Auto dealers hope incentives spur sales

Freedom New Mexico illustration: Kevin Wilson

By Kevin Wilson: Freedom New Mexico

U.S. automakers are rolling out payment protection plans to ease potential buyers worried about job security.

But in eastern New Mexico, car dealers are optimistic that isn’t the key motivation for customers.

“I haven’t had anybody who’s needed it, and that’s a good thing,” said Terry Wilcox, general manager of Big Valley in Portales. “Everybody’s still doing well.”

Dealers said unemployment, as high as 11 percent in some states according to the U.S. Department of Labor, isn’t as high in New Mexico (5.8 percent).

“We’ve pretty much got our own economy,” said Corey Sanchez, sales manager at Hamilton GM in Portales. “As long as there’s a strong (Cannon Air Force Base) presence and the farming and agriculture does well, so will we.”

Bryce Bender, vice president of sales and marketing for the Bender auto dealership chain in Clovis, said GM’s program has piqued interest. But it’s only been in place since April and sales impacts are tough to calculate.

“We’ve had some inquiries about it,” Bender said, “and that’s about all I can tell you.”

Under GM’s program, customers are covered for up to nine payments of up to $500 each if their jobs disappear within the first two years of new vehicle ownership.

Ford will cover payments of up to $700 per month for up to a year on any new Ford, Lincoln or Mercury.

Each plan requires customers be eligible for state unemployment.

Brewer Jeep-Mitsubishi, which has been in Clovis for about a year, has no current payment protection plan. So sales maximize what they do have — rebates for vehicles like the Commander and Wrangler, employee pricing for other vehicles, and a Web site started by the dealership’s previous owners.

Loran Hill, general manager at Brewer, said the Web site has the double impact of informing new customers and helping in customer retention.

“They’ve seen (the vehicle they want online), and they’ve called on it,” Hill said. “Also, people that are repeat customers say, ‘What do you have?’ We can say to go on the Web site and take a look at it.”

A good month for Brewer Jeep Mitsubishi equals about 50 units sold. That number’s been around 60 in the last few months, Hill said, but a month like November with just 25 sales took its toll.

“We did run into some difficulty,” said Hill. “Sales haven’t been as good as they were, but sales are picking up over the last two months.”

Sanchez, who came from Las Cruces 15 years ago after a friend told him Clovis had a steady car market, said sales are noticeably down but not devastating — 19 trucks were sold at Hamilton in March 2008, and 16 were sold this March.

Sanchez and Wilcox said customers are happy to get the payment protection plan for no charge, but nobody’s told them it’s their top motivator.

Meanwhile, Sanchez thinks the company might get mileage out a trial program called Total Confidence.

Under the program, Sanchez said, a person who buys a new GM vehicle in April can come back to a GM dealer halfway into their loan agreement. If that person wants to trade and they’re upside-down in their vehicle (owe more than the vehicle’s value), GM will cover up to $5,000 in negative equity.

Sanchez says he hears negative news about GM related to federal bailouts. But he takes solace in federal guarantees on warranties from U.S. automakers and realizes individual dealerships won’t save or destroy car companies.

“If GM fails, there’s nothing I can do about it,” Sanchez said. “All I can do is try to make the best deals I can with these plans.”

Bender, meanwhile, said his Dodge store is gearing up for the annual Professional Rodeo Cowboys Association event in Clovis. Bender said he’s been doing the rodeo since 1983, and he likes the double benefit of a community event like the Dodge-sponsored PRCA event and an employee price rate sale timed around the rodeo.

Even with offers on new vehicles, many customers are forgoing them for used cars. Bender said it’s shown in the supply and demand on his used car lots.

“The price of used vehicles from March to April,” Bender said, “increased in the (National Automobile Dealers Association) book for the first time I’ve seen in, I’m going to say, over 10 years.”