It didn't take a genius to predict that before the year was over, General Motors, Ford and Chrysler would offer special promotions to clear dealers' lots and boost 2005 market share. But most forecasters didn't think it would happen so soon.

On November 14, GM announced its Red Tag Event, which sent dealers scurrying to paste big red tags announcing discounted prices on vehicles on their lots. Sure enough, Ford followed suit on November 16 with its Keep It Simple discount program.

Chrysler completed the hat trick on November 17, but its Miles of Freedom offer takes a different tack -- free gas and maintenance. Chrysler sales have been much stronger than GM's and Ford's, so slashing prices to move product was not imperative. All the promotions are set to expire on January 3.

The problem with value pricing

Carmakers traditionally host year-end sales, but this year they have more at stake. You may recall that last summer, all three Detroit carmakers introduced employee-discount promotions -- you could buy mainly 2005 models for the same price as Big Three employees. Those promotions were extended, then extended again, and finally expired in early October.

In their place the carmakers touted "value pricing" -- a reduced sticker price or the same price but with extra options at no charge. Value pricing is an attempt to get closer to the actual transaction price without throwing rebates at buyers.

Unfortunately, brisk sales encouraged by the employee-discount deals led to a hangover effect, and October sales fell off the cliff. Truck and SUV sales in particular took a dive -- it didn't help that gasoline prices were still high, incentives were stingy and dealers didn't have a lot of trucks available.

One reason for the popularity of the employee-discount promotions was that the carmakers advertised them as no-haggle prices. Buyers felt as if they were getting a good deal without going to the mat.

No-haggle is also the subtext of the new promotions from GM and Ford. But feel free to dicker anyway.

"It's interesting that the employee-pricing promotions did so well, because consumers could have gotten that price before employee pricing," says Chris Satovick of Vehix.com, which sells new and used vehicles. He points out that a good negotiator can still beat the sale prices.

Keep an eye out for year-end promotions from Japanese and German carmakers, too. Nissan launches its sale December 1, though dealers can start it sooner. Toyota and Lexus should announce their campaigns around Thanksgiving.

Volkswagen and Mercedes-Benz are promoting lease deals instead of price cuts. For example, VW offers a 39-month lease for the 2006 Passat for $299 a month with no money down. Mercedes-Benz will offer lease deals on C-, E-, M- and R-class vehicles, such as a 39-month lease on a 2006 C230 sport sedan for $329 a month with $3,874 due at signing.

GM's Red Tag blitz

Go to GM.com, click on the Red Tag link, and select a model and trim level. The bottom line reflects the new, discounted price plus any rebates. Prices are generally close to the invoice price, which is theoretically what the dealer pays to the manufacturer.

For example, the 2006 Buick LaCrosse CXS has a sticker price of $29,095. With the sale price plus incentives, you pay $25,662. The invoice price of the LaCrosse CXS is $26,678, so you pay about a thousand dollars less.

The slow-selling Chevy Tahoe 4x4 LT stickers for $45,265. With the Red Tag price, after incentives, you'll pay $36,470 -- about $600 more than the invoice price.

The Corvette, Pontiac Solstice and Hummers aren't included in the offer.

Ford's Keep It Simple sellathon

Ford is also combining discounted stickers with rebates on most 2005 and 2006 Ford, Mercury and Lincoln models -- including the Ford Escape and Mercury Mariner gas-electric hybrids. (Excluded are the Mustang, Ford GT and new Ford Fusion, Mercury Milan and Lincoln Zephyr midsize sedans.)

Go to fordvehicles.com for the new prices. For example, the front-wheel-drive Ford 500 Limited has a pre-sale sticker price of $27,080. With the promotional price and a $1,000 rebate, the price will be $24,355. That's about $600 below invoice.

The two-wheel-drive Escape Hybrid has a list price of $27,515 and a Simple price of $26,104, or $440 above invoice.

Chrysler's Miles of Freedom come-on

Basically, you choose between existing rebates and free gas and maintenance. If you choose Freedom, you get a debit card for $2,400 (the amount Chrysler calculates you'd need to buy 12,000 miles worth of gasoline for two years at the carmaker's average fuel economy rating of 21.8 mpg -- assuming gas costs $2.15 a gallon).

You also get free scheduled maintenance for up to 24,000 miles. And Chrysler is throwing in a beefed up, five years or 60,000 miles warranty, versus the usual three years or 36,000 miles.

As with the other programs, hot sellers and limited production vehicles aren't on the table. That leaves out the Chrysler 300; Dodge Viper, Magnum, Charger and Sprinter; and all SRT8 vehicles.

Got a question? E-mail Mark at cars@kiplinger.com

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