The New Car-Buying Landscape

There are a lot of questions new car buyers are facing right now, stemming from the controlled bankruptcy of Chrysler, the all-but-certain GM bankruptcy filing and the tough new fuel efficiency standards rolled out by President Obama last week. Karl Brauer, editor-in-chief of, stopped by Tuesday’s show to help navigate the new rules of the road.

The Chrysler bankruptcy – and the GM bankruptcy, if it happens as expected – have created sea change effects across the auto industry, Brauer says, helping to slash sticker prices on more than just Chrysler and GM vehicles. If you’re looking to take advantage of the Chrysler bankruptcy by purchasing from one of the dealers that are slated to close by June 9, think in terms of pricing versus inventory. The closer you get to the day of closing, the less inventory will be on hand at the dealers scheduled to close, but the better the deals are sure to be.

Brauer exemplifies the popular Chrysler Town & Country LX as one of the many deals coming out of the tumult in the industry. The minivan, which has an MSRP of $27,160. The true market value of that car, according to Edmunds, is $24,522 and consumers are getting it for around $23,715 with incentives and rebates.

>>Web Extra: 3 Cars Selling Below Cost

The new efficiency plan that was just announcedby President Obama, notably the 30 percent increase in CAFE (Corporate Average Fuel Economy) standards, is also doing a lot to transform the industry, Brauer says. Initially, it will be more expensive for consumers as it simply costs more to incorporate the new technology. You can expect to pay an average of $1300 more by 2016 for a new car that integrates greener mileage standards. However, a “cash for clunkers” program could offset that premium by offering anywhere frm $2500 to $4500 to people who trade in their gas guzzlers for more fuel efficient vehicles. It is unclear how effective this sort of incentive could be, though, Brauer says, because the cash may not be enough to make buying a new car worth it for many consumers.

>>Click here to read previous OTM automotive posts