DETROIT – With the two largest automakers announcing new incentives on Wednesday – and history suggesting that industry deals to consumers often peak in July – this seems like a good month to get a great deal on a new car or truck.

That’s especially true if you’re shopping for a vehicle made by General Motors Corp. and Ford Motor Co.

On Wednesday, the two automakers announced new incentives that may help them clear a glut of inventory they accumulated in June when sales of their vehicles fell dramatically.

Through Aug. 2, under GM’s new “Summerdrive” program, consumers can take advantage of rebates of up to $5,000 on most 2004 trucks, especially the automaker’s SUVs, and up to $4,000 on most cars. That’s an increase of about $1,500 on the trucks and $1,000 on the cars, said GM spokeswoman Leslie Rajewski.

GM also has improved the financing rate and terms for many of its vehicles. For example, zero percent financing is now available on the Cadillac Escalade for up to 60 months. Previously, that rate was available only to consumers financing the popular SUV over 36 months.

GM also is continuing an owner-loyalty program that offered a variety of cash-back deals and financing terms to its current customers, as well as a program for GM lease customers. That lease pull-ahead program allows customers whose contracts expire between Aug. 1 and March 31 to get out of their vehicle early as long as they lease or buy another GM product before Aug. 2.

Ford, meanwhile, is offering an additional $1,000 cash back on several vehicles – for a total of $4,000 on the 2004 Ford Explorer SUV, $5,000 on the 2004 Freestar minivan and $1,500 on the 2005 Ford Focus. The automaker is also offering $1,000 in bonus cash for consumers who finance the following vehicles through Ford Credit: the Ford F-150, Explorer and Expedition.

Zero percent financing for up to 60 months was already available on about half the company’s products, and Ford will continue offering that, said spokesman Jim Cain.

Paul Taylor, chief economist for the National Automobile Dealers Association in McLean, Va., agreed that the latest incentives will probably spur many waiting consumers into action.

“This will help get some of those customers off the fence,” he said.

However, while July might be a good month to get a great deal, it may not necessarily be the very best time – despite the new deals and despite historical data that shows industry incentives often hit highs in July.

The average incentive figure is a hodgepodge of the incentives for previous, current and upcoming model-year vehicles, and the best deal depends on which vehicle and which model-year you’re shopping for, said Jesse Toprak, director of pricing and market analysis for the consumer Web site Edmunds.com.

If you’re after a 2004 vehicle, he suggests waiting until September, when automakers start putting many 2005 models on showroom floors and begin offering big discounts on outgoing 2004 model-year vehicles.

However, if you want a 2005 model in 2004, he suggests waiting until December, when automakers roll out their end-of-year programs.

“The longer you wait, usually, the better deal you’re going to get,” Toprak said.

But Toprak said his advice comes with this caveat: the longer you wait, the less likely you may be to find the options, colors and other features you’re seeking. So you may not get that SRX painted silver green with a V8 engine and all the bells and whistles.

(EDITORS: STORY CAN END HERE)

Another caveat for bargain-hunters: Read the fine print. Attractive finance rates often apply only to the customers with the best credit scores, and in many cases, buyers can’t combine a cash-back deal with a low-rate finance deal.

Other automakers are expected to strategically enhance their incentives to consumers in response to the new programs offered by GM and Ford – the top-selling automakers in the United States.

Incentives are a mixed blessing for automakers. While they help boost sales, and can be a useful tool for automakers reluctant to cut production, the expensive deals also eat into per-vehicle profits.

Bob Thibodeau Jr., a Ford dealer in Center Line, Mich., who serves as vice president of the Detroit Auto Dealers Association, said he’s glad that Ford is doing what it must to remain competitive in the marketplace but he worried about the cost.

“I don’t know how much more money they can continue to put out there,” he said.

—

(c) 2004, Detroit Free Press.

Visit the Freep, the World Wide Web site of the Detroit Free Press, at http://www.freep.com.

Distributed by Knight Ridder/Tribune Information Services.

AP-NY-07-07-04 1959EDT