Save on a clearance-priced new car

Consumer Reports News: August 28, 2007 10:13 AM

As the model year transitions from 2007 to 2008, a slew of clearance sales compete for car-buyers' attention. Choosing the right car from hundreds of available models is complicated by the big decision to save on a discounted, '07 car or buy the latest car fresh from the factory.

On the surface, many of these Labor Day weekend deals look attractive, especially for models that are not significantly changed for 2008. However, Consumer Reports Auto Price Service's analysis shows that there is even more potential savings than shoppers may realize.

Reviewing the 2007 incentives, we have seen hundreds, even thousands, of dollars in hidden dealer incentives. Car shoppers who claim their rebate, and perhaps even take advantage of reduced-rate financing, may be thrilled with their deal. However, they could be leaving significant money on the table.

The customer cash incentives come from the manufacturer, leaving the dealer to still earn money above their invoice price, plus a holdback fee, which the manufacturer pays the dealer and sometimes a manufacturer-to-dealer incentive. The holdback fee and manufacturer-to-dealer incentives are typically unadvertised. This means dealers may not be making big sacrifices to move old stock, and there could be more negotiation room.

Learn more in "How to drive a great, end-of-summer new car deal."

And check the Best New Car Deals on CR-recommended models.

Shop smart, and you could be driving a great deal this holiday weekend.

--Jeff Bartlett