Luxury-car companies are making the holiday season one of the best times of the year to get a good deal on a new vehicle.

Competition for year-end buyers is generating a host of commercials touting the notion that an expensive car is a perfect Yuletide present, as romantic as a diamond, but bigger. In reality, though, pragmatic shoppers—most likely buying for themselves—aren't won over by the big red gift bows but by fundamentals.


Luxury automakers are making their strongest push for holiday sales, but there's a way to be smart about buying in, Joseph White reports on the News Hub.

Financing is cheap and available for people with good credit. Used luxury cars and sport utility vehicles are fetching unusually strong prices and buyers get more for their trade-in.

And leases are cheaper because the higher the predicted value for a car in three years, the less you have to pay to lease it today.

"It's the peak for the entire year, the last 10 days" of December, says Mike Jackson, chief executive officer of AutoNation Inc., the largest auto dealership chain.

It isn't just advertised deals that are moving the luxury market, he says. New models, such as the revamped Mercedes C-Class sedan and M-Class sport utility vehicle, are reviving interest at the same time as the economy is showing signs of improvement.

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Jaguar
Jaguar's year-end sales campaign highlights sleek designs and speed.

Mercedes-Benz and BMW AG are making their most aggressive efforts in several years to win customers, offering big discounts on financing and lease rates. They also are allowing customers stuck in leases out to April 2012 to cancel contracts early.

At BMW, some of the biggest discounts are on the most expensive models, including the 6 series and 7 series. BMW is providing dealers greater leeway to negotiate a sale. "I've got $7,000 coming from the factory before I even discount the car," says Bart Bezanson, general sales manager at Advantage BMW in Houston, part of the Group 1 Automotive chain.

Mercedes launched its winter sales push in early November, says Stephen Cannon, vice president of marketing at Mercedes's U.S. sales arm. Spurred by discounted financing and leases on the brand's highest volume models— including the C-Class and E-Class passenger-car lines and M and GLK sport utilities—the company's November sales jumped 46% compared with a year ago.

So far in December, dealers are seeing strong traffic, Mr. Cannon says.

More than usual, it will pay for consumers to shop around. Someone looking to switch from, say, Lexus to BMW can get as much as $1,500 extra taken off the price of the vehicle under a BMW "conquest" program. Other auto makers are offering similar bonuses to help dealers reel in customers from other brands. Shoppers should use the Web to sniff out these deals, and ask salespeople what they have to offer.

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Audi
Audi features its sporty A6.

Leases are designed to hit attention-getting numbers—$399 a month for a Lexus RX 350 SUV, $669 a month for a new Audi A6, or $599 a month for a new Mercedes E-Class. Arriving at those precise price points can be tricky, because they are based on relatively low mileage—10,000 miles per year—or base models that lack desirable options.

Jesse Toprak, vice president of industry analysis for Truecar.com, an online car-pricing-and-shopping site, says shoppers drawn in by the monthly-payment figure should first negotiate the bottom-line price for the car. "People still don't realize they can negotiate the...price on a lease," he says. Negotiating a lower price will in turn lower the monthly payment.

Luxury brands over the past decade or so have been gradually transforming once humdrum year-end clearance sales into holiday "events." Lexus turbo-charged the concept of luxury cars as gifts a dozen years ago when it launched its "December to Remember" campaign. The jingle that accompanies the ads, a tune called "Friends and Family," is now so familiar that Lexus' latest ads are built on the assumption that everyone knows the campaign and its lilting signature song.

But other brands' moves point to a backlash against the idea of giving a car as a Christmas present.

Honda Motor Co.'s Acura luxury brand spoofs holiday excess in a television commercial in which a woman boasts of hiring celebrity chef Gordon Ramsay to cater her holiday dinner.


Lexus (top); Mercedes
Signs of the season: Lexus, top, pushes the idea of luxury cars as gifts, even if most people buy the cars for themselves. Santa surveys his 'reindeer' in a Mercedes ad.

From the kitchen arises a clatter as Mr. Ramsay, the coarse-talking impresario of the Fox Television reality show "Hell's Kitchen," chews out a hapless underling within earshot of startled guests.

"At a time when it's easy to go overboard," a soothing voice interjects, "Acura invites you to be smarter and over-save."

The Honda brand is taking more direct aim, asking in one ad: "Are you a millionaire?...Then you probably don't give cars as gifts."

Acura vice president for sales Jeff Conrad says the brand is offering financing rates as low as 0.9% for five years. So far, he says, "the market looks pretty strong. Dealers like the ads."

Volkswagen AG's Audi brand is putting a wink in its holiday promotion with a TV ad in which the elderly parents of a successful young A6 owner make off with his car. Viewers who watch the spot closely will catch a peekaboo shot of the parents' Mercedes-Benz sitting in the driveway.

As for Audi's deals, Matt Carpenter, general manager of vehicle sales for Audi of America, says they aren't much different from those on offer last month.

Jaguar Cars, an early pioneer of holiday promotions, has ditched big red bows in favor of new spots that highlight the styling and performance of its new model lineup. One of the cars in the "Welcome to our jungle" campaign is red, but Jaguar brand vice president David Pryor says "that wasn't intended to be a holiday theme."