RENEE MONTAGNE, host:
Cars especially are among the big purchases that people are putting off during this recession. Dealers are trying to change that with some of the lowest prices in a long time. But all those rebates and discounts have yet to rekindle the market, as NPR's Frank Langfitt reports.
(Soundbite of papers rustling in wind)
FRANK LANGFITT: It's a blustery day at Springfield Ford outside Philadelphia. The wind rips through the plastic colored flags that line the parking lot. Steve Amabile is the sales manager here and he's pitching me some of his best deals. We come upon a 2009 Ford Fusion. It's a midsize sedan that competes with the Toyota Camry and Honda Accord.
Mr. STEVE AMABILE (Sales Manager, Springfield Ford): This particular car here is what's most people would consider to be fully loaded - a $25,000 car, leather and sunroof and all that good stuff - and you're looking at a sub-$20,000 car by the time it's all said and done.
LANGFITT: I'm not expert on pricing, so I brought along John Giamalbo(ph). He's an analyst with Edmunds.com, the consumer car Web site.
Now, John, is that a good deal?
Mr. JOHN GIAMALBO (Analyst, Edmunds.com): It is a good deal. It's a brand new car, and get a vehicle like this in this segment for that price, it is a very good deal.
LANGFITT: And, Giamalbo says, not unusual. He says prices are lower than they've been in years, and now is a good time to buy. Most consumers are still too worried about the economy to jump in. In March, General Motors' sales were down 45 percent from a year ago; Chrysler's were down 39 percent; and Ford, down 41 percent.
But Amabile says his dealership is getting some traction.
Let's say I have no money and I'm a totally economic buyer. Is there a really cheaper Fusion here to look at?
Mr. AMABILE: It's gone already. They're out there. It's the S model, and you can buy one of them for around 15 grand.
LANGFITT: But how does a dealership make money when it sells cars for so little? Amabile says it helps to understand the business strategy. The dealership actually makes more selling a used car than it does a new one.
Mr. AMABILE: When we sell a new vehicle, we might only make a couple hundred dollars on a new vehicle, which would be surprising to some people.
LANGFITT: But Amabile can recondition a trade-in and sell it for a profit of about $2,500. Despite the recession, Amabile says that strategy is working and Springfield Ford is holding its own.
But it's not just Detroit companies that are cutting prices. I went a little ways up the road to Conshohocken. I'm now at Conicelli Toyota, and I'm walking through the lot and they're offering deals on just about everything they've got here, and that includes the Prius.
Dom Conicelli owns the dealership, which is also in the Philadelphia suburbs. Last year, he says, customers had to sign up to buy a Prius.
Mr. DOM CONICELLI (Owner, Conicelli Toyota): When the gas prices were extremely high, we had a backlog of customers that were waiting. You know, we had a line of people waiting and...
LANGFITT: How long was the line?
Mr. CONICELLI: We were probably back a month.
LANGFITT: Not anymore. Gas is now down around $2 a gallon, Priuses line the parking lot, and Conicelli is reducing prices to move them.
Mr. CONICELLI: To have a thousand dollar rebate on the Prius is really unusual. That's never happened before.
LANGFITT: And that rebate comes on top of a more than $3,000 discount.
If I wanted to drive out of here today in the cheapest Prius, what could I walk out with?
Mr. CONICELLI: I would think that you could see one somewhere around $23,000, maybe a little bit less.
LANGFITT: John Giamalbo of Edmunds.com says that price highlights an inconvenient truth about hybrids. Sales are driven far more by gas prices than by concern about carbon emissions.
Mr. GIAMALBO: I think people worry more about the green in their pocket when gas prices are that high, as opposed to the green in the environment.
LANGFITT: As to the future of car sales during this recession, some dealers are pinning their hopes on rust. Each year people scrap about 13 million cars in America. So, the thinking goes, people will have to start buying eventually, whether they like it or not.
Frank Langfitt, NPR News, Washington. Transcript provided by NPR, Copyright NPR.
