Ed Bobit's Publisher's Page

With the new car announcements now behind us and prices now set by each of the auto makers, we can analyze the sticker prices and determine how we stand for pur­chases for the '76 model year. Well, maybe.

General Motors' boost on the average-equipped car is $206; Ford Motor's is $216; and Chrysler's was a mere $144 (or 2.6-percent.) Seems plain enough.

But you have to be a combination statistician, actuary and accountant to really figure out what has happened to prices when obvious efforts are made to shroud the passing along of increased costs to a public that is still wary from last year's sensational and substantial cost increases.

Factors affecting financial automotive fleet people are many. Thirty models were dropped in the changeover. You can expect more another year from now; particularly in the big car series. Even this can be deceiving as there were actually 69 models dropped with 39 new additions. When the makers call them new additions, they are often actually repositioning the models and repricing them.

The extensive revision of standard equipment and op­tions has got to keep a volume fleet purchaser staying up nights to remain knowledgeable about his orders. And try­ing to compare prices between the '75 'standard equipped' car and the '76 'option' car is an even more difficult task.

In addition, all makers have developed a new dealer discount plan of 15-percent on compacts, 19-percent on intermediates and 22-percent on most of the big car NADA president, William E. Hancock, believes that dealer can live with the new arrangement even though it repre­sents a slightly lower percentage decrease on the average as dealers will realize an average $25 increase in gross per car over last year if projected volume and model mix are attained because the smaller discount is applied to a higher price.

Hancock states that dealer expenses in the first quarter of 1975 were $1,514 per car, compared to $1,213 per car in the first quarter of 1974. Even with a net of $25 more on gross it still leaves the average dealer in the hole to a tune of $276 per car.

The U.S. Bureau of Labor Statistics says that new car prices (after adjusting for quality changes, or standard equipment changes, as we know them) have increased 14-percent in the past three years; while both the consumer price index and wage rates are up more than 25-percent.

Looking at it in the same manner, new cars have risen a bit more than 30-percent over the past ten years with the consumer price index up to 70-percent; food costs up 80-percent; cost of home ownership is up more than 90-per­cent; and the cost of medical care is up more than 100-percent in the same period.

It just may be that our car purchase is not that bad a buy in today's market. Certainly the cutting of the deal discount and the de-optionalizing of the models has a dis­tinct advantage to fleet buyers for obvious reasons.

There has to be sunshine above those clouds.