GM boosts price of new trucks to pay for rebates

James R. Healey | USA TODAY

General Motors has boosted prices of its redesigned 2014 full-size pickups $1,500 – enough to pay for a $1,500 rebate currently offered on most models.

"It's the oldest game in the book – raise the price and raise the rebate. It's a marketing message," says Karl Brauer, senior analyst at Kelley Blue Book. Shoppers have come to expect a rebate, and are less attentive to whether the price of the vehicle has gone up commensurately, he says.

The new prices make the least-expensive 2014 GM pickup – a Silverado with two-wheel drive and regular cab -- $26,670 including $1,095 shipping.

The peculiarities of car buying mean that it's easier to get financing for a $36,500 truck that comes with a cash rebate of $1,500 than it is for a $35,000 truck – even though the net price is the same.

The $1,500 rebate becomes all or part of the down payment that lenders want to see. "Dealers like that. They can use it to help get customers qualified for a loan," says GM spokesman Jim Cain.

Average transaction prices for full-size pickups are $40,000 to $42,000, Brauer says, "so $1,500 is nothing."

The higher prices were announced to dealers Oct. 7 and are effective from then. The $1,500 rebates run though Oct. 31. GM, Ford Motor and Chrysler Group's Ram are battling fiercely for sales so rebates, cheap leases, low-interest loans all are likely to continue.

"This price adjustment was planned and is a normal part of business," Cain says. The 2014 trucks were launched in the summer at the same prices as similar 2013 models, and "a new truck with more capability, more power, better mileage, more equipment – that's kind of a rebate itself," he says.

Might seem odd coming just after a month when Chevrolet Silverado sales were down 10.8% and GMC Sierra sales were off 1.5%, according to sales tracker Autodata.

But in GM's view, that's because it ran short of leftover 2013 pickups before it had fully ramped up production of the 2014s – not because the new pickups are unpopular.

Even though Cain says GM has just 20,000 of the 2013s left in stick, discounts on those are huge: as much as $6,000 on a 2013 Silverado regular cab, $5,500 on an extended cab.