Consumer Car Buying Advice Blog

In a move to prop up sales, the Detroit automaker begins its annual Red Tag Sale event three weeks earlier than normal.

There are good deals out there

As recently as yesterday, here at Auto Credit Express we read an article on CNN Money stated that there were “Bargains For Consumers Able To Buy.” Nowhere is this more apparent than in the case of the domestic automakers. Because while Toyota can offer 0% financing on many of its vehicles, GM, especially, does not have that luxury. Without sufficient liquidity at GMAC to match that kind of a deal, the General is forced to discount vehicles – and it is doing so in a big way.

Red Tag Pricing

The Red Tag event is essentially a fixed-priced sale based on the supplier price of most GM vehicles. The operative word here is “most”, since although the sale encompasses all of GM’s brands, it does exclude some vehicles such as the Chevrolet Corvette and the Cadillac CTS-V, although it does include some vehicles, such as the Buick Enclave, that are selling very well right now.

Here’s how the program works: The supplier price is 4% above GM employee pricing. This means that for a 2008 version of the aforementioned front-wheel-drive Enclave in CXL trim would have an MSRP of $36,190.00. The Red Tag price of this vehicle would be $34,448.00, but since this vehicle also has a $2,750.00 rebate, the bottom line price, before taxes, would be $31,698.76 – a savings of over $4,000.00 off the sticker price.

Cadillac Escalade

Another particularly good deal can be found on the Cadillac Escalade. With an MSRP of $56,890.00, the Red Tag price is $53,456.55 – but if you deduct the total cash back of $6,750.00, the bottom line price comes to over $10,000.00 less than the MSRP.

The Bottom Line

The GM program is not scheduled to end until January 5th, 2009. With a year-over-year sales drop of over 40% last month, it’s easy to see why the General chose to begin the program early. The automaker is also hoping to entice consumers out of their lethargy and move them into dealer showrooms with supplier pricing plus cash incentives of up to $7,250.

For shoppers looking for a good car deal, General Motors is hoping you take the plunge.

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