You've heard the talk. You've seen the stories. "Incentives have lost their zing." "Incentives don't sell cars today." "People pay less and less attention to incentives." And so on, ad infinitum.
What utter and complete nonsense!
Let there be no mistake: Incentives, primarily cash and finance incentives, are the most important contributors to today's sales of new cars and light trucks.
Prove it, you say? That's easy. Just imagine what would happen to new-vehicle sales if there were no rebates or cut-rate loans.
Today's U.S. market would collapse with the speed of light. Instead of 16 million cars and trucks a year, we'd be lucky to sell 8 million or 10 million. Only persons who desperately need a new car or truck would step into a showroom.
The marketers of a generation ago didn't realize what a Pandora's box they were opening on Super Bowl Sunday in 1975. Those long-ago ads offered moderate cash rebates (a few hundred dollars) on Chrysler Corp. models and featured sportscaster Joe Garagiola urging, "Buy a car. Get a check."
Everyone else, domestic or import, soon got into the act.
Why give money away? To move cars and trucks, of course. But even more, it was the ultimate result of the Big 3's profligate pricing practices that had been in place since price control ended after World War II.
The automakers will never admit that, but it's true.