Is the Chevy Confidence Program a Good Deal?
No-Haggle Pricing and Buy-Back Incentives
Chevrolet launched its "Chevy Confidence" program in early July, a sales promotion that offers consumers no-haggle pricing on 2012 models and gives them the option of returning the vehicle within 60 days of purchase if they don't like it. There is also the option to forgo Chevrolet's "Love It or Return It Guarantee" and get a $250-$500 discount on the vehicle instead. The program ends September 4.
Why is General Motors doing this? As Edmunds Senior Analyst Michelle Krebs noted in a story announcing the Chevy Confidence program, it is "an effort by GM to clear out 2012 inventory, close the model year on a high note and kick-start the 2013 model year for its highest-volume brand, yet do it in a way that doesn't scream 'fire sale,' but rather stresses value."
At first glance, this offer seems like a dream come true for those who don't want to negotiate. But just how good is the no-haggle price? Could you still haggle if you wanted to? Let's take a closer look at the inner workings of this program.
Love It — Don't Return It
The Love It or Return It Guarantee seeks to eliminate buyer's remorse by allowing a customer to return his new car if he's unhappy with it. While this is a notable sign of product confidence from GM, the reality is that very few people bring cars back in such programs. Buying a car is seldom an impulse purchase, so chances are that if you bought the vehicle, you've already thought long and hard about it and there's little chance that you'll be unpleasantly surprised by it.
A lesser-known aspect of the Chevy Confidence promotion is that buyers can opt out of the 60-day trial. If they do so, they're eligible for bonus cash of $250 or $500, depending on the model. We recommend taking the time to make sure you like the car before you commit to it. Take the bonus cash instead.
Have the Confidence To Haggle
The "Total Confidence" no-haggle pricing promises a great deal from the start, without your having to negotiate with a salesperson. Not every dealer is calling the pricing promotion "Total Confidence," however. The dealers we talked to referred to it as "employee pricing" or "preferred pricing." The "Total Confidence" price is actually the equivalent of the GM Supplier Discount, but it's available to everyone during the Chevy Confidence promotion.
While the Total Confidence price is a discount from the manufacturer's suggested retail price (MSRP), it isn't really the best price. According to Edmunds data, the advertised Total Confidence price is about $124 higher than the current True Market Value (TMV®). This might not seem like much, but there are other factors to consider.
Just because the Total Confidence price is "no-haggle" doesn't mean that you can't try to cut a better deal. In fact, "haggle" isn't really the appropriate term. Here's how we were able to beat the Chevy Total Confidence price with a few minutes of research, two phone calls and a nonconfrontational car-buying approach.
We chose two vehicles on opposite ends of the discount spectrum. The Chevrolet Sonic represents a car with a small profit margin and therefore a smaller discount. The Chevrolet Impala, a slow-selling model that is on its last year before a redesign, comes with big sales incentives. We used the same approach in shopping for both vehicles.
First we went to the official Chevy Confidence Web site. The page asks you to enter a model you are interested in and then filters the results based on the dealers closest to you. Next we went to the dealer's own Web pages. This helped us get the stock number of the vehicle and a copy of the window sticker so we could see the options on the car.
Once we knew the options, we opened a new tab in our Web browser and looked up the Edmunds TMV price. The plan was to call two dealerships, speak to the Internet sales managers and ask for the price of the car. The stock number would help them quickly look up the vehicle in their system.
Example 1: Chevrolet Sonic
The first dealer gave us the advertised no-haggle price, as expected. We told the salesperson that we had done our homework on this car and saw that it was actually selling for close to its invoice price. He then lowered the price another $100.
The second dealer was a pleasant surprise. This dealership's Web site proclaims, "Get our best price up front every day." How would no-haggle pricing work at a dealer that already had a "best price first" policy? This is how the salesperson laid out the numbers — with no prompting from us:
2012 Chevrolet Sonic 2LT
Edmunds TMV: $18,557
Total Confidence Price: $18,491
Quoted Price: $18,193
Minus $250 for opting out of the Love It or Return It Guarantee: $17,943
Improvement from Total Confidence no-haggle price: $548
Final Price: $17,943
This dealership's first price was, in fact, the best price. With two phone calls we were able to save $548 on the price of this Chevy Sonic.
Example 2: Chevrolet Impala
The savings were even more pronounced for the 2012 Chevrolet Impala. The Total Confidence price was significantly higher than TMV at both of the dealerships we checked out. Not only was the car selling below invoice, but it also had a $3,750 dealer cash incentive available. This incentive gives dealers discretion on whether they want to pass the savings on to the consumer.
Once again, the first dealer quoted us the Total Confidence price, which was a $647 improvement over MSRP. That was it. We mentioned that we'd seen on Edmunds.com that a dealer cash incentive was available. This prompted the salesman to take a closer look at the numbers. He came back with a revised quote that included the full amount of the dealer cash incentive — a much better deal.
Next we called the dealer that had given us its best price on the Sonic. It batted a thousand, as the salesperson offered us another amazing deal:
2012 Chevrolet Impala LT
Edmunds TMV: $25,237
Total Confidence Price: $28,433
Quoted Price: $24,518
Minus $500 for opting out of the Love It or Return It Guarantee: $24,018
Improvement from Total Confidence no-haggle price: $4,415
Final Price: $24,018
In both cases we wound up with a price quote that was more than $4,000 less than the initial no-haggle Total Confidence price. It was much easier to achieve at the second dealer, though, since the salesperson essentially volunteered the dealer cash incentive without calling it that.
Chevy Confidence Shaken?
An uninformed consumer who walked into a Chevrolet dealership and was willing to take the no-haggle price at face value would potentially be leaving thousands of dollars on the table. So it's probably better to think of the Total Confidence price as a head start on your negotiations.
Be sure to ask about any current incentives that might be available, and bypass the Love It or Return It Guarantee for additional savings. If you do that and then follow our steps in the "Quick Guide to Buying a New Car," you'll be driving a new Chevy in record time — with some extra cash in your pocket.