Car Makers Lavish Incentives on SUV and Truck Buyers

Skyrocketing gas prices scared off many would-be buyers of SUVs, trucks, minivans and other large vehicles over the past year. Now auto makers are trying to lure them back onto car dealers' lots by offering head-turning cash incentives — some as high as $8,000 — on these now-notorious gas guzzlers.

Call it an act of desperation. Sales of SUVs and light trucks fell 24% since last May, while heavy truck sales are down 30%, according to Autodata Corp., a New Jersey-based market researcher. (The situation is so dire that both Ford (F) and General Motors (GM) are temporarily shuttering some plants that make SUVs and trucks.) During the same time, manufacturer incentives were up 5% year over year, according to Edmunds.com. Today, average incentives for large trucks total $4,667; for large SUVs, $4,603.

"Dealerships have a lot of money tied up in these vehicles," says Jack Nerad, executive editorial director for Kelley Blue Book. "They don't want them sitting on the lot."

Cash isn't the only lure they're using, however. Auto makers are also throwing in generous financing offers with low rates and extended repayment periods, says Jessica Caldwell, an industry analyst for Edmunds.com. One catch: You need stellar credit to qualify for, say, the 0% financing over 36 months that Volvo's offering on its XC90 (see chart below for more current offers). Since most of these financing promotions can't be combined with cash incentive offers, make sure to crunch the numbers to see which deal is best.

Should you bite? Yes, but only if the vehicle makes a better fit for your driving needs than a more compact, fuel-efficient model, says Nerad. "Someone shopping for these kinds of cars has serious carrying need in people or cargo, so a Toyota Prius just isn't going to cut it," he says, "and a $5,000 cash incentive buys a whole lot of gas."

Other factors to consider: how much you drive each month and whether you still owe money on your existing car. Use our calculator to help you determine whether it makes more sense to buy a fuel-efficient car instead.

Here are some of the biggest incentives currently on the market:

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