Car Companies Offer Aggressive March Discounts

Car companies continue to have high levels of vehicles in inventory, particularly at their dealer locations. This, as well as worry that the economic recovery may have lost steam, have led to a series of discounts, even on top-selling cars, SUVs and pickups. The price cutting trend has continued into March, and some of the offers are shockingly good, for buyers if not the manufacturers.

Kelley Blue Book (KBB.com) examined the On Sales-new-car-deals?printable">10 most aggressive deals for March and broke them into three categories: leases, cash back and financing deals, most of which involve very low rates on loans. Its editors commented:

The extreme winter weather conditions much of the country has experienced in February resulted in fewer shoppers on dealership lots. Consequently, March is a time for automotive brands to catch up on sales lost last month by offering a variety of new-car deals.

Zero percent financing, particularly over several years, is an enticement because payments are almost exactly the same, in sum, as if the buyer paid cash. Unfortunately for the manufacturer, it takes the risk that interest rates may rise over the next several years. KBB identified the Toyota Motor Corp. (NYSE: TM) Camry Hybrid LE Sedan at the top of the list with zero percent financing over 60 months - five years.

Ford Motor Co. (NYSE: F) had the two best cash back deals, according to KBB. Both the Mustang six-cylinder coupe and Focus SE Sedan are being offered with $3,000 cash back. Notably, each is an inexpensive car. The base price for the Mustang is $23,335. For the Focus, it is $19,440.

The balance of the 10 best deals are on leases. General Motors Co.'s (NYSE: GM) Chevy Volt topped the list, a sign that the struggling electric car has not caught on after years on the market. The Nissan Altima 2.5 S Sedan and Toyota Venza LE Wagon each require less than $2,000 down at signing. The Ram 1500 Quad Cab is the only pickup to make KBB's 10 best deals. So did the four-wheel drive Nissan Pathfinder S and the Ford Flex SEL, both SUVs, as well as the Acura ILX 2.0L Sedan.

Matters could get worse for the car companies as the year drags on. The bad weather may have ended, but the struggling economy may continue to falter.