Archive for May, 2010
Since the introduction of the Toyota Prius in North America in 2000, a portion of the general public has had a fascination with the hybrid vehicle, thanks to the automobile’s impressive gas mileage and environmentally friendly features.
And now, almost a decade later from that first introduction, there are more hybrids on the market and increasingly more interest among car buyers, most likely because of the financial benefits that come with owning a hybrid vehicle.
But for those who are interested in purchasing a used hybrid car, what exactly goes into researching this new type of automobile? And for those who have purchased used cars in the past, can their prior knowledge be used toward a hybrid purchase?
Here are some things potential hybrid owners should consider when looking at used cars.
Get the history
As with all used car purchases, it’s still important to run the history of a car, be it hybrid or not. The oldest hybrids out there will be approximately 10 years old, and it’s worth knowing what kind of work has been done to it and whether or not the car was involved in an accident.
It may also be a good idea to get a pre-purchase inspection from a dealer who is authorized to sell the same make of the used car you are looking at.
Mileage may not be a big issue
In the past, people who were looking to purchase a used car usually paid attention to the mileage of the vehicle. High mileage meant there was most likely more wear and tear on a car. However, this way of thinking may not apply to used hybrids.
These are cars are meant to have a higher mileage, so it may be typical to see cars with 80,000 miles on it. In fact, there have been reports that some hybrids in the market have already gone past 100,000.
The hybrid battery
Part of the reason hybrid cars get such good mileage is because they partially runs off a battery, which also helps owners of these vehicles to save on gas (a full tank of gas in a hybrid can go much further when compared to a standard gas-powered car).
But like all batteries, there may come a day when the one in an older hybrid model needs to be replaced. It’s important for used car buyers to get a full understanding on what a battery replacement may entail. For example, those looking into a used Toyota Prius should conduct research and talk to dealers so they understand how they should replace the car’s battery if it should come to that. In some cases, it’s been reported that a replacement battery could cost upwards of $2,000.
Learn how to drive
Finally, keep in mind that hybrids are a different kind of car and that just turning them on may confuse some consumers who have spent years driving gas-powered vehicles. Doing the necessary research on how to operate a hybrid car will help buyers be more comfortable during and after the process of buying a used car.
Due to a recall notice issued last week, Japanese automaker Toyota has stopped the sale of one of its most popular models.
The company announced that it will stop selling Lexus sedans until parts for the recalled vehicles reach car dealerships. These parts are meant to fix a steering deficiency that could have potentially caused numerous car accidents.
According to news reports, drivers of the Lexus LS could experience their steering wheels stuck after making a sharp turn in either direction.
The recall notice for the Lexus LS last week affected a total of 3,800 vehicles in the U.S. and approximately 11,500 cars around the world.
Despite the recall, and the recent troubles Toyota has experienced, used car buyers may still want to look at older models of the carmaker’s award-winning Lexus LS brand.
The LS 430, which was produced from 2001 to 2006, was reviewed by editors at Edmunds.com as excelling in “both urban commuting and long-distance road trips” and that the “suspension easily soaked up road irregularities, especially when equipped with the optional air suspension.”
Though the Nissan Leaf was set to debut this year in December, it appears to already be a hit with consumers.
According to Autoblog.com, Nissan CEO Carlos Ghosn announced the Leaf was sold out during a speech he was giving to the Detroit Economic Club on May 26. He added that the automaker received approximately 13,000 orders for the electric car that will reportedly come with a price tag of $32,780.
Those who did reserve a Leaf of their own placed a $99 deposit.
In an effort to combat the demand, Nissan is also reportedly building a battery plant next to its main North American auto-assembly plant in Smyrna, Tennessee. It is slated to open in 2012.
“What we’re doing here will radically transform the automotive experience for consumers,” Ghosn told Bloomberg Businessweek. “Production of Nissan Leaf and lithium-ion batteries in Smyrna brings the United States closer to its goal of energy independence, creates green jobs and helps sustain American manufacturing.”
Some automotive analysts are predicting this will start an electric car boom, and possibly increase sales of used hybrids on the market among environmentally conscious consumers who do not want to wait.
While the sale of new cars dropped sharply during the recent collapse of the automotive industry, owners of used cars found that their assets actually increased in value as a result of a fortunate confluence of events.
Last year’s Cash of Clunkers program incited many Americans to buy newer, more fuel efficient cars, and took many used vehicles off the road, ABC affiliate KFBB 5 reports.
In addition, as many automakers responded to the recession by pulling older models out of production, owners of used cars found that some of their vehicles actually gained value after their purchase.
For instance, Jerome and Patricia Fuller, a South Carolina couple, recently purchased a 2005 Dodge Durango, says CBS affiliate WSPA. According to the National Automobile Dealers Association (NADA), the value of the used car has increased by 16 percent, or roughly $1500, in the last six months.
NADA reports also indicated that used cars that have experienced the greatest increase in value since December 2008: Ford Expedition, GMC Yukon, Chevrolet Equinox, Ford Explorer, Lincoln Navigator, Chevrolet Tahoe, Dodge Ram 1500, Ford F150, Chevrolet TrailBlazer and Chrysler Town & Country.
While there may be plenty of used car deals out there, none may surpass the sale of 30 Bugattis that were sold for $85,000 in 1964.
According to the New York Times, the freight load of 30 vintage French sport cars was loaded onto a train in a small Illinois town to be shipped to an unknown seller in France. When the price of the cars are converted to today’s economy, the news provider stated it was still a “giveaway” since the amount came to $600,000.
To put in context, a Bugatti Type 41 Royale sold for $28 million, Katie Hellwig from the auction house Gooding & Company told the Times.
Though it may be rare for a garden-variety consumer to find such a deal as astounding as the 1964 Bugatti one, there is still something to be said for finding great deals on used cars for their value.
The editors at Edmunds.com say used BMW 3 Series from 2002 to 2007 are a great used car buy because it “embodies everything a coupe should be: sporty, stylish and with a level of practicality closer to that of a sedan than a dedicated sports car.”
Recently released statistics from the Colorado Automobile Dealers Association (CADA) reveal that more Americans in some regions may be opting to buy used cars over new ones.
In its 2009 Economic Impact Report, CADA revealed that the state registered only 104,540 new cars and light trucks in 2009, the Denver Business Journal reports. This figure is almost half of the annual rate 10 years ago – the state recorded about 208,000 new car registrations in 2000,
“The industry, and indeed the entire state and U.S. economy, declined to depths not seen in modern history” last year, Tim Jackson, CADA’s president, said in a statement.
Despite the recession, which peaked only in the last several years, Jackson mentioned that the decline in new vehicle registrations has been most significant over the last four years.
According to the report, new car dealerships made $410 million in state and local tax revenue in 2009, while sales on new cars in Colorado totaled $9.62 billion, or an average of $34.2 million per dealership.
In light of the recession, drivers may be compelled to purchase new cars to save extra money.
The consulting firm A.T. Kearney has projected that car sales in the U.S. will top 11.7 million in 2010 and the positive economic outlook will bring sales to historical levels next year.
According to a Reuters report, this year’s car sales volume will range from 11.4 million to 12.3 million units, and is expected to hit 12.9 million vehicles to 16.8 million vehicles in 2012.
Analyst Daniel Cheng of Kearney told the news provider that the increase will be fueled by pent-up demand and the availability of more credit sources.
“If you look at the 1980s and the recovery from the low point then, the steepness of the return is much like our forecast,” Cheng said.
He added that the average age of cars in the US is about 9.9 years and will rise to 10.1 years in 2011. After that, more cars are expected to be scrapped and consumers will more likely send buyers to the market.
More than 16 million cars were sold between 1999 and 2007 in the U.S. When the recession hit the industry, sales volume dived to 13.2 million in 2008 and to 10.4 million in 2009.
Prices for new, used and certified pre-owned (CPO) cars have continued to rise in recent months as the economy continues to ride out the recession and consumers start to toy the idea of purchasing a car again.
AutoTrader.com reported in its Trend Engine Report for May that used and CPO car prices have increased substantially, with many of them picking up double-digit increases in recent months.
The Ford F-150 and the Ford Fusion racked up 35 percent and 31 percent increases, respectively, in the certified pre-owned car category when compared to their market prices in April last year, a news release said.
In the used car category, the Ford F-150 also led the pack and was tied with Jeep Wranglers with 18 percent price increase in the same period. Other car brands that saw double-digit price increase since April 2009 were Chevrolet, Toyota, Volkswagen, Honda, GMC and Dodge.
AutoTrader.com President and CEO Chip Perry said more consumers are looking online for new, used and CPO vehicles. In an analysis of AutoTrader’s web traffic, car shoppers used the site to compare vehicles, check prices and see car inventory.
“Car shoppers today, coming off two years of a tough economy, want to know that they’ve made the right purchase when they finally do decide to buy a new or used car,” Perry said.
Ford and Mercedes-Benz have announced the use of smartphones to add new features to their cars. Now, it’s General Motors’ turn to jazz up its mobile application suite to make driving more fun and easy.
The American automaker has announced that its exclusive OnStar system will use the power of Google technology to develop mobile apps aimed at strengthening Chevrolet‘s commitment to give Volt customers a “connected vehicle experience possible.”
“While OnStar will never lose sight of our core focus on safety and security, this relationship is an example of how we’re evolving our leadership position in connected vehicle technology,” OnStar president Chris Preuss said in a statement.
The partnership will support phones that use the Android software from Google, such as the Motorola Droid and HTC Droid Incredible, Preuss said, adding that initial features will include advanced navigation features using Google’s voice-based search, mapping and routing functions.
While the new mobile apps will be created on the Android platform, the New York Times’ "Wheels" blog reported that iPhone and Blackberry owners can expect to see support for these models announced soon as GM has done demonstrations using other smartphones in the past.
Higher resale value of Ford cars, which has increased by about $3,000 over the prior year, will take center stage in the automaker’s summer marketing campaign.
This comes after the American carmaker received the largest increase in quality score in a recent survey conducted by the Automotive Lease Guide, which measures the perception of quality in car brands as a way of determining resale value.
“We have made huge strides in vehicle quality in recent years but customer perceptions don’t change overnight – so it is gratifying to see our real-world improvements begin to fully register with consumers,” Jim Farley, Ford’s group vice president of global marketing, said in a news release.
Ford showed a 7.6 percent improvement on the Spring 2010 results compared with Fall 2009 in ALG’s annual Perceived Quality Score survey, according to a Wall Street Journal report.
The news provider added that while Ford posted the biggest gain, it ranked third in overall quality score at 70.5 percent from front runners Honda Motor, which scored 83.2 percent and Nissan Motor, which received 70.6 percent.
According to an April survey by the nonprofit publication Consumer Reports, 57 percent of current Toyota owners would “most likely” purchase a new Toyota vehicle, says Reuters. This figure is down dramatically from December, when 70 percent said they would buy another vehicle from the Japanese automaker.
More than half respondents said that the reputation of a brand was the most compelling factor in their choice of a new car, a factor which could have contributed to the negative approval rating because of Toyota’s recent negative publicity due to recall issues.
Though the brand’s reputation has suffered a blow, the sales of used Toyotas may not be as drastically affected.
In comparison to the opinions of Toyota owners, 68 percent of Honda owners and 61 percent of Ford owners said they would return to their brand.
As a result of dropping two spots in Consumer Reports’ ranking, Toyota may continue to extend sales incentives aimed at attracting more drivers in the U.S.
Some critics were known to attack the size, power and quality of the midsized cars released by Mazda through much of the past decade – and the 2009 Mazda6 was the automaker’s answer.
Designed with all the comforts to please American sedan owners, the 2009 Mazda 6 unveiled in the U.S. contains only about 10 percent of the key-dimension components of the world-car platform version and has no common sheet metal or glass, according to MotorTrend.com.
Aside from being a pleasure to drive, the car boasts new eye-catching bodywork that consists of a blending of contours and edges. A stylized grille and jewel-like projector-beam headlamps lead into fenders with bold RX-8 and CX-9-type features. In addition, tighter gaps in the Mazda’s body panels and the addition of aero cleanups help to reduce the model’s drag coefficient by about 10 percent, compared to earlier versions.
When drivers climb into the 2009, the cockpit motif will make them feel like a pilot behind the wheel. The interior features an attractive blend of textured plastic surfaces with matte metal trimmings.
According to Edmunds.com the car also comes with antilock disc brakes, stability control, front-seat side airbags and full-length side curtain airbags.
Toyota has announced that it is preparing to introduce a hydrogen fuel-cell sedan by 2015, with a retail price of about $50,000.
The automaker believes this sedan will have an advantage over electric cars, as it will have no emissions and the same range and refueling time of a gas-powered car, the Chicago Tribune reports.
While consumers might expect a higher price tag on the innovative vehicle, Toyota representatives have said that the cost of making fuel-cell cars has decreased by about 90 percent in the past 10 years – initially estimates for building a hydrogen fuel-cell car reached $1 million.
“Our target is, we don’t lose money with [the] introduction of the vehicle,” Toyotas managing director for advanced autos, Yoshihiko Masuda, told Bloomberg News. “Production costs should be covered within the price of the vehicle.”
As the technology emerges, some consumers have expressed hesitation in purchasing the new cars, as refueling options for the vehicles seem limited at present.
Drivers currently in the market for a Toyota may note the low expense of used cars. According to Automotive.com, a used four-wheel-drive 2009 Toyota Camry Sedan can sell for as little as $10,675.
In a bright spot in an otherwise rough year for the troubled automaker, Toyota Motor Corp, the company recently released a report that predicted a 48 percent rise in profit this fiscal year.
The increase is expected to be the result of an anticpated recovery in Toyota’s large North American market, where sales recently suffered due to the notorious series of recalls, and a boost in sales the Asian market, outside of Japan, Bloomberg reports.
“North America is the only market that matters [for Toyota’s earnings],” said Gentoku Kiyokawa, a Tokyo-based fund manager for Fortis Investments, which bought shares from the automaker in February.
He added, “Based on the recent sales numbers, the recalls aren’t posing a problem.”
During April, Toyota’s sales in the U.S. rose 24 percent. The company anticipates selling 2.13 million vehicles in the U.S. by the end of the fiscal year, constituting a 1.5 percent rise.
The uptick would be a promising reprieve from 2009’s market trends, which were reflected in a 20 percent drop in Toyota’s U.S. sales.
Cars are lasting longer now than ever before, making used cars a sound investment for consumers planning for the future.
While many automotive experts once estimated that cars typically are spent when they hit about 100,000 miles, some are changing their tune, MSN Money reports. According to Edmunds.com, cars can now easily endure about 200,000 if their given regular maintenance.
Steven Lang, the owner of two used-car lots, told MSN, “A conservatively driven and well-maintained $5,000 car should last 10 years.”
He added, “Cars are engineered today so that you’ll get tired of them long before they tire you out.”
A study by CNW Market Research found that the average value of a new car in the U.S. is $30,266, and is financed for an average of 58 months with a monthly payment of $411.
Analysts suggest that by that the savings gained by purchasing a used car are compounded by poor interest rates on car payments.
According to the Bureau of Transportation Statistics, about 41 million used cars are sold each year, about half of which are purchased from new car dealers.
Several media outlets are reporting that an undisclosed buyer has agreed to purchase a 1936 Bugatti 57SC Atlantic for between $30 and $40 million, making it the most expensive car ever sold at auction.
The vehicle, which once belonged to late car collector Peter Williamson, has been declared the most valuable car in the world by Autoblog Magazine. The previous record sale for a car at auction occurred last year, when another undisclosed buyer paid $12.2 million for a 1957 Ferrari 250 Testa Rossa.
“I am extremely pleased to have found the new buyer for the 1936 Bugatti Type 57SC Atlantic, one of the world’s most significant and valuable automobiles that has been in a private collection and rarely seen during the past four decades,” said David Gooding, founder of Gooding and Company, the automotive auction house that brokered the deal.
As with most high-end purchases, the auto auction refused to identify the new buyer. However, Gooding did indicate that he or she is “a devoted connoisseur” of automotive history. The only other 1936 Bugatti 57SC Atlantic in existence today is owned by famed fashion designer Ralph Lauren.
With summer just around the corner, many northeastern car owners are surely looking forward to enjoying some leisurely weekend drives around the countryside. Those who are interested in an exciting, quick and flashy sports car may want to take a look at the 2008 Mazda MX-5 Miata, which was ranked as the most fun to drive new vehicle on the road in 2008 by Consumer Reports.
The 2008 Mazda Miata is the most popular small convertible in production today. It comes standard with a 2.0-liter, four-cylinder gas engine capable of creating 166 horsepower and 140 pound-feet of torque. When paired with a manual transmission, the Miata can go from 0-60 miles per hour in 7.5 seconds, while still sporting a strong fuel economy.
However, the hallmark feature of the Mazda’s 2008 convertible is still its pinpoint steering and control.
“Although tuned for a smoother ride than before, the Miata still changes direction with the immediacy of a roller skate and speaks to you clearly through the steering wheel and driver seat,” says Edmunds.com.
In Consumer Reports test scoring, the Miata almost tied the Porsche Boxer, while costing almost half as much.
In an effort to track the nation’s recovery from the recession, many experts look to the U.S. auto industry as a barometer for economic improvement. Over the last four months, new and used car sales have steadily risen, giving hope to many that the turbulent economic conditions of 2008 are now behind us.
Since the beginning of the year, U.S. auto sales have increased each month, resulting in 162,610 more vehicles being purchased compared to the same 4-month stretch in 2009, according to Auto Week.
Specifically, Nissan North America had the most impressive April, increasing their sales by 35 percent compared to March. Ford, Chrysler, Hyundai–Kia and Toyota also had excellent months. However, based simply on overall volume of sales, General Motors sported the number one ranking for April.
“We’re seeing the ebb and flow of the market recovery,” Joseph Phillippi, president of AutoTrends Consulting, told Business Week. “We’re still working our way off the bottom. A rising tide lifts all boats, but some are lighter than others.”
Michelle Krebs, a research analyst with Edmunds.com, noted that the car manufacturers that are having the most success are those that sell moderately priced vehicles.