Best Car Deals: August 2009

From U.S. News and World Report
By Sean Tucker

The U.S. government has poured a shot of rocket fuel into a depressed car industry. With the help of the federal Cash for Clunkers rebate program, Americans have begun buying cars again, at a pace not seen since late 2007.

The Car Allowance Rebate System, the impulse behind the surge, offers buyers a credit of up to $4,500 toward the purchase of a new, more fuel-efficient car when they turn in an older gas-guzzler.

Automakers have tailored their incentives around the CARS program this month. Most are offering additional rebates on top of the government's contribution, making for nearly unprecedented low prices on some models.

It's working. It may even be working too well. Some dealerships are running low on popular cars.

Chrysler, for instance, offered to match the government's rebate on almost every model it makes with its "Double Ca$h For Your Old Car" promotion when the program started, but had to restrict that offer to just a few models after one week because its supply of the most fuel-efficient models dwindled quickly once CARS launched. Volkswagen has nearly run out of its most fuel-efficient car, the diesel-powered Jetta TDI. Some Toyota dealers are having trouble locating another Prius to sell.

Still, great deals are available. And, with or without promotions, the fundamentals of car shopping still apply this month. Take good care of your credit rating, negotiate respectfully with a dealer who is trying to survive a troubled market, and apply any cash-back rebates to the down payment to knock down what you owe before you even drive away. If you keep those principles in mind, you'll be able to negotiate a good deal even if you can't take advantage of government funds.
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The Best Deals we found this month are listed below:

2009 Hyundai Elantra

Up to $2,000 cash back plus $1.49/gallon gas for a year

Our 2009 Best Small Car for the Money isn't really a small car. The Elantra is so roomy that the EPA classifies it as midsize. Yet it's sold for a small car price, and gets small car gas mileage, with an EPA combined fuel economy rating of 27 mpg. This month, it's available with a $2,000 rebate ($1,500 for the Elantra Touring wagon edition), plus Hyundai's unique pricelock program, which caps the price of gas at $1.49 per gallon for the first year you own the car - refunding you the difference if you pay more. It's no wonder the Elantra has been one of the 10 fastest-selling vehicles under the Cash for Clunkers rebate program.

Note: The Elantra's combined EPA-estimated gas mileage is greater than 22 mpg, so it is eligible for the Cash for Clunkers rebate.

MSRP: $14,120 - $17,820

Invoice: $13,735 - $17,090

MPG: 24 City / 33 Hwy

2009 BMW 335D

$4,500 "eco credit" plus up to $5,400 in government rebates

The BMW 3-Series is widely considered the benchmark sport sedan. Other cars are judged on how close they come to matching this car. Because of that reputation, the German automaker generally doesn't discount the 3-Series much. However, a diesel-powered option introduced for 2009 hasn't been selling well. There's no good reason for that - the 335D offers more off-the-line torque than any other 3- Series model, and is the most fuel-efficient. Perhaps Americans simply aren't sold on the benefits of diesel. So the company has tacked a rare incentive onto the diesel 3 -- a $4,500 "eco credit." The car also qualifies for a $900 tax incentive for fuel-efficient diesel-powered cars. That's $5,400 off the price of the best Upscale Midsize Sedan on the market. If you have clunker that qualifies for the full $4,500 voucher, the discount climbs to nearly $10,000 - an unprecedented markdown.

Note: The 335D's combined EPA-estimated gas mileage is greater than 22 mpg, so it is eligible for the Cash for Clunkers rebate.

MSRP: $33,600 - $50,700

Invoice:$30,910 - $46,645

MPG: 23 City / 36 Hwy

2009 Ford Taurus

0% APR financing for 60 months or up to $3,500 cash back

The arrival of the exciting 2010 Ford Taurus has left thousands of 2009 Taurus models sitting on dealership lots gathering dust. On the outside, the '09 Taurus is certainly not the equal of the muscular new bull...but look deeper, and you'll quickly see that it's a solid and affordable choice for those who need a full-size car. One of the most fuel-efficient large cars, the Taurus is also a "Top Safety Pick" from the Insurance Institute for Highway Safety. This is a great month to buy one. It's available at a significant discount before you even start negotiating, and dealers are anxious to negotiate...they want to move this Taurus off the lot so they can replace it with the 2010 model that is earning all the good press.

Note: The Taurus' combined EPA-estimated gas mileage of front-wheel-drive Tauruses is greater than 22 mpg, so those cars are eligible for the Cash for Clunkers rebate. All-wheel-drive models are not.

MSRP:$25,170 - $32,520

Invoice:$23,103 - $29,718

MPG:18 City / 28 Hwy

2009 Ford Escape

0% financing for 60 months or up to $2,500 cash back

Americans have figured out that the 2009 Ford Escape is a great deal. It's been one of the ten fastest-selling vehicles under the Cash for Clunkers rebate program. The reasons are easy to see. An Insurance Institute for Highway Safety "Top Safety Pick," the Escape is a smooth driver and one of the more fuel-efficient SUVs. It's also high-tech, available with Ford's unique SYNC infotainment system, which allows drivers to control Bluetooth devices inside the car with voice commands. This month, it's available with no interest for five years, or $2,500 cash back.

Note: The Escape's combined EPA-estimated gas mileage is greater than 18 mpg, so it is eligible for the Cash for Clunkers rebate.

MSRP:$20,435 - $27,670

Invoice:$19,245 - $25,625

MPG:20 City / 28 Hwy

2009 Volkswagen Touareg TDI

0% APR financing for 60 months

The Volkswagen Touareg is one of the sharpest-looking SUVS on the road, and boasts an upscale cabin that wouldn't be out of place in a Mercedes-Benz or a Lexus. Its roomy interior includes a long list of standard features, including one of the more impressive stereos in the class. And unlike most sporty- looking SUVs, this one holds its own off-road. The diesel-powered TDI edition even meets Cash for Clunkers requirements. This month, it's available interest-free for five years, keeping payments reasonable.

Note: The Touareg TDI's combined EPA-estimated gas mileage is greater than 18 mpg, so it is eligible for the Cash for Clunkers rebate. Other Touareg models do not qualify.

MSRP: $39,300 - $48,900

Invoice: $36,203 - $44,997

MPG: 14 City / 20 Hwy

2009 Mazda CX-9

0% APR financing for 36 months plus $1,500 cash back

The Mazda CX-9 has many of the virtues of a large SUV, but few of the vices. As buyers of big sport ‘utes expect, the CX-9 can comfortably seat seven and haul a lot of cargo. But, somewhat unexpectedly, it's easy to drive - even a bit sporty. It's also among the most fuel-efficient large SUVs, and, in most configurations, carries an MSRP low enough to qualify for the Cash for Clunkers rebate program.

Note: The combined EPA-estimated gas mileage of two-wheel-drive CX-9s is greater than 18 mpg, so they are eligible for the Cash for Clunkers rebate, though four-wheel-drive versions do not qualify.

MSRP: $29,820 - $35,205

Invoice: $27,600 - $32,567

MPG: 16 City / 22 Hwy

2009 Dodge Ram

Up to $5,500 cash back or 0% APR financing for 60 months plus $2,000 cash back

The 2009 Dodge Ram is one of the smoothest-driving trucks ever built. Dodge designed the Ram with a unique coil-over suspension, giving it the sharpest handling on any full-size pickup. It also offers comfortable seating, a high-tech cabin, and innovative Rambox storage containers over the fenders, which can even be plugged and used as coolers - making you, hands down, the hero of the tailgate party. This month, it's available with up to $5,500 in rebates, or a combined rebate and interest-free financing offer.

Note: The Ram is available in many configurations, but most have a combined fuel economy greater than 15 mpg, so many are eligible for the Cash for Clunkers rebate.

MSRP: $21,520 - $43,490

Invoice: $19,390 - $38,769

MPG: 14 City / 19 Hwy

2009 Porsche 911

1.9% APR financing for 36 months

Porsche is in trouble, for reasons that have nothing to do with its extraordinary cars. The company overreached last year in a failed attempt to buy Volkswagen, and now faces a mountain of debt. Industry analysts widely expect Porsche to sell itself to VW in order to save its hide. But Porsche's moment of crisis is a moment of opportunity for car buyers. After all, the crisis was caused by overreaching management - the cars are still the stuff of legend. Porsche vehicles are almost never discounted. There is no need to mark them down because there is never a shortage of people dreaming of a Porsche. But this month, the company has tendered a rare financing offer on virtually all of its vehicles. While 1.9% APR is nothing revolutionary, it's unheard of from Porsche...and here it is, offered on the iconic 911, with its four-second zero-to-sixty time and legendary razor-sharp handling. The offer lasts until the end of September.

Note: The Cash for Clunkers rebate does not apply to cars in this price range.

MSRP: $76,300 - $103,900

Invoice: $68,490 - $93,330

MPG: 18 City / 26 Hwy