Ford Motor Co.'s rebate program is doing a U-turn.
The nation’s No. 2 auto maker announced Monday that it will stop offering cash incentives to consumers in most cases and will instead give the money to dealers and let them decide how to use it to sell more cars.
Under the program, which begins Wednesday and runs through Feb. 28, Ford will give a dealer a fixed amount of money for most cars, and the dealer “can do with it as he wishes,” said company spokesman David Krupp.
“He can put some of it into advertising, he can give it back to the customer, or he can keep part of it for profit. It gives the dealer more flexibility.”
Ford declined to disclose specifics, citing competitive reasons, but it is believed that the dealer incentives will range up to $700 per vehicle at Ford, and up to $750 per model at Mercury.
As part of its transition to the new program, Ford will continue to offer $500 to $1,000 cash back on a few models and loans at 7.9% interest on some vehicles.
The program that expires today has provided consumers cash rebates of $500 to $1,500 on 1990 and 1991 models, or loans with interest rates as low as 4.8%.
Krupp said the switch to dealer incentives will not lower costs for the auto maker, which has been spending about $1,200 per vehicle in recent months.
“This new program returns the merchandising responsibility to our Ford and Lincoln-Mercury dealers,” said Robert L. Rewey, Ford vice president of sales operations.
“It also enables Ford and its dealers to focus on product advertising and customer satisfaction . . . rather than simply selling ‘the deal,’ ” he said.