Todd Bianco's ACarIsNotARefrigerator.com Blog

One online resource I use frequently is TrueCar.com.  TrueCar’s stated mission is to “bring transparency to car buying in America.” You can research any make/model you’re interested in and see a chart of the transaction prices for that make/model in your area (by zip code or city).  You have instant access to the (1) average prices paid, (2) recent sales data (broken down into local, regional and national trends), (3) Price Trend (monthly, graphed), and (4) Vehicle Pricing Details.  The data includes the actual number of sales/transactions on which the results are based.

I love the Vehicle Pricing Details.  It shows the dealer cost, factory invoice, average price paid and sticker price. Then it details any holdback (see below), dealer incentives, options, regional ad fees, destination fees and customer incentives.  It arms you with plenty of salient information that is usually not disclosed when you’re negotiating a vehicle purchase.

A dealer  holdback is a percentage of either the MSRP or invoice price of a new vehicle (depending on the manufacturer) that is repaid to the dealer by the manufacturer after the vehicle is sold. In other words, when the dealer says they are selling you the car at “invoice” and they aren’t making a dime, you can call their bluff and tell them you know about the $$ holdback.

When I want to see which manufacturers are giving heavy discounts and/or what models they are pushing – usually because sales are slow or there is excess inventory of a less-than-desirable model – I check TrueCar’s research. Did you know that Mercedes-Benz has the highest discount rate of any manufacturer – 14.2% – for 2011? It’s higher than Chrysler’s Ram brand at 14%.  Good to know next time you’re in the market for a new Mercedes.

Here’s another pearl.  The 2011 BMW ActiveHybrid 750Li, with a  base MSRP of $101,000, has $7,500 customer cash back – the highest for any vehicle currently.

For 100 grand, you get West Side/Entertainment Industry bragging rights to being “green” with a BMW “hybrid.”  Now this is not your standard Prius-like hybrid system.  You get a 4.4 liter 32 valve, 400 hp V8 engine with TwinTurbo technology, direct gasoline injection, 4 overhead cam shafts and Double-VANOS variable valve timing.  (So far, I’m not hearing “green.”)

BMW adds a super sophisticated ZF 8-speed automatic transmission with Hybrid Start/Stop function, Automatic and Manual shift modes, and fully synchronized electronic gear changes in both.  There’s an electric motor sandwiched between the gas engine and the torque converter in the 8-speed transmission.  It contributes an additional 20 hp and 155 lb-ft—combined powertrain output is 455 hp and 515 lb-ft.  In other words, it’s a very fast hybrid.  When you come to a stop, the engine switches off and the battery powers the accessories. The slightest nudge to the gas pedal restarts the engine and you’re seamlessly, almost imperceptibly, on your way.

Add to that, Brake Energy Regeneration to convert kinetic energy into usable electrical power and a 120-volt lithium-ion battery with boost function.  All that fancy-schmancy hybrid-electric tech adds a sobering $12,800 over the base 750Li (with the same 400 hp V8 engine).

But hey, it’s a hybrid, right? So the fuel economy must get a big boost, right? Not so much. The base 4.4 liter turbo V8 750Li is EPA rated a disappointing, but expected 14 mpg City, 22 Highway, Combined 17 mpg on premium fuel.  The ActiveHybrid 750Li, also running on premium, is rated at 17 mpg City, 24 Highway, Combined 20.  Be still, my green-beating heart.

On a percentage basis, the bump is around 16%.  Not bad; but when the numbers are so low to begin with, an extra 3 mpg doesn’t impress, does it? So far it hasn’t impressed well-heeled “green” customers either. I guess the good news is that the “standard” 750Li gets socked with a $1,000 gas guzzler tax while  the ActiveHybrid 7Li doesn’t.

The BMW factory to customer cash of $7,500 helps reduce the $12,800 hybrid premium and puts more cars on the street.  So if you’re in the market to drop $100k on an ActiveHybrid 7,  don’t be too impressed when the salesman offers you a 7.5% discount before you even start negotiating.  I’m betting that dealers may sweeten the pot further,  probably enough to almost erase the $12,800 Hybrid premium.  You know, it takes real muscle to move 4,800 pounds of high-quality German steel.

Here is TrueCar’s Blog of  July 18, 2011 listing the top five  Models with Largest Total Incentives:

Models with Largest Total Incentives
Rank	Make/Model	Customer Cash Rebate	Dealer Cash
1	2011 BMW 7 Series Hybrid	$7,500	$0
2	2011 Cadillac DTS	$7,000	$0
3	2011 Chevrolet Silverado	$4,505	$0
4	2011 Ram Dakota	$0	$4,500
5	2011 Volkswagen Routan	$0	$4,500

Here’s TrueCar’s latest list of Top Discounts (by Vehicle Category).  They have them for 2012 models as well.

2011 Top Discounts (by Vehicle Category)
Vehicle Category	Model	% Below MSRP
Large Car	Chevrolet Impala	25.0%
Large Truck	Chevrolet Silverado 1500	22.4%
Midsize Car	Mitsubishi Galant	19.7%
Luxury Car	Cadillac DTS	18.9%
Subcompact Car	Chevrolet Aveo	18.5%
Minivan	Volkswagen Routan	17.9%
Large SUV	Nissan Armada	17.0%
Luxury Sport Car	Chevrolet Corvette	17.0%
Small Truck	Nissan Frontier	16.8%
Luxury SUV	Mercedes-Benz GL-Class	16.2%
Small SUV	Dodge Nitro	15.8%
Van	Chevrolet Express Cargo Van	15.6%
Midsize SUV	Nissan Pathfinder	14.3%
Small Car	Ford Focus	12.9%
Sport Car	Ford Mustang	11.0%
Luxury Sport Car	Jaguar XK	10.6%

Some of what you see here makes sense; however, some may surprise.  It’s easy to dismiss the Chevy Impala or the Dodge Nitro. No one wants either one, so they are sold mostly to fleets. It’s the car you don’t want at the rental counter and it’s going to take some serious discounts to get retail sales.  I think Dodge has killed the Nitro and the old fleet soldier, the Chevy Impala, is due for a complete refresh next year.

The Ford Mustang is popular, but it’s losing the sales battle with its arch rival, the Chevy Camaro.  Through June 30, 2011, Camaro outsold Mustang by 9,720 units.  Ford and its dealers are discounting the Mustang to at least keep pace with the new kid on the block.  Ford needs the volume to keep the Mustang affordable and in production. There isn’t a car enthusiast on the planet that would want Ford to kill the Mustang. And it won’t as long as we keep buying them.

So what about America’s Sports Car, the Chevrolet Corvette?  In my humble opinion, the Corvette is the best car made by General Motors – bar none. But it’s expensive (easily over $60,000) and it’s ancient in car years. The 6th generation Corvette was introduced in 2005 and we probably won’t see the C7 until late next year (2012) as a 2013 model.

Sales of Corvettes are down substantially.  In 2010, Chevy sold only 12,624 units, down 9.4% from 2009.  As recently as 2006, Chevy sold 36,518 Corvettes.  So far, sales for the first six months of 2011 are up by about 8.5% (6,896 compared to 6,355 in 2010); but that comes at the cost of $3,000 customer cash or 1.9% financing for 60 months.

Did you even know that Mitsubishi still made the Galant? I had forgotten about it and so has everyone else.  Hell, I can’t even find a Mitsubishi dealer in Metro LA.   Mercifully, Cadillac has euthanized the DTS, it’s large front-drive former flagship. It is actually fairly reliable, according to Consumer Reports, but it hasn’t felt modern in years. R.I.P.

As far as the Chevy Silverado, there is so much profit in each one that even a 20% haircut won’t hurt either GM or its dealers. This is a solid, popular pickup truck that you can get at a bargain.

So when you are researching a new car, I’d add TrueCar.com to the list below:

• The website for the car manufacturer
• ConsumerReports.org
• KBB.com (Kelly Blue Book)
• Edmunds.com
• Car & Driver Magazine
• Road & Track Magazine
• Motor Trend Magazine
• Automobile Magazine
• Westways – the AAA magazine

The only pay site above is Consumer Reports. Support it if you can.

Also, do a Google search for blogs dedicated to the car(s) you’re interested in. Often time you’ll find comments, complaints and likes that directly answer questions or issues you may have. These people own the vehicle you’re checking out and their experiences in daily driving can illuminate things about the vehicle that you didn’t even think of.  Join a user group and ask a question. The answer may be more helpful than anything you get at a dealer. This is what Web 2.0 is about. Use it to your advantage!