Ford reports rise in resale value, fewer repairs

Ford vehicles with one to five years on the road are fetching higher resale values during the first quarter of 2010 compared to the same period last year, according to the latest North American Dealers Association auction data.

In a news release, the Dearborn, Michigan-based carmaker reported that its car fleet gained 23 percent year-over-year improvement in resale value, outpacing the industry average by 4 percentage points.

“Ford products have outperformed the overall market, especially in the increasingly important segments of compact cars, midsize cars and crossover vehicles,” said Tom Webb, chief economist at Manheim Consulting. Webb cited the 2010 Ford Taurus, which he said sells 50 percent higher at auction than the 2009 Taurus after one year in service.

Meanwhile, Ford also reported that warranty repair rates have declined by 40 percent globally in the past three years, claiming that Ford, Lincoln and Mercury vehicles now have the “fewest number of defects of any full-line manufacturer.”

Ford reported Tuesday its best quarterly performance in six years with a profit of $2.1 billion. According to the New York Times, the last time Ford earned a quarterly operating profit of $2 billion was in 2004, when it sold nearly 17 million cars in the U.S. Ford expects to sell less than 12 million this year.

Car loan interest rate drops to record low

Consumers may be better off buying cars now as a new study found that the average automobile finance rate dipped to 4.4 percent in March, the lowest rate in the last eight years.

Edmunds.com said Toyota has the lowest average finance rate at 1.9 percent, followed by Mazda (2.5 percent) and Mercury (3.3 percent). Kia claimed the spot with the highest interest rate in March at 7.1 percent.

“Low interest financing is compelling for consumers because those who qualify often enjoy greater savings than they would get from a cash-back offer,” said Jessica Caldwell, a senior analyst at Edmunds.com.

In other trends, Edmunds.com reported that of all luxury brands BMW had the highest average down payment, $13,614, and the shortest average loan term, 52.4 months. Subaru took this spot in the non-luxury category with an average loan term of 60.9 months and highest down payment of $3,911.

Dodge had the industry’s longest average loan term, 67 months, followed by Chevrolet at 66.6 months and Hyundai and Kia at 66.1 months. Scion buyers financed the lowest average dollar amount, $18,978, and the lowest average monthly payment, $348.

General Motors upgrades 5 factories to meet car demand

General Motors will spend $890 million to upgrade five of its engine and component plants to keep up with demand for the company’s most popular vehicles, including its four core brands Chevrolet, Cadillac, Buick and GMC.

About $400 million will be spent to revamp GM’s powertrain factory in Tonawanda, New York, and $235 million will be spent on the company’s St. Catharines, Ontario plant. The rest will go to engine casting and component production at factories in Defiance, Ohio; Bedford, Indiana; and Bay City, Michigan, the New York Times reports.

The new investment comes less than week after the Detroit-based company repaid a $6.7 billion U.S. loan and announced a $257 million upgrade of its assembly plants in Kansas and Michigan for the next-generation Chevrolet Malibu sedan.

GM aims to build more fuel-efficient engines in response to consumer demand and future federal mileage requirements. Its North American assembly plants work on 24-hour schedules because of spikes in sales after it emerged from bankruptcy using government bailout money. GM’s sales were up 17% though March this year compared to 2009.

Subaru expands Indiana assembly plant by 40%

Subaru will increase its production capacity by 40 percent in its Lafayette, Indiana, assembly plant to meet the growing demand for the newly redesigned Legacy sedan and Outback wagon.

First quarter sales of the two cars in the U.S. more than doubled from last year, with the Outback reaching 19,275 and the Legacy hitting 8,550 sales, the Automotive News has reported.

Fuji Heavy Industries, maker of the Subaru brand, said it plans to produce 140,000 vehicles in the Indiana plant, which currently churns out 100,000 cars a year.

Representatives did not say how the plant will meet the new demand, but Automotive News implied it may draw from capacity currently being used to manufacture Toyota vehicles. The plant has a separate line with a capacity of 100,000 units for the Toyota Camry.

In 2009, Subaru sold about 217,000 vehicles, and the boost in production should increase this year’s figure to at least 230,000, the news provider added.

Nissan signs deal with GE to study smart-charging technologies

Fueled by the increasing demand for plug-in hybrid and electric cars in the past three years, Japanese automaker Nissan and General Electric have signed a deal to make smart charging technologies a reality.

The collaboration will explore ways to integrate hybrid and electric vehicles with homes and buildings, and will later brainstorm on how these new breed of cars can affect the larger electric grid, the two companies said in a news release.

Nissan, which last week began taking orders for the all-electric Leaf sedan, said the deal is part of its vision is to realize “zero-emission mobility through a holistic approach by by working with various partners in a broad range of industries.”

A blog post by GE scientist Matt Nielsen discussed some challenges in the integration of plug-in vehicles to homes and buildings, including the need to equip homes with the appropriate wiring for car charging and low-cost metering plans from utilities. The research will be conducted at GE’s global research operations in Niskayuna, New York.

According to the New York Times, about 98 percent of the vehicles sold in the U.S. in 2009 were powered by conventional gasoline engines. But many expect this trend to change in the next few years as automakers fill their pipeline with hybrid and electric cars and motorists become more aware of environment-friendly alternatives.

Survey: American cars are better than Asian, German makes

More Americans believe that domestic cars are superior to their Asian and German counterparts, a survey conducted by the Associated Press and GfK Roper Public Affairs & Media showed.

Thirty-eight percent of more than a thousand respondents said they think American cars are the best-made vehicles in the world. About one-third chose Asian-made cars, while 15 percent believed German automakers offer top quality vehicles, according to the survey.

Businessweek’s “The Auto Beat” blog said that the result could boost sales of American car makers Ford, General Motors and Chrysler. “All three can capitalize on this newfound respect if they continue to build better models and if, a big if in GM’s case, they can market the cars well,” it said.

The Kelly Blue Book reported that the new figures are “pronounced variations” from earlier polls made well before Toyota‘s recall issues. In 2006, for instance, the AP-AOL poll showed that 46 percent of Americans felt Asian countries had the best in quality with just 29 percent and 17 percent for U.S. and German cars, respectively.

Toyota Prius declared greenest car of the year

With its topnotch fuel efficiency, solar-powered ventilation system and various high tech features, Toyota‘s 50-mile-per-gallon Prius topped this year’s list of 10 greenest cars.

According to the Kelly Blue Book, the Prius remains the most fuel-efficient car in its class of hybrids, boasting 51 mpg city and 48 mpg highway. Aside from its hybrid powertrain technology, Prius was praised for its glass moonroof with a solar-powered ventilation system, voice-activated navigation and Dynamic Radar Cruise Control with Lane Keep Assist.

“To be considered for the green Top Ten, each vehicle was required to offer fuel economy and carbon dioxide emissions superior to the bulk of vehicles in its class and at the same time provide all the safety, creature comforts and driving enjoyment that would make it pleasant to own,” Kelley Blue Book said in its website.

This year’s list was largely dominated by last year’s collection, but also included two newcomers — the Volkswagen Golf TDI, one of the newest “clean diesels,” and the Chevrolet Tahoe Hybrid, which demonstrates SUV-like features that can co-exist with a hybrid powertrain.

Rounding up the top five are Honda Insight Hybrid (41 mpg), Ford Fusion Hybrid (39 mpg), Volkswagen Golf TDI (34 mpg) and MINI Cooper (32 mpg). Ranked sixth to tenth are the Ford Escape Hybrid (32 mpg), Honda Fit (31 mpg), BMW 335d (27 mpg), Toyota Highlander Hybrid (22 mpg) and Chevrolet Tahoe Hybrid (22 mpg).

The New York Times reported that Toyota will introduce a third-generation Prius in May in line with Toyota’s plan to sell a million hybrid cars in the next few years, from about 250,000 hybrids in 2008.

Good time to refinance an auto loan

An online aggregator of financial rate information has reported that many of this year’s auto loan refinance rates are 1 percent to 2 percent lower than they were in April of last year, depending on the length of the refinance loan.

“Refinancing an auto loan may be a good option if you need to reduce your monthly expenses in order to get your finances back on track,” said Tara Baukus Mello, an analyst at Bankrate.com.

While it is ideal not to extend the length of any loan, job loss or other similar situations could urge people to consider refinancing their loans to ease some financial burden, according to the news provider.

For example, a car purchased in April 2008 for $28,000 and financed for five years at 6.53 percent (the national average at the time) requires a monthly payment of about $550. This means the owner currently owes the bank a little less than $18,000.

Refinancing the remaining amount for four years, at the national average rate of 5.38 percent, would drop monthly dues by $133 and the owner would spend just $176 more in interest over the life of the loan, Mello said.

According to a Businessweek report, refinancing an auto loan might be a very good idea in the near future because interest rates remain at historically low levels. “Whether you have a used car loan or a bad credit personal loan, you could probably get the interest rate lowered if you go through a refinance process in the near future,” the report said.

Ford Focus’ appeal for teen drivers

Mom and dads contemplating the first car of their teenager may consider buying the Ford Focus, which aside from its reasonable pricing and European style, comes with an innovative Sync system that allows voice commands to control the iPod and other smartphones.

The 2008 Ford Focus feels and looks entirely different from its 2007 predecessor, inside and out. The 2008 line-up now includes a 3- and 5-door hatchbacks and wagon, and a new two-door coupe. It boasts an EPA fuel economy of 24 MPG city, 33-35 MPG highway and is reasonably priced at about $14,600 for a brand new one.

But perhaps, Focus’ most attractive feature is its optional Microsoft-designed Sync system, which provides seamless integration with media players and Bluetooth phones. Sync can read incoming text messages out loud, and can text useful one-liners like “Be there in 10 minutes” and “I love you.” It can also recognize voice commands to control music so drivers don’t need to fumble with their controls while driving.

Ford Focus’ Sync system not only adds fun to driving. It’s a great driving safety tool that parents would surely want to have for their teens.

Maine tops list of least expensive state to buy for car insurance

Car buyers always want to get the best deal. Those who want to get more but pay less for auto insurance may want to go to Maine, which boasts the lowest average rates in the country.

According to Insure.com, the average car insurance rate in Maine is $902.85, almost two times lower than Louisiana’s $2,510.87, which claimed the title as the most expensive state in which to get car insurance. New Jersey ranked No. 22 with $1,473.73, slightly higher than the national average of $1,429.26.

Maine’s low car insurance rates stem from the fact that its average annual mileage is low relative to other states. The largely rural state has the small population of 1.3 million people, which means fewer people on the roads and fewer claims.

Meanwhile, Louisiana’s No. 1 ranking can be explained by its court system. Only cases with claims in excess of $50,000 receive a jury trial, driving up out-of-court settlements to $49,000 that insurance companies must pay.

Rounding up the five most expensive states in which to buy car insurance are Michigan, Oklahoma, Montana and California, while other states with the least expensive rates include Vermont. Ohio, Wisconsin and New Hampshire.