Car Employee Discount Really a Bargain?

By: Lindsay Puccio
By: Lindsay Puccio

August 3, 2005

If you are in the market for a new car, you've probably heard that car dealers like GM, Ford, and Chrysler are offering an employee discount but, just how much of a bargain is it?

It's a straight forward, no-haggle deal. Through the "Employee Discount" program 2005 cars and trucks are selling like hot cakes. The discount combined with a rebate saves the customer an average of $8,000. However, there are some limitations. For instance, the no haggle policy means the discount price is final sale.

"Most dealers don't negotiate off that price. It's not our policy to do so. It doesn't mean we will never do such a thing. But, it's just not something we're going to do as a matter of course, and its not part of the program persay," said Chris Mason, of Brown Chrysler.

Consumer experts said in that case, this isn't the best deal for everyone. By negotiating smartly consumers can save more.

"There are some consumers that will benefit and some consumers who won't because if you’re a good bargainer you'll be able to buy a car for less," said Robert Spekman, a Darden Law School Professor.

While that may be true, experts said some people don't like the hassle of negotiating when buying a car, which is why the companies offering the employee discount say their business is booming.

"It's just - here is the invoice, here is the [employee] price, which is set by Chrysler, not by the dealer - here is the rebate, boom, done, you get it and lets go," said Mason.

Not so fast some experts said. There are a few other pitfalls that could washout the great deal. Sports cars and some trucks are not part of the deal.

Usually the 2005 inventory is limited so the dealership might not have the exact configuration of the car you want. Therefore, don't consider yourself an employee just yet.

"They're making people feel good about a process that kind of works more to GM's advantage than to their advantage. Not that people aren't saving money. But if you can haggle real well, you're leaving money on the table," said Spekman.

Consumer experts say the best thing to do is research the car, and the dealership before you make a purchase.

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