Ford (NYSE:F) is trying a new twist with its Black Friday sales event this year.
Instead of the traditional discount, buyers of some new Fords will get up to $1,000 on a prepaid MasterCard awards card.
It's clear what Ford is thinking: Buyers who are in a holiday shopping mood will love the idea of a prepaid MasterCard.
But do Black Friday events really work for automakers?
Why car dealers love Black Friday
For years, Toyota's (NYSE:TM) Lexus luxury brand has run holiday season ads showing its vehicles being given as gifts, with giant red bows on them. The ads promote an annual "sales event", where Lexus offers discounts on some models.
Some find those ads appealing, others think they're annoying. But the reality is that most people don't give (or get) new cars as holiday gifts.
Still, many car dealers have long offered special Black Friday promotions, and in recent years, some automakers have jumped in as well.
The thinking isn't that people are going to buy cars to give as gifts. Rather, the idea is to get customers into showrooms at a time of year when they might be inclined to spend a little more freely.
Do "Black Friday" discounts actually help sell more cars?
They definitely do, at least to some extent.
Automakers use incentives -- cheap financing or "cash-back" deals of various kinds -- all year round. They're used to adjust pricing in the face of competition, to offer regional discounts, to help clear out excess inventory, and to help spur sales of older models that may be set for replacement soon.
Many car buyers are price-sensitive, and for those buyers, a timely discount can make the difference between a decision to buy brand X over brand Y.
If nothing else, Black Friday gives automakers a frame for advertising their current discounts. And any well-advertised discounts will tend to bump an automaker's sales, at least a little bit. Edmunds.com analyst Jessica Caldwell says that she has already seen a lift in November's sales numbers as car shoppers have begun to take advantage of advertised holiday season deals.
And this is the time of year when many automakers, and their dealers, are looking to clear out remaining 2013 models and are discounting accordingly. Tying those discounts into the Black Friday retail theme makes sense.
Ford's not the only automaker jumping into the Black Friday fray
Ford's Black Friday promotion stands out because of its intriguing twist. But at least one of Ford's rivals is already hopping on the bandwagon with its own holiday season deals.
General Motors (NYSE:GM) began a promotion last week in which buyers of several popular models will receive the same discount that GM offers to employees of its suppliers, Automotive News has reported.
GM's supplier pricing is pretty good: It's the dealer's invoice price, plus the destination charge, plus a $150 fee. That adds up to a substantial discount on some models, especially when combined with the substantial discounts that GM is already offering on some models, including the Chevy Volt.
Nissan (NASDAQOTH:NSANY) is also offering good deals on several key models, including the Maxima, Murano, and Quest, according to Consumer Reports, as is Volvo.
And it isn't exactly a Black Friday campaign, but Lexus is (of course) already running its annual "December to Remember" sale, complete with the ads with the big red bows.