Edmunds.com consumer advice editor Philip Reed was recently interviewed on "America's Car Show" by host Tom Torbjornsen. He spoke about changes in the new and used car markets as well as his prediction for the future of the American car business. Have a listen.
In related news, columns about auto maintenance will be presented on Edmunds Daily written by radio host Torbjornsen. The articles will cover a wide variety of topics that will certainly help car owners prolong the life of their cars. Tom's columns will begin appearing weekly in March.
Each Thursday I post my deal of the week, a vehicle that represents a great value for the consumer. In order to get my nod as a deal of the week, it must have a great finance or lease rate or perhaps has a large amount of cash incentives. Today, though, I want to make note of a vehicle that is just the opposite.
We've been saying for a long time but it's a great time to buy a car. Apparently people are listening. And they're using our advice to press for smokin' hot deals.
Last week I had to sell our long-term Scion xB and nobody even wanted to come look at it before making an offer. Everyone wanted to negotiate over the phone.
I put it on Craigslist and Autotrader.com for $29,000 voting for quick sale. Before doing that I had taken it to Carmax for a quote. They offered $26,000.
Last night, during dinner, my phone rang and when I picked it up it was a woman interested in buying our Mercedes. She didn't make any preliminary comments or ask if I was flexible on the price or even try to make small talk. Here's what she said:
1. It's not that nice inside. Used to be that the Toyota Corolla was the slam-dunk in this segment if you wanted a reasonably upscale yet economical ride. The economical part is still there, though the new Corolla tops out at 27 mpg city/35 highway (with the automatic), while the previous generation was rated at a marginally better 28 mpg city/37 highway (with the manual). But the upscale part? Not so much. The Corolla's interior is rife with hard plastic, and none of the switchgear feels particularly substantial. It's not bad, but it's certainly no better than, say, the cheaper Hyundai Elantra's cabin.
2. It's not that nice to drive. I know driving enjoyment isn't a priority for many shoppers, but the Corolla's flaccid character still seems a bit much. The steering is completely devoid of feel and feedback, and the body roll is Buick-like. Also, the 1.8-liter engine drones unpleasantly at higher rpm, which is odd -- I remember finding the previous Corolla's 1.8-liter engine note smooth and refined.
1. It's up against some pretty impressive competition. There's the abovementioned Elantra, which is basically a more endearing and content-rich Corolla for less cash. There's the redesigned 2010 Mazda 3, which has both a nicer interior and a much more engaging driving demeanor. The Honda Civic remains a strong if quirkily-cabined entry, and the Mitsubishi Lancer feels both sportier and more substantial. Moreover, Ford's waiting around the corner with the redesigned Euro-spec Focus.
Many Corolla buyers probably didn't bother test-driving anything else. If they had shopped around, I wonder how many of them still would have bought the Toyota. I suspect our 2008 Economy Sedan Consumer Comparison Test contains a few clues.
The name "Frontier" conjures up all sorts of images: prospectors in search of Alaskan black gold, adventurers crossing the Amazon, nomads roaming the sand-swept dunes of the Kalahari -- the types of environs for which an off-road-ready pickup truck like the 2009 Nissan Frontier PRO4X.
Now, we didn't take the Frontier to those places. Our CFO laughed when we suggested it. "Do you know how much it costs to ship a pickup truck to Botswana?" he asked. What a party pooper. But I did take it into the San Bernardino Mountains for a photo shoot and some light off-roading to dip our toes into the Frontier's rugged potential.
Despite that potential, though, the Frontier couldn't overcome my own stupidity. Go ahead and laugh, but I buried the rear tires when I was requested to fling up some snow for a photo. I gunned it in rear-wheel drive and kept gunning it without realizing the Frontier was making like the Titanic. Ten minutes and a lot of shoveling later, I was out. But the ego was bruised and I suspected the truck was making fun of me.
The Saab brand and performance cars were the latest casualty in GM's attempts to move forward as a financially viable company.
In AutoObserver we note that the Swedish manufacturer, owned by GM, is likely to file Chapter 11. Anyone with questions about existing warrantees on their Saab should review our earlier post on warranty questions.
Also on the chopping block was GM's High Performance Vehicle Operations Unit which was in the company's Performance Division. As reported in Straightline, the production of such cars as the Cobalt SS and the HHR SS has been put on hold. This could mean that existing inventories of these cars could be sold at bargain prices. It will also mean that depreciation on these cars will be precipitous.
The fate of the sentimental favorite, Chevrolet's Corvette ZR1, also seems uncertain. But one thing that is definite is that prices are dropping. Though once over-sticker priced performance car will be selling at prices well below MSRP and may soon include incentives. Check out our story in a Straightline for more information.
The Toyota Camry is the bestselling car in the land. Toyota's reputation for reliability and resale value helps move hundreds of thousands of units of the Camry every year. However, there is an updated 2010 Carmy set to go on sale in March and, due in part to the sick economy, Toyota has an oversupply of the 2009 model.
According to Automotive News, Toyota ended January with a 77-day supply of Camrys. Since Toyota would like them to be sold out by the time the 2010 Camry arrives, Toyota has decided to increase incentives on the 2009 model. While incentives for Toyota vary by region, consumers can claim as much as $1500 customer cash or financing as low as 0% for 36 months on the 2009 Camry.
The question is, should you wait for the 2010 Camry or pick up a discounted '09 model? Well, the 2010 Camry will have some styling changes along with some minor equipment and interior enhancements. However, the biggest change will be in the standard 4-cyl engine. A new 2.5-liter four-cylinder engine equipped with variable valve timing with intelligence (VVT-i) will produce 169 hp for Camry, LE and XLE grades. For sporty performance, SE grade get additional tuning and gets 179 horsepower, 21 more horsepower than the previous four-cylinder engine.
So if you like the looks of the current Camry and find the power to be adequate, you might just prefer to save some money and go with my deal-of-the-week, the 2009 Toyota Camry.
Click here for more information on the 2009 Toyota Camry.
Last week we reported that the Senate had hoped to make both the sales tax and the interest on auto loans deductible in the giant economic stimulus package signed yesterday by President Obama. During House/Senate negotiations, the interest deduction was struck down in order to decrease the overall size of the package. But H.R.1, the American Recovery and Reinvestment Act of 2009, still allows sales tax deductions on new vehicle purchases.
What are the specifics for auto shoppers? In sum, state and local motor vehicle sales taxes and motor vehicle excise taxes are all deductible on any new car, light truck, recreational vehicle, or motorcycles purchased between February 17th and December 31, 2009. Individuals with a modified adjusted gross income of less than $125,000 or joint-filers making less than $250,000 a year in 2009 qualify.
With the demise of Saturn nearly certain and the fate of Hummer, Saab and Pontiac hanging in the balance many consumers are wondering what will happen to their warrantees if these brands are sold or go into bankruptcy.
Saturn owners may face the biggest challenge since the Saturn sales and service experience is perhaps more popular than the cars themselves. Still, it is likely Saturn owners will be able to have repairs made under warranty, have routine service performed and continue to buy parts even if the Saturn brand is phased out by 2011 as proposed.
The recently announced plan to restructure GM and Chrysler, described in this Auto Observer article, has raised questions in consumer's minds about the long-term viability of owning one of these domestic cars. However, any plans automakers forge to return to stability (that means business as usual in the service bay) will certainly include plans to continue warranties and service.
If you happen to work for Miami's City National Bancshares -- or have otherwise managed to find a silver lining in the economic downturn -- then you may be interested to hear that Porsche has announced stateside pricing for its new Panamera four-seat performance sedan. The Panamera S, powered by a 400-horsepower, 4.8-liter V8 mated to Porsche's excellent PDK dual-clutch automated manual, will start at $89,800, while the all-wheel-drive Panamera 4S checks in at $93,800 with the same engine and transmission. The top-of-the-line Panamera Turbo sports a 500-horsepower twin-turbocharged version of the 4.8-liter V8, as well as a considerably heftier MSRP of $132,600. The Panamera family will be available at Porsche dealerships starting in October.
"With all the talk of financial bailouts and corporate jets, politicians, news anchors and stock market analysts have suddenly become automotive experts. They all seem to be saying the same thing: American cars are no good. OK, sure -- we'll admit that 20 years ago, American cars like the Pontiac Sunbird and Ford Bronco II weren't even in the same ZIP code as cutting-edge, and quality was often an afterthought. But that's no longer true -- today, there are plenty of American cars that deserve respect."
Wondering which domestic vehicles are worth a look-see? Read the rest of the story here: Top 10 American All-Stars.
This week we got an email from a car sales manager with a list of 25 things he wanted to tell car shoppers. Later in this blog, I'll post some of his items. But first I wanted to revisit an AutoObserver article with comments about car dealers from the head of Hyundai Motor America.
Seems acting Hyundai CEO John Krafcik believes that part of the reason cars aren't selling is because of the way they are sold. He even quoted a study saying people would prefer to visit the dentist rather than go to a car dealer. Do you agree? Dentist? Or car salesman?
The answer obviously lies in the kind of car salesman you're dealing with. And the dental procedure you're having perform (having your teeth cleaned isn't so bad).
So, to spark some discussion, here is a list from an "anonymous sales manager" who writes, among other things, "Sales people have families too and have the right to earn a living just like anyone else." (Hey, we never said they didn't!)
We edited his list down to the points we thought were particularly valid and added a few comments of our own in italics.
There are so many ways that a manufacturer can help a dealer to "move" a car that it's almost impossible to keep track of. But two of the main tools are Dealer Cash and Dealer Holdback.
Dealer Cash is money that the manufacturer offers to the dealer to help sweeten the deal for the consumer. The manufacturer might offer this money when the dealer first buys the car, or later, when the dealer sells the car or reaches certain sales targets. Dealer Cash is listed in our Incentives and Rebates, so you can see exactly what's being offered to the dealer. But here's the catch: Dealers aren't required to pass all that cash through to the customer. They may, or the customer may get some or none of it. It all depends on your negotiation.
Dealer Holdback is a percentage of either the MSRP or invoice price of a new vehicle (depending on the manufacturer) that is repaid to the dealer by the manufacturer. The holdback is designed to supplement the dealer's cash flow and indirectly reduce "variable sales expenses" (code words for sales commissions) by artificially elevating the dealership's paper cost. It is dealer holdback, among other factors, that allow dealers to sell a vehicle at invoice price -- or sometimes even below -- and still make some profit.
Our True Market Value vehicle figures incorporate Dealer Cash as one of several types of incentives that can affect the average transaction price for a car. So when you use TMV as your target, you can rest assured that Dealer Cash has been factored into that price.
Dealer Holdback is a "sacred cow" to dealers and something they generally won't budge on (and if you bring it up, you're likely to be met with some scowls), so it is not figured into TMV. Although there are strategies for when to ask for the holdback, we recommend only bringing it up if a dealer starts whining about "not making any money" on a vehicle. Even if they sell the car for invoice price, they will still make a few hundred dollars on the holdback.
BMW used to be the peddler of simple sedans and coupes. A convertible was thrown in occasionally. Now there are sedans, coupes, convertibles, wagons, roadsters, SUVs, sport utility coupes and now an AMC Eagle.
BMW released the official images of its 5 Series GT Liftback to be unveiled at the 2009 Geneva Auto Show. It is dubbed a concept, but what you see here is incredibly close to the final version. (Read the full story on Inside Line News) It will be priced and sized in between the 5 and 7 Series, "pitched at customers seeking a raised seating position who may be uncomfortable with the idea of image of a conventional crossover SUV." Sounds like a Venza to me.
But Jiminy, look at the thing -- especially from the rear three-quarter view. That does not look pretty. Sure, you could say it looks like a BMW Prius (or maybe a huge Saab 9000) but I'm going with an AMC Eagle in overall concept. The Eagle and 5 Series GT are both taller than conventional wagons, shorter than SUVs, have all-wheel drive and sport a sloping rear roofline. Heck, look at the BMW's interior trappings, they look time warped from the '70s. (Pictures After the Jump)
We here at Edmunds are quite fond of the Cadillac CTS. While our long-term CTS has certainly received its share of complaints, most editors agree that it is not just leaps and bounds better than most Cadillacs in recent memory, but that it also more than holds its own when compared with other vehicles in its class, whether they are from Germany or Japan. But just being a great vehicle does not make for a "deal of the week." Read on to see what does.
In our recent article, How To Get an Auto Loan During the Credit Crunch, we said that consumers could expect that higher interest rates and bigger down payments would be required to buy a new car. A new report from Comerica Bank illustrates what that really means to Joe Consumer: The total cost of buying an average-priced vehicle rose from $27,160 in the third quarter of 2008 to $27,700 in the fourth. That's a $540 difference, which isn't exactly chump change.
When it comes to vehicle reliability, the two brands that probably pop into most consumers' heads are Honda and Toyota. However, the facts illustrate how sometimes perception lags reality. The domestic automakers have been claiming that their reliability is at least on par with their Asian rivals. Ford now has some facts to help back up this claim. Over the last two years, Ford has reduced its warranty repairs costs by $1.2 billion. In addition, their warranty repair rates are 50% lower than they were just five years ago.
We're already been pretty clear about our positive reaction to GM's "Lambda" crossovers, the GMC Acadia, Buick Enclave and Saturn Outlook. However, while these triplets have sold well, the fact remains that the real GM bread winners inevitably wear a Chevrolet bow tie. There's certainly something to be said for the fact that there's a Chevy dealership in just about every town in America -- not so much Saturn and GMC.
That makes the 2009 Chevrolet Traverse the most important Lambda of them all. Not only is it the least expensive, but it's also likely to be the best seller. Is it the best version, though? Or is it worth the extra effort to find a Buick-GMC store?
There are plenty of fees associated with buying a new or used car -- enough to make you think you should have bought a less expensive vehicle. Which of these fees are mandatory and which can you haggle over? Let's break it down:
Vehicle Registration fee: This one's a no-brainer. Every vehicle must be registered by the state. It covers registration, license plate fees, and title assignment.
Sales Tax: Same as it ever was. At 8%, tax on a $20K car can cost $1,600!
Documentation fee: If the doc fee is regulated in your state, pay it. But in most states it's not, and the dealer could really overcharge you. Try to keep your doc fee at or below $100.
Dealer fee: Often labeled 'dealer prep' or 'shipping' or any of a number of made-up names, this is where you need to be careful.
Advertising fee: If it's listed in the car's invoice, pay it. If not, but the dealer tries to write it into your contract, fight it.
Taxes on Trade-Ins and Rebates: This is a complicated subject and, as usual, it depends on your state law. But a state-by-state breakdown of these taxes, along with more details on all the fees listed above, is in our article, What Fees Should You Pay? Here, as with the price you pay for the metal you'll be driving home, it really pays to do your homework before going to the dealer.
As Edmunds Green Car Advisor reported yesterday, the sales of hybrid cars and SUVs are circling the same drain as regular gasoline-powered vehicles. The horrible economy isn't helping things, nor is the knowledge that the all-new Insight and 2010 Prius are just around the corner. General Motors' hybrids took the biggest hit recently, but they're sold in such ridiculously small numbers, it's hard to imagine it really matters much to GM's quivering bottom line. Just look at the disparagies and specifically how the Prius outsells all other hybrids combined by 977 units.
Toyota Prius: 8,121 Lexus RX 400h: 1,556 Toyota Camry Hybrid: 1,141 Honda Civic Hybrid: 1,076 Toyota Highlander: 984 Ford Escape Hybrid: 753 Nissan Altima Hybrid: 644 Chevrolet Tahoe Hybrid: 299 (981 sold in December) GMC Yukon Hybrid: 168 Saturn Vue Greenline: 153 Chevy Malibu Hybrid: 145 Cadillac Escalade Hybrid: 132 Lexus GS 450h: 41 Lexus LS 600h: 33 Saturn Aura Greenline: 19 (not a typo)
As Green Car Advisor reported yesterday, BMW has qualified for federal clean-diesel tax credits for its 335d and X5 xDrive35d models. Both are powered by a 3.0-liter twin-turbo straight-6 that produces 265 horsepower and a whopping 425 pound-feet of torque. Those who pony up the $44,725 for a 335d (our recent test car hit rang in at 50 large) will receive a $900 tax credit, while the $52,025 diesel X5 gets a $1,800 credit.
At those prices, these rather small credits could seem like getting a free iced tea with the purchase of a six-courser at Le Bernadin. However, BMW is hoping the credits wipe out the price premium attached to diesel fuel and the car's diesel engine (if that luscious torque didn't already do the trick). To find out if it does, let's do some math.
The 2010 Mercedes-Benz GLK350 is about to make a big splash. Get it? It's funny because it's making a big splash in the photo.
Puns aside, we didn't have high hopes for this all-new luxury compact crossover. The three-pointed Mercedes star is usually enough for people to buy whatever old thing it's glued to, regardless of whether it truly lives up to the brand's historic pedigree. The dumpy C-Class hatchback or Europe's A-Class come to mind. To be honest, the 2010 GLK350 seemed like nothing more than one of these cash-grab products preying on customer vanity (it was featured in Sex and the City after all) and the popularity of compact SUVs. We were wrong ...
With gas and oil prices significantly lower than they were six months ago, buyers have begun to shift their buying priorities away from fuel economy and more towards other factors. One vehicle segment that has benefited from this shift is the full-size pickup market. These vehicles have fans in both the work and recreation markets, with their ability to haul large loads, tow and in general just being big and comfortable. While models from Dodge, Ford, GM and Toyota get all the press and accolades, the Nissan Titan tends to be forgotten by many buyers.
While it may not win comparison tests, it is still a capable hauler. For 2008 Nissan updated the Titan with many changes and improvements. Most significant was the new long-wheelbase model. A 20-inch-longer wheelbase is available on both extended-cab and crew-cab trucks. Truck buyers who were previously put off by the Titan, such as contractors or those who do a lot of hauling, no doubt appreciated the new cargo bed lengths. Long-wheelbase versions of the crew cab and extended cab have 7-foot and 8-foot beds, respectively. The exterior was updated with revised front-end styling, while the interior features new designs for the seats, center stack and gauge cluster. Feature-wise, the 2008 Nissan Titan could be had with Bluetooth connectivity and factory-installed satellite radio, and the optional rear-seat entertainment screen is a little bigger than before. Nissan has also introduced a new trim level, the Pro-4X, but it's pretty much just a new name for the equipment offered in the 2007 optional off-road package.
But what makes the Titan a "Deal of the Week?" Through March 2nd, Nissan is offering $5,500 customer cash on the 2008 models and $5,000 on the 2009 models. Zero-percent financing for up to 60 months is available on the 2008 models (in lieu of the cash). With Titan sales down more than 60% last month, dealers want to move their bloated inventory, so you should be able to swing quite the deal on either an '08 or '09 model.
Click here to search for Nissan Titian inventory in your area.
When you buy a car the sales tax and the interest on the loan may soon be deductible, the U.S. Senate decided yesterday.
Is this the catalyst that will open the floodgate for shoppers to return to the car lot? It's debatable. While a deduction of any kind is welcome, and might spur to action shoppers who are currently on the fence, it remains to be seen how much money this will actually save consumers.
When Maryland Democratic Senator Barbara Mikulski proposed the measure, as part of an auto industry stimulus plan, she said it would save a family $1,553 on a $25,000 car. But that projection might be a little too optimistic. For more information, and some sample savings calculations, see our news item in Straightline.
Meanwhile, car buyers can get unprecedented deals using Edmunds calculators which pull in all the numbers you need to negotiate a great deal. It's also important to review the car's True Market Value price and pay particular attention to incentives and rebates. Finally, a visit to the "Predicted Price Trends" for TMV will show if the car's price is forecast to go up or down.
We don't want to hear anything about black smoke, stinky hands or Grandpa's Oldsmobile breaking down on the side of the Jersey Turnpike. That was diesel 25 years ago. Not considering diesel-powered cars like the sensational 2009 BMW 335d because of the above reasons would be like passing on a Tom Hanks movie because you associate him with Bosom Buddies.
This latest edition of BMW's venerable, top-selling luxury sedan is both civilized and thrilling; explosively powerful and frugally efficient. Provided you don't blanch at a starting price of almost $45,000, the BMW 335d is bound to win you over.
We've been hearing that dealers are trying all kinds of different sales tactics to stay afloat and that this has created wild price swings for car buyers. Earlier this week I told the story of a Denver-area man who drove 2,000 miles to a dealer in Wisconsin and saved $12,000 on a new hybrid SUV.
Now we have the data to back up this anecdotal evidence of price variations. According to the Edmunds.com data department, the difference in pricing on new cars varied by as much as 62 percent from July to December. But that's not all. For 2009 cars the prices varied as much as 34 percent in December and for 2008 models it was an amazing 119 percent.
That means that some buyers paid way too much while others got screamin' deals.
Want a $3,400 tax credit on the 2010 Ford Fusion/Mercury Milan Hybrid that is getting great reviews? Looks like you're going to have to get in line with the early adopters. Green Car Advisor reports that the tax credit will drop to $1,700 on April 1. No, this isn't an April Fool's joke that Ford is playing on the public.
Ford has reached its sales threshold of 60,000 hybrids, and must begin the phase out period for the tax credits. Under the guidelines stated in the Energy Policy Act of 2005 , the allowable tax credit must be reduced by 50 percent for two calendar quarters. After about six months, that credit will reduce by 25 percent, and by next year it will be completely phased out.
You might be thinking: "No big deal, I have about two months to go get one." It's not that simple. The problem is, the cars will not be available until sometime in the spring. "That could be early March, but it could be later," said a Ford spokeswoman quoted in the article.
It's not an impossible situation and there are steps you can take to ensure you are eligible for the full credit. Check out the Green Car Advisor Blog to get the full story.
(The 2009 Chrysler Aspen HEV was only produced for about three months and are now sold at deep discounts.)
We've been saying that you can get great deals on new cars. One Denver area car buyer took our advice to the extreme, saving $12,000 on a "new" $50,000 hybrid.
The father of one of our editors drove his son's 2009 Chrysler Aspen Hybrid at Christmas and decided he'd like one for himself. He started surfing the internet on Autotrader for the best deals and soon found one for sale in a small town in Wisconsin. Over the phone, he made a deal to buy the hybrid for $36,980 including receiving a $4,000 trade-in credit for his 2003 Mercury Sable wagon.
But something struck him as odd. Even though the Aspen had been driven only 20 miles, it was being sold as a certified used car with a slightly reduced warranty. A Carfax report revealed that the hybrids had been purchased by the dealer at an auction rather than ordered from Chrysler for their new car inventory.
Our Editor's father felt confident about proceeding with this deal after talking with the Wisconsin dealer a number of times on the phone. So, he set out in sub-zero weather driving his Mercury. He arrived the next day and the deal went down just as agreed to.
Feeling pleased with himself, he set out to visit another son in Oklahoma. He stopped in a rest area and returned to find that the car wouldn't start. His heart sank. However, after frantic calls to service and roadside assistance, he discovered that, since it was a hybrid, the engine wasn't supposed to fire up. In other words, the car really was "running." Feeling a little foolish, he set off again.
Several hundred miles later, the "Check Engine Light" came on. He scrambled to find service in Des Moines, Iowa, and learned that the problem was minor and it was okay to keep driving it. For the rest of the trip to Oklahoma and back to Denver there were no other issues. However, when he came out the next morning, he found drops of transmission fluid under his Aspen.
Now, nearly three weeks later, all repair issues have been resolved under warranty and our friend loves the car. However, "That first night in a hotel room, when it didn't even have 1,000 miles on it -- talk about buyer's remourse! I thought, 'What have I done?'"
So what's the bottom line on savings? Well, our friend was able to get the whole story once he found the new car invoice for the vehicle he purchased. The MSRP on that hybrid was $48,830, nearly $12,000 higher than what he paid. That saved him a bundle on registration fees too since he only paid tax on $32,000 which was the difference between his new car and his trade-in.
The deal our friend's father got has been the talk of Edmunds. One editor commented, "That's a sweet deal. Once these teething isues have been resolved, the car will probably be bulletproof for years."
We were impressed with the savvy shopping techniques of our editor's father. We asked if his father had always been like that? After a long pause, our editor wryly answered: "My father always has had a knack for going outside the traditional car buying methods."
As the recession deepens, we'll probably be seeing more situations like this. Shoppers wading into these uncertain waters will need a combination of skills to put together the right deal with the right protection. Remember that there are many tools available on Edmunds.com -- and on the web -- to help you get the right car at an awesome price.
In these economically tough times, consumers are looking closely at every cent they spend. So it may seem counter-intuitive to think that you can actually save money by spending it.
But that's the premise behind a recent Edmunds feature story that examines whether car owners can shave a few dollars off of their yearly driving costs by subscribing to a telematics system such as OnStar.
We keep hearing that there is a pent-up demand for cars out there. After all, in recent years, 16 million vehicles were sold, but last year car makers only sold 12 million units in the U.S. That potentially leaves 4 million people out there who have decided to stick with old faithful (or old good-enough-until-we-feel-a-little-more-secure) for now. I know I fall into that category since my husband and I postponed our intention to buy a car last fall.
But what about you? Did you put buying a new car on the back burner in 2008? Are you planning to buy a car --whether new or used -- this year? If so, are you paying cash or looking for financing?
News of the potential Fiat-Chrysler Alliance has set the automotive world aflutter. On the one hand, it must be taken with great apprehension -- there's still much to be done with many questions. But the basic idea of this alliance is certainly solid. Chrysler gains access to Fiat's extensive range of small car platforms, while the Italian automaker gets access to Chrysler's American factories and dealer network -- two pieces that could allow it to get back into the world's most lucrative market.
We're not entirely sure yet which models would be transformed into Chrysler-Dodge products, nor do we know if they would be straight badge-engineering jobs or a more complete working of a platform. We also don't know which Fiat and Alfa Romeo vehicles could make it over here. Again, there are plenty of issues. But here are some possibilities and what each could mean to American car buyers.
(License plate on the '48 Caddy in the Edmunds.com offices in Santa Monica, California.)
The "Strategies for Smart Car Buyer's" blog has been renamed "Edmunds Daily" to reflect a shift in the content we'll be presenting. Don't worry, you'll still get the great blog posts, car shopping advice, road tests and comparison tests. We just wanted to give the blog a name that better reflected what it's become: an assembly of the thoughts and opinions of some of the editors.
"Strategies for Smart Car Buyers" was started as a spinoff of the book by the same name which was a hands-on guide to navigating the car lot. At first, it was just me and "bloggin'" Lee Scott with occasional guest writers. But sometime last year we began assigning more writers to specific days and topics. We also folded in the blog "The Driving Woman" and convinced their best writers to join forces with us.
The resulting blog needed a new name. After a lot of head scratching and brainstorming we came up with the elegantly simple "Edmunds Daily." We've added a tag line that says it all: "News and Advice for Car Shoppers and Owners." Covers just about everything, don't you think?
Soon, I'll be writing again to give you the line-up of who is blogging when and on what subject. We're still kind of moving things around. But you can expect some catchy titles 'n' topics. As always, we welcome your suggestions and feedback.
So look for the new title and header and stay tuned for more improvements to follow.
Philip Reed, Edmunds.com Senior Consumer Advice Editor
Anyone with a platelet's worth of enthusiast blood running through their veins knows what a Mitsubishi Lancer Evolution is. Sporting blistered fenders, hyperactive turbocharged engine and all-wheel drive, the "Evo" has fans as rabid as those of the Jonas Brothers. It's certainly a cool car and a stout rival to Subaru's equally popular STI.
But not everyone can afford the $35,000-plus needed to purchase a street-tamed rally car. For them, Subaru's WRX has been the lone budget buy. Not any longer. The 2009 Mitsubishi Lancer Ralliart makes this a tight, two-horse race -- one so close it arguably comes down to tire selection.
You only have to look at an example like the AMC Gremlin (better make it a quick look, lest you nuke your retinas) to know that hatchbacks have come a long way. Back in the day, "cheap hatchback" was just a gentle euphemism for "blighted, God-forsaken deathtrap," but my, how things have changed. If you were to round up today's most affordable hatches, you'd find a few bona fide stars that offer more than just soup-kitchen prices.
One such star is the Honda Fit, which holds the distinction of being a budget-priced car that's genuinely fun to drive. Then there's the Scion xB, which shines as a supremely practical choice, thanks to its incredibly roomy interior.
You can check out the rest of this year's most attractively priced offerings in our Top 10 Least Expensive Hatchbacks and Wagons for 2009. Of course, the list also includes a few forgettables. (The less said about the Chevy Aveo 5/Pontiac G3 twins, for example, the better.) Get the scoop on each of these cars by researching them via our model reviews.
What's your favorite budget-priced hatchback? Warren Clarke, Automotive Content Editor
The National Automotive Dealer Association's chief economist is predicting 12.7 million new vehicles will be sold in 2009, along with the assumption that the economy will begin to recover in the second half of the year. I am not sure if this is a case of a delusional self-fulfilling prophecy or if NADA is trying to give its dealers some (false) hope, but I don't quite buy the prediction.
For the last three months of 2008, the Seasonally Adjusted Annualized Sales Rate (SAAR) was under 11 million vehicles. Predictions for January's SAAR are also below 11 million vehicles. As I have stated before, until people are not afraid of losing their jobs and/or their homes, car sales will continue to suffer.
Everything I have read seems to indicate that it will take the better part of the rest of the year for jobs and housing to stabilize, even with an effective economic stimulus package from the governement. One economic study group, the Conference Board, sees the US in an "Intense Recession" through at least the spring and unemployment reaching close to 10%. "As we move into the New Year, the big question is whether conditions will worsen further," said the research group's economist Ken Goldstein in a statement on Monday. "The Conference Board's indicators suggest we'll still be in an intense recession through the spring."
If that is the case, we could see the SAAR remain below 11 million vehicles for the first half of this year. Even after we see a recovery, this recession will likely leave emotional scars on the public, and it may be some time before consumer confidence returns to some semblance of normalcy.
Having said that, if you feel comfortable with your own personal finances and job situation, now really is a great time to be buying just about anything, from clothes to cars. While irresponsible consumer spending helped to contribute to the mess that is currently impacting the lives of so many Americans, some responsible spending might be just the spark that will help light our path to the end of this dark economic tunnel.
(With dealerships closing, this electronic billboard has slides not being used to advertise to freeway drivers in Southern California.)
I hope you'd never do this.
A dealer last week told me that consumers are smelling blood and demanding ridiculously low prices for the cars they want to buy.
"They come in and say, 'Look, I know you dealers are hurting,'" one internet salewoman told me. "So they expect you to take a $5,000 loser on this car." She looked at me, her expression seeming to say, "Can you believe it?" She continued, "I mean, that's not right. Product is still product and it has value, even in a bad economy."
I heard of a similar thing happening at Circuit City stores. When it was announced the chain was closing, consumers flocked to the bargains like vultures, rudely demanding that the salespeople give them even deeper discounts. I don't know about you, but that doesn't seem right to me.
Yes, car dealers are a favorite target for angry consumers. And, yes, there are deals to be had in this marketplace. But remember to get your deal the right way. Stick to the facts by consulting True Market Value (and while you're there, check out our new TMV tutorial). It's essential that you also review the incentives page which is updated frequently to reflect changes in the market. For an overview of recent incentives see this recent blog post. And finally, make sure you use our new "Search New Car Listings" feature which is on the home page just below the new car box.
It's a great feeling to get a good deal on a car. But I feel that it's also important to feel good about the way you do business. Let your research get you your best deal, not a predatory attitude.
Evaluated on its own merits, the Australian-made 2009 Pontiac G8 GXP is a dream come true for driving enthusiasts who need four doors. Rear-wheel drive? Check. Corvette-derived LS3 V8 power and a sport-tuned suspension? Oh, you betcha. Snick-snick manual transmission? Check the $695 option box, and it's yours. As for the rest of the family, the G8 GXP has one of the most accommodating backseats this side of a Maybach -- and at around $40,000, it's far easier on the wallet than many of its performance peers. Trouble is ...
Incentives on new vehicles -- even ones that used to command sticker price and above -- are getting to crazy levels. Why? Dealer lots are still full of new 2008 vehicles that aren't moving (not that the '09s are moving so well, either). In fact, on average, 39% of the cars in lots in December 2008 were that year's models, compared with only 19% for 2007.
The average "days to turn (DTT)" -- the number of days from when a dealer receives a car to when it drives off the lot -- is at a record 86 days for the industry overall. Here's the December DTT for the Big 6. (All names include their subsidiaries except for Ford's Mazda.)
Chrysler Group 124 GM 99 Ford 88 Nissan 83 Honda 59 Toyota 58
Of the above, GM, Nissan, Honda and Toyota are at all-time highs. Toyotas that used to be sold before they even came into the showroom are now sitting on the lot for two months!
What this means to consumers is deals galore. In an unusual reversal of the general rule, it may even be a better deal to get a new car (with incentives on it) than a late-model used car. But the deals aren't limited to '08s; there are some great deals on '09s as well.
With most of the country experiencing some of the worst weather that winter has to offer, it is not surprising that Mazda has put some incentives on the MX-5 (nee Miata). Snow and ice does not make for convertible weather! So to help melt your heart, through February 2nd, you can get $2000 customer cash on both the soft-top and power retractable hard top 2008 MX-5. Â That, plus some healthy discounts (at least on the soft-top) should make the idea of driving a convertible in January a bit more palatable.
The used market is also a great place to pick up a deal on a Miata this time of year. Â You often find late model Miata's for sale, often with low miles, as owners discover they are not quite as versatile as they had hoped. The cold and snow make owners that much more anxious to sell.
I used to own a '99 10th Anniversary Edition Miata, and it was the most fun car to drive that I have ever owned. It even eclipsed the fun I had in my old 12-second '84 Camaro Z/28. However, it didn't make for a very good commuter car, especially having to drive with the top up in 90+ degree Florida summers.
And anyone who says the Miata, I mean MX-5 (it will always be a Miata to me), is a chick car has clearly never driven one. If I had the money and space for a third, fun-car, the Miata would be at the top of the list. For the latest incentives and rebates, click here. You can also click here to see more monthly deals.
(Corona Nissan Internet Director Linda Webber listens as new carbuying tool is presented.)
When I first heard about Edmunds' new car inventory tool I was so blown away I asked to be involved as it was rolled out into the marketplace. For years I've been shopping for hard-to-find cars for our long term testing fleet by calling one dealership after the next, all the time thinking, "If there was just some way to search the entire inventory of the local car lots." Well, that time has arrived.
Little did I know that Edmunds executives would take me up on my offer to help introduce what we call our New Car Inventory tool (NCI, for short). Recently, I spent an eye-opening two days in car dealerships in the Riverside-Corona area talking to dealership owners about our new tool, the state of the economy and the fine art of selling cars in tough times.
Day 1: Sales Training
It's 8 a.m. and I'm in a downtown Los Angeles hotel surrounded by several dozen Autotrader.com (www.autotrader.com) sales representatives.
We car guys love 0-60 times. We can tell you a BMW 335i does it in 5 seconds or a Nissan GT-R in 3.3 seconds (with launch control and roll-out). When a car comes back from our test track, the first question you'll hear is "what was its 0-60?" I don't recall anyone saying, "hey Mike, what was the Mustang's braking distance?" But you know, maybe we should.
If you're buying a new car, you've probably invested lots of time and effort trying to make sure you get the best deal possible. You've compared TMV numbers. You've ferreted out the latest incentives and rebates.
We hate to hit you with yet another item to ponder, but how much thought have you given to car insurance? Taking the time to consider potential insurance costs before you buy can help you choose a vehicle that truly fits your budget.
Car shoppers aren't the only ones who can benefit from taking another look at their insurance -- there are things you can do to lighten the insurance bill on vehicles you already own. For example, if you own a ride that's a bit long in the tooth, you may be better off relinquishing collision and/or comprehensive coverage.
Is there a chance that Fiat cars, long absent from the American market, could soon be back in our dealerships? Well, they moved one step closer to that when Fiat agreed to join forces with ailing Chrysler (and its majority owner Cerberus) to help it find a new way to move forward.
No, it's not a buyout and Fiat will not be giving Chrysler any money. Instead, it's what's being called a "global strategic alliance." This means that that Fiat will take an initial 35 percent equity interest in Chrysler in exchange for providing competitive, fuel-efficient vehicle platforms, powertrains and components to be produced at Chrysler manufacturing sites.
There's no question that this could breathe new life into the struggling U.S. automaker, especially when gas prices shoot back up again. But it also provides a dealership structure for Fiat to introduce its cars into America.
For more details about this historic announcement, please read our more comprehensive article by Michelle Krebs in Auto Observer. For some thoughts on how this will help Chrysler build fuel efficient cars or even diesels, read John O'Dell's story in Green Car Advisor.
Thanks to a loan from the government, to the tune of $1.5 Billion, Chrysler Financial is now offering 0% financing (for up to 60 months) on 11 Chrysler, Dodge and Jeep vehicles. Included in the program are Chrysler Town & Country, 300 and 300C, Jeep Grand Cherokee, Commander, Wrangler, Dodge Grand Caravan, Charger, Magnum, Challenger, Ram Pickup and Ram Heavy Duty. Customers need not have perfect credit to get the 0% rate either, with the minimum credit score being 620, instead of the 700+ that had been the requirement.
Of course, 0% financing does nothing to help consumers who are still afraid of losing their jobs, homes or both. Even with Toyota's [annoying] "Saved By Zero" campaign, sales still dropped nearly 37% in December. So it is clear that cheap financing alone will not be enough to save Chrysler.
That uncertainty in the future of the weakest of the domestic auto manufacturers has resulted in my advising, anyone who asks me, to avoid Chrysler products. I just can't see recommending their vehicles when there is no guarantee that the company will still be around by the time the loan is paid off. This is especially true when there are so many other more competitive products out there from other manufacturers. Sure, if Chrysler is sold off or liquidated, Jeep will likely survive in some form, but Dodge and Chrysler products are a big question mark. Yes, that is just my opinion.
For the latest incentives and rebates, click here.
Welcome to FAQ Fridays, a new weekly blog feature that answers some of the most frequently asked questions Edmunds readers send in.
First up: Folks want to know why the prices, specs or options on Edmunds might be different from what they see on other automotive sites. Good question! There are several reasons why this might happen, and we'll outline them here. Destination Charges and Other Fees: On our site, we always make it clear when destination charges or other fees are included in a vehicle's price, but to determine this elsewhere you may need to examine the pricing details or window sticker closely.
Vehicle Styles: Most vehicles are available in many different styles, and sometimes this leads to confusion when making comparisons. Styles listed on our site include the vehicle's trim, number of doors, body type, drive type, engine and transmission. For example, here's a style currently available for the 2009 Honda Pilot: EX-L 4dr SUV AWD (3.5L 6cyl 5A).
Sometimes a style contains a Special Identifier (SI) when a manufacturer wants to specify a unique feature. For example, rear entertainment is the SI on the following style of the 2009 Honda Pilot: EX-L 4dr SUV w/Rear Entertainment AWD (3.5L 6cyl 5A).
The 2009 Mercedes-Benz SLK55 AMG is a car I really didn't expect to like. Honestly, I'm still not completely sold on it, for one reason -- it's saddled with a conventional automatic that's simply not up to the task, serving up lame throttle-blip-less downshifts and generally sluggish responses to driver commands. But otherwise, whoo, pig sooey! This car turned out to be a total hoot. Here's three reasons why.
Last summer, gas prices shot to record levels at a rapid rate. Buyer's panicked and snapped up every fuel efficient vehicle they could find. Fuel sipping hybrids were more in demand than front row seats to the Presidential Inaugural. Consumers were happily paying thousands of dollars over MSRP for any hybrid car or small hybrid CUV. Fast forward to the here and now. Gas prices have dropped by more than half, people are buying trucks again and the once high-flying hybrid sales have crashed. Not only can you deal on them, but now you can get a deal.
There's a lot of rhetoric going around these days about why the Big 3 find themselves in their current quagmire. The conventional (lack-of) wisdom seems to be that they failed to make fuel efficient vehicles, which is often synonymously dubbed "vehicles people want to buy." At the same time, every manufacturer is touting how green and fuel efficient its vehicles are, most often citing the misleading highway EPA number as fuel efficiency gospel. The result is an atmosphere of half-truths, falacies and misrepresentation -- which is no surprise given that Madison Avenue and the United States Congress are involved.
Part of the problem is the source: manufacturers spinning facts to sell cars. We all expect that. But another issue is people who don't know what the hell they are talking about being thrust into the automotive world all of a sudden: the United States Congress and general interest TV anchors/reporters who wouldn't know a Chevelle from a Chevette. These are the folks who often take manufacturer spin and puke it back out without looking closely at the fine print. Spin like this.
Last week, Honda rolled out their incentive and rebate programs for January. Curiously absent were any special finance programs. Instead, Honda seems to be promoting leases with lease and dealer cash on most models. I am not sure why they have taken this route at the same time most other brands are offering subvented finance rates as low as 0%. However, Honda has always been a brand that "does it their way," and I am sure they have their reasons.
Consumers looking to buy a Honda this month should be aware of this and should not expect any fantastic financing offers like they might be seeing at Toyota, Ford or other manufacturers. For a list of all current incentives and rebates, click here.
The 2009 International Car of the Year Awards (ICOTY) were announced last night at the 13th annual black-tie ceremony held at the MGM Grand Detroit. The event was attended by more than 600 industry leaders and media members on the eve of press week for the North American Auto Show.
Hosted by Edmunds.com Editorial Director Kevin Smith, and Road & Travel Magazine Editor-in-Chief Courtney Caldwell, ICOTY presented the International Car of the Year and International Truck of the Year awards. The ICOTY jury, made up of 16 nationally-renowned automotive journalists, selected the 2009 vehicles as the best for the new model year with final ballots tabulated by J.D. Power and Associates to ensure accuracy and credibility.
The ICOTY Awards honor new model vehicles that reflect lifestyle compatibility and how well automakers achieve that goal through the design and marketing of the vehicle.
And now, this year's winners. For International Car of the Year, the award goes to the Nissan GT-R. The award for International Truck of the Year goes to the Dodge Ram 1500. For more information about the event, and additional awards, please follow this link.
We can guess what some of you are thinking: "Look at that! Honda went and built a Prius!"
Not necessarily. Honda's Insight hybrid actually came to these shores before the Toyota Prius. It even had the high rear hatch with the vertical peek-a-boo glass panel between the taillights from Day One. That no one remembers this is due to the fact that the original Insight was a weird-looking 2-seater that was impractical for the masses. Honda sold only 18,000 of them worldwide over a 6-year run.
Understandably, Honda wanted its new Insight to have broad-based appeal. They wanted to build a hybrid that didn't harbor any eccentricities. And they wanted to sell some 90,000 of them per year. To do this they had to morph the Insight into a 4-door, 5-passenger machine. The 2010 Honda Insight you see above is the result. But comparisons to the Toyota Prius are inevitable. How would this new Insight measure-up to the current king-of-the-hill? We recently pitted the two against each other to find out.
Final pricing for the 2010 Honda Insight won't be released until we get closer to the April 22, 2009 on-sale date, but an Insight is expected to go for several thousand less than a comparably-equipped 2009 Toyota Prius. In this case, the desire to compare on an equivalent equipment basis means we've matched the top-level 2010 Honda Insight EX Navi against a 2009 Toyota Prius with package #5 -- loaded, but without leather seats.
We put these cars head-to-head at our test track, compared them back-to-back on the road and ran them nose-to-tail through the same 197-mile fuel economy test loop. Then we poked, prodded and evaluated them side-by-side using our 27-point evaluation sheet. And yes, we also factored-in the expected price difference. After crunching all of that data, which of these dedicated hybrids do you suppose came out on top?
The 2009 Infiniti G37 Journey sedan features a pumped-up 328-horsepower V6 and Infiniti's new seven-speed automatic transmission. Our test car had the Sport Package, which adds the G37 coupe's quicker steering ratio and other performance-minded mods. Curiosity piqued? Check out our comprehensive Edmunds Test Drive of the new G37, and then come back and tell us what you think.
3. Sounds like a Scion. No, really, it does. The 2.0T starts around $33 grand, and it drones like an econobox under hard acceleration (here's our man Kavanagh on why the VW GTI's similar engine sounds much better). There's some steering-wheel vibration at full throttle, too. This is the engine that Audi's sending up against the likes of the BMW 328i's velvety inline-6 and the Mercedes-Benz C300's confident V6?
2. Transmission trickery. Our test car was a 2009 Audi 2.0T Quattro. It weighed in at 3,770 pounds. It generates 211 hp and 258 lb-ft of torque. It did zero to 60 mph in 6.5 seconds. Yes, the 2.0T is signficantly torquier this year, but something's fishy here. The 230-hp, 3,424-lb BMW 328i did the same feat in 6.4 seconds; shoot, so did the 265-hp, 3,835-lb Audi A5, which shares the A4's platform. And no, our 2.0T wasn't a ringer -- our long-term A4 Avant weighs even more and did the deed a tenth of a second quicker.
Here's part of what's going on: Audi has slipped a drag-strip mode into the transmission that activates only when you turn stability control off and brake-torque the A4 off the line (as far as I can tell; the owner's manual doesn't mention it). What does it do? It changes the upshift point from about 6,300 rpm to 5,800 rpm, presumably to keep the turbo spooled up, and the upshifts get really fast and really harsh. Result? We automotive journalists get better numbers -- belief-beggaring numbers, really, given the power-to-weight ratio -- and you owners won't be able to tax your drivetrain under ordinary circumstances with this high-stress procedure.
That's a little too sneaky for my taste. If there's a high-performance shift program, I want to be able to access it anytime. Audi should give owners a button so they can activate that mode at will; otherwise, it just produces eye-catching but somewhat misleading acceleration numbers for automotive publications. Which I hope wasn't the intent.
1. Not enough juice -- 2.0T or 3.2. This is arguably the A4's Achilles' heel: The 2.0T obviously doesn't have the oats to go toe-to-toe with the 335i/d, G37, C350, IS350 or CTS DI, and the uplevel A4 3.2, which competes with these models on price, is actually slower than the 2.0T at legal speeds. Audi makes a wonderful V8 (see S5, RS4, R8), and maybe the new supercharged six will be cool, but the two currently-available A4 engines are behind the curve. I told Santa I wanted no part of that.
This is the first installation of my weekly highlighting of deals and offers that I see as beneficial to you, the consumer. If I see a particularly large amount of cash incentives, a super low lease or finance rate or an incentives trend, I will make note of it here. Today I would like to highlight a deal on a crossover utility vehicle (CUV).
While it may not be at the top of anyone's shopping list, the Subaru Tribeca is certainly worth a second look. The Tribeca offers some unique styling, good road manners, lots of features and amenities, better than average reliability and resale value and a flexible seating arrangement. In addition, and why it makes my list this week, is the fact that there is as much as $4000 dealer cash on MY08 models and $1000 on MY09 vehicles, along with a TMV price that is at or below invoice price. MY08 models also have 0% financing for as long as 63 months. I like the Tribeca, and these offers make it that much more attractive.
One thing to keep in mind that the cash available on the Tribeca is dealer cash, and not customer cash. This means that the dealer can use the cash in any manner they see fit, passing it along to the consumer at their discretion. However, my experience has been that most dealers will indeed pass the cash along to the customer as a way to lower the final selling price.
While most agree that you should buy the vehicle, and not the deal, sometimes the deal can make the vehicle that much more appealing. Tune in next Thursday for another highlighted deal of the week.
I recently spoke with some friends who are about to have their third child. They're shopping for a new car that can accommodate the seating requirements of a newborn, a 2-year-old and a 6-year-old to prepare for the new arrival and asked me what I'd recommend. I was all ready to start singing my Honda Odyssey/Toyota Sienna/Hyundai Entourage love song, when the wife blurted out, "No minivans." Seems that, as the youngest of seven children, my friend had her fill of boxy peoplemovers as a passenger and a teen driver in the 1980s and had made a solemn vow to herself never again with the minivan. OK, so no minivans. After I stifled my sob and put aside my own minivan-fan feelings (though I don't share her aversion, I can respect it), I suggested the Chevrolet Traverse (pictured above, courtesy of General Motors) or one of its corporate siblings, all excellent and relatively affordable large crossovers. I also recommended the Hyundai Veracruz, a stylish but reasonably priced three-row crossover with a luxury-quality interior.
The jury's still out on what they're going to buy, but if you're considering buying a new car in the short term (and there are lots of great reasons to buy now, if the time is right for you) and you're not sure what vehicles to look at, check out our Buying Guides for a list of recommended models in the segment you're interested in, and then read a great overview of each vehicle on our newly redesigned model reviews page. I won't even mind if you totally ignore the minivan recommendations. Really, I'm fine with it.
"Critics of the 2009 Acura TL and its, um, interesting styling should recall 1889. That's the year Parisians and artistic experts were aghast at a hideous mass of steel and rivets rising over their city of lights -- a "black blot" it was called. They took solace in the fact that after 20 years, it lease would end and it would be dismantled. Well, the Eiffel Tower still stands 119 years later and most consider it rightly beautiful ..."
(Find the small link reading "View Inventory" and click on it for car buying satisfaction.)
When I was a car salesman, I was instructed to always "sell from stock." This meant that if someone came onto the car lot looking for a black pickup truck, and all we had was a white minivan, I was to use my sales skills to convince them that they really didn't want a black truck but would be more happy, attractive and successful in white minivan.
Now that I'm not a car salesman anymore, I can level with you. Finding the car you want -- the right color, configuration and trim level -- is now easier than it's ever been before. It's available on Edmunds.com. And it's free.
You will be hearing more about this later, but for now, trust me -- this is a revolutionary step forward for car buyers.
Here's how you used to have to search for the car you want: call each dealership in your area and wade through countless conversations with eager salesmen who keep assuring you that, yes, yes, yes, that the very car you want is "on our lot right now!" When you arrive you are told it was just sold or is out on a very long test drive.
Here's what you do now: put in your zip code and click on "View Inventory." When you do that, this is what you see:
One obvious reason for slow car sales is that consumers are afraid they will lose their job and default on their auto loan. Hyundai wants you to know they understand that and they're cool with it.
Under the "Hyundai Assurance Program" you can turn your car back in and walk away from your loan if... Well, it's a pretty big "IF" and there is a lot of small print. But the new program is probably going to spawn a host of imitators as automakers struggle to overcome the objections of on-the-fence car buyers in a slow economy.
The Assurance Program is offered free with every new vehicle sold by Hyundai and it lasts for the first year of ownership, either for sales or for leases.
Hyundai achieved a higher level of acceptance once it offered it's 10-year, 100,000 mile warranty some ten years ago. Now it hopes to overcome the fears of consumers in an economy that is fraught with job insecurity.
These are hard times for America's auto dealers. Last year saw the double hit of high gas prices followed by the credit crunch. But at the end of the year was a ray of hope: the long-awaited bailout in the form of bridge loans to GM and Chrysler.
At Edmunds we are often asked for our opinion about the auto industry and, naturally, we were asked whether we thought the bailout was a good thing and if it would work. We thought this historic event deserved a careful response. The editors discussed the issue and drafted the following statement. Please read it and share with us any thoughts you have on this subject.
Drive America Forward
Edmunds.com would generally not be in favor of government intervention in the free market, but our economy is in a precarious position. Because of the financial industry collapse, car sales were down more than 30 percent in the last four months of 2008. Car sales contribute critical tax dollars to the economy, and experts say that for every automotive job in the country, between five and ten other jobs (at restaurants, office supply shops and other related businesses) are affected.
The current climate is such that no carmaker, foreign or domestic, can thrive. Car companies known for their recent success are also reeling from the crisis: BMW sales dropped over 25 percent in November, Toyota announced that it will not be profitable in 2008, and in a move to shore up its core business, Honda has withdrawn from Formula One racing. Although this government funding in the form of bridge loans is not ideal, we believe it is a necessary first step out of the current situation and essential for the health of the national and global economy.
The government loans are only part of a solution to a problem that is not entirely financial, as consumer confidence must also be addressed. For a meaningful and long term rebuilding of the car industry to take place, these loans need to be paired with a stimulus package that will convince Americans to begin buying cars at a sustainable level. Without this second step - in the form of federal tax credits or other incentives - the bridge loans by themselves will not address a major aspect of the crisis.
Another front that must be addressed is the availability of credit. While lenders assert that money is currently available to car buyers, only those with the most exceptional credit ratings are finding easy financing deals. Restrictive credit requirements continue to shut-out many consumers, and the current credit process needs to be restructured so that Americans with good credit can more easily obtain car loans.
Fluctuating fuel prices wreak havoc on manufacturer's product planning since consumer preferences change drastically with the cost of fuel, despite talk of environmental responsibility and interest in alternative fuel technology. We believe that the new administration in Washington should move quickly to set a clear energy policy that stabilizes gas prices at a level which encourages the purchase of fuel efficient cars.
Ideally, this increased consumer cost would be offset by a decrease in a different tax, so that out-of-pocket spending remains constant, even as behaviors change. Also, legislation should be modified to stop penalizing diesel fuel vehicles, which in their latest iterations, are both exceptionally clean and fuel efficient.
Automotive consumers need a stable environment that allows them to make savvy long-term buying decisions with readily available financing options. Only with a sensible stimulus package can the auto industry recover and drive America forward.
As part of its drive to improve fuel efficiency, Hyundai has developed its own 6-speed automatic transmission for use in its lineup of cars and SUVs.
The upcoming 6-speed transmission is 25 pounds lighter than the 5-speed that's currently used. It's expected that the transmission's extra gear range will enable engines to run in the most efficent mode more often, ultimately serving to improve fuel economy by up to 12 percent. With the new transmission, Hyundai joins Toyota, General Motors and Ford as the only carmakers to have proprietary 6-speeds for front-wheel drive vehicles.
Hyundai's new transmission will eventually be featured in 16 models, including the redesigned 2010 Santa Fe, which will debut in showrooms toward the end of the year. We've long been impressed with the carmaker's adeptness at providing sterling value-oriented choices (check out our model reviews of current Hyundai vehicles here). This latest development will only make its lineup more appealing.
This, friends, is the 335d, BMW's new diesel-fueled 3 Series sedan. It starts at $43,900, which is about $2,500 more than a comparably equipped 335i. Pound for pound and dollar for dollar, the petrol-powered 335i is one of the finest automobiles on the planet. But the 335d is even better, and here's why.
(Classic Motors' car lot in Richfield, Utah, lies under a blanket of snow at year's end.)
I was passing through Richfield, Utah, last week and we stayed in a motel across the street from a dealership selling Chrysler, Jeep, Dodge and Chevrolet. Initially, I noticed the interesting mural on the wall alongside the car lot, but as I gazed at the rows of cars I began to think of the people who worked there, the owner and then the state of the business in general.
It was a bitter cold night and my mind was filled with gloomy thoughts about the collapse of the car industry, financial problems and plummeting sales. But when I woke up the next morning I decided it was unfair of me to put my own negative judgment on this dealership. Perhaps they were coping better than I knew.
After an excellent breakfast in the Little Wonder Cafe on Richfield's Main Street, where many of the locals hang out, I asked my waitress who was the owner of Classic Motors. She told me it was Joe Betar. I emailed him through the dealership's website and waited for a response.
Thanks to a recent infusion of funds from the TARP and the Fed, GM today announced new reduced financing with rates as low as 0% APR for up to 60 months on select new cars and trucks. The reduced rate financing is available to qualified buyers today through January 5, 2009 on many 2008 and some 2009 vehicles (see list below). In addition, many of the vehicles listed below have stackable bonus cash and/or dealer cash ranging from $500 to $4,250. This means that the financing can be used along with bonus cash.
Just as important, GMAC has lowered the credit score requirement for buyers to qualify for these reduced rates. A credit score of 700 had previously been required for a buyer to qualify with GMAC. Now, that threshold has been lowered to 621, allowing an estimated 75% of additional buyers to qualify for the loans.
"We're very excited to offer this reduced rate financing through GMAC to encourage our customers to get back into the game," said Mark LaNeve, vice president, GM North America Vehicle Sales, Service and Marketing. "This enables even more qualified customers to finance through GMAC at their local GM dealership, and provides additional financing capacity with conventional and reduced rate APRs for our dealers to make sales. With GM's Financing That Fits, and the Red Tag Sale now underway that offers supplier pricing, customers have an opportunity to get a variety of extremely attractive offers through the end of the year."
2008 Model Year Vehicles:
0% APR for up to 60 months on '08 Chevrolet TrailBlazer; GMC Envoy; and Saab 9-3, 9-5, 9-7X
0.9% APR for up to 60 months on '08 Buick Lucerne
1.9% APR for up to 60 months on '08 GMC Yukon and Yukon XL; Chevrolet Tahoe, Suburban and Avalanche; Cadillac CTS, SRX, Escalade, DTS, STS and XLR 2.9% APR for up to 60 months on '08 Buick Lacrosse; HUMMER H2 and H3
3.9% APR for up to 60 months on '08 Chevrolet Equinox, Colorado Ext and Crew cab and Light Duty Silverado; Pontiac Torrent; GMC Canyon Ext and Crew cab, and Light Duty Sierra
4.9% APR for up to 60 months on '08 Saturn Astra and Sky; Pontiac Solstice; Chevrolet Corvette and Heavy Duty Silverado; and Heavy Duty GMC Sierra
2009 Model Year Vehicles:
3.9% APR for up to 60 months on '09 Chevrolet Cobalt; Pontiac G5; and Cadillac CTS
4.9% APR for up to 60 months on '09 Pontiac G6; Chevrolet Malibu, Light Duty Silverado and HHR; Saturn Aura; and Light Duty GMC Sierra
5.9% APR for up to 60 months on '09 Chevrolet Avalanche and Heavy Duty Silverado; and Heavy Duty GMC Sierra
Check out the current incentives and rebates available on GM, and all other vehicles here.
Ford recently announced that they would offer a backup camera on 75% of their vehicles by the end of 2009. I am a big fan of rear view cameras, and I consider them a must-have safety feature.
Until recently, most consumers could only get them as part of a pricey navigation system, with the camera using the screen of the navigation system to display the rear camera's image. That is now changing as we are seeing more vehicles with integrated information screens in the dash and the expanded availability of screens built into the rear view mirror, like what Ford is offering. These types of installations, which don't require expensive optional navigations systems, reduce the cost of this invaluable safety feature down to as little as a few hundred dollars.
Consumer Reports did a very revealing study showing that even a typical car (never mind an SUV or pickup truck) has a sizeable rear blind spot, which only a camera can eliminate. I am glad to see the more car buyers will be able to benefit from this safety feature.
Even with uncertain economic times and crazily fluctuating gas prices, we're going to bet that the crossover SUV is here to stay. They now come in all shapes and sizes, while seating between five and eight passengers. This test concerns the five-passenger midsize group, the one that effectively replaces those truck-based models from the 1990s that launched the SUV craze. These are the bread-and-butter crossovers, but amongst 2009 Nissan Murano, 2009 Toyota Venza V6 and 2009 Ford Edge which one excels in the most areas?
Each vehicle was similarly priced and equipped. The Murano was all-wheel-drive, while the other two were front drivers. We ran each crossover through our usual gamut of testing and utilized the same comparison scoring system as Inside Line, with the exception of final score weighting, which we adjusted to reflect a more consumer-oriented perspective.
Ford's 2010 Fusion Hybrid was heavily spotlighted by the manufacturer at the recent Los Angeles Auto Show, and with good reason: The frugal hybrid offers the sort of fuel economy that's likely to command the attention of buyers hoping to save at the pump.
The official EPA ratings are now in, and they cast this Fusion in a very favorable light. The car has ratings of 41 miles per gallon in the city and 36 mpg on the highway. This makes it the most fuel-efficient midsize car available in the U.S. market -- a title previously held by the Toyota Camry Hybrid.
According to Ford, the Fusion Hybrid can travel for more than 700 miles on a single tank of gas. Official pricing is not yet available, but it's expected that the car will cost about $25,000 once the applicable federal tax credit has been factored in.
Imagine that you have a rich car fanatic relative, someone like Jay Leno, who says he'll get you six cars of your choice for Christmas. The stipulations are that three must be new and that of the six, three are domestic and three are foreign.
Of course, my list will probably change right after I post this blog..."Shoot, I forgot about the ____". But nonetheless, these would be (for the moment) my six picks...
David Kiley, of BusinessWeek'sAuto Beat, has written a fantastic article that helps to push back many of the mistaken notions, ideas and generalizations much of the buying public has regarding the domestic auto makers. I have paraphrased the ten things the taxpayer should know about the U.S. auto industry, read them after the jump.
You hear a lot about the struggling U.S. auto companies. But what about the poor guys selling cars? What kind of a Christmas are they looking forward to?
Well, obviously, they aren't too busy right now. So I imagined it was a car salesman who took the time to adapt the classic, "Night Before Christmas" and post it in our forums.
Here's a taste of it... And then you can follow the link to read the whole thing.
The salesmen were nestled all snug in their sheds While visions of customers danced in their heads. And dealer in his plaid jacket and I in my cap, Had just settled down for a long winter's chat.
When out on the lot there arose such a clatter, I sprang from my chair to see what was the matter. Away to the glass doors I flew like a flash, Peered outside and hoped for some cash.
In the past seven-plus years in California, I've probably activated windshield wipers about 12 times. In the past two days, I've twenty-tupled that.
See, I'm driving a 2009 Ford Escape XLT 2.5 4WD up in Toronto this week where it dumped a whole heap of snow on Friday with sporadic flurries ever since. Thankfully, the Greater Toronto Area is superb at clearing streets by salting the living crap out of them, but that also means your car is constantly hit with a fine mist of salty gunk.
I've rediscovered this makes your windshield wipers, the windshield washers and the stalk that operates them both a pretty clutch automotive feature. Sadly, I've been unimpressed with the Escape. Like every recent Ford I've driven, the windshield wipers are operated via the turn signal stalk. Turn the end for the various speeds, turn an inner ring for the rear wiper and push the end for spray. It would be much better for the stalk to be on the right like so many automakers utilize. In those other vehicles, you can usually push up or down on the stalk for a single wipe (something I've needed quite frequently). If you do that in the Escape, you signal that you're turning. Instead, you must turn the stalk on then off.
However, the Escape's real problem is the washer pattern. It wipes immediately three times, which successfully does the job. Then three seconds later, it randomly wipes again, smearing the windshield and the first blast of salty gunk that's sprayed up from the road. I then have to wash it again to get rid of the smear. Fail.
This certainly showed me an area where we California-based Edmunds editors leave our readers out in the cold. Perhaps we need to set-up up a salty gunk wet skidpad at our test track. I'll stick that in the suggestion box.
It was bound to happen; Subaru could only have a lock on the affordable repli-Rally car segment for so long. We're talking about the Impreza WRX. Sure, Mitsubishi offers the Lancer Evolution, but that's more a rival to Suby's pumped-up WRX, the STI. An STI or Evo is great if you've got $35- to $40 thousand to spend, but until now, those enthusiasts looking for turbocharged, all-wheel-drive kicks for $25- to $30 grand were limited to but one choice, the WRX. But now there's also the Mitsubishi Lancer Ralliart.
Last year, Subaru redesigned, and sadly, dumbed-down the WRX. The gripes came fast and furious. Our staff vocalized its share on the tepid styling -- "The WRX has lost its personality", as well as the softened suspension -- "Is this a standard Impreza or a WRX?". Subaru listened, so for 2009 the WRX comes with firmer suspension calibrations and more power (always nice). The styling still doesn't do it for us. The Ralliart, like the WRX has all-wheel drive and a turbo engine, but where the WRX comes only with a five-speed manual transmission, the Ralliart is equipped with a six-speed automated (dual) clutch manual.
So we (Associate Editor Mark Takahashi and I) commuted with them, took turns thrashing 'em back-to-back on our test loop (which includes twisty canyon roads as well as a freeway cruise), took notes and came to a unanimous decision (okay, so there was just two of us...) about which one we'd take.
Toyota plans to move in an even more environmentally conscious direction in the years ahead by increasing the use of plant-based "green" plastics in its vehicle interiors. The advantage offered by these materials is that they emit less global-warming carbon dioxide than traditional petroleum-based plastics during a product's life cycle. They also serve to reduce petroleum use.
Look for the redesigned 2010 Toyota Prius to feature a generous serving of these environmentally friendly bioplastics.
Ray LaHood, a recently retired Congressman from Illinois, has been tapped by President Elect Obama to be the new transportation secretary and will oversee a wide range of issues from fuel economy matters to auto safety to the national highway system.
While the speedy appointment of LaHood shows the decisiveness of the new administration, John O'Dell, editor of our Green Car Advisor, calls LaHood a "cipher" on these key transporation issues. The appointment might have been an attempt by Obama to make good on promises to reach across the aisle by appointing LaHood a Republican.
O'Dell writes: "LaHood, 63 (left), has little transportation record beyond his support for Amtrak, the national passenger train program, and his apparently friendly relationship with the Teamsters Union and other transportation unions, which endorsed and financially supported him during his congressional career. The national Teamseters Union also has endorsed his nomination as Transportation Secretary."
Check out our coverage of LaHood's appointment by reading the whole story in Edmunds' Green Advisor.
Americans have stopped buying cars and who can blame them?
With the stock market crashing and dire predictions of Detroit's bankruptcy, people are just not in the mood. But in all the thunderclouds of verbiage coming out of Washington along with the recently announced bailout, there's one word I'm not hearing: "stimulus package."
What's it going to take to get people buying again? Because, buy they must. No car company -- not even the mighty Toyota or Honda -- can't survive at the current sales numbers. So, what we are really talking about is a bailout of the car industry, not just Detroit.
Consider this: in a "normal" year, about 16 million people buy cars. This year, only about 12.7 million people have gotten new wheels. That means about 3.3 million Americans have postponed a needed trip to the car lot.
What will get those 3.3 million people off the dime? When will they say, "It's safe to go back to the car lot?" That's the part of the bailout that's being ignored. It doesn't make sense to carbuyers yet.
Look, it's one thing for a bunch of politicians and auto execs to reach an agreement. But that's not what it's about. It's all about boots on the ground. Or more to the point, customers on the car lot.
We have already seen a massive bailout of the banking industry where the government merely threw money at failing companies to keep them afloat. Notice how the real estate industry is going gang busters now? Maybe that should tell you something.
The stimulus part of the bailout is not an important part of the concept -- it's the most important part of any plan. If we give the car makers a loan, it won't do much more than put the auto industry on life support for another few months. But if the bailout can include a way to get car buyers on the lot, then the tide will turn.
So what's it going to be? For those of you who are reading this, who have put off getting a new car, what would it take to get you in that new car today? For starters, we have to offer loans that people can qualify for. But what about tax credits? Interest-free loans? How about a government guarantee to honor extended warranties and supply parts and service? Or, this is really wild, how about an amnesty program to forgive the negative equity many consumers are now carrying?
Ever notice how the best advertisement for a restaurant is a line of people waiting for a table? Get the stimulus package in order and 3.3 million people will flood car lots and pump cash back into our economy. Just think how that will look on the 5 o'clock news.
As the Edmunds Oracle Weekly Top 3 guy predicted early this morning, an initial bailout has been provided to save GM and Chrysler from a catastrophic demise. The White House today announced a $17.4 billion rescue package to help the two ailing giants survive into the Obama era. A TARP-funded $13.4 billion will be released over the next few weeks, and an additional $4 billion is on tap for February, pending the approval of Congress and then-President Obama.
We welcome this news, but we think consumers need a shot in the arm as well. No amount of government assistance will make a significant difference if consumers stay on the sidelines, and right now the economic downturn is forcing them to do just that. Consumers need financial incentives to purchase cars -- e.g., tax rebates or deductible interest -- in order for the bailout to be a resounding success. Here's hoping that this crucial next step will be taken in the weeks to come.
Don't let the ominous skies above dissuade you -- right now is undoubtedly the best time in recent memory to buy a new car. Here are three reasons why, as well as a couple tips to help you find a screaming deal as the year draws to a close.
3. An initial Big 3 bailout, probably on the order of $10-15bn and sourced from the TARP, looks to be just around the corner. The incoming Obama administration has repeatedly expressed its intention to help the auto industry get back on its feet. The long-term future of the industry looks bright, believe it or not, so consumers should feel increasingly confident about taking advantages of hot deals in the here and now.
2. Lagging demandis a good thing for car shoppers, as you may recall from Economics 101. Over the past few months, demand has slackened to historically low levels, which is largely why there are so many bargains to be found right now. It's not just American cars that are going for cut-rate prices -- Audi/Volkswagen, Hyundai/Kia, Nissan/Infiniti and Toyota/Lexus are all offering cash rebates on new car purchases. How do we know? We checked the Edmunds.com Incentives & Rebates page, which gives you a rundown on current cash-back offers, as well as exclusive insider information on how much money dealers have to play with on particular models.
1. You have the upper hand. Why? Because you're armed with the Edmunds TMV price for every model you're looking at. For example, suppose I go check out a stripper '09 Audi A6 3.2 Quattro sedan. The MSRP is $46,875, and the Invoice is $43,648. The salesman says he'll cut me a sweet deal: "$42 grand out the door...that's almost two thousand bucks below invoice!" But I've checked my TMV, so I know that, thanks to current incentives, the True Market Value is actually $39,314. The salesman was trying to pull a fast one, and it probably would have worked if I hadn't been prepared. So do your TMV research before you shop -- it'll get you a great holiday deal instead of a good one.
If you thought you were the only one hurting (or at least feeling scared) during this historic economic downturn, here is proof that even the very wealthy are being forced to take a haircut. In a normal month, Ferrari sells about 600 cars worldwide. However, in November, Ferrari's worldwide sales tallied a paltry 92 units.
One can only imagine what Ferrari's sales with be in December. The economic news has only gotten worse since last month, and now many of Ferrari's well-to-do clientele are no doubt looking for a defibrillator in light of the Madoff ponzi scheme coming to light.
What does this mean for the average Joe and Jane? Perhaps you can score a deal on used Ferrari from Palm Beach? However, this one is all mine, so stay away!
Acura has dropped touch screens in favor of its Interface Dial on all 2009 models. But most manufacturers are going the opposite direction by increasingly adding touch-screen interfaces to control audio, navigation, communication and even climate control functions.
And it's not just in the U.S. that touch screens are proliferating. TRG reports that Mazda and Porsche added the technology for the first time in MY '09 European vehicles, while VW expanded it to 10 of its cars over there. Overall, Germany saw a slight increase in vehicles available with touch screens: 23.6 percent in MY '09 vehicles vs. 20.6 in MY '08.
As a fan of touch screens, I'm glad to hear that Acura, which is normally on the cutting edge of car tech, is in the minority and is leading a lone retreat away from touch screens.
Last month, Toyota sold 8,660 Prius hybrids. That is just about half of the 16,737 they sold in November of 2007. Average gas price in November of 2007? About $1.30/gallon more than it was in November of this year. After the spike in gas prices over the summer, Toyota reacted to consumer demand by increasing production of the Prius and even developed plans to produce the Prius in the US, which it has shelved. Now that Prius demand has fizzled, Toyota is reacting by offering cut rate finance and lease deals in many parts of the country in an effort to move all those extra hybrids that nobody seems to want now. Clearly consumers are reacting to the rise and fall of gas prices and Toyota, and other manufacturers, are reacting to consumers' fickle nature.
It is safe to assume that once the current world-wide economic recession abates, in a year or two, and oil and gas prices spike back up, consumers will once again demand hybrids and other fuel efficient vehicles. This is why I suggest buyers think long and hard about their priorities when they look to buy a vehicle in the near future.
Buying a vehicle represents a commitment that is usually measured in years and not months. So when you are thinking about the color, options and body style, give long thought to what if. What if gas prices go back to $4/gallon, can you comfortably afford it? Don't just assume that gas will stay under $2/gallon indefinitely. Wall Street seems to have forgotten the lessons of history. Don't let the same thing happen to you. Don't just look down at the nice straight-a-way in front of you, lest you fail to notice the sudden curve until it is way too late.
The all-new 2010 Fusion line clearly has two targets it's going after- the Honda Accord and Toyota Camry. With all three priced competitively in the midsize sedan market, the decision comes down to which one has the all-around edge in features, performance and quality.
Three weeks ago, Ford unveiled the 2010 Fusion at the Los Angeles Auto Show. This week Edmunds.com was invited to get behind the wheel of this second generation in our very own backyard. During two days in and around Los Angeles, we tested the entire Fusion line, which includes the 2.5-liter inline-four version, the 3.0-liter V6, the 3.5-liter Fusion Sport, all-wheel-drive versions and first ever Fusion Hybrid.
There were a number of exciting entrants in this year's car color sweepstakes. Which one proved most popular among North American car buyers?
Uhhh...white.
According to the 2008 DuPont Automotive Color Popularity Report, one out of every five new cars sold this year was painted white. Black was second with 17%, while perennial leader silver dropped to a second-place tie with black.
The report also contains the following nugget of wisdom from Leatrice Eiseman, executive director of something called the Pantone Color Institute. "Blue [13%] is being utilized as the 'new green,'" Eiseman asserts, "because it is well-understood by people all over the world that blue can also represent the preservaton of nature."
With the recent announcement that GM is trimming nameplates, it would seem to make sense that extraneous "twinned" (or more) versions of vehicles within GM would be among those sent to the gallows. Though we think highly of the Lambda platform (Buick Enclave, Chevy Traverse, GMC Acadia, Saturn Outlook) aren't four versions of the same vehicle a bit ridiculous? Really, two would be enough -- one lower-priced (Traverse) and one premium (Enclave) brand. You'll see why I've pictured a Pontiac Vibe above after the jump...
The House has passed the bill that will get GM and Chrysler the loans that will carry them over until the Obama Administration and the new Congress can work out a larger and more long-term assistance package for the domestic manufacturers. As of this writing, we are still waiting to see if the Senate will pass the same bill, which they likely will. However, the economy as a whole is still going to suffer and car sales will likely remain low for at least the next year.
By their own estimates, the Detroit 3 are predicting annual sales for CY09 of around 11M units. This number is not financially sustainable for the industry, partially due to under-utilization of factories. As the November industry sales indicated, the outlook looks to be even more bleak going into 2009.
However, one way the government could help the domestic industry, and spur the greater economy as a whole, is to encourage the purchase of domestic vehicles through an income tax credit (which comes right off the top of what you might owe, unlike a deduction). This tax credit could be part of the estimated $1 Trillion stimulus package that is expected to be sought by the incoming Obama administration as a way to jump-start the recession-ravaged economy.
If the government offered such a credit for the purchase of domestic brand vehicles only (Ford, GM, Chrysler), it would certainly be seen as unfair to the transplants. However, many foreign governments (including Japan, China, South Korea, Australia and Germany) have been injecting cash and offering other financial incentives to their respective domestic auto industries in an effort to help them out during this world-wide recession.
Do you think this would be a good way to spend government money as a way to stimulate the economy and help the domestic auto industry, would such a plan motivate you to purchase a domestic vehicle and how much of a tax credit would you need to get you to "pull the trigger?"
In addition to great tools like our gas guzzler trade-in calculator, our data wizards at Edmunds.com also compile a regular, internal analysis of the cost-benefit of buying a hybrid vehicle versus a traditional gas-powered one. It calculates how many years of ownership it would take to make up for the price difference between a hybrid and an equal non-hybrid vehicle. This time, the news is worse than usual for hybrid hopefuls -- a lot worse. In some cases, the time frame required to break even has doubled, or even tripled.
Why? Due to the significantly lower oil prices compared to several months ago, the overall cost of ownership for cars that run on gas alone is also down (makes sense, right?). That means hybrids, with their higher asking price, are even less of a value right now. So if you're looking to buy a hybrid in order to save money, you're out of luck. At least for the time being.
Here's how many years it would take to break even on a hybrid model compared to the non-hybrid version now, compared to August of this year:
Cadillac Escalade Dec. 2008: 10.3 years Aug. 2008: 5.2 years
Chevy Malibu Dec. 2008: 29.1 years Aug. 2008: 11.2 years
Ford Escape Dec. 2008: 12.4 years Aug. 2008:7.8 years
Honda Civic Dec. 2008: 23.8 years Aug. 2008:10.1 years
Mazda Tribute Dec. 2008: 26.8 years Aug. 2008: 9.7 years
Toyota Camry Dec. 2008: 13.2 years Aug. 2008: 4.0 years
Toyota Camry (gas) vs. Toyota Prius Dec. 2008: 8.4 years Aug. 2008: 3.9 years
Saturn Aura Dec. 2008: 52.1 years Aug. 2008: 19.6 years
As you can see, saving money shouldn't be a motivating factor for buying a hybrid vehicle. Unless, of course, you plan to keep your Saturn Aura more than 52 years.
Dealing with an automaker's finance arm shouldn't be a harrowing experience, but it sometimes is. Recently, J.D. Power came out with their 2008 Consumer Financing Satisfaction Survey, which measures customer satisfaction with new vehicle finance services according to four criteria: application approval process; customer contact; payment/billing process; and provider offering.
The rankings are divided into categories: Luxury loan, luxury lease, non-luxury loan, and non-luxury lease. BMW took both luxury categories, while Hyundai took the non-luxury loan and Ford the non-luxury lease. Interestingly, Honda ranked third (which is still quite good) in three of the four categories.
I noticed that Toyota and Nissan, which I personally found to be a pain to deal with on my own vehicles, were nowhere to be found. Just goes to show you; 27,964 surveyed consumers can't be wrong.
So for now, forget about the dealership experience. What's your experience been with the finance companies? Good, bad or otherwise?
There's a fight going on at the bottom of the marketplace right now. Who sells the lowest priced car? Well, it's not always that easy to answer that question.
Though the base price of the 2009 Hyundai Accent and the 2009 Nissan Versa are just 20 bucks apart ($9,900 vs $9,970), when they are priced them out with A/C and an automatic transmission, suddenly the Accent was almost $1,500 more than the Versa. I don't think anybody has figured that out yet.
As readers of our Long-Term Blog will have noted, I didn't particularly enjoy the Subaru Impreza WRX STI's company while driving to Oregon and back last week. Which got me to thinking: Exactly what is it that makes a car a good road-trip companion? If you ask me, the following three features are necessary conditions for Roadtrip-Rated status. Check 'em out, and then tell me what YOU think a Roadtrip-Rated ride's gotta have -- and which models deserve this status, past or present.
Cars are a big expense and commitment, no question. Making the decision to buy one should not be arrived at on a whim. Edmunds.com is a fantastic resource for analytical information such as pricing and specifications, along with the valuable insight and opinions of the editors' reviews. But as thorough and professional as those reviews are, their exposure to the various vehicles represent just a snap shot of what an owner will experience over the months and years of ownership. Owners can often point out both positive and negative aspects of a vehicle that can only be realized during the day-in and day-out experience of ownership. The best place to tap into those aspects is vehicle specific forums.
It probably won't surprise you to hear that car sales are still way down as of November. Our sister blog, Auto Observer has the whole story.
But that means you can probably get a really great deal on a new car right now, particularly on 2008 model. And to help you make the most of this opportunity, check out our Car Buying Tips for a Slow Economy article.
Confused about how to evaluate a used car? Check out our top 10 on the subject
Top 10 funniest commercials, top 10 pop albums, top 10 Chicago bartenders, and my personal favorite, Lifehacker's top 20 top 10s. As December 31 quickly approaches, seems like everyone's got a top 10 list or two of the best, worst, weirdest and other sundry ways to categorize the year that preceded.
But rather than wait for the rush of the holidays and the end-of-year crush, Edmunds.com publishes Top 10 lists frequently throughout the year. You can check out all of our Top 10s on your own, but some of my favorites are Top 10 Deals of the Month - Cars (perfect for shoppers who are ready to buy now), Top 10 Tips on How to Test-Drive a Used Car (used cars can be a great way to get more for your money) and Top 10 Cool Features on Cheap Cars (you don't have to spend a ton to get the latest gadgets and conveniences).
There are all kinds of topics, some funny, some serious and dozens of Top 10s to choose from. So check 'em out! And remember to come back throughout 2009 to see what's at the top of our list all year long.
The Edmunds editors pump out so much information every week that it's sometimes hard to keep up with what's new -- even for us. So here are a few highlights that you might find interesting:
Feature Articles:Frugal Family Challenge, Part II -- two families go head-to-head to see who can save the most gas. Our own Phil Reed crowns the winner on Good Morning America.
Feature Articles: How To Negotiate An Extended Warranty; and the latest in our "Confessions" series, "Confessions of a Car Thief."
Speaking of features, I'd like to know about the kind of Consumer Advice stories you'd like to see more of. What questions -- about new or used cars, financing, safety, fuel economy, etc. -- would you really like to see answered? Where do you think you could use the most help in the car selection/buying/ownership/selling process? If I've got an answer for you within an existing article, I'll let you know, and if it's a topic we haven't covered yet that we think would have broad appeal, we'll get on it!
I've been an XM fan since I first got it in my car back in May 2006. Aside from the fact that its baseball channels allow me to listen to Toronto Blue Jays games 2,500 miles from Toronto, I enjoyed its commercial-free alternative rock channels and the ability to listen to it everywhere (XM's signal strength has always been better).
With the Sirius-XM merger, more than just the companies have merged. Both channel line-ups have now been dramatically alterred as well. Channels have been dropped, several have been added and a huge number have been renamed to match equivelent channels. For instance, XM's Ethel now adopts Sirius' Alt Nation label, while Sirius Gold adopts XM's 50s on 5. (The neat XM channel graphics that used to pop up on my portable XM player have also been replaced by simple font and colors. Boo.)
However, it's not just names that have changed, so has programming. While Sirius' Alt Nation and XM's Ethel offered basically the same alternative rock hits, I'm disappointed that XM's Lucy has been replaced by Sirius Lithium. Both were always supposed to feature alternative rock from the 1990s, and yet whenever I listen to Lithium, I never seem to recognize the song -- and I was there in the '90s. I'll be interested to see what Karl Brauer, our resident 80s satellite radio channel expert, has to say about Sirius Big 80s becoming 80s on 8 -- he enjoyed the former, hated the latter.
Another thing to consider is that unique Sirius channels like Howard Stern, NASCAR, NFL play-by-play, Martha Stewart and her exact opposite channel, Playboy, will now cost extra on XM. At the same time, Oprah & Friends, NBA and NHL play-by-play, PGA putt-by-putt, college sports and IndyCar will be available on Sirius. Both amount to a $4 per month increase, although there are currently special offers. I don't really get this. If I don't pay for NBA with XM, why must I pay for it with Sirius?
This brings me back to the beginning: MLB stations. They aren't on that list of XM channels being available on Sirius. I don't need Oprah & Friends, I need Cito & Friends. From what I can tell, Sirius-XM does not yet have an agreement with MLB but is working on it. Double your efforts and give me back Lucy while you're at it.
In a clear response to a country that is neck-deep in economic doom and gloom, Nissan and Hyundai are now offering their respective dealers the ability to advertise a new car for under $10,000*.
At Edmunds we don't usually discuss individual dealership promotions, but this one caught my eye. Bettenhausen Dodge, a "one price" dealer in the Chicago area, has a pretty unusual deal. If you buy one of their new 2008 Dodge vehicles at MSRP, you get another used 2008 for only $1.
Before you get too skeptical, know that they've shared their numbers with me, including what would happen if you applied all the rebates instead of paying MSRP, and the bottom-line savings are substantial -- between $$4,181 and $6,324. Though it's not the first time anyone's offered a "Buy One, Get One for a Dollar" sale, the dealership makes a point of saying that all vehicles can be financed and all of them are 2008 model year, not earlier. The only catch (and this is important) is that you don't get to choose which combination of vehicles you want. They've chosen five combos to offer:
New Charger RT or Durango SLT paired with a used Avenger
Grand Caravan SXT or Dakota Crew Cab paired with a used Caliber
Ram Quad Cab paired with a used Caravan
I don't know many people who need to buy two cars at once, but it does happen. And if you don't live nearby but want to take advantage of the deal, you can always have the cars shipped.
A sign of the times? Definitely. But a slightly used car for a buck beats the 99 Cent store any day.
A full road test (including video) of Nissan's highly anticipated 2009 370Z is now available on Edmunds Inside Line. The sixth generation of Nissan's most famous sportscar recently made its debut at the Los Angeles Auto Show. A host of lucky enthusiasts got an even earlier look at the car after an Inside Line sponsored preview of the car at Nissan's L.A.-based ad agency.
The 2009 Nissan 370Z is motivated by the latest evolution of Nissan's venerable V6, a 332-horsepower 3.7-liter mill designated the VQ37VHR (Very High Revving). The new mill redlines at 7,500 rpm, and is coupled to a heavily stiffened chassis and more supple suspension. The result? Check out the full test for Michael Jordan's insightful take, but know that he's convinced "Z-car people will be pleased."
The Insurance Institute for Highway Safety (IIHS) reported today that a record 72 vehicles for the 2009 model year received top ratings for protecting occupants in a crash -- more than double the number named "top safety picks" for the 2008 model year. A similar report included only 13 top-rated vehicles for the 2007 model year.
With an exponential number of vehicles getting passing grades, the IIHS is considering ways to make its tests more difficult. But even if more cars lose in the coming years as the tests grow more stringent, drivers and occupants will win since cars across the board become safer.
There was lots to see at the 2008 Los Angeles Auto Show, but here are the Top 10 Must See Things.
1. The Mustang Garage: Along with the revised 2010 Ford Mustang, the Mustang Garage is a whole corner of the huge Ford stand that includes a wall of wheels, parts displays, a Mustang on its side and live modification demonstrations. Sadly, the 15 or so Mustangs on display during press days have mostly been returned to their stable.
2. The Porsche Room:While all the other manufacturers share space with others, Porsche gets its very own room to celebrate both new and old models from the beloved sports car brand. It's located just to the right of the West Hall entrance -- it's easy to miss.
3. 2011 Chevrolet Volt: This could be the future of transportation and the savior of GM, or the future and savior that never arrived because of Chapter 7. Either way, the Volt concept is an absolute must-see in Los Angeles.
4. 2011 Honda Insight and Honda FC Sport: One is a real, forthcoming fuel miser that will give the Prius a run for its money. The second is a fanciful design concept of what a fuel cell sports car from Honda could be like. They're both something to behold -- for completely different reasons.
5. 2010 Nissan Cube: Not since the Borg, has there been this much interest over a Cube (yes, I'm a nerd, live with it). This weirdo, assymetrical box should capture some first-gen xB buyers jilted by the current edition.
6. The Exotic Rooms: Aston Martin, Ferrari, Lamborghini, Bentley, Rolls-Royce, Lotus. Do you require more description?
7. 2010 Kia Soul: Not a sexy choice, but this is a radical new direction for Kia, plus if they have even half the number of Souls they had during press days, it should be neat to see all the different Soul variations.
8. Old Cars Amongst the New: Sure you go to a car show to see the bright, shiney and brand-spanking new cars, but some of the older models on display are real special.
9. Modified Specials: We're not exactly a Pimp My Ride crowd around here, but some of the modified/customized versions of production vehicles on display are pretty darn cool. Make sure to check out the Scions, the Ford Flexes and Mercedes GLKs.
10. The Emphasis on Green Vehicles: Case in point at the GM stand. The 2010 Camaro and Corvette ZR1 are tucked way back into a corner, while a Malibu Hybrid, Aveo and Volt are prominently shown.
So you've got about $40 grand to play with, and...wait a minute. Actually, these days you probably don't. For that matter, neither do I or my cohorts in this comparative venture, Automotive Editor John DiPietro and Associate Editor Mark Takahashi. Nonetheless, what would you do if a 2009 Acura TL SH-AWD, a 2009 Infiniti G37 Journey and a 2009 Volkswagen CC VR6 4Motion magically appeared in your garage?
You'd grab the keys and head for the hills, that's what. And that's exactly what the three of us did. We mapped out a 22-mile driving loop through the Santa Monica mountains and hot-lapped it three times, switching cars after each circuit. Then we sat down with our ratings sheets, ordered up some bloody burgers and debated the virtues and vices of each ride.
Truth be told, there wasn't much disagreement. In fact, the final rankings were unanimous. Read on to find out how these midsize sport sedans stack up -- and don't be afraid to tell us what you think.
While credit may still be tight for many buyers, and cut-rate financing may not be as prevalent on some popular models it used to be, there are still sources for lower than average finance rates available to car buyers. One of the best places to look to for lower than average finance rates are credit unions. What most people don't know is that they are easier to join than you think.
Most typical new car test drives generally amount to little more than a drive around the block. Often times, this is by design as the salesperson would prefer to give you just enough of a taste to whet your appetite and get you excited, without giving you too much time to form any negative opinions. However, as I learned over the last 24 hours, taking an extended test drive can help bring out the little things that can both annoy and delight you. Things you won't have realized during just that short drive around the block.
Edmunds Says: A compressed natural gas (CNG) hybrid version of Toyota's best-selling sedan would be good for the environment -- and we won't run out of natural gas before we run out of petroleum. But Toyota's last attempt at a CNG Camry in 1999 was discontinued after one year due to lack of interest and a dearth of refueling stations.
Edmunds Says: A Fuel Cell Electric Vehicle (FCEV) version of the Borrego would get 54 combined mpg and a trio of 202-liter hydrogen tanks located underneath the vehicle would yield a 426-mile range. But like Kia's entrance into the big SUV market, it could be too late to make a difference.
Edmunds Says: Infiniti designers set out to create a drop-top that looks as good with the top up as it does with it down, and they've succeeded. Aside from the three-piece retractable hardtop, two colors and an available Bose system with headrest speakersare unique to the convertible. Both the base and Sport 6MT models get the coupe's 325-horsepower 3.7-liter V6; the base comes with a seven-speed automatic transmission and the Sport with a six-speed manual.
Edmunds Says: Hyundai's first hybrid will be the next generation Sonata, using the company's "Blue Drive" parallel system and the advanced lithium-polymer battery pack. A 30 kilowatt electric motor will work with a 2.4 liter engine to deliver fuel economy in the mid 30s. Hyundai's steadily improving design sense and build quality bode well for their entry into the hybrid market.
Vehicle: 2010 Lexus RX 350 When Available: February 2009 Price: Not Yet Available Edmunds Says: Lexus reveals the newly redesigned RX 350 which returns with a slight bump in size and horsepower, a six-speed automatic transmission with sequential shift and an innovative "Remote Touch" controller. Given the past success of the RX, this luxury SUV should be on your "must-see" list.
Vehicle: 2010 Lexus RX 450h When Available: Spring 2009 Price: Not Yet Available Edmunds Says: Redesigned along with its conventionally powered sibling, the hybrid RX 450h offers the same level of luxury and performance but with an environmentally conscious drivetrain. The RX 450h distinguishes itself from the RX 350 with exterior touches and a blue-trimmed Lexus logo, exclusive to the hybrid model.
Edmunds Says: Two new six-cylinder Boxer engines -- a 2.9-liter and a direct-injected 3.4-liter -- combined with the availability of a new dual-clutch transmission (PDK) means more power, truly decent fuel economy and easier commutes for this most practical two-trunk convertible. This roadster's nearly unrivaled mid-engined handling should remain intact, though the very subtle styling changes will likely go unnoticed.
Edmunds Says: The Cayman and Cayman S get the same new engines as their Boxster platform mates, but with just a little more urge (10 extra horsepower). Just like its sibling, the Cayman gets the PDK dual-clutch gearbox option, unique yet still subtle styling tweaks, and the availability of swank new heated and ventilated seats. With the impressive PDK tranny, this mid-engined track-day maven has become even more capable.
Edmunds Says: Ford goes aggressively after the Honda Accord and Toyota Camry with the 2010 Ford Fusion and Fusion Hybrid. It offers a giant, shiny new grill, improved fuel economy over what's currently available in the Fusion (and in the Accord or Camry), standard six-speed transmissions (both manual and automatic) and a new hybrid drivetrain that reportedly can go 700 city miles on one tank of gas and up to 47 mph on battery power alone. The new Fusion and its hybrid version could be a great option for shoppers looking for an American midsize sedan or hybrid sedan as an alternative to what's already available from Japan.
Edmunds Says: As a corporate twin, the 2010 Mercury Milan benefits from all the same changes the Ford Fusion does, and thus gains its own hybrid version that is expected to return 39 mpg. If you're not keen on the bold, chrome three-bar grille -- or any of the other new styling cues on the Ford -- opting for the Milan will garner Mercury-themed tweaks, like the waterfall grille and the two-tone cabin design theme.
What Edmunds Says: The 2010 MKZ receives an MKS-inspired split grille treatment and streamlined taillights. The overall shape, however, is little changed from '09; same goes for the 3.5-liter V6 and underlying platform architecture. A new six-speed automatic transmission reportedly helps quicken acceleration, and the MKZ sports a revamped interior with impressive materials quality. On paper, it looks like a contender.
Edmunds Says: With few notable mechanical changes, the big news for the 2010 Ford Mustang is stylistic. The refreshed 'Stang sports a newly pumped-up hood along with a meaner-looking front fascia, curvier haunches and tidier taillights. The dash layout has also been mildly revised. However, the Mustang is still considerably down on power relative to rival ponycars.
Edmunds Says: The latest car to showcase Volkswagen's Clean Diesel technology, the Touareg TDI will cost about $3500 more than a non-diesel model. The engine will get a 21-percent increase in fuel economy and an extra 140 lb-ft of torque. If the added cost can be offset by tax credits, the Touareg TDI becomes an even better deal.
Edmunds Says: With styling that captures the essence of the original 240Z, improved cockpit materials, a weight loss of 73 pounds and a ripping 332-horsepower V6, what more could Nissan's sports car possibly offer enthusiasts? How about a six-speed manual that offers automatic rev-matching for downshifts and a bargain price tag of 30 grand?
Edmunds Says: A cute, aptly named runabout, the Cube boasts impressive space efficiency, seating five within its tall, boxy body. A foot shorter than a Versa hatchback, the Cube is powered by a larger and more powerful engine -- a 1.8-liter, 122-horsepower four -- than we would've guessed. Fuel efficiency is quoted only as better than 30 mpg on the highway.
Shopping for a new car and wondering what's coming down the pike?
Lusting for chrome when your budget limits you to plastic?
Come with us to the 2008 Los Angeles Auto Show. Once every two hours starting at 9 a.m. west coast time, you can read new posts about the new cars debuting at the show. And when we say "read" we mean only the leanest, meanest, sinewy prose.
Especially for car shoppers we've developed the ideal format. We will post one auto show photo if we can elbow our way through the other ink-stained wretches. Of course we'll give you the year make and model of the vehicle. Then we list the on-sale date and price (super important for car buyers). And finally, we'll include one short gut-level paragraph labeled "Edmunds Says." Hey, if you want more info, the link for more information will be right there.
So call in sick. Make some popcorn. Grab you mouse. And hold on!
Now through January 2nd of 2009, members of the AARP will qualify for employee pricing on most Chrysler, Dodge and Jeep products. Buyers will also qualify for most cash and/or financing offers. Of course, one must question whether anyone who is a member of the American Association of Retired Persons, and who purchases a Chrysler Group vehicle, will outlive the existence of their vehicle's manufacturer.
(A sleek, early concept for the cutting edge Chevrolet Volt.)
GM screwed up and we should just let them die. They had fair warning with the oil embargo of the 1970s and they went right on building bigger and thirstier SUVs while shrugging their corporate shoulders and repeating the mantra: "Hey, it's what sells."
That's what Thomas Friedman said -- and much more -- in his recent column. I read the letters to the editor a few days later, and may people agreed with him.
We recently sampled the Audi Q7 TDI. And loved it. There's plenty of power (diesels provide a lot of low-end grunt, so the Q7 has a lot of "pick-up") and yet fuel mileage is over 50 percent better than the comparably-performing V8 Q7. The problem is, you can't buy one...yet.
Making their debut at the LA International Auto Show later this month, the 335d Sedan and the X5 xDrive35d Sports Activity Vehicle (they had to make it bigger just to fit the name on the back!) will be BMW's first diesels sold in the US in over 20 years. Pricing will start at $44,725 and $52,025 for the 335d and the X5 diesel, respectively.
These prices represent an approximately $2400 price premium over their gasoline powered counterparts. This pricing is somewhat offset by available income tax credits; $900 for the 3-Series and $1,550 for the X5.
Both models are powered by a 3.0L twin-turbo I6 that makes 265 hp and a stump-pulling 425 lb-ft of torque. Official EPA fuel economy numbers are not yet available, but it is estimated that the 335d will achieve 23 mpg in the city and 36 mpg on the highway. For comparison, the 335i is rated at 17/26. The X5 Diesel is estimated at 19/26 vs 15/21 for the gas model.
While I am not sure the improvements in fuel economy will make up for the price premium (and dealer markups), the diesel models should offer performance that those BMW diesel drivers of 20 years ago could only dream of.
More and more "redesigned" or "all-new" cars these days are riding on old platforms. Take the "new" 2010 Ford Fusion, for example. It looks different inside and out, and its powertrains have been revised. But underneath, it's basically the same car as the 2009 model, which means it's based on a stretched previous-generation Mazda 6 platform.
Ford has been at the forefront of this phenomenon, which I like to call the "ABP" (All But Platform) design movement. To wit, the Focus was redesigned for 2008 but hasn't changed platforms since 2000; the Lincoln MKS is new for 2009 but rides on a previous-generation Volvo S80 chassis; and even the sexy new 2009 Jaguar XF shares its underpinnings with the defunct Lincoln LS, the MKS' predecessor at the top of Lincoln's lineup.
The Blue Oval folks aren't alone, though. In general, there seems to be a trend toward "tweaking" or "refining" platforms rather than redoing them from scratch, as well as a tendency to milk every last drop out of existing platforms.
And you know what? That's not necessarily a bad thing.
We all had fun last week with Josh's suggestion that the Ford Escape Hybrid was a joke when compared with the Honda Fit. The discussion brought out the fact that the act of picking one vehicle over another is clearly not just an analytical exercise made up of crunching facts and figures and coming up with a solution like some rocket scientist. Clearly we buy what we buy not just because of physical dimensions and slide-rule computations. Rather, there are numerous factors, both tangible and intangible, that go into our decision making.
The reason for one person's decision might seem trivial or ridiculous to another. Of course, because our buying decisions are based sometimes as much on emotion as they are on rational thought, our decisions don't always have the desired effect. Sometimes we are happy with our decisions, and other times we are not. So, why did you buy what you bought, and are you happy with your decision? I'll start with my two current vehicles: 2006 Nissan Murano and 2007 Audi A4.
Faced with sales that are 45 percent lower than last year, GM has gone back to what's worked for them in the past -- the Red Tag Sale.
Several summers ago the Red Tag event turned sales red hot. Now, prices are being slashed to invoice and below on most models.
Included are all 2008 and 2009 Buick, Cadillac, Chevrolet, Hummer, Pontiac-GMC, Saab and Saturn passenger cars and light duty truck models. The only cars not being Red Tagged are the Cadillac CTS-V and the Corvette ZR1.
How good a deal can you get? We are changing our TMV pricing to reflect current GM deals. But as a rule of thumb, the Red Tag sale appears to be invoice minus the holdback (about 2 percent) minus $150.
If you want to see if waiting will give you an even better deal, take a look at our new feature TMV Predictive Pricing.
Despite the fact that gas prices have recently fallen, demand for hybrid and clean diesel vehicles remain one of the few bright spots for dealers in a dreary automotive market. Dealers are often demanding MSRP or higher for vehicles with a hybrid powertrain or diesel engines. Phil's recent Jetta TDI buying experience bears this out. One benefit, not to be forgotten, is the availability of a tax credit for most hybrid and diesel buyers.
Today brought more bad news for the auto industry. GM's sales were down 45 percent. Most carmakers -- including even Toyota and Honda -- were also hurting.
But industry insiders see a coming trend. Right now, with the election looming, everyone is in a holding pattern. After Nov. 4, a "pent-up demand" for cars will burst and buyers will flock to the car lot for a never-before-seen spending spree.
I have a couple of questions for you:
Are you waiting for the election to be over before you buy your next car?
Will your purchase hinge at all on which candidate wins?
Sales of pickups, SUV's and pretty much anything else that wasn't powered by a 4-cylinder engine tanked over the summer as we saw oil flirt with $150/barrel and gas prices surge past $4/gallon. Now, as gas prices have fallen below $3/gallon in most of the country, sales of pickups and SUV's have begun to increase again. Buyers seem to be either suffering from short-term memory loss or they must think that gas won't return to those $4 levels anytime soon. I would like to caution against such thoughts.
Readers of our Long-Term Blog will have noted that I'm rather infatuated with our 2002 BMW e46 M3. That car is an enthusiast's fantasy -- it's like BMW scanned the brain of a car nut, figured out exactly what made it tick, and then made the e46 M3 the embodiment of those qualities. Too bad the same development team wasn't in charge of the current M5 sedan. The M5's principal virtue and vices are the subject of this week's Top 3.
The Good
The engine folks at BMW's M Division are still on top of their game. The M5's 500-horsepower V10 is scintillating. Put it in third gear at about 65 mph, wood the throttle, and...wow. It's not just the ridiculous power it makes -- it's the fire-breathing F1-style wail it emits while doing so. This engine fully deserves to be mentioned in the same breath as the e46 M3's 3.2-liter inline-6. It's the highlight of this car.
The Bad
Surprise! The M5's steering stinks. Oh, it's not that bad compared with the mere mortals of the automotive world, but we're talking about the M-freakin'-five here. This is a variable-assist, variable-ratio setup, and it's invariably uncommunicative. There's so little feel that it reminded me of the rack in the new Acura TL SH-AWD, which is pretty good...for electric power steering! The M5's rack isn't electrically-assisted, so BMW can't use that as an excuse. What they should do is ditch this nonsense and replace it with, say, the telepathic steering available in even the lowliest 3 Series model.
The "What In Das Vaterland Were They Thinking?!"
SMG. Sequential Manual Gearbox. It was widely panned when it debuted years ago, and guess what -- it's still really bad. Frankly, I can't believe BMW's product people ever agreed that SMG was ready for prime time. The delays between upshifts are unacceptably long, even when the sportiest setting is selected, and each upshift lurches you forward in your seat while you wait for the single clutch to engage. It's uncomfortably reminiscent of the Smart's painfully crude transmission, except the M5 costs an additional $70 grand.
The Moral
Give me typically communicative BMW steering and a six-speed manual transmission, or at least BMW's new dual-clutch M-DCT transmission, and we'll talk. Until then, I'll take an M3 sedan with either of those transmissions, thank you...or a C63 AMG...or a CTS-V....
Starting next year, 500 lucky customers in California, New York and New Jersey can lease an electric MINI. With a range of 150 miles and a top speed of 95 mph, the MINI E eschews a gas engine (and the two rear seats) for a series of over 5,000 small lithium-ion batteries and an electric motor. These batteries offer up a capacity of 35 kilowatt hours and are used to power the 204 hp electric motor. This powertrain is saddled with an extra 400lbs over that of a gas MINI Cooper, resulting in a 0-60 performance of 8.5 seconds. Faster than a gas Cooper, but slower than the turbocharged Cooper S.
Before you decide to camp out for your place in line, be aware that the monthly lease payment will be a not-so-mini $850 and the lease term is for only 12 months. Included in the payment is maintenance, a charging station (in your secure garage) and any electricity you use charging the batteries. The question of insurance coverage could not be answered, but it may also be included in the monthly payment. However, even if it doesn't include insurance, the high payment is partially mitigated by the fact that you won't have to be paying for any gas.
My take? I like it! I believe the future power source for automobiles is electricity. From both an economic and environmental standpoint, the world can no longer afford to power our vehicles by internal combustion engines. It will still take years, if not decades, for electric vehicles to become mainstream. However, we have to start somewhere. As they say, how do you eat an elephant? One bite at a time. The MINI E will be one such bite.
We''ve been hearing a lot about the frozen tundra of credit availability and how folks under 700 FICO need not apply. Well, Phil and I did a little research and got the low down on what's really happening to consumers in search of new wheels.
Why Are Car Buyers Staying Away from the Dealership?
Can I Get a Car Loan?
How Have Credit Requirements Changed?
Is It a Good Time To Buy a Car?
Car-Buying Tips in Troubled Times
Because automakers are hurting so badly, it might be one of the best times ever to buy car -- just be sure to check our Rebates and Incentives information to make sure you get every manufacturer and dealer incentive coming to you. Yes, it's true: Both auto financing and leasing standards are tougher, but nowhere near impossible to overcome. If your credit's not great, you'll have to pony up more cash up front to make it happen. But the people who are shut out of vehicle financing are likely to be those who truly should be -- because they're bad risks. Call it a market correction.
But what about you personally? Have you found it tougher to buy a car, or do you know people who have? Are you polishing up your credit score? Are you shopping the used car market instead? Or have you taken advantage of the chaos to score a great deal? Let us know!
Over on my own blog yesterday, I pointed out how many excellent sedans and coupes one can purchase for between $28,000 and $43,000. I then pondered why anyone would want or needed anything else beyond these mostly fantastic cars. So amongst the following, what would you buy? The car with the most votes wins a coupon to Denny's.
(In no particular order)
BMW 3 Series Infiniti G37 Pontiac G8 GT Mercedes-Benz C-Class BMW 1 Series Audi A4 Volkswagen CC Nissan Maxima SV Hyundai Genesis Acura TL Cadillac CTS Lexus IS Dodge Challenger Chrysler 300C Lincoln MKS
Consumers Union, publisher of Consumer Report, has released the results of its annual reliability survey. The report shows that Ford is the most reliable domestic brand, and it continues to distance itself from GM and Chrysler. According to the results, Ford's overall reliability is on par with many Japanese brands. However, the Japanese brands still rank highest in overall reliability, leading in 15 of 16 categories. European brands are a mixed bag with some 2/3rds of models showing average or better reliability, while others still struggle. The Korean duo ranked in the top ten. The Scion xD was ranked as the most reliable model, overall.
The top five brands (in descending order) were: Scion, Acura, Honda, Toyota and Lexus. The bottom five brands were: Dodge, Cadillac, Chrysler, Saturn and Land Rover. The complete listings can be viewed by clicking on the thumbnail below.
Reliability is certainly something to be considered when shopping for a vehicle, but I personally wouldn't let it stand in the way of my getting a vehicle I really like. In the last 10 years, I have had three VW's and two Audi's. Neither brand scores highly in the rankings. At the same time, I have had two Honda's, a Mazda and a Nissan, None of these vehicles ever left me stranded, while all required some sort of warranty work, though none being chronic. Reliability, issues or rankings, have never been a huge deciding factor for me. I would likely rank reliability below such factors as safety, fuel economy, value, performance and comfort/features.
How reliable have your vehicles been? Have any ever left you stranded, or have issues been mostly minor?
(The 2009 Volkswagen Jetta TDI,Vail Pass, Colorado, at sunset. Photo by Andrew Reed.)
The newly redesigned 2009 Volkswagen Jetta TDI is improved in nearly all categories and is as different from its predecessor as a Prius is to a BMW. I discovered this recently while giving the VW a rigorous cross-country workout driving it from Los Angeles to Denver.
As I mentioned in an earlier blog, my father, a huge VW diesel fan, turned down the chance to buy the new Jetta for nearly $7,000 over-sticker from a Denver-area dealer. Instead, I arranged for him to buy the car from a Los Angeles dealer for $500 below sticker. All that remained was to deliver the car to him some 1,000 miles away. Since we were due for a visit, my son Andrew and I headed out on the open road to mix business and pleasure.
You find the most interesting things in our Forums.Here are three things that will get you browsing. Who knows what else you'll find?
One member described some bad information he'd been given by a car salesman and how he had responded by giving the salesman a bad response on a survey. He finshed by saying, "On a side note, I am currently serving in Iraq and time spent on Edmunds takes me away from this God forsaken place. Thanks to all of you... " Read the exchange.
The Chevy Cobalt isn't typically held in high esteem around these parts. Many of my colleagues lambaste Chevy's compact chiefly for its sub-par interior quality and bland styling. While the Cobalt's cabin pales in comparison to the class-leading Mazda 3's or Subaru Impreza's, its fit and finish aren't much different from a Civic's or Corolla's. That said, if I were buying a compact economy car, I'd still probably consider the Mazda 3, the Civic or the Suzuki SX4 ahead of the Cobalt.
But enough about the mainstream Cobalt, I'm here to tell you about a different animal that deserves my Dark Horse promo -- the Cobalt SS.
A look at this month's incentive landscape reveals a trend towards convincing people who have been leasing to buy their next vehicle by sweetening the deal with generous cash rebates. General Motors, which was hard hit by the leasing downturn two months ago, is leading the charge in this new incentives strategy.
In an effort to make room at dealerships for the 2009 models, GM has increased the purchase bonus cash on most of their 2008 large SUVs by up to $1,500, and an additional $2,000 if you are coming off of an expiring GM lease. The lessee bonus cash is available for anyone with a lease end date through June 30, 2009.
When combined with their other incentives, this can add up to a savings of $9,000 on a Cadillac Escalade, $8,000 on a GMC Yukon, and $5,500 on a Saturn Outlook.
I remember my first job in the car business. It was the summer of 1988 and I was working at an independent used car lot ripping people off...I mean selling cars (used cars was and still is a dirty business). Among the many pieces of knowledge I walked away with was how important vehicle color can be when it comes to resale value and desirability. At the time, blue cars were considered the least desirable color. We didn't want them as a trade, and they were valued as such. Twenty years later, blue appears to be poised for a comeback.
Sure, the Prius still tops the rankings that the EPA and the Department of Energy issued last week. But there are some notable new additions to the Top 10 list. In particular, the 2009 Volkwagen Jetta diesel and the 2009 Smart Fortwo. The Jetta, which comes in no less than 32 different flavors, will benefit from a $1,300 federal tax credit. The Smart? Well, you couldn't get me to buy that car even with a tax credit. Not with that transmission, anyway.
Happily, I'm the owner (or lessee) of the #3 car on the list, although I have to admit I'm getting less than the EPA estimated mileage of 35/33. I can't complain too much about getting 30/31, but the VW diesel's numbers (30/41 or 29/40) sure are tempting. The fact that VW sells every diesel it makes, means that if you want one, get in line now.
Jay Kavanagh and I have a huge lead going into day three, but we're not letting up. The coasting non-trick we employed in our Audi Q7 TDI diesel during day 1 and day 2 won't help on today's mostly flat route from Monterey to rally's end in Santa Monica, so we're going to employ a tactic so basic that we think everyone else will overlook it.
We're not going to drive the suggested route down the beautiful but sinuous Route 1 at all, because frequent turns, rolling clogs behind tourists and the lack of passing lanes on the narrow two-lane will make it hard to drive economically. Oh sure, speeds might be low and seemingly thrifty, but frequent on-again off-again throttle applications will drink more diesel than a steady cruise.
I spent the weekend in a 2009 Acura TL, a car that's been widely derided for its elephant-seal-like face and Saturn-Aura-from-the-future butt. I'm not wild about it, but I don't think it's enough for me not to buy it. The allure of similarly priced competitors might, but the TL doesn't nudge the Aztekometer enough to repel me. I'd say being dull is a bigger turn off -- at least Acura is trying to make some statement, however potentially misguided.
So how important is styling for you?
Is it everything? (The Thunderbird buyer). Does it have to have a particular aesthetic? (Jeep or Volvo boxy only!) Is it just a tie-breaker for evenly matched cars? (C-Class vs A4) Is it only important if it's really pretty or really ugly? (Aston Martin vs Sebring) Is it completely inconsequential? (Any Subaru)
Finally, do you care to read about styling interpretations in car reviews, or would you prefer to leave the analysis to yourself given that everyone has different opinions?
Team Edmunds, as the driving combo of Jay Kavanagh and me has come to be called, pulled out a big lead in the first day of leg 4 of Audi's diesel-powered fuel economy competition, the Audi Mileage Marathon. We managed to coax 28.6 mpg out of a laden TDI diesel V6-powered Audi Q7 7-passenger SUV on a day that consisted of a lot of climbing, descending and re-climbing on our way to a 7,500 ft high perch at Mammoth Lakes, California.
At the end of today's route we'll end up at sea level in Monterey, California. Jay and I are confident that the fact that we're destined to lose well over a mile of elevation should help us smash the 30 mpg barrier. Before the real downhill starts, however, we must first burn a bit of fuel climbing up and over the 9,945 ft summit at Tioga pass, the eastern gateway into Yosemite National Park.
The roads in this remote section of the park are narrow and sinuous. Long lines of cars can get bottled-up for miles behind tourist rent-a-cars that are crawling along at a bicycle's pace while they ogle the view all around them. We're not going hyper-fast, but we do want to avoid the brakes and preserve as much momentum through the turns as possible so we can avoid unnecessary dabs of throttle. Getting around such rolling roadblocks cleanly yet promptly is advantageous.
What makes this all the more critical is the fact that today's long downhill stretches are ideal for our secret tactic--a tactic that also happens to be today's strategy for smart car drivers: coast downhill in "D" instead of "N".
"Huh?" You say.
Contrary to popular belief, coasting a modern vehicle in Neutral consumes more fuel than coasting in Drive. In Neutral, the engine is decoupled from the road, so fuel must be burned to keep the engine running at idle speed and allow it to power accessories such as the power steering, air-conditioning and alternator. In contrast, coasting downhill in Drive consumes no fuel because the engine computer shuts off the fuel injectors in an attempt to limit descent speed via engine braking. The road itself is driving the crankshaft via the still-engaged transmission, so the power steering, air-conditioning and alternator get a free ride. Yes, you can coast down the long grades into places like Death Valley with the A/C on and still not burn any fuel.
Everybody else has failed to understand this fact and has been coasting in "N" throughout the competition. But we're not about to point out their mistake. They probably wouldn't believe us, anyway; everyone turns into big fat liars around the dinner table at competitive events like this.
The end-of-day score sheet demonstrates the validity of our strategy with a double whammy. Team Edmunds not only posts a best day 2 fuel economy result of 31.5 mpg, we manage to achieve this at 47 mph, the day's fastest average speed. Out of a Q7 field of 7 competitors, here are the top three results from day 2:
1st: Q7 #3 31.5 mpg @ 47 mph, 191 points
2nd: Q7 #4 30.6 mpg @ 45 mph, 174 points
3rd: Q7 #2 30.2 mpg @ 45 mph, 167 points
With a virtually insurmountable lead in the points so far, the final day of the competition promises to be little more than a formality. Day 3's roads are mostly flat and level as we travel along the coast back to Santa Monica to a finish at the same elevation, so our downhill coasting tactic won't be of much help. But we have something else up our sleeve--something so basic we think everyone else will overlook it.
(The newly redesigned 2009 Volkswagen Jetta TDI. Photo by Andrew Reed)
My father called me recently and said he had found a 2009 Volkswagen Jetta TDI (diesel) he wanted to buy from a local dealership in Denver, Colorado. I told him to ask the dealer for a breakdown of all the fees and call me back. Here's what he came back with:
It's funny because, when he read me off the "market adjustment" fee, he added, "Whatever that is."
My father is a smart guy but he didn't know what the "market adjustment" charge really is. It is essentially a dealer markup for an in-demand car. I told him if he wanted to wait six months it might cool off and he could buy it at sticker. Or I could shop for it around Los Angeles. He asked me to shop for the car.
I hired Authority Car Buying Specialists (www.authoritycbs.com) and they located the car in Los Angeles for $500 below sticker. Yesterday the car was delivered to my house.
So, my dad saved $7,298 (the dealer markup and $500 discount off sticker) not to mention the fact that California's doc fee is only $55 (a $345 savings). And who knows what those "other fees" were for that justified $496.
If you're shopping for an in demand car, and you find that there is a hefty markup at local dealers, try another city or another region of the country. Often, you can save enough to pay for the shipping cost -- and then some.
Well, technically this is Day 12 of Audi's cross-country diesel-powered adventure. New York, New York was the starting place fo a convoy of over twenty diesel-powered Audi products, ranging from the TT sports coupe to the A3 and A4 sedan, some Q5 SUVs and our designated mount for the final 4-day push from Las Vegas to Santa Monica, California, the soon-to-be-released US-spec Audi Q7 3.0-liter TDI SUV--a 50-state clean diesel.
Yes, you're right; Vegas to LA should only require 4 hours. But they don't want this fuel economy competition to be easy, so they're sending us the long way.
It's no big secret that the 2009 Toyota Prius is the most fuel-efficient car on the market, thanks to its thrifty gas/electric hybrid powerplant. And therein lies much of its appeal, though the Prius' green credentials have not gone unchallenged in these parts. But with all the hubbub about fuel economy, it's easy to lose sight of the Prius' other virtues. The Weekly Top 3 is here to set the record straight.
3. It's a pleasant car to drive.
Plenty of folks these days would probably be happy with the Prius no matter how harshly it rode, or how loud it was inside. But the Prius' refined nature is nonetheless a welcome surprise. It's reasonably quiet at 80-85 mph over a variety of surfaces, and its suspension conjures up images of hovercrafts as the Prius calmly floats over bumps and ruts.
I've often wondered why even the high-tech Prius can only match the combined fuel economy of an '86 Civic CRX HF -- and that's using the EPA's revised estimates, as opposed to the 54 mpg on said Civic's window sticker. But say this for the Toyota: it's not at all the rolling penalty box that economy cars used to be.
2. There's plenty of backseat space.
Econocars of yore weren't exactly known for their accommodating rear quarters, either, so the Prius' spacious backseat is more icing on the cake. Would Prius owners have rioted if there weren't so much room in the rear? Of course not. But it's pretty cool that the Prius gives you midsize-sedan backseat space and, well, '86 CRX HF fuel economy.
1. It can haul a whole lot of stuff.
Thanks to some ingenious battery-pack placement, the Prius has a flat load floor, and its rear seatbacks fold flat as well. Throw in the hatchback bodystyle, and the result is a very useful cargo bay. I once wedged a kitchen table, four chairs, a set of golf clubs and a few boxes back there, and last weekend I took a friend to Ikea and managed to squeeze in just about everything he needed to furnish his one-bedroom apartment. One doesn't often think of the Prius as a practical vehicle, but name a car other than the new Jetta diesel wagon that can hold this much cargo with remotely comparable fuel economy.
The Moral
The Prius' calling card will always be its miserly fuel consumption, but it also offers an appealing combination of refinement and practicality.
A Florida dealer decided to stop tacking on a $495 "doc fee" (document fee) and, although it reduced his profit on each car, he sold twice as many vehicles.
Earl Stewart, of West Palm Beach, Florida, decided the doc fee was a dealer's "dirty little secret" and he didn't want to be associated with it. The decision raised his son's opinion of the business so much he joined him on the staff at Earl Stewart Toyota in North Palm Beach. But now other dealers in the area are hacked off about Stewart's position. They feel they need the extra profit even if it is a "gotcha" for the customer when they discover the charge as they sign the contract.
Read more about the controversy on Stewart's blog. You can find out what fees you'll be facing before you sign by checking out our 50-state chart called "What Fees Should You Pay?"
On Monday I told you how Toyota was now offering 0% financing while GMAC was limiting some long-term loans and had virtually ceased leasing. Now it seems that GMAC has gone one step further by now requiring applicants to have a credit score of at least 700 in order to get approved for a loan. GMAC blamed "lack of stability in the global capital and credit markets" as the reason for the new policy.
This has the potential to have a major impact on GM sales. According to information from Experian Automotive, 43.5% people who financed new or used vehicles during the second quarter of 2008 had credit scores under 680. While third-party lenders, banks and credit unions will still make loans available, consumers will almost certainly not see anything close to the 0% financing that is being offered by other manufacturers' captive lenders. GM buyers will likely look elsewhere if GM dealers can't offer competitive finance rates.
It is important to remember that Cerberus owns a controlling 51% of GMAC. Cerberus also owns Chrysler. Cerberus has virtually eliminated leasing through GMAC and has now cut off lending to potentially half of GM's buying public. While it is likely that Cerberus is simply trying to improve its ability to sell asset-backed securities in order to maintain liquidity, the cynic in me thinks there is something a bit nefarious going on here. Is Cerberus trying to squeeze GM sales for its own benefit? hmmm...
Edmunds True Market Value has empowered consumers by giving them an idea of what other people are paying for each car on the market. But even if you're confident you paid the same everyone else did, there's always been that sneaking suspicion that you could have saved even more money if you waited another month. Buying a car remained a bit of a crap shoot.
Well, your odds are about to improve as Edmunds introduces Predicted TMV, which forecasts likely price changes for all car, truck and SUV models. It'll be updated during the second and last week of each month and calculated at the model level, although we'll highlight a particular model style if it significantly shifts.
There far 5 different levels and subsequent arrow icons that'll go along with each model's TMV. A 2-percent-plus increase or decrease will have a big arrow, 1-2-percent change is a little arrow, while a horizontal bar is a less than 1-percent movement in either direction.
We're able to predict TMV trends by taking into account inventory level history, days-to-turn history, prior incentives, past retail unit sales, historical TMV prices, current actual transaction prices, brand pricing patterns, incentive patterns, scheduled new or revised model launches, overall market macroeconomic factors, and current and historical consideration intent among Edmunds users.
It's complicated stuff, but hopefully it'll help folks not only pay what they should, but when they should as well.
Even in this crazy economic climate, most people can get still auto financing. Preparation and knowing what to expect at the dealership can make the difference between getting a car loan (yes, a good one) and not getting one at all. Below are the most common auto financing pitfalls that consumers experience:
#1: Not knowing their credit rating when they apply for an auto loan.
#2: Overspending once they get to the dealership.
#3: Not knowing the current interest rates being offered in the marketplace
#4: Not having approved financing in hand before entering a dealership
#5: Assuming a zero-percent loan will save more money than a cash-back rebate
#6: Falling victim to the F&I officer, who may try to confuse you by "intertwining" different elements of your deal. ("We'll give you an extra-low price on the vehicle, but this interest rate is the best we can do.")
#7: Not reviewing the contract for "extras" that have been thrown in before signing.
#8: Succumbing to pressure and exhaustion by signing the contract, despite confusion, second thoughts, or misgivings.
Most people forget that the price of the car is important, but the financing deal is often moreso. Paying a slightly higher interest rate or extending your payments for a few more months adds up to hundreds, sometimes thousands of dollars more. If you take time to do a little homework, you'll leave the dealership confident that even in these strange economic times, you got a good deal.
As Phil reported yesterday, the credit crunch that is currently paralyzing short term loans from bank-to-bank and loans to businesses and municipalities has not done the same to consumer lending. Loans can still be had, especially to those with good credit. However, credit availability is not equal among the manufacturers' captive finance companies.
We keep getting the same questions from nervous car buyers who spend too much time looking at the little numbers from Wall Street crawling across their screens. They're assuming that what's happening on the stock market is happening on the car lot. There are some similarities, but they are not completely the same.
Last Friday I spend the day on the phone asking auto experts for a status report. I'll be writing a full blown article about it soon. But here briefly, are my questions and their answers:
As my colleague Lee pointed out earlier today, unlike the so-recent past, car loans are no longer as easy to get as a Happy Meal. In the economic paradox of our times, car makers are offering big incentives in an effort to move metal, but car loans are tougher to get.
That said, if you are credit worthy and are in the market for new wheels, you still need to do your homework. There are a lot of tempting incentives out there, and they're not just on vehicles you wouldn't typically be considering. Toyota, for example is offering 0 percent financing on Corolla, Camry and RAV4, in addition to its larger SUVs and trucks. GM is offering low (though not 0 percent) financing as well on most of its vehicles.
Don't know whether to take the low financing or cash incentive? You can compare the two using Edmunds Low Financing versus Cash Back calculator. That and many other useful tips can be found in this article on buying a new car in a slow economy.
In addition to the virtual stand-still of the nation's credit markets, another obstacle may be making it harder for you to get an auto loan. According to a recent study by Experian Automotive, consumer auto loan delinquencies are on the rise.
Finance companies saw the percentage of loans that were more than 30-days past due rise 9% over the same period last year. Loans that were more than 60-days past due were up 11%. In dollars, that adds up to more than $25 billion in past due notes.
With many lending institutions already hesitant to make new loans along with their desire to keep their funds liquid, consumers will likely encounter further difficulties in obtaining auto loans in the coming months.
Banks have also been tightening up their lending requirements at the very time when consumers have seen their credit-worthiness head south. Experian is reporting that the percentage of auto loans made to consumers with a credit score higher than 680 is down nearly 6% from two years ago. In the past, a credit score of 720 was usually required in order to qualify for the most favorable finance rates. Today, many finance companies are flat out turning down consumers with a credit score below that mark.
This drop in consumer credit-worthiness has helped to contribute to a sharp downturn in auto sales this year. Of course, the upside for consumers is that the manufacturers are even more desperate for sales, and have opened up the incentives spigot in an effort to spur sales. If you have the credit, or the cash, good deals are aplenty.
If the idea a Chevrolet Volt that can wean you off buying gas during your 40 mile round-trip commute has piqued your interest, but the thought of it costing your $40,000 has left you with some sticker shock, there is some good news. Buried in the recently passed $700 Billion bailout/stimulus (depending on your point of view) package was $1 Billion (over 10 years) in funding for a consumer tax credit of up to $7,500 for plug-in and fully electric vehicles.
The tax credit will vary from $2,500 to a maximum $7,500. In order to qualify, a plug-in hybrid would be required to have a battery capacity of at least 4kWh. For each additional kWh of battery capacity, the credit goes up $200. The Chevrolet Volt, with a battery capacity of 16kWh, would quality for the maximum credit of $7,500.
With a $7,500 tax credit, along with other state and local tax incentives, the price of a Volt, and other future plug-in hybrids, could become a lot more palatable to more potential buyers.
It's hard to find anyone willing to put in a good word for the Mercedes-Benz R-Class, and understandably so. It looks weird, it's exorbitantly priced, and its extra-long second-row doors can't hold a candle to a minivan's sliding doors in terms of convenience.
That's why I wasn't expecting much when I spent this past weekend driving up and down the California coast in a diesel-powered 2009 R320 BlueTec. Turns out I sorely underestimated the R's charms. In at least three ways, this is an excellent vehicle -- and I've got the list to prove it.
(3) Best Hood-Closing Sound Ever.
Imagine a humorless German prison guard slamming a cell door shut with all his might. That's what the R320's hood sounds like when you close it. It's genuinely spine-tingling. On the R320 photo shoot, Mr. Niebuhr and I must have opened and closed the hood five times, just for kicks. Now that's a Germanic thunk!
(2) Steers And Handles Better Than The ML320.
Well, of course it handles better -- it's got a lower center of gravity. But that doesn't explain why the R320's steering is notably tighter and less gooey-feeling than the similarly-priced ML320's. It also doesn't explain why the R320 feels smaller than it is in corners, while the ML320 feels every bit its size. The R320 was actually kind of fun to drive on the twisty Big Sur Highway. The ML320 was not fun to drive anywhere.
(1) Eats Highway Miles For Frühstuck.
I love the futuristic rake of the R-Class' windshield, and the panoramic view it affords of the road ahead. The front seats are über-supportive, and the driving position was just right for my lanky 6'1" frame. Some unseemly road noise filtered in over a couple coarse surfaces, but for the most part, the R320's ride remained hushed and utterly composed at all velocities. It was kind of like piloting a personal high-speed train.
The Moral:
Hey, I wouldn't buy one either -- just look at the thing. But from behind the wheel, the R-Class is an unexpected treat.
For most compact SUV intenders, the 2009 Suzuki Grand Vitara is going to be somewhat overqualified for their needs. Getting to work, hauling purchases back from Ikea and getting the Lab to the dog groomer's are tasks more typical facing these consumers than going off-road or towing a small boat.
In case you haven't heard enough bad financial news, yesterday's car sales figures elicited comparisons to the dark days just after 9/11.
It was also the first time in 15 years that monthly sales fell below a million units. Only 965,671 vehicles were sold in September, compared with 1.3 million vehicles sold in September a year ago.
A comprehensive sales analysis story in Auto Observer stated, "Last month's sales disaster was indiscriminate: It affected luxury and economy models, big and small, fuel sippers and gas guzzlers, foreign-made and domestic. The U.S. Big three and Toyota suffered mightily as they have for months, but in September even Honda - whose fuel efficient fleet had helped it largely achieve positive sales comparisons this year - saw its sales decline by 20 percent."
Clearly, Americans are in a wait-and-see mode. They are waiting for Wall Street to stop predicting the end of the world, waiting to see if the next president has any answers for us.
In the mean time, if you really need a car, this is a buyer's market -- big time. While credit is tight, there are still avenues for car financing and even some leases that will get you in a new car without breaking the bank.
Kia's tagline for their new Borrego SUV is "A New Kind Of Luxury SUV." Their new commercial (see above) seems to mock traditional luxury vehicle advertising while at the same time suggesting that the Borrego is a luxury vehicle. That really got me thinking, what exactly is considered a "luxury vehicle?"
Why are they so mad? Because I told the truth. And my boss, understanding the way of the world, knew that anger often accompanies revelations of this kind.
The Insurance Institute For Highway Safety (IIHS) recently added 11 more vehicles to its "Top Safety Pick" list for 2008. The 11 vehicles are: small cars '09 Honda Civic*, '09 Mitsubishi Lancer*, '09 Scion xB, '09 VW Rabbit, midsized '09 VW Jetta and Passat, large luxury '09 Lincoln MKS, midsized SUV '09 Ford Flex and '09 Honda Pilot, small pickup '09 Toyota Tacoma and midsized convertible '09 VW Eos. These 11 vehicles are added to the existing list of 51 vehicles that have earned this distinction.
Question: What does an automotive enthusiast do when s/he hears that the keys to a manual-shift 2009 Dodge Challenger SRT-8 are free for the taking?
Answer: Dons stupid grin, pushes daily schedule ahead by two hours, heads for the canyons.
Yeah, there's definitely nothing wrong with eight cylinders, six forward gears and three pedals. Except for a thing or two here and there, as it turns out. To paraphrase Crash Davis, here come the Top 3 Things To Do In A Challenger SRT-8 -- and when you speak of me, speak well.
3. Roll windows down, find nearest tunnel, depress right foot.
Most cars sound better in tunnels, but few sound so good that they elicit involuntary cackling. The SRT-8 has officially joined this exclusive club. Actually, you don't even need a tunnel with this dirty Dodge; just puttering around town is an aural pleasure. The exhaust note in this beast puts the Mustang Bullitt's to shame. We haven't gotten our hands on the new Camaro SS yet, so at least for the moment, this is the American muscle car soundtrack to beat.
2. Enter sharp corner, turn steering wheel, pray fervently.
Because that wheel tells you nothing, nada, zilch about what's going on below. The benchmark for this steering system was evidently a '95 DeVille -- it's ultra-light, it feels completely disconnected from the tires, and the effort doesn't change one iota as cornering forces build. Hey, isn't this the high-performance Challenger? Isn't steering, like, pretty important in a high-performance car?
1. Close windows, cue up Beethoven piano sonatas, take measured sips of Earl Grey.
Because if anything, this Challenger is too refined under ordinary circumstances. The featherweight clutch could have come out of a Caliber, and the shifter glides easily from gate to gate -- shouldn't they feel substantial (think Mustang Bullitt shifter), even a bit recalcitrant in a car like this? The suspension swallows bumps like Kobayashi does hot dogs, 20-inch wheels notwithstanding -- shouldn't a bad-ass muscle car ride like one, too? The SRT-8 cruises as quietly as a luxury coupe -- shouldn't there be a touch more road and wind noise in the mix? I actually admire the SRT-8's dual personality in this regard, but it contributes to my overall sense that this car doesn't have quite as much, I don't know, swagger as it should.
Times are tough in the auto industry. The housing crisis has not only shocked consumer confidence, but it has also put a tremendous strain on the willingness and ability of lending institutions to offer loans to both businesses and consumers alike. This "credit crunch" has contributed to the decision by many automotive captive finance companies to either drop leasing altogether (Chrysler Financial) or severely curtail new vehicle leases. The result is that many lease customers are discovering major sticker shock when their current leases are up and they look to lease a new vehicle. To illustrate this point, I decided to compare the cost of leasing a 2009 Nissan Murano with what it cost me to lease my 2006 Murano back in May of 2006.
It's hard to imagine any good news about credit right now. According to Bloomberg.com, Senate Banking Committee Chairman Christopher Dodd said, ``I was told today you have to have a FICO score of 720 to qualify for a car loan. The effects of this could be huge.''
Huge, indeed. Before you can buy or lease a car, a dealer checks your credit, and if you don't pass the smell test, the rate s/he offers you will be higher... or you might not qualify at all.
We've got lots of information on the importance of your credit score and tips for subprime borrowers. (Is 710 the "new" subprime?) But the bottom line is, not only do you need to know your score, you need to know what's keeping it from being the best it can be. For example, when I refinanced my mortgage, I discoverd that my score was getting dinged for an outstanding payment owed to a book club from five years ago... and I knew nothing about it.
So where's the silver lining? TransUnion, one of the big three credit reporting agencies, got caught giving away too much information about its customers to insurance and credit marketers (read: unsoliticed phone calls and junk mail). As a result of a successful class-action lawsuit, TransUnion now has to provide free, 24-hour credit monitoring to pretty much the entire country. The benefit of this is that you'll be able to see your TransUnion score, what's affecting it, and receive 24-hour credit monitoring (which will help protect you from identity theft, a service not to be underestimated). Whether you get six or nine months free depends on whether you opt to take a little cash that might come your way with the settlement. Personally, I would forego the cash, because it's likely to be pennies or a couple dollars at most. (Analysis on the settlement can be found here.)
The settlement is old news, but now you can register for benefits at a special site set up for the purpose. It's super easy and we strongly recommend you tell all your friends about it. (To make this work, you will need to have an email address.) This service is far beyond the once-yearly credit report that these companies are normally obligated to provide.
Dodge has introduced its all-new Ram pickup truck into a market that is not particularly truck friendly at the moment. With gas prices as much as a dollar a gallon higher than they were this time last year, along with a credit crunch, which has seen the end of leasing at Dodge along with more difficult to secure traditional financing, Dodge has an up-hill battle on its hands if it expects people to flock to their new full-sized pickup truck. It also doesn't help that there is a sizable number of 2008 Dodge Ram pickups still stilling, unsold, on dealer lots. What is an automaker to do?
First you slap sales incentives as high as $10,500 on your existing inventory of 2008 Rams. Then you introduce your all-new pickup with a lower sticker price and with a higher level of standard equipment than the outgoing model. Finally, to sweeten the pot even more, you slap as much as $1000 of cash incentives on the hood.
While this pricing strategy may not ensure that Ram sales return to their historical high points, it does show that Chrysler management is serious about making sure the Dodge Ram will remain competitive, and relevant, in the marketplace. It certainly won't hurt that GM is raising prices by 2.7% on all of their 2009 models, including pickup trucks (cue more GM incentives!).
While the days of buying pickup trucks for the purposes of commuting may be over, there are still a sizable number of consumers and businesses that require the capabilities of pickups trucks for hauling and towing. With a constricted market, you can be sure that both product and prices will become more competitive, which is a win-win situation for the consumer.
You would think that with all our advances in engine technology and lightweight materials, the cars of today should be getting the best mpg ever. But this doesn't seem to be the case.
According to a recent Los Angeles Times article, "For the 1992 model year, car buyers had the choice of 33 cars that had a combined city and highway EPA rating of at least 30 miles per gallon. For the current model year, there are 12."
What happened? Cars have been gaining weight with each new generation. It seems like most consumers want their cars to be bigger and have more power. Can you think of a new model that had less power or weighed less than its previous model? As size and horsepower was increased, in many cases, so did the car's weight.
An extreme example of this can be found in the 2008 BMW M3, which has 222 more horsepower than the 1991 model, but weighs 837 pounds more. This car has grown 10.7 inches longer, and went from having a four cylinder engine in '91, to an eight cylinder in '08. Fuel economy has dropped, from a combined 19 mpg, to 16 mpg. (Note: EPA numbers have been adjusted to reflect current standards.)
Sometimes this added weight is necessary. More safety equipment, like airbags, reinforced frame and roll-stability control have become standard, but at the cost of making the car heavier and therefore less fuel efficient. SUVs in particular have grown wider to make them more stable in rollover situations. This requires more metal, which in turn leads to more weight. The SUVs of 15 years ago were lighter, but more susceptible to rollover than the current models.
While not generally known, Porsche is one of the more profitable car companies out there. While Ford, GM and Chrysler have lost billions over the last few years, Porsche has had profits of over a billion dollars. That is profit, not just revenue. Porsche has been using some of that money to buy an ever-higher stake in VW. Recently, Porsche upped its stake in VW to 35%, which gives it a controlling share of VW (according to German law). Porsche has stated that they would like to further increase its stake to over 50%, pending regulatory approval.
So a much smaller company has effectively gobbled up a larger one. What makes this even more remarkable is the fact that VW is the third largest automotive manufacturer in the world, selling over six million six million vehicles last year. By comparison, Porsche sold just over 97,000. Let's not forget that Audi, Bentley, Bugatti, Lamborghini, Skoda and Seat are all part of VW (the latter two are not sold in the US).
Of course all is not rosy at VW. Its labor union and board consider this a hostile takeover and are not particularly pleased. In addition, cousins Wolfgang Porsche and Ferdinand Piëch, respective Chairmen of Porsche's and VW's boards are not exactly on the best of terms following years of various conflicts.
For the consumer, it could mean more product synergy between Porsche and VW. Most recently we have seen the two companies work together in the form of the VW Touareg, Porsche Cayenne and Audi Q7. In the past, we have seen VW powered Porsches (914) not to mention that the Beetle was originally designed by Ferdinand Porsche. So it seems that destiny of these two companies will continue to be intertwined.
How does an affordable mid-engined RWD sports car from VW sound to you?
It's that time of year again, when dealers start selling off this year's cars and next year's start rolling in. But when next year's is an all-new model, the sell-off at bargain basement prices can often be much greater.
So here's the question, do you buy last year's model for cheap or wait for the all-new, better model? Take the Audi A4. A 2008 A4 2.0T Quattro with automatic and no options has roughly $2,000 off its MSRP according the Edmunds TMV. The 2009 Audi A4 2.0T Quattro's MSRP is only about $500 more than the old car at $32,700 and its TMV is only $150 off sticker. So, is the all-new car worth two grand?
Of course, that's assuming both are worthwhile choices like the A4. There are obviously exceptions. Sometimes the old car isn't worth buying at all (2007 versus 2008 Malibu, for instance), and sometimes the new car no longer tickles your fancy (2008 versus 2009 Acura TL, for another instance). What are some other examples of these?
In the wake of Hurricane Ike's devastation, and the resulting shut-down of many of this nation's oil refineries, some gas stations have taken the opportunity to raise gas prices through the roof. In some cases breaking the $5.00/gallon barrier, with station owners blaming shortages for the drastic price increases. Florida's Attorney General's office sees things a different way, blaming the drastic price increases solely on price gouging. After receiving more than 350 complaints from the public, the AG's office is set to serve four gas companies with subpoenas in order to ask for documentation justifying the price increases.
While oil prices have retreated below $100/barrel, the gas spike following Hurricane Ike shows how quickly an circumstances can cause energy prices to quickly rise. Whether it is a hurricane, political instability or a terrorist attack, we are very much at the mercy of events that are beyond our control, when it comes to gas prices. It is important to keep this in mind when you are shopping for a new or used vehicle. You should ask yourself if your budget can comfortably withstand a sudden and/or prolonged spike in gas prices and whether or not you have a sufficient income cushion.
By now you have probably seen the leaked Chevrolet Volt pictures. While there is a question as to whether they were leaked deliberately or not, there can be no debate as to the less than stellar reaction that people have had to the final production sheetmetal.
GM has been teasing the public with pictures of the Volt concept since the 2007 NAIAS. That concept looked the part of a futuristic vehicle that promised a unique propulsion system. It looked unlike anything on the road today. It looked special. It looked like something that people might actually want to drop $40K on. Can GM really be surprised that most people are underwhelmed by the production version?
Yes, the realities of full-scale production necessitate certain design compromises in sheet metal. Yes, the need to carry actual humans in comfort required that the hopelessly chopped greenhouse be expanded upwards. However, the end result is a vehicle that does little to distinguish itself, visually, from the economy-minded Chevrolet Cruze (seen here in red) that is set to debut around the same time as the Volt.
Toyota was on to something when they offered up their first hybrid as a unique stand-alone model. The result is that most people identify "hybrid" with the Prius. This goes a long way toward explaining why it is more popular than its conventionally-styled hybrid counterparts like the Civic and Camry. Most Prius owners like the fact that other drivers know they are driving something different. It is part of the appeal and helps explain why you have famous people driving a glorified economy car. It is no wonder that Honda's new Insight hybrid shares design cues with the Prius (yes, aerodynamics play a part too).
So it appears that, from a styling aspect, GM has dropped the ball with the Volt. One can only hope that GM follows through with the rest of what they have been promising with the Volt. Namely, an electric-only range of 40 miles, the ability to plug it in to recharge the batteries and making the electric motor, gas motor and batteries all play nice with each other. If they can deliver a Volt with those abilities, we might be able to get over its looks.
We know that sometimes the Edmunds.com Web site can be overwhelming. We have so much content available that you probably couldn't read the entire site in one lifetime.
So, in an attempt to make your lives a little easier, we gave our Tips & Advice landing page a facelift. You can now easily find the most recent consumer advice articles displayed prominently at the top of the page.
We've also organized our advice topics into easy-to-use guides and centers. So if you are interested in family car information, check out the Women and Family Guide. If you are interested in going green, click on the Green Car Guide. If you are a new driver just starting out and are tired of hearing your parents tell you that you "stop on a dime" -- oh, wait, that was me -- check out the Young Driver's Guide for articles written just for you.
There are more guides on other topics and several more on the way. You get the idea.
So stop back often to find out the latest information about buying, selling, leasing, safety, etc. You name it, we've got it.
Here's a comparison you won't be seeing elsewhere. A rear-wheel-drive sport sedan versus a front-wheel-drive sport sedan from the same company. However, I'm going to venture to say that most buyers (especially outside the snow belt) don't care so much about the handling benefits of RWD. So using this as a basic premise, let's size up the 2009 Nissan Maxima SV Premium and the 2008 Infiniti G35 Journey.
Democrats, republicans. Red states, blue states. Creationists, evolutionists. Red Sox, Yankees. We are truly a divided country.
Two weeks ago we posted a blog asking if you thought Prius drivers are "eco-snobs" and got a lot of heated comments.
Now we've upped the stakes. In Green Car Observer we have a polarizing article about a Prius being torched and a web site that posts pictures of people giving the finger to Hummers. Even "The Mechanic" (an alias or pen name, depending how you look at it) posted a piece called "I Hate Hybrids." The title pretty much says it all -- he hates hybrids.
Why can't we just let other people drive what they want without getting all cheesed off about it? What is it about what other people drive that demands hateful comments, name calling, obscene gesturing, vandalism and acts of extreme violence?
I briefly drove the redesigned-for-'90 Honda Fit last night, a Sport version with the five-speed manual. First I subjected it to my six-mile, 0-to-20-to-0 (repeat countless times) commute and then got to stretch its legs when I went over my girlfriend's house (about 10 miles away) later on. So though I didn't get into any twisty roads, I was still able to form some impressions. It's the old good news / bad news. But it's mostly very good news and only a little semi-bad news...
Traditionally, the 2010 model year won't begin until October 2009. In reality, the 2010 model year is right around the corner. Legally, they can be sold on January 1, 2009, and you can be sure that at least one manufacturer will trot out a 2010 on that day. The question will be, "What shall we call them?" It is common to abbreviate the model year of a vehicle. Most will call a 2009 model an "oh nine," as with the '08's before them. But what about the 2010 models?
Should we call them a "two thousand ten?" A "20-10?" A "ten?" A "one oh?" This was a situation similar to what we saw for the 2000 model year, where most people ended up just calling vehicles a "two thousand." I'm sort of partial to "one oh." What about you?
Also, the 2010 model year* has some highly anticipated vehicles coming out: Chevrolet will offer up the Camaro and perhaps the Volt; Cadillac will have CTS Coupe and Wagon and SRX CUV. Honda and Toyota will both have all-new hybrids. Porshe will introduce the four-place Panamera; Acura will try to spice up its range with the NSX; Ford will begin its Euro-car onslaught with the Fiesta and Nissan may give us Super-Godzilla in the form of the GT-R Spec V. But which MY10 vehicle are you most looking forward to? My vote goes to the Cadillac CTS wagon and SRX, only because they are on my short list of vehicles to buy next year when I replace my Nissan Murano.
*Final model year designation is subject to change.
Earlier this week I asked you what you thought of as getting "good" fuel economy. I got a lot of interesting opinions about what good fuel economy is and whether or not it matters. Many people said it depended on the vehicle class. Good fuel economy for a truck would be terrible for a small car.
I bring this up because here at Edmunds we are wrestling with how best to educate consumers about fuel economy so they can make good car buying decisions. One reader wrote that 30 mpg was "the magic number." I had always thought of 30 mpg as an important benchmark of good fuel economy too. But recently I've realized that 25 mpg (combined city/highway) is pretty darned good.
The Edmunds data team took all the cars on the market, crunched the numbers and found the average was 21.7 mpg. They then created categories corresponding to that midpoint. It was decided that from 22 to 27 mpg would be labeled "good" fuel economy (combined hwy/city mpg). From 27 to 31 mpg would be "excellent." Above 31 mpg would be "best." That makes from 18 to 22 mpg "average" and 18 to 14 "below average." Last, and very much least, below 14 mpg is "poor."
By now you're saying, "Interesting... But why should I care?" Well, first of all, it's nice to know where you stand so you can feel smug or pleased, apathetic or flat out bummed. Secondly, when car shopping, it's nice to know, at a glance how a car stacks up to the competition. Sometimes, name calling does make it easier to see the truth.
So how does your car compare? And does this categorization seem like a lot of hot air? Or is it need to know information?
There's something convincing about hard copies. When something is printed out, it lends substantially more validity to a subject than just the spoken word. Nowhere is this more true than when you're in the heat of battle. That is, when you're at the dealership negotiating the price for your new set of wheels.
I thought I would take some time today to update you on some stories I have previously blogged about.
Back in March I blogged about Honda clamping down on internet warranty sales, due to the fact that online retailers were discounting the warranties and taking business away from less tech-savy dealers. I updated the story in April, Saccucci Honda, which has been doing quite the business selling extended warranties on their website, decided to single-handedly fight back by challenging Honda in court. You can follow the story in our forums. The outcome of this court case may determine whether the public will have to start over-paying for extended warranty coverage, or if the free market will prevail.
Last month I posted my prediction that we would all be paying more for cars in the future, due to ever-increasing raw material costs. Since then, several automakers have announced price increases, including Nissan and Toyota. The latest is BMW. As the global demand for raw materials continues to increase, it is likely that we will be paying more for everything, not just cars.
In an effort to display my prowess in business, I posted my thoughts on what I thought Cerberus was going to ultimately do with Chrysler, with respect to their decision to drop leasing. Most did not agree with my ultimate conclusion, and rightfully so. Recently I spoke with Mike Jackson, the CEO of AutoNation, the nation's largest auto group. I asked him what he thought of Chrysler's move to no longer lease vehicles. He told me that it was a move that was necessary for them to assure that they could continue to secure funding for maintained operations and future product development. By divesting their portfolio of leases, investors would be more willing to purchase securities backed by Chrysler and Cerberus. Ultimately, this is a move that will help assure the long-term viability of Chrysler as an automaker. Although Chrysler does have many challenges to yet overcome.
Finally, I blogged about MyGallons.com, which was supposed to offer consumers a way to hedge against rising gas prices by letting them buy gas credits at current prices and them redeem them in the future, when gas prices presumably go higher. Shortly after my post, the Better Business Bureau gave MyGallons an "F," when it was discovered that they did not have a contract in place with a vendor who could process transactions with gas stations across the country. MyGallons stopped accepting paid memberships and offered a refund of all existing membership dues. As of this date, MyGallons is still not accepting new memberships and appears to still not have a vendor in place. Of course, it probably doesn't help that gas prices have gone down, and not up, since the site was launched in July.
"Studies conducted by J.D. Power show that the typical hybrid purchaser is better educated and wealthier than the average car buyer. Furthering the exclusivity is the fact that available hybrids are hard to find... Toss in the tax breaks and access to highway HOV lanes that hybrid drivers get in many locales, and it's no wonder old-school drivers can get irritated."
To which the non-profit 40mpg.org, which encourages hybrid ownership says, "Enough already!" with all the hybrid owner bashing.
But is there some truth to the idea that Prius owners are eco-snobs?
While on a recent family vacation, it seemed like half my family was looking to buy a new car (a more economically viable prospect in Canada). Five kin, plus one friend were looking to buy something new. All were looking at fuel efficient choices and all had a good idea of what they wanted to get -- three Civics, a CR-V and a Malibu. All choices I could get behind. But one wasn't sure what she should get, so let me pretend for a moment that I'm my aunt, what should "I" buy?
I presently drive a 2005 Volkswagen Touareg V6 with minimal options that my spouse bought for me. I like it a lot, but it's time for something new. I'm very environmentally conscious and want something more eco friendly than a gas-guzzling and heavy SUV. I have two boys, ages 5 and 8, one of which plays hockey in the winter so I do need trunk space. I also live with snowy weather, so all-wheel-drive could be nice.
The Insurance Institute for Highway Safety (IIHS) recently conducted crash tests on eight small SUV's. Four scored the best, earning a "Top Safety Pick" award. These were the VW Tiguan, Ford Escape (along with the Mercury Mariner and Mazda Tribute platform mates), Mitsubishi Outlander and Nissan Rogue.
The VW Tiguan was noted as the top performer of the group. "In the latest tests, the Tiguan's performance is a standout," says Institute president Adrian Lund. "It sailed through the front and side crash tests without a single downgrade for structure or measures of injury likelihood recorded on the dummy. This is 1 of 4 models in this group that afford superior crash protection in their class. This is a huge change from just 5 years ago when most small SUVs were rated either marginal or poor in our side test, and standard side airbags and electronic stability control were rare."
To help car buyers, the data department at Edmunds.com decided to classify all the vehicles on the market according to their fuel economy rating. Some would be below average. Some would be poor and some would be excellent. And, naturally, some would be classified as getting "good fuel economy."
It would be useful to have a universal definition of good fuel economy. Then, if you were car shopping, you could simply ask, "Does it get good gas mileage?" No car salesman could then use a fancy sales pitch to turn bad into good.
Obviously, everyone is going to have a different definition of what is good fuel economy. But there has to be an overlap somewhere in the middle. Once the "good" range is established we can figure out what is above and below that. Shoppers can tell at a glance if a car is worth considering. Vehicles can quickly be ruled out or considered only for low mileage situations.
This being an election year, I thought you might be in a voting mood. So this is your chance to make your opinion heard. What do you consider "good fuel economy?" And do you think that knowing what "good" is will help you make a car buying decision? Or is it just more election year rhetoric?
For many car shoppers, it's common sense -- if a stereo has a premium label on it, it must produce premium sound. You want the truth? Can you handle the truth? Read on for the Weekly Top 3.
GM has rolled out yet another Employee Discount Program which offers invoice and below deals on virtually all its 2008 vehicles.
Earlier this year GM offered many incentives but many vehicles were excluded. Now, nearly all 2008 and select 2009 vehicles are being discounted.
There are two notable aspects of the current offer: several fuel efficient 2009 models are being offered including the Chevrolet Cobalt and the Pontiac Vibe. Also, the program will feature window stickers that show the bottom-line price buyers will pay which will include all incentives and rebates. This is a real benefit for consumers who are often confused by multiple numbers and how the incentives are applied.
The event begins Aug. 20 and is currently scheduled to run through Sept. 2. GM's 100th Anniversary is Sept. 16th. Is this program a good way to celebrate?
I'm up in Canada this week, and while driving through Toronto I happened to notice a new Mercedes-Benz C230. In the States, we only get the C300, C350 and C63, but Canada gets those plus the C230, featuring a 201-horsepower 2.5-liter V6 that gets a tiny bit better gas mileage than the 228-hp C300 (20.45 mpg versus 20.10 in Canadian testing). Of course, given that cars cost more in Canada, it's highly likely that Canadians are just more inclined to pay less for a less powerful Mercedes-Benz. But given the economy, wouldn't an increasing number of Americans be willing to do so now?
In addition to the C230, there's the 228-hp E300 4Matic (all non-AMG E-Class are all-wheel drive in Canada), the 335-hp S450 4Matic, and the B200 and B200 Turbo. I'd say the last two are the most intriguing, as the B-Class is a funky-looking hatch that gets 25 mpg city in its 134-hp four-cylinder form. For those looking for a premium, fuel efficient car, the B-Class could find some takers -- although it's certainly expensive. I've seen a couple around Toronto, but not enough to lead me to believe it would be a hit in the United States.
What do you think? Are smaller, slightly more fuel efficient engines installed in subsequently cheaper cars a smart move for premium car makers like Mercedes-Benz? And does the B-Class have a shot?
While the aftermarket car audio industry is singing the blues, it's never been a better time to get great music in your ride -- without visiting a car stereo shop. Wired's Autopia points to Bentley's alliance with fellow Brits at the high-end home audio company Naim Audio as yet another example of the automaker/audio brand mash-up, but Naim's Paul Stephenson makes it sound like you have to spend tons of money on a car and a premium audio system to get better than "quick and dirty low-cost" audio add-ons.
Although hardcore audiophiles can and will beg to differ (because that's just what they like to do), there are several examples of premium audio systems below $1,000 that offer better sound dollar for dollar than aftermarket options. Several Boston Acoustics systems available in Dodge, Chrysler and Jeep vehicles range from $495 to $995, and while these systems are far from the last word in superior car sound, try getting similar quality from the aftermarket for the same amount of coin.
THX is another premium audio supplier that offers excellent value. I've often pointed to the $995 THX Certified Premium Sound System in the Lincoln Zephyr as an example of excellent bang for the car audio buck, and the company's stereo system in the '09 Lincoln MKS runs $645, while the 5.1 Surround version is bundled with the vehicle's Navigation Package option that includes voice-activated nav, a hard disc Jukebox and Sirius Travel Link for $2,995.
In a sign of how bad things have become in the light truck market, Honda recently put a $2000 dealer incentive on their all-new just released Pilot. Even though gas prices have retreated, the 4WD Pilot's 16 city and 22 highway fuel economy is certainly not a selling point. This is especially true when Honda likes to tout the fuel economy of the rest of the vehicles it sells.
If Honda, who is generally reticent to put cash incentives on their vehicles, is using cash incentives, you can be sure that most other manufacturers will continue to pile on the incentives on their less-than-fuel efficient models. Stay abreast of all the latest incentives here.
In an article in Automotive News it was reported that three dealerships in Arizona are being investigated for abuses committed against servicemen at nearby military bases.
Servicemen from Fort Huachuca, many of whom are sent to Afghanistan or Iraq, were warned by their superiors to steer clear of Wildcat Mitsubishi in Tucson and Ideal Automotive (Mitsubishi and Suzuki stores) in Sierra Vista. The State of Arizona is investiging the dealerships' practices after the local Better Business Bureau received 30 complaints about the businesses over the last three years.
The dealerships are owned and operated by Rick Johnston and his sons Heath and Beau.
It made me angry to hear about the alleged abuses but it didn't surprise me. Car salesmen love young customers with cash who aren't particularly well informed. Furthermore, military men are taught to respect anyone with an air of authority.
It reminded me of what Nick James told me while I was writing "Confessions of an Auto Finance Manager." He said that the Finance Manager always looked for customers that where uninformed. In particularly he looked for customers who had good credit but thought their credit was bad.
"If I sensed that they (the customers) were uninformed about their credit score I knew I could offer them say two points over (the prime rate) and they would agree to it. I could tell them, 'We ran your credit report and, well, we both know you've had a few problems. But you're nice people so I'm going to help you out.'"
It's bad enough ripping off trusting people. It somehow seems even worse taking advantage of the people who are serving their country.
Suppose you've got about $70 grand to play with, and your heart's set on a sports car. I don't, for the record, and you probably don't either -- but nevermind about that. Say you've got the $70k, and you won't be satisfied until you've nabbed the keys to the best all-around sports car you can buy for the money. You've narrowed it down to three choices: the Chevrolet Corvette Z06, the Nissan GT-R and the Porsche 911 Carrera. How do you think they'll rank in this week's Olympic-themed Top 3?
I can hear the grumbling already. "This is the Strategies blog," you'll carp. "It's supposed to be about real advice for real people!" Well, last time I checked, Donald Sutherland and Andrew Bynum were real people -- and every real person could use some buying advice. Having driven the Chevrolet Corvette Z06, Nissan GT-R and Porsche 911 Carrera in recent weeks (and pretending, for the sake of argument, that the GT-R isn't selling for $30k over sticker), this week's Top 3 will tackle a question that's on everyone's mind these days:
Which sports car is most deserving of your hard-earned 70 large?
After seeing our latest leasing and incentive information, I was struck by the fact that Chrysler has left the leasing game. As far as I know, this is the first time a major carmaker has done that.
Boiled down to its essence, leasing could be thought of as another way of saying long-term rental -- typically anywhere from two to four years. You essentially are paying for the use of the vehicle, its depreciation in value over the term of the lease. You are not paying for the entire value of the vehicle; at the end of the lease the vehicle is worth a certain amount.
If the vehicle's value when new is say $30,000 and at the end of the lease it's worth $15,000, then you've used up $15,000 of that vehicle's value, and your monthly payments are essentially based on that. Great, you get to drive a $30,000 car while making payments that are based on $15,000. Of course, the trade-off is that you don't own the vehicle at the end of the lease. Now you know why you see so many new BMW 328s driven by new college grads.
You're looking at a graph that shows how many people searched for information on hybrid cars as gas prices rose in the spring and then began to fall in the summer.
When gas prices shoot up people panic and begin thinking about dumping their SUV for a hybrid. But when gas prices begin to level off and then drop (now the national average is $3.88 a gallon) people lose interest in smaller cars and again search for information about larger vehicles, trucks and SUVs.
"It's human nature," said Jeremy Anwyl, CEO of Edmunds.com. "There's been a rush to small cars, but that doesn't mean it's permanent. And in fact, our data shows that the recent sensitivity consumers have toward gas prices still goes both ways."
This is an interesting snapshot of consumer behavior. But I'm left wondering how far back we will swing toward larger trucks and SUV? Or are we headed toward becoming a nation of small, fuel efficient car drivers like in Europe and Asia?
Let's say I'm a person who loves little German cars (not really a stretch). Sadly, a 1 Series, C-Class and even A3 is out of my price range. Also, I'm looking for something vastly more fuel efficient than my last little German car: a 2000 Jetta VR6 (17 city, 24 highway). I also like the idea of a hatchback.
Therefore, I've narrowed down the choices to the Volkswagen Rabbit and the secretly German Saturn Astra. Which should "I" buy? And should "I" get the two door or four door? The Astra two-door certainly looks better than its four-door version and the Rabbit is the opposite situation. "I'm" shooting to spend about $19,000 so that "I" can get some goodies on the car.
Sometimes life on L.A.'s Westside can be a little too idyllic. Seriously, how many consecutive days of sunny skies and 75-80 degree temperatures with a cool ocean breeze could you handle? That's why I hightailed it to the Dearborn Inn in Dearborn, Michigan, earlier this week -- I had a hankering for a hot and humid slap in the face. Conveniently enough, Ford happened to be introducing its 2009 model lineup right across the street at its Dearborn testing facility.
So what's Ford got in store for car shoppers this year? Well, it's not all roses, but I did leave Dearborn with the distinct impression that this is a company committed to rectifying past wrongs and reestablishing itself as an industry leader. Some of that committment is already evident in 2009 models, while in other respects there's still a ways to go. This week I'll give you the Top 3 reasons why you should be excited about the 2009 Fords -- and the Top 3 reasons why you shouldn't.
On vacation here in New England, I've had the use of a Suzuki SX4 sedan for the past week. I have to say, for 15 grand (with the manual 5-speed gearbox) , this is a nice little car. For the short money of a Fit or Yaris, you get a roomy cabin, a peppy 143-hp engine, 17-inch alloys, power everything, a CD player, steering wheel-mounted audio controls, a trip computer and even automatic climate control. It also sports a 15 cubic foot trunk, cavernous for this class, though it lacks a fold-down rear seat.
But it's not just a healthy standard features list that makes the SX4 likeable.
(The 2008 Buick Enclave gets surprisingly good fuel economy. But jump on the gas and it doesn't want to downshift.)
As the old saying goes, "There's no replacement for displacement."
Or is there? Can you have both good fuel efficiency and good performance.
Carmakers will tell you that yes, you can have it all. But as the Enclave demonstrates, there's usually a trade-off of some kind, somewhere in the performance. With the Enclave, it didn't want to downshift. Then, when it did, it went from sixth to fourth.
In our article we take a look at what Ford and GM are doing to keep drivers high on the emotion meter which dialing in good fuel economy in "Where's My MPG?"
The Insurance Institute For Highway Safety (IIHS) recently conducted side-impact crash tests on a group of compact pickup trucks. Tested were the Chevrolet Colorado, Dodge Dakota, Ford Ranger, Nissan Frontier and Toyota Tacoma. The results were less than reassuring with only the Tacoma scoring a "Good" rating. The others were...not so good.
The Dakota, Ranger and Frontier earned a "marginal" rating while the Colorado scored a "poor." As drivers move away from large pickups and perhaps into smaller ones, the relative safety of these vehicles becomes even more important.
"More people may be looking at small pickups because of rising gas prices," says Institute president Adrian Lund. "Unfortunately, they won't find many that afford state-of-the-art crash protection. Most earn dismal ratings for protecting people in side crashes, and all but the Tacoma and Frontier lack electronic stability control, which is a key feature in preventing crashes. Until they improve, most small pickups aren't good choices for people looking for safe transportation."
Click here to see a video of the crash tests and here to read the complete results.
Some years ago we hired an investigative journalist to be an undercover car salesman. He got a job in a Los Angeles-area dealership and learned all the insider tricks of the trade. The result was "Confessions of a Car Salesman" one of the most widely read articles on our site.
Now, get ready for more confessing. On Tuesday, "Confessions of an Auto Finance Manager" will be added to the promotional box on the lower right hand corner of our site.
This time around Nick James, a six-year veteran auto finance manager, has decided to clear his conscience. For the past year I've been interviewing him, taping our conversations and learning the kinds of magic the pros work on a car contract.
As noted in my teaser post, automakers currently find themselves in an awkward transitional period. Consumers suddenly want maximal fuel-efficiency, yet most manufacturers are saddled with gas-guzzling fleets that offer only a few efficient alternatives. So what are they doing about it? Calling Madison Avenue, of course. This week we'll highlight three ways in which marketing mavens are trying to pull the wool over your eyes with misleading MPG claims.
With the sudden increase in gas prices, automakers are scrambling for ways to pitch old products with timely new claims about fuel-efficiency. Are they being honest about it? Are you kidding?! They're doing what companies do -- trying to make their wares look as attractive as possible for the buying public, reality notwithstanding. Tune in later today for our Weekly Top 3, in which we'll highlight three sneaky tactics designed to impress consumers with MPGs while keeping some uncomfortable facts under wraps.
The IRS recently announced that 2009 VW Jetta Sedan and Sportwagen models equipped with TDI engines would be eligible for an Advanced Lean Burn Technology Motor Vehicle income tax credit in the amount of $1300.
This tax credit is similar to what buyers of hybrid vehicles receive, and it speaks volumes as to the relative "greenness" of the new clean diesel technology.
Critics have expressed disappointment with the official EPA 31/41 MPG fuel economy rating, especially after VW hyped the potential for 50 MPG highway economy. As a result of this, VW commissioned a third-party certifier, AMCI, to test the Jetta TDI. AMCI found it performed 24 percent better in real world conditions, achieving 38 MPG in the city and 44 MPG on the highway. Still not 50 MPG, but noticeably better than what the EPA results showed.
Such discrepancies are not unusual for diesels, or even hybrids. The EPA test cycle is optimized for testing conventional gas engines, which clearly have different characteristics than hybrids or diesels. As a consequence, the tests often report inaccurate results that are not indicative of what drivers can expect in the real world.
For the consumer, the $1300 tax credit helps to off-set the price premium of the TDI engine and diesel fuel, further reinforcing the shorter payback period of diesel technology over a hybrid. Not to mention the fun of having 236 lb.-ft. of torque at your beck and call and the rush of power that Prius owners can only dream of.
Before an all-new vehicle arrives in dealer showrooms near you, before pre-production models are driven by drooling and/or jaded automotive journalists at "first drive events," before the cars we buy ever make it to a single auto show, they have to be test-driven, a lot.
Much of this testing can be completed at private, secluded "proving grounds" -- testing facilities with various road surfaces and track types that can simulate many different driving conditions and scenarios. But there are times when real-world on-road testing is necessary. In that case, car designers and engineers must take their vehicles to the streets and highways, but they must do so with the cars in disguise, which is where professionals like General Motors camouflage engineer Lionel Perkins come in. It's the job of Perkins (who's featured in that video up there) and his colleagues to do everything they can to obscure the actual shape of the vehicles using fabric, foam and wild graphics so that lurking paparazzi and everyday citizens out on the road won't recognize that 2010 Honda Hybrid sedan or 2011 Chevy Camaro Convertible under there.
So the next time a strangely draped sedan slinks by you on the highway, don't feel too bad if you can't get a good look at it. That's just Lionel doing his job.
(Bonus points for anyone who can guess what car that is in the video.)
Chrysler is reaching farther to get buyers by extending 0 percent APR financing to other vehicles such as the Grand Cherokee, Jeep Commander, Dodge Durango and Chrysler Aspen. The low-interest financing is even being offered to buyers with less than perfect credit, according to information from Chrysler.
Not to be out done, GM is offering all their U.S. employees a one-time opportunity to extend their employee discount to anyone they choose now until the end of July. Not only that, but this employee discount is "Option 1" which is the strongest discount offered, substantially below invoice.
With gas prices retreating below $4.00, America is "about to be told the problem is solved," a friend of mine said today. Anyone think that gas prices will keep falling and car sales will rebound?
Conventional wisdom can be a drag when it comes to car shopping. Many shoppers will settle on a particular brand because it has a reputation for this or that virtue, only to discover that the reality is rather different. Or maybe they'll go on believing in that mythical reputation, simply because no one's told them otherwise. That's where this week's Top 3 comes in. We're going to break it down for you -- three examples of brands that either deserve more credit or aren't living up to their reputations.
The 2008 Pacific is one of many Chrysler vehicles affected by declining residual values.
Dealers are being told not to lease any Chrysler vehicles through its financial arm after August 1, sources report.
The carmaker is trying to control losses as its lending institution, Chrysler Financial, struggles with $30 billion in debt.
Declining values of SUVs and trucks, which Chrysler sells a large percentage of, have been worth less when they are turned in at the end of a lease. This translates to losses and increased debt. The company plans now to focus on convential financing.
It is thought that current Chrysler lease holders it will be unaffected. However, going forward, those people who enjoy the flexibility of leasing (not to mention the tax break) will have to look elsewhere. Chrysler said it will continue to offer "lease cash" incentives that can be used to lease through other lending institutions.
Consumers who prefer to lease a Chrysler vehicle can still do so through other channels such as banks. A Chrysler spokesman told Edmunds he does not think this change will have a big impact on consumer behavior.
An Edmunds analyst commented that Chrysler's move is not likely to be followed by Ford and GM because their fleets are more diversified. However, Ford yesterday announced it took a $2.1 billion hit in part by falling residuals of large vehicles.
Earlier this week, Honda announced that in August it would reduce production of the Odyssey and all-new Pilot at its Lincoln, AL plant. At the same time, they are looking to increase production of the hot selling Civic.
Toyota will idle its Princeton, IN Tundra plant for three-months, starting in August. Sales of the Tundra dropped nearly 53% last month.
Today, Ford will announce that they are going to retool three plants that had been producing SUV's and trucks. Production will shift from Navigators and Expeditions to more fuel efficient smaller cars. Ford is also investigating the possibility of reinventing the Mercury brand as a channel for many of Ford's well-regarded small (and fuel efficient) European models.
Even with the recent drop in oil prices over the last week, it is clear that the cost of energy has had a fundamental impact on both consumers and the industry alike. With the notion of cheap oil likely a thing of the past, you can expect a continued shift to smaller and more fuel efficient vehicles.
It is very expensive to idle a vehicle assembly plant. It is even more expensive to re-tool one. These announced production shifts and plant closures demonstrate that manufacturers believe that the shift to fuel-efficient vehicles is a long-term reality.
Will higher fuel economy be a major influencing factor on your next vehicle purchase?
I'm wading through stop and go traffic in the car with a friend of mine. Every inch forward required a change in gears and my friend -- unable to contain his curiosity -- asks me: "Don't you get tired of driving that thing?"
He's talking about my 16 -year-old Honda Prelude . I've had the car for about 11 years, and the fact that it's a stick shift has never bothered me. I just love the feeling of driving a stick. I'm more concerned with the age of the car and its peeling paint than the nature of its transmission.
But I seem to be in the minority. As I was researching an article I'm working on, I was surprised to hear that manual transmissions make up about two percent of Toyota's total sales. The numbers don't improve much at the other manufacturers, either. My source at Honda said that fewer than ten percent of their cars sold are stick.
"Let's get right into it," said Tom Loveless, VP of Sales for Kia Motors, at the 2009 Kia Borrego introduction in Cle Elum, Washington, that I attended this week. The Kia Borrego is the company's all-new, midsized, seven-passenger SUV.
"The market is down considerably year after year. The truck-based segment is down and is creating angst in the industry. The reality is, six months into the year and our business is up. In April and May we set all kinds of records. It has been an all-time record quarter."
I'm thinking (as is everyone else in the room). "Four dollars a gallon for gas and the introduction of an oversized truck. What is going on here?"
Earlier today I argued that MPGs aren't the only thing consumers should be thinking about when they go car-shopping these days. For many people, I suggested, it might be worth paying a little more at the pump for a more enjoyable car. In the spirit of this suggestion, here are two informal top-three lists -- one consisting of fun cars that are still pretty fuel-efficient, and one featuring fuel-efficient cars that are about as much fun to drive as a Zamboni.
Car shoppers are understandably freaking out about skyrocketing gas prices. Suddenly those big black EPA estimates are among the most important numbers on the window sticker. But in some cases you may be sacrificing a lot in order to get a few extra MPGs. We'd recommend trying to strike a balance between fuel economy and enjoyment, particularly if you spend a lot of time in your car.
Of course, there are some cars that offer both class-leading fuel efficiency and driving pleasure. But the ones to watch out for are the one-trick ponies -- you know, the cars that boast "A Best-In-Class 36 MPG!" but drive like glorified golf carts, or give you all the accoutrements of a farm tractor.
Consider two hypothetical cars -- one that gets a combined 30 mpg, and one that gets a combined 25 mpg. Suppose you drive 12,000 miles a year, and gas costs $5 a gallon. The premium you'll pay for the 25 mpg car over the course of a year is $400. That's not exactly chump change, but we suspect most people would be willing to pay an extra 33 bucks a month for a car they'd actually look forward to driving.
Be sure to check back later today for Against MPG-Mania: Part II, in which we'll move from the hypothetical to the actual and tell you which models we'd avoid despite their high MPG numbers -- and which marginally thirstier models are worth the extra gas money.
This morning this Driving Woman attended a Q&A session with Ed Wellburn, GM's vice president, Global Design at the Art Center College of Design in Pasadena, California -- which has graduated many noted automotive designers. The main topic: The globalization of GM's vehicle design.
GM recently announced that a fuel-efficient compact "world car," the Chevrolet Cruze, will replace the Chevy Cobalt. It represents a huge shift for GM, which of course is struggling to survive the sea-change in popular preference for smaller cars that get great fuel economy.
"Times have changed," he said. "If [the pendulum] swings back to larger cars, it's because they're not running on gas, or they drive themselves and can't crash, requiring less front and rear overhang" [which would shave off weight and improve fuel economy.]
The Cruze, Wellburn said, was designed in Korea as a result of an intra-company competition among GM's different design centers around the world.
Admitting that domestic automakers have been focused on large cars for too long, he gave the nod overseas. "Korea, Brazil, Europe understand small cars and how to do them right," he said.
The Cruze will share far more than just a platform/architecture across regions. Practically everything will be identical. While some features may be standard in one country and optional in another, or the available trim levels and colors may differ slightly, it means that a person buying a car in China, India, Europe, and the Americas will be buying the same car. This is a serious engineering challenge, as any world car" will have to meet the highest level of both safety and emissions standards before it can be accepted globally.
For more details on GM's plans, see Michelle Kreb's blog entry about her interview with Bob Lutz.
A reader said that I should write an article about how to go car shopping with your wife. He explained that his wife wants to buy a 2008 Mini and they recently visited a car lot for a test drive in the Denver area. He excerpted this entertaining bit of dialogue to illustrate his point.
Wife: Do you think I need the CRCS option? Husband: What does CRCS stand for? Wife: Compound Regenerative something..... It's part of the steering.... or transmission...I think. Husband: Then no, you don't need it. Wife: It must be good or they wouldn't charge $600 for it. Husband: (blank stare) Wife: But it makes it run better in the snow. Me: The car is 4 inches off the ground, how much snow do you expect to be driving in? Wife: (long pause, sad face) I'm getting the stripes on the hood!
Has anyone out there had an exchange like this?
Actually, man or woman, husband or wife, you have to be really careful who you go shopping with. The right person can be very helpful. The wrong person can become the ally of the car salesman and wind up costing you thousands.
(Lease a BMW 3 Series for as little as $429 a month.)
More people are leasing these days.
The number has been hovering around 20 percent of all new car transactions. And certain brands are favorites for people who like to lease. Like BMW for instance. Some 49 percent of people getting a BMW last month decided to lease it.
Carmakers like leasing too because it's easy to apply incentives without having those incentives drag down the residual value of the car. The residual value is how much the car is worth at the end of the lease. Carmaker's like a high residual value for many reasons.
Jesse Toprak, our executive director of industry analysis, said that leasing is currently at 18.6 percent. Usually, there is a dip over the summer as people respond to sales preceeding the introduction of new models and more abundant dealer cash.
"What's interesting is that the average lease payment hasn't gone up," Toprak said. "Some people are seeing this as a good way to protect against inflation."
The average lease payment is currently $431 a month. Several years ago it was $448.
I had to wonder if there is anything about leasing that helps people cope in times of high gas prices.
"The person currently driving a big SUV won't have a trade-in problem when it comes to the end of the lease," Toprak said. "It's like an insurance policy that protects you against a big dip in the value of your car."
A Dodge dealer in Albuquerque, N.M.,started selling Ram pickups at half price and -- guess what? -- they started flying off the lot. But here's the interesting thing is. The dealer said he was still making money.
This story actually reveals an important lesson about incentives. There's a lot of money out there and knowing how to use it can get you a great deal.
Here's how the Dodge dealer explained his Ram sale in an Automotive News article: there's now $9,000 in customer and dealer cash on the Ram. Add $9,000 to the $15,000 selling price and the dealer has $24,000 for a $30,000 pickup. Apparently, the dealer counts on getting another $3,000 in parts and service.
Last Thursday we told you about the latest incentives but we didn't really go into detail about how to use them.
Let's take a look at the 2008 Lincoln Mark LT for example. If you check it on our Incentives page you'll see that there is $6,500 customer cash, plus some bonus cash ($500) for recent college grads and $750 for people who finance with Ford. But that's just the beginning. Besides low APR financing at 3.6 percent, there is also $500 in dealer cash which is listed on our site as "marketing support."
The tricky part of dealer cash is that they don't advertise it and it up to them to decide how much of it will be shared with the customer. Still, knowing about it will help you make a better deal.
So in the case of this Lincoln, the MSRP is $39,865, the invoice is $35,940 and the TMV price is $36,520. However, once all the incentives and rebates are applied, you could buy it for $30,020.
As reported in our earlier Consumer Advice article, the federal government is going to change the way its crash tests are conducted and rated. This will make it tougher for cars to achieve that 5-star safety rating that so many automakers tout when advertising their cars.
Beginning with the 2010 model year, cars will feature an overall safety rating that combines results from frontal, side and rollover tests. The upgraded system also will include new frontal crash tests, and a new side pole test to simulate wrapping a vehicle around a tree. Female crash dummies will be added to the tests, so women and larger children are represented, and new testing for leg injuries will be done.
And here's something really new: Emerging safety technologies will have their own rating be added so consumers will know whether specific crash avoidance technologies (electronic stability control, lane departure warning systems and forward collision warning systems) are optional or standard features on new vehicles.
So what's the bottom line?
For a long time, NHTSA lagged behind in its crash test scoring, and we always felt that the Insurance Institute for Highway Safety's ratings, while different, were more true-to-life. The new NHTSA tests go a long way toward bringing the 5-star rating system up to snuff, and the addition of the emerging technologies rating is an excellent feature that will encourage automakers to include more of these technologies as either optional or standard. (Under another federal ruling, stability control will be a standard feature of all cars sold in the U.S. by 2012).
For more information on the new changes, click here.
You may have noticed in the recent Inside Line comparison test of full-size crossover SUVs that there was one significant omission. If you were to combine the 2007 sales of GM's three "Lambda" crossovers -- the GMC Acadia, Saturn Outlook and Buick Enclave -- it would add up to a total much greater than any single competitor. Furthermore, our long-term Enclave test car has proven to be an all-star, racking up accolades and more than 20,000 miles in nine months.
So why no GM? An Outlook was originally slated to be in the test, but during the week prior to testing, GM reported it was in an accident and could not participate. No equally equipped Outlook, Acadia nor Enclave could be scrounged up in time (and the Chevy Traverse is not yet available). Therefore, the comparison would have to continue as a best-of-Japan test.
However, the long-term Enclave was still at our disposal.
The 2008 Mazda CX-9 takes the top spot on the overwhelming strength of the editors' personal picks. Had we counted only what we recommend to Average Joe Consumer, there would've been a tie with the Buick and Hyundai. But the CX-9 is the seven-plus-passenger crossover all but one of us would take home. Quite simply, the Mazda's sportier driving demeanor made us forget we were driving a vehicle that can comfortably schlep seven adults and some luggage.
Here's a surprise for you. The crossover that was thrown into this quasi-comparison test because it just happened to be sitting in our garage finishes second. The 2008 Hyundai Veracruz was the "recommended" pick of two editors, and the only vehicle not named CX-9 to receive a personal pick. Although the biggest Hyundai offered the smallest amount of interior and cargo space, it's high quality and well-rounded nature catapulted it to the top.
The 2008 Buick Enclave ends up in third place by the narrowest of margins -- 0.8 points to be exact. Two editors placed the Buick first in the recommended category, while two had it in second for personal picks. Had there been a full evaluation and performance score included in the tally, who knows? But even if the Enclave didn't come out on top, it once again proved its well-rounded nature that should appeal to many families.
Times are tough for the auto industry. Sales are down and the costs of raw materials are rising rapidly. The result is that the red ink has gone from a steady flow to a deluge for many suppliers, manufacturers and dealers. Over the last several years, costs and expenses have been reduced to the point where there is virtually nothing left to save. Yet the red ink still flows. The once less-than-tasteful option of raising prices is looking to be the only possible way to turn things around. This will eventually result in higher prices for the consumer.
If the Pilot was the most truck-like, the 2008 Toyota Highlander felt the most like a wagon. That's probably because it's the smallest vehicle in our test -- length, width and curb weight were all at the bottom of the pack. This size difference certainly contributed to many of the Highlander's highs and lows, although ultimately, it was unimpressive driving dynamics and Toyota's slipping interior execution that cemented it into the fourth spot.
It doesn't get more dead last than the 2009 Honda Pilot. When we tallied up the scores (5 points for a first-place editor pick, 1 point for last), there was a whopping 16.8-point difference between the #5 Pilot and the #4 crossover. Only one editor picked it higher than last in either scoring category. However, the Pilot isn't some Yugo-like automotive disaster -- it could have done much better.
"A revolutionary family car prototype that gets 63 miles to the gallon, was unveiled today at the North American International Auto Show." Can you guess what year this announcement was made? The answer after the jump.
Are you overwhelmed and clueless about where to start?
For some things, getting started is the hard part. Once you're rolling, you might even enjoy it.
We have an article that will help you get off the dime. It's called "Three-Day Shopping Plan for Holiday Weekends" and it will break down the process and tell you what to do on day one, two and three.
Car buying requires a combination of skills. In the beginning you need to be research oriented and analytical. Then you need to be intuitive as you ponder your choice. And finally, as you enter the deal-making section, you will need to be verbal and socially aware. The three-day plan separates these skills and lets you apply them most effectively.
Also, remember that incentives are rampant right now with everything from Ford's Employee Discount Program to GM's 0 percent financing to Chrysler's $2.99 a gallon gas cards. So, as the story says, check out our Incentives and Rebates page.
So before heading to the car lot, read our user-friendly story. It will save you a bundle. And who knows? Maybe this time around, you'll actually enjoy the process.
As you've probably already noticed, we've changed our format to a new and improved way of bringing you all you need to know about car buying. There are a few other changes which I wanted to quickly brief you on before we move forward.
First of all, we've never really had a statement of purpose as the "Strategies for Smart Car Buyers" blog has evolved. In a nutshell, this blog is for car shoppers, car buyers and car owners. That covers a lot of territory, I know, but the good part is, it gives us a lot to write about!
One of the big changes is that the Driving Woman blog, formerly a stand-alone blog, has now become a weekly feature on the Strategies blog. Edmunds Senior Features Editor Joanne Helperin will blog each Wednesday, lending some much-needed representation to our female readership (roughly one third of Edmunds readers are women). Joanne may blog on stories of special interest to women, or she may simply offer a woman's perspective on automotive issues or driving impressions. Other women from our editorial staff that may drop by include Senior Editor Bryn MacKinnon, Erin Riches, Senior Inside Line Editor, Donna DeRosa, our managing editor, Caroline Pardilla and deputy managing editor. Readers who enjoy freelancer Holly Reich can look forward to her weekly participation.
We are going to feature one blog each weekday morning with updates on incentives and buying trends throughout the day. Mondays and Fridays will belong to me, Philip Reed, senior consumer advice editor, while Lee Scott, data acquisitions and incentives specialist will take Tuesdays and Thursdays. We are hoping to eventually assign a theme to each day to even increase the excitement further (can you stand it?).
As if I haven't had enough problems with my newly-leased 2008 Nissan Altima Hybrid. First the battery died as I tried to leave the car dealer's lot. Then, it died again two days later, requiring that it be towed and the battery replaced.
Now, the headliner -- the cloth that covers the roof interior -- is falling down. I've only had this vehicle one month. What happened to "vehicle quality"? Tomorrow I go to a nearby dealer to get it fixed... the whole headliner might need replacement. I just love hanging around dealership service departments; don't you?
But wait, there's more. The dealer's finance department messed up a date on the original contract, so the leasing company (Nissan Motor Acceptance Corporation) thinks I took possession of the car two weeks before I actually did. Calling the dealership finance manager (twice or three times) to straighten things out (which NMAC told me to do) has been fruitless.
While car sales fell again this month, there was a bright spot for one automaker. Sales of the 2008 Honda Fit rose by 100 percent. In fact, Honda was the only major manufacturer that posted a gain this month rising 13.8 percent over this time last year.
Meanwhile, on the home front, the GM's 72-Hour Sale has been extended for much longer than just 72 hours, until July 7. By the way, GM's bad news was less bad than predicted -- it only declined 16.3 percent compared with a year ago.
Chrysler, which reported a 36 percent sales decline, has extended its $2.99 a gallon "Refuel America" sales campaign. The automaker credits the sales gimmick with driving traffic to the showroom. Not to be overlooked, Ford continues its "Employee Discount" program and declined almost 28 percent.
With a less-than-competitive vehicle lineup and relative lack of fuel efficient models, Chrysler plans to introduce some sizzle to its vehicle menu this fall when it introduces optional wireless internet access across its entire lineup. Called UConnect Web, it will be the first of its kind from any auto manufacturer. Centered around a wireless router that hooks up to the same CDMA wireless network technology used by Verizon and Sprint, users will be able to access the web with any wifi enabled device, such as a laptop or PDA. Connection speeds are advertised at 600-800 kbs, but speeds will vary and will likely average about half that, depending on coverage.
Pricing is not available yet, but it will likely include the base price of the option, plus a monthly usage fee, probably based on the amount of data you use. This is similar to how most cellular companies charge for their data plans.
We keep hearing that there is a pent-up demand for cars out there. After all, in recent years, 16 million vehicles were sold, but last year car makers only sold 12 million units in the U.S. That potentially leaves 4 million people out there who have decided to stick with old faithful (or old good-enough-until-we-feel-a-little-more-secure) for now. I know I fall into that category since my husband and I postponed our intention to buy a car last fall. 
announced last night at the 13th annual black-tie ceremony held at the MGM Grand Detroit. The event was attended by more than 600 industry leaders and media members on the eve of press week for the North American Auto Show. 
Vehicle: 
Making their debut at the LA International Auto Show later this month, the 335d Sedan and the X5 xDrive35d Sports Activity Vehicle (they had to make it bigger just to fit the name on the back!) will be BMW's first diesels sold in the US in over 20 years. Pricing will start at $44,725 and $52,025 for the 335d and the X5 diesel, respectively. 
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Faced with sales that are 45 percent lower than last year, GM has gone back to what's worked for them in the past -- the Red Tag Sale. 
Included in the payment is maintenance, a charging station (in your secure garage) and any electricity you use charging the batteries. The question of insurance coverage could not be answered, but it may also be included in the monthly payment. However, even if it doesn't include insurance, the high payment is partially mitigated by the fact that you won't have to be paying for any gas. 
I remember my first job in the car business. It was the summer of 1988 and I was working at an independent used car lot ripping people off...I mean selling cars (used cars was and still is a dirty business). Among the many pieces of knowledge I walked away with was how important vehicle color can be when it comes to resale value and desirability. At the time, blue cars were considered the least desirable color. We didn't want them as a trade, and they were valued as such. Twenty years later, blue appears to be poised for a comeback.
In case you haven't heard enough bad financial news, yesterday's car sales figures elicited comparisons to the dark days just after 9/11. 
In the wake of Hurricane Ike's devastation, 
GM has rolled out yet another Employee Discount Program which offers invoice and below deals on virtually all its 2008 vehicles. 
"More people may be looking at small pickups because of rising gas prices," says Institute president Adrian Lund. "Unfortunately, they won't find many that afford state-of-the-art crash protection. Most earn dismal ratings for protecting people in side crashes, and all but the Tacoma and Frontier lack electronic stability control, which is a key feature in preventing crashes. Until they improve, most small pickups aren't good choices for people looking for safe transportation."
The 2008 Pacific is one of many Chrysler vehicles affected by declining residual values. 
While car sales fell again this month, there was a bright spot for one automaker. Sales of the 2008 Honda Fit rose by 100 percent. In fact, Honda was the only major manufacturer that posted a gain this month rising 13.8 percent over this time last year.
