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Ridiculous car deals


Dasher

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Some of these car deals are getting ridiculous. A local Caddy dealer is advertising new 2004 Devilles for $415 per month with no money down. If my old math still works, that's less than 5 g's a year. On a two year lease, you pay 10 g's on a car that lists at over 50 g's. When they get the car back after the two year lease, they'll be lucky to get 20 g's for it. Who pays the other 20 g's?

Another dealer is advertising a new BUICK Rendesvous for $159 a month - no money down! On a two year lease, you'd pay about $1,900 a year. If I could get by on 12 k miles a year I might better sell the Caddy and get the Rendesvous. I can't drive my Caddy for $1,900 - not even close.

Now they're letting your return cars that are under lease through next August! Talking about robbin Peter to pay Paul! That's about 30 percent of the two year lease. Sooner or later all of this is going to catch up with the industry.

Or do "they" know something I don't?

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Somehow it might work into tax write-offs for them in addition to other factors?

This whole lease deal might LOOK like they are losing money, but I doubt it.

That $50,000 caddy didn't cost $50,000 to build. It probably cost them about $9,000 to build, or less. They're making a profit, in fact, HUGE profits. Or else they're cooking their books "Enron style" and this country is in real DEEP trouble.

Here's another example, a fully loaded MINI Cooper in the USA runs about $27,000 but in Europe, the same car is about HALF the price. Why? Whatever the reason(s) it's a complex answer, that's for sure. I think one of the reasons why cars are almost double the price in this country is because what we don't pay for at the gas pump, we apparently pay for when we buy the car.

If you really want to make people safe drivers again then simply remove all the safety features from cars. No more seat belts, ABS brakes, traction control, air bags or stability control. No more anything. You'll see how quickly people will slow down and once again learn to drive like "normal" humans.

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The deals you see in the newspaper are for 1 car only. They are called "bait and switch" cars. They are designed get you to come to the dealer. I personally don't think you should lease cars because you basically "renting" the car from the dealer and if you modify or break anything on that car you will have to pay for it.

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A local Caddy dealer is advertising new 2004 Devilles for $415 per month with no money down. If my old math still works, that's less than 5 g's a year. On a two year lease, you pay 10 g's on a car that lists at over 50 g's. When they get the car back after the two year lease, they'll be lucky to get 20 g's for it. Who pays the other 20 g's?

I think the better question is...after you've paid over 400 bucks a month for two years, what do you have to show for it after you turn the car in? Nada. You've shelled out about 10 grand and come out with nothing. You obviously can't sell it because it's not yours. Whaddya do? Just keep leasing I guess... :o

Jason(2001 STS, White Diamond)

"When you turn your car on...does it return the favor?"

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A local Caddy dealer is advertising new 2004 Devilles for $415 per month with no money down.  If my old math still works, that's less than 5 g's a year.  On a two year lease,  you pay 10 g's on a car that lists at over 50 g's.  When they get the car back after the two year lease, they'll be lucky to get 20 g's for it.  Who pays the other 20 g's?

I think the better question is...after you've paid over 400 bucks a month for two years, what do you have to show for it after you turn the car in? Nada. You've shelled out about 10 grand and come out with nothing. You obviously can't sell it because it's not yours. Whaddya do? Just keep leasing I guess... :o

I agree - If you want to purchase the car at the end of the lease, the dealer or leasing company will typically charge a much higher price than what the retail value of the car is...

Kevin
'93 Fleetwood Brougham
'05 Deville
'04 Deville
2013 Silverado Z71

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Somehow it might work into tax write-offs for them in addition to other factors?

This whole lease deal might LOOK like they are losing money, but I doubt it.

That $50,000 caddy didn't cost $50,000 to build.  It probably cost them about $9,000 to build, or less.  They're making a profit, in fact, HUGE profits. Or else they're cooking their books "Enron style" and this country is in real DEEP trouble.

Here's another example, a fully loaded MINI Cooper in the USA runs about $27,000 but in Europe, the same car is about HALF the price.  Why?  Whatever the reason(s) it's a complex answer, that's for sure.  I think one of the reasons why cars are almost double the price in this country is because what we don't pay for at the gas pump, we apparently pay for when we buy the car.

Nope, it's advertising and endorsements !

It has nothing to do with the gas pumps. Everywhere you look there is an ad for something and the money to pay for it has to come from somewhere.

Not to mention "perceived value". If a $50,000 Deville cost the same as a $20,000 Chevy Malibu the Caddy wouldn't seem as "special" anymore would it ?

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Well I wasn't suggesting that leasing is a good deal. I was looking at it from the other side and what all this will do to the market in the future. I just don't see how they can come out ahead on those prices.

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i'm not going to say that the dealers don't do bait and switch, but dasher's point is valid. the deals you can get are amazing. unfortunately, that's part of the problem.

it's good for the consumer up front buying the vehicle, but the resale value is another story.

another angle is the volume numbers, the big three have decided that they will increase their percentage of the market at all costs...literally. this is kinda making a pact with the devil. it's very good for those buyers who buy and hold their vehicle for 5-6 years. resale value isn't as important to us.

one last point: in some states (connecticut for example) it is no longer possible to "lease" cars...you must now "buy" them for a period of time (something to do with the liability laws for insurance/legal aspects). i point this out simply because the advertising in the newspapers make the deal out to be an outright "buy"...when in actuality, it's a lease. the numbers can be deceiving at first glance. jackg 90 seville 92k

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Somehow it might work into tax write-offs for them in addition to other factors?

This whole lease deal might LOOK like they are losing money, but I doubt it.

That $50,000 caddy didn't cost $50,000 to build.  It probably cost them about $9,000 to build, or less.  They're making a profit, in fact, HUGE profits. Or else they're cooking their books "Enron style" and this country is in real DEEP trouble.

Here's another example, a fully loaded MINI Cooper in the USA runs about $27,000 but in Europe, the same car is about HALF the price.  Why?  Whatever the reason(s) it's a complex answer, that's for sure.  I think one of the reasons why cars are almost double the price in this country is because what we don't pay for at the gas pump, we apparently pay for when we buy the car.

Nope, it's advertising and endorsements !

It has nothing to do with the gas pumps. Everywhere you look there is an ad for something and the money to pay for it has to come from somewhere.

Not to mention "perceived value". If a $50,000 Deville cost the same as a $20,000 Chevy Malibu the Caddy wouldn't seem as "special" anymore would it ?

They don't advertise in Europe? <_>

If you really want to make people safe drivers again then simply remove all the safety features from cars. No more seat belts, ABS brakes, traction control, air bags or stability control. No more anything. You'll see how quickly people will slow down and once again learn to drive like "normal" humans.

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What is advertised and what is in the fine print when you sign are probably two VERY different things. Just think of the dealer like a Las Vegas casino, the house NEVER looses no matter how good the deal is or appears to be.

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Sure they could make $9,000 caddy.

First you start with the $350 Northstar......

Couple it with the $250 480E.....

Then all you add is a chassis, suspension, leather, some electronics ;) , glass, sheet metal & paint. You're there! (oh yea, a few peso's labor too) -hehe

Seriously, 9K? I don't think so...

But, I wonder? A few months back I read Ford makes like 20K on each Excursion. THAT'S Amazing!! :D

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Note: in the process of trying to quote Marika' post on how much a Cadillac costs, I apparently confused the board and it made my new post as an edit to Marika's post instead. To try to fix that I deleted the post, but then added my response which included that quote. Sorry for the confusion.

Ok, Cadillac Guru, then enlighten us.  Exactly how much does it cost to build a Cadillac? 

Just to jump in, this is a very complicated question. Overall GM profits were less than $1K/unit in 1998, for example, but that does not mean that they sold cars to dealers for $1K less than they made them for. Instead it means that if you took the total profits GM made (as a public company, this is a published number), and divided by the total number of units sold, you would arrive at a profit of under $1K per car for all of GM's varied operations worldwide.

Generally, GM won't answer anyway, but probably best to ask what the direct cost with full overheads and burdens, including total amortized cost of any specific tooling for that particular model of Cadillac, and any remaining allocated costs for the factory used for that model.

My guess on a $44K Deville that invoices at $40K with holdbacks of $1K the GM cost directly attributable is close to $30K. That only because the Deville has not benefitted from a major redesign lately. Profits on the trucks are apparently somewhat higher, perhaps because their tooling & development cost are shared over a larger base?

For the 4th quarter of 2003, the North American Auto wing of GM's profits were $397M (excluding charges) on $32B of revenue, or 1.2%. I appreciate that this is not Cadillac specific, but they are not making a pile of money on cars. In fact, they make more money on car loans:

"While G.M.'s margins remain low for an auto company running 94 percent of capacity, and much of its earnings are generated through the financing of cars rather than the manufacturing of cars, the fact is that the company is growing earnings in a difficult pricing environment," John Casesa, a Merrill Lynch analyst, said in a research note.

Bruce

2023 Cadillac CT4-V Blackwing

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GM is lucky they have the Impala. With that car, they've become the number 1 automaker with the highest level of customer loyalty and retention, according to a recent J.D. Power & Associates survey. Yes, they finally passed Honda and it's all because of Chevrolet and their hot selling, georgeous Impala.

If you really want to make people safe drivers again then simply remove all the safety features from cars. No more seat belts, ABS brakes, traction control, air bags or stability control. No more anything. You'll see how quickly people will slow down and once again learn to drive like "normal" humans.

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I've just been told by somebody who should know that the manufacturers prefer to keep the plants running with small profits rather than pay the 90% employment that their UAW contracts require. makes sense to me.

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I doubt Cadillac is making a profit of $1,000 per car.

And yes it's true, the SUV's are raking in massive profits for all the car manufacturers, sometimes as much as $20,000 PER CAR which is why I find it hard to believe that Cadillac is only making a profit of $1,000 per car.

The Escalade is very popular, I wonder what the profit is on that? Definately NOT $1,000.

If you really want to make people safe drivers again then simply remove all the safety features from cars. No more seat belts, ABS brakes, traction control, air bags or stability control. No more anything. You'll see how quickly people will slow down and once again learn to drive like "normal" humans.

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Impalas huh..Hmm....Yeah, I think I've seen one or two of those things in my rear view mirror... ;)

Impala is a nice car. Fully loaded it's very affordable and well made.

They are even being used as police cars now. It's represents a good buy for most towns who need simple cruisers.

Besides, my father had a '61 Impala station wagon that was just sooooooo much fun. B)

If you really want to make people safe drivers again then simply remove all the safety features from cars. No more seat belts, ABS brakes, traction control, air bags or stability control. No more anything. You'll see how quickly people will slow down and once again learn to drive like "normal" humans.

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Besides, my father had a '61 Impala station wagon that was just sooooooo much fun. B)

Now your talkin'! Do you have any idea what that would be worth in Japan? American station wagons from the sixties are worth a small fortune over there right now..

'93 STS.. opened, dropped, wide...fast.

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Impalas huh..Hmm....Yeah, I think I've seen one or two of those things in my rear view mirror... ;)

Impala is a nice car. Fully loaded it's very affordable and well made.

They are even being used as police cars now. It's represents a good buy for most towns who need simple cruisers.

Besides, my father had a '61 Impala station wagon that was just sooooooo much fun. B)

In 2001 Myself and 3 friends all bought new Impala's! They are nice. Oddly enough, I bought the first one and every one there after looked mine! But I still love my Cadillac!

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They are even being used as police cars now. It's represents a good buy for most towns who need simple cruisers.

My brother works for the village PD and they just recently aquired their 2nd Impala. It is an exceptional police car, especially just for town use. Although the first one was in and out of a transmission shop 3 times in the past 2 months. But, I am sure that has a lot to do with the drivers. :)

If theres snow on the roads though, they leave the Impalas and head for the Jeep.

-Eric

Eric

93 Cad Seville 100K

95 Chev Blazer 143K [garaged summers] :)

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Even if I win the lottery, I don't think I will ever buy a brand new caddy. I bought my first caddy, a 87 Deville w/190k for $400.00. I drove that car for 2 years, put 20k on it and turned around and sold it for $800.00 :D

I bought my current one-owner Eldorado with 48k for $5800.00. I'm sure it would have gone for more at a used car lot.

Anyway, the point is, you can get a nice caddy for a good price if you don;t mind a used vehichle.

...just my 2 cents... B)

Crystal Red Tintcoat Exterior | Shale/Brownstone Interior | 32k

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I doubt Cadillac is making a profit of $1,000 per car.

And yes it's true, the SUV's are raking in massive profits for all the car manufacturers, sometimes as much as $20,000 PER CAR which is why I find it hard to believe that Cadillac is only making a profit of $1,000 per car.

The Escalade is very popular, I wonder what the profit is on that? Definately NOT $1,000.

Marika,

I don't base this on anything other than gut feeling and perhaps something way back in my mind that I heard a long time ago and can't remember but somehow I suspect the General is making a LOT more than $1000 on a new Cadillac.

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I doubt Cadillac is making a profit of $1,000 per car.

And yes it's true, the SUV's are raking in massive profits for all the car manufacturers, sometimes as much as $20,000 PER CAR which is why I find it hard to believe that Cadillac is only making a profit of $1,000 per car.

The Escalade is very popular, I wonder what the profit is on that?  Definately NOT $1,000.

Marika,

I don't base this on anything other than gut feeling and perhaps something way back in my mind that I heard a long time ago and can't remember but somehow I suspect the General is making a LOT more than $1000 on a new Cadillac.

Larry, I agree. There's no way the General is making only $1,000 profit on a caddy. NO WAY. At $1,000 profit each it would not be profitable enought to continue to build them.

If you really want to make people safe drivers again then simply remove all the safety features from cars. No more seat belts, ABS brakes, traction control, air bags or stability control. No more anything. You'll see how quickly people will slow down and once again learn to drive like "normal" humans.

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