Cars for Christmas? Beware unhappy returns

By Brian J. O'Connor • Bankrate.com

With only a few more days until Christmas, plenty of shoppers are headed out to the mall -- the auto mall, that is.

Despite one of the worst economies in decades, dealers and manufacturers expect low- and no-percent financing, cash rebates and other incentives to tempt buyers into grabbing end-of-the year deals on 2002 and 2003 cars. And more than a few of those cars -- or at least the keys to them -- are going to end up under the tree.

But unlike those glittery television ads that show ecstatic recipients squealing with delight on Christmas morning, car-givers who surprise spouses, paramours or offspring with the wrong make or model could easily end up moaning with buyer's remorse. That's because returning that Jaguar XK coupe in White Onyx for the convertible in Phoenix Red could cost a lot of cold, hard green -- up to $10,000 -- unless the paperwork is handled just the right way.

A little savvy shopping, though, can make a Twilight Amethyst Pearl Lexus SC 430 as easy to exchange as a pair of camel Isotoner gloves. And in most cases, you can get the dealer to throw in that humongous holiday bow on top of the car at no extra charge.

Gift sales liven dealers' slow December According to auto industry experts, gift sales make up 5 percent to 10 percent of December sales -- both new and used. December has traditionally been a slow month for auto sales, dealers say, except for the week between Christmas and New Year's Day, when many workplaces are closed and buyers look to snap up deals on model-year closeouts. Now, the zero-percent financing and other deals seem to be driving more pre-holiday business.

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"Incentives are much stronger and have been applied to the new model year. That's going to push more people to buy this year," predicts Paul Taylor of the National Automobile Dealers Association. "That's also going to increase the number of cars that are given as gifts."

With deals such as $3,500 cash rebates on Lincoln Town Cars, financing of zero percent to 3.9 percent on Jaguars, Lexuses, Cadillacs, BMWs and others, buyers can still get in touch with their inner Scrooge when giving holiday wheels. Even Porsche is offering an unprecedented low financing rate on 911s, Boxsters and the new Cayenne sport utility vehicle.

Other shoppers, however, don't make financing a consideration.

"There is a lot of car-giving for Christmas, mostly surprises, and the paperwork is usually a cash deal," notes Peter Leavy, floor manager for Mercedes-Benz of Fort Lauderdale, Fla. "We have four or five cars waiting upstairs for Christmas. It happens every year."

Whether it's a Cadillac or Kia, if you've decided on giving a car as a gift, the first step is to decide how much a secret Santa you really want to be. Dealers say the only surprise with most Christmas cars is when -- not whether -- they show up. Most times, the decision to buy a new car, as well as the make, model and color, already was made earlier in the year. Then a husband, father or boyfriend -- it's nearly always a man, dealers note -- springs the new car as a Christmas gift. "Being such a big gift, it's rarely done as a surprise," notes Michael White, general sales manager at Jaguar of Great Neck/Roslyn on New York's Long Island.

Uh-oh, it's used If you don't already know whether your true love wants a Lexus, the best bet probably is to just give a fancy key ring or toy model of the car, rather than the vehicle itself.

"It's almost easier to let them know beforehand what you're doing, then actually go get the color you want and not have to turn it back," advises White. "That way, it's a surprise, but it's not a surprise in the driveway."

If you insist on being able to pull back the drapes Christmas morning to reveal a new set of wheels adorned with a huge bow, let the dealer know what you're planning. Otherwise, the "driveway factor" could end up costing you. In most cases, dealers will agree to hold off on processing the paperwork until a day or two after the holiday. If, however, the car has been registered and titled, it's officially a used vehicle. Instead of simply exchanging the car like a bad necktie, the buyer is now trading it in -- at a loss.

"It's a pre-owned car, so we have to sell it as a used car," Leavy explains. "We'll take the car back at the right money, so we don't lose. They usually lose, we usually win."

Don't spoil the surprise Cluing the dealer in also ensures that there won't be any telltale mailings or phone calls to your home to spoil the surprise. Lexus, for instance, sends out a "purchase acknowledgment" right after selling a car, while many car dealers follow up with phone calls to make sure customers are happy with their new wheels.

Some dealers also are willing to play a part in arranging a surprise. "Late at night we have somebody leave the car in somebody's driveway so that when they wake up in the morning, it's there," says White. "We try to make it so that nobody knows what's going on."

Rick Germain, owner of Germain Lexus in Columbus, Ohio, also goes the extra mile -- or miles. "I've got somebody who's asked me to take a car home on Christmas Eve and leave it in my driveway, so that they can come and get it later that evening."

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Dealers also schedule follow-up appointments with recipients, so that they can familiarize the new owner with the details of the car.

Take a bow One detail that all car-givers seem to be insisting on this year is one of those gargantuan bows on top of the car, just like in the TV ads.

"We have had an awful lot of requests for bows this year," Germain observes. "They see the bows on the cars on display and tell us, 'You got to throw in one of the bows.' "

Requests are running so high that even Lexus itself is scrambling to order more of the $150 bows as seen in its ads. "There's been a big rush on bows," marvels Lexus spokeswoman Nancy Hubbel. "We can get them a car, but getting a bow is a little tougher." Whether or not the buyer is charged for the bow is up to the dealer, she notes, so don't be afraid to haggle.

If all else fails, bow-buyers can resort to what one desperate car-giver did last year in Ohio. After buying his wife a car on Christmas Eve, the man found the dealer was out of bows. A call to Adsco of Cincinnati found the promotional specialties firm with bows on hand, but just a few staffers holding an office party and scheduled to go home at noon.

"Someone called and said he bought his wife a car but the dealer didn't have a bow, and begging us to stay late," recalls Chuck Folzenlogen, an Adsco partner. "He got here at a quarter to one. I guess that's how guys are."