Edmunds Daily
The Savvy Shopper
October 26, 2009
Dealers are basically honest and can regulate themselves. True or false?
I'd love to know your opinion on this question and I bring it up for two reasons. This week I read a news item that said the government was considering creating an oversight agency that would, among other things, prevent fraudulent lending practices of dealers. Apparently, this is the number one ranked complaint from consumers, according to an annual survey by the Consumer Federation of America and other consumer groups.
What caught my eye was the list of shenanigans that goes on in the finance and insurance room (F&I). When I got done reading the list I felt sick to my stomach.
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- Philip Reed October 26, 2009, 12:26 AM
- Categories:
- Car Buying, Car Loans and Financing, The Savvy Shopper
October 19, 2009
When you're shopping for a used car it's essential to get it inspected by a professional before you decide whether to buy. But let's face it, schlepping to the mechanic is a hassle. Now there's an alternative. Alliance Inspection Management (AiM), based in Long Beach, Calif., is offering pre-purchase car inspections to consumers who are buying or selling a used vehicle.
A 150-point inspection can be scheduled online through AiM's website. AiM has conducted more than fifty million new and used vehicle inspections for corporate clients including auto manufacturers, financial organizations and daily car rental companies.
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- Philip Reed October 19, 2009, 12:34 AM
- Categories:
- The Savvy Shopper, Used Cars
October 12, 2009
I've just spent a week in Montana and I have one word to say about their car buying choice: Subaru. Actually, Subaru, with its affordable all wheel drive, takes a backseat to any kind of pickup truck (preferable with several cracks in the windshield). But in the car market, Subaru is the only game in town.
It got to the point where my wife asked, "Do you think Subaru dealers are really rich up here?" I don't know the answer to that, but I do know that my eyeball survey revealed that every other car on the road is a Subaru. And on my visit to Big Sky Country, I wish I'd had one.
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- Philip Reed October 12, 2009, 12:35 AM
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- Car Buying, The Savvy Shopper
September 30, 2009
Chrysler said recently that it was getting back into the leasing game. While this is an indication of good news, don't get too excited. You probably won't be seeing the bargains which sunk the ship back in 90s.
A lease payment is based on residual value of the vehicle. So cars that hold their value (think Hondas, Toyotas and BMWs) make good lease cars. Cars that have poor resale value (think Chrysler and other domestic cars) are not good for leasing. American manufacturers tried to ignore the simple math of this residual rule and it came back to bite them in the shorts.
But now Chrysler is back. And GM and Ford are leasing too. Is there some case under which this could possibly make sense? Sure.
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- Philip Reed September 30, 2009, 1:00 PM
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- The Savvy Shopper
September 28, 2009
I was riding with two friends in the 2010 Honda Insight and we were buzzing up a mountain pass in Los Angeles when my friend said, "I'd never buy this car -- I need more power." I answered, "You mean you want more power, you don't need more power."
This triggered a long debate about driving styles, modern traffic patterns and the generally befuddled state of motorists in Los Angeles. But when we all calmed down again, I began thinking how important it is to choose a car with features that we will use about 80 percent of the time. What do I mean?
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- Philip Reed September 28, 2009, 12:15 AM
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- Car Buying, The Savvy Shopper
September 21, 2009
It's time to ponder the eternal question: is this a good time to buy a car? There's no doubt that "Cash for Clunkers" has left us with a hangover. Incentives are down and prices are up. A bad combination. But the good news is that it won't last forever. And there are ways to get a good deal.
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- Philip Reed September 21, 2009, 7:36 AM
- Categories:
- Car Buying, The Savvy Shopper
September 14, 2009
Fact #1: In Europe, 60 percent of the passenger cars on the road are diesel.
Fact #2: Diesel engines are 30 percent more fuel efficient than gasoline engines.
Fact #3: In the U.S., 3 percent of the passenger cars on the road are diesel.
Question: What the heck is wrong with us?
That was just one of the questions I had in mind as I left a Motor Press Guild presentation by two leading diesel experts (and advocates). As Gale Banks, an avowed "torque junkie" and diesel proponent put it: "The engine of the future is 115 years old."
So, should your next car be a diesel? Here are a few bullet points to help you decide.
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- Philip Reed September 14, 2009, 1:21 AM
- Categories:
- Car Buying, Fuel Economy, The Savvy Shopper
September 7, 2009
"Make me an offer," says the car salesman.
And yet, as a professional negotiator, the salesman probably believes the old saying, "The person who speaks first, loses." Making the wrong offer can hamstring your good deal. So how do you know where to start? Too low and they laugh or throw you out. Too high and you leave money on the table.
Recently, with GM selling cars in California through eBay, we advised shoppers to use the "Make an Offer" choice. But apparently the offers were all over the place and didn't result in many sales. So we came up with a solution.
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- Philip Reed September 7, 2009, 1:24 AM
- Categories:
- Car Buying, The Savvy Shopper
August 31, 2009
I recently sold our Long Term 2008 Ford Focus SES Coupe and the next day got a thank you email from the buyer. He said he had driven the car on a short trip and just loved it.
Car enthusiasts reading this are screaming in agony decrying the Focus and saying he should have bought this, that or the other car that was far superior. But this buyer was perfectly happy with the Focus. And why not? For him it was a big step up. It's reliable, fuel efficiency and he likes the color.
I often get calls from people asking what car they should buy. I act a bit like a psychiatrist who never takes a firm position but always asks, "Well, how do you feel about that?" Choosing the right car is both infinitely complicated and absurdly simple. But here are a few things that I do know.
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- Philip Reed August 31, 2009, 1:59 AM
- Categories:
- Car Buying, The Savvy Shopper
- Technorati Tags:
- Car buying, Decision making, features, needs, New cars, process, Sticker price, test drive
August 24, 2009
The news stories I've been reading about Cash for Clunkers are all over the place. Some call it a complete failure while others call it a roaring success. As clunkers wraps up today at 8 p.m. EDT, I thought it would be good to look back on this incentive program which has hit its share of potholes but has definitely moved the metal.
We would love to hear from anyone who has cashed in on this program, or tried to participate without success. What did you trade in and what did you buy? For how much? And most importantly, did it go smoothly, or did the dealer play games with you?
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- Philip Reed August 24, 2009, 1:32 AM
- Categories:
- Car Buying, The Savvy Shopper
- Technorati Tags:
- Cash for clunkers, dealers, incentives, negotiating, pricing
August 21, 2009
Should you buy your next car online? And by "online," what do we really mean? Can you really click a button and have a car show up in your driveway?
GM has launched a month-long experiment to sell cars through eBayMotors in California. Some early figures are in. And the results are, well, intriguing...
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- Philip Reed August 21, 2009, 1:29 PM
- Categories:
- Car Buying, Car Negotiating, The Savvy Shopper
- Technorati Tags:
- Car buying, car salesman, dealers, eBay, GM, negotiating, online car buying, upselling
August 17, 2009
Two people can go into the same dealership and buy the same kind of car at prices thousands of dollars apart. Why? The obvious answer is that one person is a better negotiator. The other answer is that one person knows more about car pricing than the other person.
The way cars are priced is complicated. It's nuts. It doesn't make sense. But unfortunately, we're stuck with it. Here's a quick review of a few things that could save you a lot of money.
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- Philip Reed August 17, 2009, 1:21 AM
- Categories:
- Car Buying, The Savvy Shopper
- Technorati Tags:
- car buying, Car prices, incentives, invoice price, negotiation, sticker price, TMV
August 2, 2009
After a weekend in which a White House spokesman told the American public "go buy a car," many shoppers might be left wondering if they still have a green light under the cash for clunkers program.
Friday was a roller coaster day for dealers with the White House guaranteeing deals through the weekend and the House of Representatives approving an additional $2 billion to subsidize the trade-in of old cars for more fuel efficient vehicles.
But after the weekend, where do shoppers stand?
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- Philip Reed August 2, 2009, 12:11 PM
- Categories:
- Car Advice Articles, Car Buying, Car Negotiating, Fuel Economy, The Savvy Shopper
- Technorati Tags:
- Cash For Clunkers Extension, Cash for Clunkers Suspension, Replacement vehicles, Trade-in
July 27, 2009
The long wait for Cash for Clunkers is over. Or is it?
Friday was the start of the government program (or one of the "starts") designed to stimulate car sales and take gas guzzling polluters off the road. But Friday saw dealers scratching their heads in confusion, reading the mammoth rules document and trying in frustration to register online.
Furthermore, NTSHA (National Highway Traffic Safety Administration), the administrating agency, said money won't be available for dealers until Monday.
Still, Cash for Clunkers (or C4C) seems popular with consumers and interest is building on many other fronts. Here are a few late breaking developments.
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- Philip Reed July 27, 2009, 1:05 AM
- Categories:
- Car Buying, Fuel Economy, The Savvy Shopper, Vehicle Incentives and Rebates
- Technorati Tags:
- Cash for clunkers, Fuel-Efficiency, gas guzzler, Incentive, NHTSA
July 13, 2009
As it emerged from bankruptcy GM announced it is considering selling new cars on eBay.
Car dealers have always had a love hate relationship with the internet. Mostly hate.
In 2000 when the internet was first sending ripples of terror through the car business, dealers fought to beat back the transparency that the internet brings to the buying process. A few years later, at a NADA conference, dealers talked smack, bragging how they had repelled the attack and how "all roads still lead to the dealership."
But now a humbled GM, reemerging from a speedy bankruptcy last week, announced it's working on a deal with eBay Motors to sell its new cars on the internet. The cars would still be delivered by local dealers.
Is this a path to profitability for General Motors? Or just lipservice to a generation of young buyers who currently get their books, music and movies with just a coupla clicks.
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- Philip Reed July 13, 2009, 1:48 AM
- Categories:
- Car Buying, Car Loans and Financing, Car Negotiating, Selling Cars, The Savvy Shopper, Vehicle Incentives and Rebates
- Technorati Tags:
- car sales, certified pre-owned cars, eBay, finance and insurance, GM, internet, negotiating, TMV
July 6, 2009
With a few key strokes, a car salesman can turn the cash for clunkers into gold -- for them.
Now that the Cash for Clunkers bill (aka CARS) has been signed, and will go into effect July 23, it's time to think about how to actually apply the cash credit.
Some readers have suggested that dealers will perform their usual sleight of hand with the government credit of $3,500 or $4,500.
What could go wrong? A lot. Let's take a closer look.
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- Philip Reed July 6, 2009, 1:03 AM
- Categories:
- Car Buying, Car Negotiating, The Savvy Shopper, Used Cars
- Technorati Tags:
- car salesman, cash for clunkers, dealership, incentive, negotiating, sales tax, trade-in
June 22, 2009
My 2000 Mitsubishi Galant has a trade-in value of $2,437 but it isn't technically a "Clunker."
Many folk have been asking about Cash for Clunkers, how it will apply to their specific situation and details of how the program will work. I have a clunker. It's a 2000 Mitsubishi Galant. I'd love to turn it in for a $4,500 voucher but I can't. The mileage is too high -- 21 mpg combined. Not only that, but I'm not looking to get into a car payment right now.
So I'll pass on Cash for Clunkers.
But based on the email we're getting about this bill that was passed last Thursday, a lot of you are sharpening your pencils and staying up late at night looking for loopholes in this government program.
"Hey, what if I trade in TWO clunkers? Can I get $9,000?" Or, "Can I tow in a rusting piece of junk and get my voucher?" And even, "Can I put an ad in the paper, find someone with a clunker, trade it in and buy a car for me? Then I'll give the guy $500."
Calm down everyone. You're making this WAY too complicated. Here's how to think this through.
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- Philip Reed June 22, 2009, 1:15 AM
- Categories:
- Car Advice Articles, Car Buying, Car Loans and Financing, Car Negotiating, Selling Cars, The Savvy Shopper
- Technorati Tags:
- Cash for Clunkers, fuel economy, incentives, mileage, rebates, trade-in value, used cars
June 15, 2009
Avoid the long wait to pick up your new car at the dealership -- ask to have it delivered.
One of the great secrets of car buying is that most dealerships are willing to "deliver" the new car you want to buy. It's best to push for the delivery just before you agree to the deal. Say something like, "Well, I think the price is reasonable but I can't get down there to pick it up until the weekend. Could you deliver it to my office over the lunch hour?"
In some cases the answer might be, "Yes, but it will cost you." But the vast majority of the times, they will jump at the chance to ink a new deal and say yes. Basically, they send the car, along with a salesman or porter, to your home or office with all the documents. A "chase car" follows to take the salesman back to the dealership. They are in and out in 15 minutes.
There are many advantages to having your car delivered, not the least of which is your time and aggravation. But the biggest advantage isn't immediately obvious. Here's what it is.
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- Philip Reed June 15, 2009, 6:55 AM
- Categories:
- Car Buying, Car Loans and Financing, Car Negotiating, The Savvy Shopper
- Technorati Tags:
- Car buying, delivery, extended warranties, F&I, Finance and Insurance, negotiating
June 8, 2009
Are you blinking your eyes in disbelief at that headline? Are you thinking that we've gone soft?
These are tough times and we find ourselves with the strange urge to shed a tear for the poor car salesman. Even if it is a crocodile tear.
What has inspired this change of heart?
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- Philip Reed June 8, 2009, 1:36 AM
- Categories:
- Car Negotiating, Chrysler, General Motors, Selling Cars, The Savvy Shopper
- Technorati Tags:
- bad economy, bankruptcy, car buying, car salesman, Chrysler, closing dealerships, GM, Negotiating
March 19, 2009
While new cars sales are down big time -- despite massive incentives that include zero percent or nearly as low interest rates -- used cars have been selling comparatively well. Because of this buying climate, a new version of a given model may prove cheaper to purchase than a used example, due to the aforementioned incentives and the fact that used car loans typically have much higher interest rates compared to new car loans.
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- John DiPietro March 19, 2009, 3:45 PM
- Categories:
- Automotive Consumer News, Car Buying, Car Loans and Financing, The Savvy Shopper, Vehicle Incentives and Rebates
- Technorati Tags:
- Financing, New Cars, Used Cars
March 9, 2009
(A customer "in the box" at a dealership negotiates with a salesman. Photo by Andrew Reed.)
This week we stumbled across the account of a car shopper who made every mistake in the book. Unfortunately, he ran straight into two dealerships which were trying to make up for a bad economy by running the old shell game on any unsuspecting customer who ventured onto their car lot.
While the shopper was thinking he was boosting the economy by purchasing an American car, the dealer thought it was payday. Uninformed consumer + hungry car dealer = disaster.
This story illustrates how there is blame on both sides. And it also shows that the car buying system (at least the traditional feet-on-the-ground method) is an outdated business model.
Here's how it went down.
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- Philip Reed March 9, 2009, 1:39 AM
- Categories:
- Car Buying, Car Negotiating, The Savvy Shopper
- Technorati Tags:
- auto financing, bad economy, car buying, car salesmen, incentives and rebates
February 26, 2009
Even those considering a used Porsche 911 can appreciate a bargain, especially in these economically depressing times. If we told you that you could buy a nice, low-mileage (25k to 35k miles) Porsche 911 for $25 to $30 grand, you might wonder if we've been spending too much time inhaling fuel fumes and burning rubber at the test track.
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- John DiPietro February 26, 2009, 1:05 PM
- Categories:
- Car Buying, Deal of the Week, The Savvy Shopper, Tip of the Day, Used Car Corner, Used Cars
- Technorati Tags:
- Porsche 911
