Incentive - September 2008 - (Page 52) some $3,000. On top of that, Dodge offers another $5,000 cash incentive. The $30,000 car is now sold for $22,000. “If I want to take that car and trade it in at the dealership a month later, I might get $15,000 for the vehicle,” says Toprak. “Dealerships are not going to give you anything near what it sold for to make it more attractive. Whenever there’s a cash rebate, immediately A C C E P T E D AT : Regis Salons Trade Secret MasterCuts SmartStyle BoRics Mia & Maxx HairMasters Carlton Hair Holiday Hair Hair by Stewarts Style America Saturday's Panopoulos Jean Louis David Beauty Express Head Start TGF Hair Salon Hair Plus Best Cuts Famous Hair Beauty Bar First Choice Haircutters Regis Signature Salons Outlooks for Hair Mitchell’s Hair Styling Fiesta Salons BeautyFirst The only gift card that makes everyone look good. Accepted at 6,000 locations with over 20 salon brands to choose from. Give your employees or customers the choice to indulge at their favorite salons. With 6,000 salons to choose from, we have something to fit everyone’s style. Enjoy salon services or professional products from Redken, Matrix, TIGI, OPI and many more. Visit Booth 4319 PureBeauty For more information, visit www.regiscorpgiftcards.com, call 952-947-7495 or email giftcardincentives@regiscorp.com. there’s an impact on the resale value.” This is why 25 percent of consumers are now “upside down” in their financing, asserts Toprak, owing more on their car than it is really worth. “Based on our analysis, they actually have negative equity when they go to trade in their vehicle, on average $4,300. This then ties into the fact that most people don’t have a lot of money to put toward the purchase of a new car. If cash incentives are not offered, most of these people will not be able to get into a new car.” Automakers’ only way out of this vicious cycle is a value-pricing strategy. The idea is to lower the incentive spending and lower the sticker price to much more realistic levels for the transaction price. The concentration will then be on selling the car and not the deal. “But when the segment is weak, car makers have no choice but to offer heavy incentives, especially in the large vehicle and truck sectors,” says Toprak. Or, of course, they can make a better, more desirable product. Toprak notes that car buyers are gladly paying some $5,000 over sticker prices on existing hybrid models and remaining on waiting lists to purchase such vehicles, which offer exceptional gas mileage. s Send comments to feedback@incentivemag.com 52 | Incentive | September 2008 | incentivemag.com http://www.regiscorpgiftcards.com http://www.regiscorpgiftcards.com http://incentivemag.com
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