purchase price that you are guaranteed to receive at trade-in. If the actual trade-in value is higher, you get the higher amount.
What you need to do: Buy a new Hyundai, trade it in on another new Hyundai within two to four years, drive less than 15,000 miles a year and have all service performed at a Hyundai delaership. Charges are assessed for miles higher than 15,000 a year and for damages to the car.
Hyundai spokesman Jim Trainor said the service stipulation is necessary to ensure the car is maintained properly. "Who's to say that Joe's garage at the end of the street is doing things to the company's specifications," he said.
Reed and Kyriakoza saw no issues with the stipulation; Reed said he advises new-car owners to have the vehicles serviced at a dealer anyway. Both said the details of the deal are similar to the details of a lease deal — including an upfront statement of value after a period of years.
"The biggest caveat to the whole thing is you have to buy another Hyundai," Reed said.
The verdict: Kyriakoza was very high on the program, calling it a "game-changer" for people buying a car. Reed felt it was more of a tie-breaker if you're considering a Hyundai anyway but looking at competing models as well.
Last word: "If you are a parent and you're going to buy your 16-year-old a Hyundai Accent because you don't care if he trashes it because you know you are going to get your $12,000, you have to be wary of that," Kyriakoza said.
CHRYSLER 90 DAYS NO PAY
How it works: If you buy a new 2011 or 2012 Chrysler, Dodge or Jeep vehicle, your first payment is deferred 90 days. Chrysler spokesman Ralph Kisiel said the program may help people who want a new car, but have other bills, such as medical expenses or student loans, that will expire soon.
What you need to do: Buy by Sept. 6, when the offer ends, and finance the car through Ally Financial, which is Chrysler's preferred lender. Kisiel said you may be able to finance through Chase bank as well.
The verdict: Kyriakoza gave the program a "lukewarm" recommendation, while Reed said he would not recommend it.
"This kind of thing is a little dangerous because, first of all, it will make people buy who can't afford it. There's a psychology that says 'I'll buy and things will get better'," he said.
"You're very excited about a new car when you get it, and then as time goes on, your motivation to make the payments diminishes."
Last word: "You still have to pay. What do you get by deferring? I don't see any benefit to the responsible consumer," Reed said.
GM FREE INSURANCE
How it works: Buy a new GM and get a year of insurance at no charge. GM spokesman Tom Henderson said the cost is born by GM, although he acknowledged that it may be rolled into the price of the car.
What you need to do: Live in Oregon or Washington and buy a car that will be titled in either state, by Sept. 6, when the offer ends.
The verdict: Reed advised buyers to check out the insurance and make sure it's adequate. Kyriakoza cautioned buyers to read the fine print and make sure they will not get hit with a balloon payment, but again gave a tepid endorsement.
"People get comfortable with their insurance providers, and switching is something consumers hate to do. But if it's technically free, I guess there is a value there," Kyriakoza said.
Last word: "Anecdotally, very few customers are declining the insurance, so it seems to be well-accepted," Henderson said.
FREE MAINTENANCE PROGRAMS
How they work: At least 15 different auto brands offer some form of free maintenance, some lasting for as long as four years. Different brands offer different levels of coverage; among luxury brands, it's common to receive full coverage, even on wearable parts like brake pads.
What you need to do: Buy a car that qualifies for coverage. Some automakers offer coverage on only some of their cars.
The verdict: Kyriakoza and Reed both said the programs can be good for the right buyer.
"A lot of luxury buyers are older. They aren't going to work on their cars; they'd much rather have someone pick it up at the house," Kyriakoza said.
Last word: Reed said the programs also take away buyers' concerns that dealers may try to fix more than what a buyer came to the shop for, at additional cost. "They don't add stuff on. You're in and out, and you know you're not going to spend extra money."