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Three and a half years into a four-year lease, Nancy Gordon was tired of her minivan. She craved a vehicle with more pep, better handling and less of a staid, soccer-mom image. So she was vulnerable last July when she wandered into the new-car showroom while her Dodge Grand Caravan was at the dealer for minor repairs. Gordon did a double take when she saw the sleek Dodge Magnum wagon, and was particularly wowed by the bold front grill.
"It looks like a luxury vehicle as opposed to a Mom's mobile," she says. And the roomy wagon has plenty of space for hauling the sports equipment she uses as coach of her son's soccer team and her daughter's softball team.
Gordon, 38, figured she couldn't afford to back out of her minivan lease early, especially because she'd exceeded the 12,000-mile-a-year allotment. But the folks at Grand Dodge, in Englewood, N.J., were willing to bargain. They offered to waive excess-mileage and early-surrender penalties if Gordon signed up for a new four-year lease. Gordon wanted the mid-level Magnum SXT because its 3.5-liter V6 engine is more fuel-efficient than the top-of-the-line RT's Hemi (as owner of a real-estate appraisal business, she drives a lot). She negotiated a 15,000-mile-a-year limit, added a DVD player for her kids -- Allison, 10, and Sean, 6 -- and drove home a magnesium pearl Magnum. Her monthly payments are $562.
By snagging one of the hottest cars of the year, Gordon is smack in the middle of several new trends swirling around the arrival of the 2005 models: a shift toward cars and wagons at the expense of large SUVs; a related, revived awareness of fuel efficiency, now that gas prices are stubbornly high; and a renewed growth in leasing, as consumers look for ways to ease the sting of climbing car payments. She's also the beneficiary of another wrinkle in the auto industry these days: niche marketing. The Magnum appeals to a slice of people who prefer a high-performance, but still utilitarian, car to a minivan or SUV. To be sure you find the right car for your niche, more than 50 new and redesigned 2005 vehicles join the hundreds of models already competing for your heart and wallet.
Buying in to the game
Although the average sticker price has sailed past $30,000, a combination of haggling and rebates pushes the average transaction price down to just $25,450 (about $150 higher than a year ago), according to Power Information Network. And despite carmakers' threats to wean buyers from rebates, their offers became even more generous in the early fall as 2004 models piled up and the 2005s rolled into showrooms. Even 2005 models introduced early to beat the fall competition, such as the new PT Cruiser convertible and redesigned Nissan Altima, sported rebates. That's a clear indication that the deals will continue long after the year-end clearance sales.
Only a handful of models moved without the help of incentives, among them Chrysler's megahits, the 300 sedan and Dodge Magnum; the eagerly anticipated, redesigned Honda Odyssey minivan; and the high-demand, pint-size cars from BMW's Mini and Toyota's Scion division. Another success story of the past year: the Toyota Prius. Environmentally conscious fans of the gas-electric hybrid pretty much ignore its sticker price after waiting up to six months for a chance to drive the Prius home. In fact, dealers were reportedly getting up to $8,000 over sticker.
But even the most popular models usually have wiggle room in the price, especially if you're a smart and patient negotiator. What's the secret? Don't set foot in the showroom until you're armed with the information that shows the dealer you've done your homework. Kiplinger's 54th annual buyer's guide has the tools you need to pick the right vehicle at the right price. We rank vehicles on a combination of factors -- including performance, value, safety and roominess -- to produce a Best in Class and Best New Car in each category (this year we skipped pickups and added more SUVs). To help you haggle, you'll find the sticker price and the dealer cost, as well as a peek at what your fellow car buyers are actually paying -- the True Market Value, as calculated by Edmunds.com. We also identify leaders in resale value, fuel economy and safety.
Follow our strategy of making several dealers in your area compete for your business to snag the best deal. If you hate to haggle, the non-profit vehicle buying service CarBargains will negotiate a purchase or lease for you.
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