Chrysler is one of many makers upping incentives as the economy falters.
Chrysler is offering qualified customers the opportunity to skip payments for the first three months after they take delivery of a new 2011 or 2012 vehicle.
The “No Payment for 90 Days” program covers any Chrysler, Dodge, Jeep or Ram product – but not the new Fiat 500 – and is officially part of the maker’s annual summer clearance program. But industry observers suggest Chrysler, like its competitors, is ramping up incentives in a bid to keep momentum going as the U.S. economy shows signs of slipping back into recession.
Notably, Chrysler announced it would step up its givebacks on a number of new 2012 models, including cash of $500 on a Chrysler 200 sedan, $1,000 on a Jeep Liberty, $500 on a Dodge Avenger or Journey, and as much as $1,500 on a Ram pickup.
The maker is also offering a number of deals on leftover 2011 models. That includes up to $2,000 in cash on the new Chrysler 300 and Dodge Charger sedans and zero-percent financing on some models.
The newest incentive program requires buyers to finance through Ally Financial and is offered only to those who qualify for the program, though automotive lenders have loosened the reins significantly over the last year after sharply limiting loan availability during the depth of the recession.
Makers traditionally come up with deals as the model-year comes to a close, but offering increased incentives on vehicles from the new model-year, in this case 2012, is less common and reflects the growing concerns about the weakening economy and sluggish automotive market.
“With auto sales already not running at a strong rate this summer, it could be tough second half of the year for the auto industry,” said Jesse Toprak, chief analyst for TrueCar.com, which tracks industry sales and pricing data.
While July U.S. car sales rose slightly for most manufacturers, they continued to slip for some of the major Japanese makers, reflecting both the weak economy and product shortages caused by the earthquake and tsunami of March 11. Toyota was off 20% and Honda 25%, leading both makers to increase incentives.
Overall, industry givebacks were up about 1% for July compared to the month before, estimated TrueCar, to an average of around $2,418 per vehicle. And the trend appears to be towards even bigger incentives in August.