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Strategies for Smart Car Buyers

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May 9, 2008

I Like My Gadgets


I love gadgets, and I am not ashamed to admit it. When I buy cars, I usually like to load them up with all manner of available gizmos and electronic toys. As a result, I have some great first hand experience with a lot of the "surprise and delight" features and options that are available on many of today's vehicles. Let me share my observations with you on some gadgets that I have on my vehicles, or have seen in action on other's vehicles...your opinions may vary.

Continue reading...

Posted by Lee May 9, 2008 8:05 am

Categories: Buying New Cars


May 8, 2008

Getting Lemon-aid for Lemons

Is your car a lemon? Or do you really want another car and so you try to force the manufacturer buy it back?

For every consumer protection law, such as the so-called Lemon Law, there are people trying to game the system and use it to their advantage. And then there are the lawyers (don't get me started on lawyers!) exploiting the laws for personal gain.

Continue reading...

Posted by Philip May 8, 2008 7:20 am

Categories: Buying Used Cars


May 7, 2008

Industry in Turmoil: And There are Deals to be Had!

The screaming headline of Automotive News this week was: "Industry in Turmoil." Cars aren't selling. Pickup truck sales in particular are completely stalled. Dealers are desparate for ways to get buyers into the showroom (as evidenced by Chrysler's "Refuel America" plan).

What does all this mean for you?

It means all bets are off when it comes to negotiating. Yes, check our True Market Value prices but you should know that due to slow sales you have extra leverage. A friend at Edmunds.com bought a two-year-old Infiniti G35 for $18,000.

Conversely, I've been checking prices on the 2007 Honda Fit that I own and have been thinking of selling. Due to high pump prices the asking price on those cars is going through the roof.

Moral of the story: sometimes prices change faster than the pricing guides. Look at the world around you and consider all factors before shopping.


Posted by Philip May 7, 2008 6:43 am

Categories: Buying Used Cars


May 6, 2008

Chrysler Offers Gas Cards As Incentive To Gas Sticker Shocked Consumers


Chrysler has announced a new program that it hopes will stimulate sales, and help to give consumers a hedge against rising gas prices. From now until June 2nd, when you purchase nearly any Chrysler, Dodge or Jeep vehicle (offer excludes all SRT models, Dodge Viper, Dodge Challenger, Dodge Ram Chassis Cab, Chrysler Crossfire, Jeep Wrangler and Dodge Sprinter), you will have the opportunity to receive a gas card that will only bill you $2.99/gallon of gas (regular grade, diesel or E85) for three years, with a limit of 12K miles/year (based on the EPA mileage figures of the vehicle purchased).

As with most things, there is a catch. If you select the gas card promotion, you will have to give up all other rebates and incentives. Also, if your vehicle requires an octane higher than 87, there is an additional price penalty, depending on the grade of fuel needed.

Whether this is a good deal or not really depends on the vehicle selected and how many miles the individual consumer drives, so be sure to check out the current available incentives and compare it to the value of the gas card offer. Keep in mind that gas prices are likely to continue to rise over the three years the program will be in effect. The current average price of regular unleaded in the US is $3.61/gallon. With a maximum of 12K miles/year for three years, the current value of this offer is about $1300. I suspect that a diesel vehicle will offer the greatest benefit since diesels rarely have any cash incentives on them and diesel gas prices are significantly higher than $2.99 a gallon right now.

Who does this offer benefit the most? Chrysler, of course. While a $1300 incentive on all vehicles wouldn't even garner a blip on anyone's radar, the offer of discounted gas for three years has every news organization, both local and national, along with every automotive and business related website, blog and forum on the Net buzzing with the news. Chrysler is getting millions of dollars in free advertising. Not to mention the fact that many consumers who might not have even thought of a Chrysler, Dodge or Jeep vehicle might be taking a look at them now.


Posted by Lee May 6, 2008 5:09 am

Categories: Buying New Cars | Fuel Economy


May 5, 2008

Fuel Economy: Break Even Time for Hybrids

"I'm so sick of the price of gas I'm going to buy a hybrid!"

I can't tell you how often I've heard this. And I want to tell these people that they are on the wrong track. If they merely want to save money, dumping the old gas guzzler and buying a hybrid will take years to save them money. That's because it costs more for the privledge of saving gas. This is the so-called "hybrid premium."

If you compare a hybrid to a nonhybrid car you will see that the hybrid car costs more because of the sophisticated powertrain. In the long run this saves money for the car's owner when buying gas. But most people aren't in touch with exactly how much they spend on gas for a year.  Even driving 15,000 miles, and paying $3.61 a gallon for gas, a typical car will consume about $2,000 of gas a year. Over the same distance a typical hybrid will consume $1,500 of gas for a $500 savings.

Now, how long does it take for the $500 savings to cancel the higher purchase price? That's the hybrid break even period.

Continue reading...

Posted by Philip May 5, 2008 8:27 am

Categories: Fuel Economy


May 2, 2008

Coming: Gas Sipper's Smackdown

(The smart fortwo and Ford Focus compete in the "Gas Sipper's Smackdown.")

For the past two days I've been driving. A lot.

We took four cars and selected three different driving routes to see which would win the "Gas Sipper's Smackdown."

Battling for the title was our flyweight 2008 smart fortwo,  our 2005 VW Jetta TDI, a 2008 Toyota Prius and our 2008 Ford Focus SES Coupe.

We drove from Los Angeles, through Death Valley and into Las Vegas to see which got the best gas mileage while cruising the backroads. Then we did a 131-mile city loop in Las Vegas which was absolutely gruelling. Then we did a highway-speed run back into LA.

Four cars, three different driving conditions. Which one took first in the Smackdown? The numbers are being crunched as I write this. But I can tell you, it's not who you think. And, while one of the cars lost in every category, it fought bravely and did better than we ever expected.

While I was in Las Vegas I read the Wall Street Journal because it appeared at my hotel room door. I read this interview with Chevron boss David O'Reilly. One exchange about gas prices was as follows:

Mr. O’Reilly: I can’t predict what the price is going to be. You would have to tell me what the economic situation in the world is going to be a year from now. I don’t think it is going to get back to those relatively low levels we experienced in the late ’90s and early 2000s.
WSJ: Ever?
Mr. O’Reilly: No.

I couldn't help but think of those words as I cruised around Las Vegas looking for a way to stretch an extra mile from every drop of gas.

Stay tuned for "Smackdown" results!


Posted by Philip May 2, 2008 8:52 am

Categories: Fuel Economy


May 1, 2008

Dealers Don't Make As Much Profit As You Think


Just as you are getting ready to sign on the dotted line, agreeing to purchase that vehicle for the price that is indicated, you will most likely be thinking, "could I have done better?" Thanks to decades of "wheeling and dealing" and playing "fast and furious" with the numbers, car dealers have garnered a reputation of being less than forthcoming when it comes to their "best price." While things are certainly changing, with information from Edmunds and the near ubiquity of the internet, old habits die hard, for both dealers and consumer alike. As a result, there is a bit of a disconnect between how much money consumers think dealers are making, verses how profitable a dealership really is, especially in this depressed economy.

According to the National Automobile Dealer Association (NADA), average dealership pretax profit for 2007 was 1.5% of sales, while over 20% of dealers lost money. Dealerships selling domestic branded vehicles generally did worse than those selling imported branded ones. Not surprising since sales of the former have suffered at the hand of the latter. Automotive News, an automotive industry weekly trade publication, recently conducted a survey of dealership profitability. According to the result of the survey, most dealers are cutting back on everything including the hiring new employees, donating to charity, spending on building improvements and reducing customer perks like loaner cars.

I point this out not to garner sympathy for dealers. Rather, I want our readers to understand that selling a car at, or near, invoice generally doesn't mean that the dealer is still making thousands of dollars on the backend from some secret fountain of money. When I talk about things like advertising charges or how the holdback works or even when Edmunds lists the invoice price, this is information is designed to educate and put the buyer on a more level playing field, Yes, there is other money the dealer gets that is not indicated in the invoice price, but also understand that this money often covers expenses other than the actual cost of the vehicle.

So the next time you sign on the dotted line, feel confident that your research has paid off and that you don't need to worry if you have made a good deal for yourself. Instead, you can drive off and worry instead on when you will get that first scratch or dent.

Posted by Lee May 1, 2008 5:00 am

Categories: Buying New Cars | Negotiation


Apr 28, 2008

SUV vs Station Wagon - Which Is Cleaner?


After reading the recent Edmunds comparison test of the Chevrolet Tahoe Hybrid vs Mercedes GL320 CDI I began to wonder how these people movers compare to the traditional station wagon. Looking for the largest premium wagon I could find (seems only fair since both the Tahoe and GL have premium features and prices) led me to the recently redesigned Volvo V70. Conventional wisdom would suggest that a station wagon should be environmentally cleaner than an SUV that weighs nearly 6,000lbs and has a big V8, regardless of the fact that it has a hybrid powertrain.

Continue reading...

Posted by Lee Apr 28, 2008 5:21 pm

Categories: Buying New Cars | Driving | Fuel Economy


A Shift in Global Thinking?

 

This morning's Automotive News was filled with evidence of a global shift in thinking: small is better. There was an interesting story that said most of the current engine research is geared toward making more out of less. The number of cylinders are being reduced while engine displacement is being downsized. Meanwhile, performance is boosted with turbo or supercharging or even direct injection.

Another story talked about the introduction of the Think electric car next year. And still another story touched on Mitsubishi's development of a new mini car.

What the heck's going on?

Continue reading...

Posted by Philip Apr 28, 2008 8:31 am

Categories: Fuel Economy


Apr 24, 2008

Dawn Of A New Era? Detroit's Small Cars Get Greener



With gas-guzzling former cash cows such as Yukons and Expeditions collecting dust on dealer lots across the country, it's clear that business as usual will no longer cut it for the Big Three in Detroit. Yet Chevrolet's ballyhooed Volt concept is still a couple years away, and although the Ford Escape and Saturn Vue hybrid models are admirably efficient for SUVs, the best one can say for the Chevrolet Tahoe Hybrid (21 mpg combined) is that it guzzles marginally less gas than its non-hybrid relatives. Americans aren't used to paying European prices at the pump, and they're showing it in their sudden aversion to relatively inefficient vehicles. It's past time for Detroit to start thinking green.

While struggling Chrysler has remained largely silent on this front, Ford and GM have shown definite signs of life. The manual-shift Ford Focus is now rated at 35 mpg on the highway, and the next-generation Ford Fiesta will be arriving on our shores before too long. Even more impressively, as the Volt inches closer to production, GM has made a few refinements to the current Cobalt that it says will yield best-in-class fuel economy.

That's right -- going forward, any Cobalt LS or 1LT coupe or sedan will get a class-leading 36 miles per gallon highway (the outgoing 2008 Toyota Corolla, which was rated at 37 mpg on the highway, is technically no longer in production) if ordered with a manual transmission. That's a big "if" given Americans' chronically lazy left feet, but it's still quite an achievement for Chevrolet, which formerly extracted just 31 mpg from the same Cobalt models. Gone are the days when any given Japanese econobox would blow the doors off the domestic competition in an efficiency contest. In the Cobalt's case, at least, the greener future is now for America's hopefully rebounding automotive industry.

Josh Sadlier, Associate Editor, Edmunds.com

Posted by Josh Apr 24, 2008 5:08 pm

Categories: Driving | Fuel Economy


 
 


Blog Team

Karl Brauer

John O'Dell

John DiPietro

James Riswick

Lee Scott

Philip Reed

Josh Sadlier

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