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CNBC ON DIGG

Going Fast. Deals And Models Harder To Find

Published: Tuesday, 30 Jun 2009 | 8:56 AM ET

Text Size

By: Phil LeBeau

Customer at an auto dealership.
AP
Have you been out lately looking for a new car or truck?

If you have, you've probably noticed things are a little different. Those deals that we've seen for months (ok, in many cases years) offering huge discounts are harder and harder to find. It's a little early to say we are done with the days when the buyer could call the shot on most models. You still, have some leverage, but not as much as in the past.

What happened? A combination of factors have started to neutralize a buyers market and have begun eroding some of the deals you could once count on finding.

* More people are buying

After 8 months of extremely low sales due to the recession, high unemployment, and depleted consumer confidence, more people are finally deciding it's time to buy a new car. This is not a snap back in demand, but the uptick in buyers means dealers don't have to sweeten the deal as much.

* Tighter supply

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All those plant closings, idling of assembly lines and limiting production runs has helped the auto makers cut their inventories. Chrysler is a good example. Yesterday it fired up some, but not all, of its plants after nearly two months of being quiet during bankruptcy. With no new models available, there are reports of dealers running low on Chryslers best sellers, like the Jeep Wrangler.

* The economy is improving

Yes, the country is still hurting, and many people are coping with unemployment, but there are signs things are improving. So much so, some auto makers now have enough confidence to gradually increase production. Ford has boosted its assembly lines by 67,000 models for the third quarter. Not a huge increase, but the company could not do that if it didn't feel confident the economy could support greater sales.

Does all this mean the window has shut on great deals? That's hard to say. You'll still find big discounts, but it's not the buyers market we once saw in this country. The question is whether the auto makers who have now "gotten religion" due to bankruptcy proceedings or billion dollar losses will keep production in check.

This is an industry with a terrible track record of running up inventories when the rationale move would be to cut production. And this is not just a big 3 problem. The foreign auto makers have fallen into the same trap. After the pain of the last two years, you wonder if the auto makers will remember the painful lessons learned.

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