Saturday, July 14, 2012

Five Overpriced Fuel Efficient Used Cars



Avoid Overpriced Prius, Yaris, Cruze, Corolla and Soul

There are five fuel-efficient used cars you might want to put the brakes on purchasing because their prices are predicted to drop.

KBB.com, according to an article at AutoRemarketing.com, has advised dealers that these five specific fuel-efficient models that could be in line for a significant price correction. The reason is softening fuel prices.



The models that made the KBB list are the 2010 Toyota Prius, 2011 Toyota Yaris, 2011 Chevrolet Cruze, 2011 Toyota Corolla and 2011 Kia Soul. The instant advice to take away from this new is in two month's time there are going to be some good bargains on these models as dealers become desperate to move these vehicles off their lots.


Why is that? It's expensive to finance unsold vehicles for a long time. No savvy buyer in his or her right mind is going to pay a dealership what it needs to make a profit on a used car listed above.


Their loss is your gain. That's a little cold hearted to say, because I want the used car industry to thrive, especially at the independent dealer level. However, there's nothing wrong with taking advantages of changing scenarios and that is what will happen with used car dealerships that bought high. They're going to have to sell low.


As has been reported elsewhere, the bloom is off the rose, so to speak, because Americans have horrific short-term memory. Once gas prices start to drop they become less concerned with fuel economy and more concerned with comfort. That's why less fuel-efficient SUVs and crossover utility vehicles are starting to see their sales increase.


KBB's senior market analyst for automotive insights, Alec Gutierrez, told AutoRemarketing.com that his company believes there will be "steep declines" for vehicles that increased in value significantly since the beginning of 2012. Expect the most adjustment in used vehicles selling near the cost of a new car.



The prime example, according to the article, is the 2010 Toyota Prius. Its value, in the last four months has increased $3,000. Used cars just don't increase in value during normal times. They decrease in value.


According to KBB.com figures, as of May 16, the 2010 Toyota Prius has a current auction value equal to 90 percent of its original price. A two-year old vehicle at this point should be worth, at best, 75 percent of its original value.


Buy Low, not High


Let's say, for argument's sake, that a 2010 Toyota Prius was worth $26,000 brand new. At 90% of its value, it's now worth $23,400. It should be more realistically price at $19,500 and below. By that simple estimation, the 2010 Toyota Prius is overvalued right now by almost $4000.



I'm not necessarily a fan of not buying a particular model because it is going to depreciate quickly because most people hold onto used cars beyond their effective depreciation life cycles. (After five years, cars only really depreciate by small amounts annually.)


The 2010 Toyota Prius, if bought right now, is going to fall off a cliff when it comes to depreciation. As KBB has warned dealers, its prices are going to adjust and soon. In a typical scenario, a good used car retains about 50% of its value after five years. That means a 2010 Toyota Prius is going to be worth about $13,000 in three years.



But, let's say you just paid the obscenely high price of $23,000 for one. In three years time, it could have lost $10,000 of its value. That's a huge number if you are financing payments.


It's also a huge concern for insurance reasons. Say, for example, something horrible happens to your 2010 Toyota Prius and it is deemed a total loss after a collision. In three years time, on a five-year loan, you would still have a substantial chunk of money left to pay but a car that is worth a lot less.



Here is what you can do as a smart consumer if you want to buy one of those cars. Instantly assume they are overvalued. Ask the Dealer how long has this car been sitting on your lot?


An honest dealer will tell you. A less scrupulous one may want to mask that fact to avoid looking desperate. (Never let the customer see you sweat!) However, you can sometimes determine from reading a Carfax Report when the dealership acquired the vehicle. If it was an Auction vehicle, it will be listed as being sold at auction in the title history.


Has the car been on the lot more than 60 days? There's no reason to pay what the dealer wants. If you have your financing arranged ahead of time, go in with an offer 10% below the asking price. The dealer might just cave to your wishes and, with your financing already arranged, might get you an even better interest rate.



Keep your eyes on used 2010 Toyota Prius, 2011 Toyota Yaris, 2011 Chevrolet Cruze, 2011 Toyota Corolla and 2011 Kia Soul models. They're priced high now but should be dropping soon. By the way, all are good cars. The Yaris may be yawn inducing but it's still a good car.





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Saturday, June 23, 2012

10 Reasons to Get a Carfax Report



With a CarFax report, you will be able to confirm the automobile's VIN number, year, make and model. This is important in making sure that you are purchasing the automobile as it is being presented to you for sale.

With a CarFax report, you can find out if the automobile has ever been flooded or has been repaired for any flood damage. This is very important, especially if purchased in areas that are prone to flooding, hurricane damage, etc. Even if an area is not prone to flood damage, there is always the possibility that an automobile has traveled through high water or been exposed to it at some point.

With a CarFax report, you can find out if the automobile has ever been involved in any type of car accident and, if so, what damages were reported. Every day, automobile accidents occur and the damages often require extensive repairs. It is important for you to know whether or not the automobile you are considering purchasing has ever had any type of damage.

With a CarFax report, you can find out if the automobile has ever suffered from any type of fire damage and, if so, what repairs were made to correct the damages.

With a CarFax report, you can make sure the automobile has a clear title and does not have any liens. This is very important when you purchase an automobile, home or even raw land. If you purchase something that does not have a clear title, you are basically throwing your money away. If you receive a clear title, you will have full ownership of the car and will be able to legally resell it in the future.

A CarFax report will confirm the number of miles to be the original miles as noted on the CarFax report. The sad, but honest, truth is that there are some individuals who attempt to falsify an automobile's actual miles in order to collect a higher sale price.

With a CarFax report, an individual can learn how many previous owners the car has had. This is important in considering why the car has had multiple owners, if it has, and may be a sign that something is wrong. An automobile with only one owner is more likely to be reliable as opposed to one that has been shuffled amongst multiple owners.

With a CarFax report, you can find out what, if any, repairs have been made on the automobile. This is important in considering what type of recurring problem there may be with the automobile or whether or not you are purchasing a lemon. A car that has had excessive repairs, either in various parts or in one particular area, may be an indication that you should be prepared to spend some time at the repair shop as the new owner.

And finally, a CarFax report provides overall peace of mind in knowing that you did the research and are not relying on the seller to provide accurate information. An informed buyer is a smart one.

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Saturday, May 26, 2012

10 Things Your Mechanic Won't Tell You

1. “You might be in the wrong garage.”
There are many choices as to where consumers can take their car when it’s in need of maintenance or repair. Those include going to the car dealer, a department or chain-store franchise, or an independent mechanic at a service station. Where you should go depends on what type of repair your car needs and its age and condition. But in most cases, mechanics in each type of repair shop may try to convince you that they’re the best ones for the job.

Work under factory warranty should go to the dealer, says Mark Eskeldson, founder of CarInfo.com, which provides consumer-protection advice to car buyers and owners. That’s where you’ll find some of the best-trained mechanics who are trained to fix problems that pop up with new car models, he says.

But because dealer overhead is high, expect to pay top dollar for repairs not covered under your warranty.

Before leaving your car at an independent automotive shop (or any repair facility) find out if the mechanic working on your car is ASE Certified ( or factory certified) on the component or system that needs fixing. Don't let some junior mechanic work on your car that is not certified or qualified on that particular repair area. He could do more harm than good.

Chain and department-store shops often advertise free services for routine services like oil changes or tune-ups, but beware if their mechanic insists that your car needs major repairs after he inspects it. Get a second opinion to confirm it isn’t a ploy to get you to spend more money, he says.

2. “My fancy certificates might not mean very much.”

The National Institute for Automotive Service Excellence (ASE) certifies auto technicians (or mechanics) in eight specialties, including brakes, electrical systems, engines, and heating and air-conditioning, ect... Although auto mechanics must have two years of hands-on work experience and pass an extensive standardized exam to become certified, an ASE sticker in your repair shop’s window is no guarantee that the work will be done properly or that all of the technicians employed are all ASE certified, or if they are Certified in the repair are you need says Tony Molla, a spokesman for ASE.

Most repair shops hire both certified and uncertified mechanics. And only 33% of ASE mechanics are certified in all eight specialties and earn “Master Technician” status. Be sure to ask who is going to do the work on your car and what areas that person is certified in. Also check to see when the certification expires. ASE-certified mechanics are supposed to recertify every five years.

In addition, you may look for repair shops that are endorsed by AAA with work being guaranteed for a minimum of 12 months or 12,000 miles. These facilities must meet rigorous standards and guarantee their work for all customers, says Robert Sinclair, a spokesman for AAA New York. Also, AAA agrees to arbitrate disputes between its members and approved repair shops.

3. “I make unnecessary repairs.”

You drop off your car at a mechanic’s shop for routine maintenance or a repair only to find out that the mechanic made additional repairs that you didn’t request but that he deemed “necessary.”

Recommendations for unnecessary maintenance are a common complaint among consumers, says Sherry Mehl, the chief of the Bureau of Automotive Repair (BAR) in California. (The bureau works to protect consumers within the automotive repair marketplace.) For instance, shops can suggest flushing a radiator or fluids, which can harm some cars, she says. (Car owners’ manuals specify if flushing will help.)

Consumer complaints about auto parts and repairs are on the rise, according to the Federal Trade Commission. For 2009, the FTC has 2,689 complaints, up from 2,438 in 2008 and 1,698 in 2007. It was dishonest practices that cost Santa Ana-based EZ Lube $5 million in a civil settlement for unfair business practices in December 2007. An investigation by the Orange County district attorney’s office “uncovered a pattern of unfair and deceptive business practices at several EZ Lube locations where consumers were being sold unneeded parts and services,” according to the DA’s statement. As part of the settlement, EZ Lube agreed to pay restitution to anyone with a legitimate claim over the past five years. (When reached for comment, a spokesperson for EZ Lube referred us to a company’s press release on the matter, which reads: “It is our goal to make sure all of our customers are protected by the highest safeguards in the industry when they bring their vehicle to one of our stores.”)

“Most unnecessary repairs are due to the fact that cars are so incredibly complex that often a shop ends up trying a few things in order to solve the problem,” says Jack Gillis, author of "The Car Book" and director of public affairs for the Consumer Federation of America, a consumer-advocacy organization. When a repair baffles a mediocre mechanic, he or she will probably keep replacing suspect parts until the problem is finally solved. Many of the parts replaced may have nothing to do with the problem, but you’ll probably end up paying for them anyway, he says.

4. “You might be charged for work that hasn’t been done.”

It happens on purpose. It happens by mistake. Either way, it happens. Let’s say you drop your car off at the garage to have the fluids, belts and filters replaced. But the garage is busy, the mechanic who works on your car is a new hire, and the station manager hasn’t left very clear instructions. As a result, the belts never get replaced, but you drive away thinking you’ve got brand-new ones. When Gillis worked at the Department of Transportation in the 1980s, he says it was one of the most common complaints, and that it remains so today.

A good way to avoid the problem of work that was supposed to have been done but wasn’t: Ask to see the old parts. In some cases, mechanics can give you the parts they’ve removed from your car. (One exception is if the warranty requires they be sent back to the manufacturer.) “If you have a concern that a part was replaced when it shouldn’t have been, you should ask for it back,” says Mehl. (Rules vary by state; in California, for example, mechanics can give parts to customers.) California residents can contact BAR, and it’ll send a representative to examine the customer’s invoice and the part. “If it’s not faulty, we can take disciplinary action,” she says.

In addition, Gillis suggests taping to your steering wheel an itemized list of all the repairs you want made. That way the mechanic who works on it — in most cases not the person you talked to when you drove in — will have direct instructions from you.

5. “You should get a second opinion.”

Getting a second opinion is a must for major repairs, since it’s a competitive business and prices can be all over the map. You may have to pay a few dollars more for an extra estimate, but the hundreds you could potentially save by shopping carefully will more than make up for it.

When exactly is it time to seek out a second opinion? A general rule of thumb is that you should get more than one mechanic’s take on a repair if you expect to pay more than $200 for it, says Gillis. If your mechanic calls in the middle of a job with a laundry list of additional repairs, that’s also a good time to seek another opinion of the problem and an estimate for the cost of fixing it. Beware of the mechanic who tries to stop you by saying that he’s already taken apart the engine or the transmission. If you were able to drive the car into the shop, you should be able to drive it back out for a second opinion.

6. “Rebuilt parts can be as good as new — and less expensive.”

When it comes time to replace a part on your car, you can save money by buying it used. But often you must specify that you want a remanufactured part or the mechanic will likely install an expensive new one.

However, recycled parts aren’t right for every replacement. “Customers may save some money, but buying a recycled part isn’t so simple,” says Chuck Sulkala, executive director of the National Auto Body Council and owner of a Boston-based car body shop. “You need to make sure it provides exactly what you’re looking for and what you need.” For example, a customer who needs to replace a car’s fender and gets a salvaged one could find that its moldings or side lights are different, he says, even if the fender comes from the same car model that’s just two or three years older. Sulkala says: “You can use it, but what good is the molding going to do if it’s in the wrong location?”

7. “Your car is too high-tech for me."

Cars have become incredibly sophisticated over the past 10 years, but some mechanics haven’t caught up. Car dealers are required by most manufacturers to buy the expensive diagnostic equipment needed to pinpoint the source of computer problems. That means their technicians are more likely to be factory-trained in these complicated repairs.

Still, not all mechanics are properly trained in the computerized systems found in most cars today, says Gillis. That could be because independent car mechanics have to bear most of the costs when upgrading their technology. Independent car technicians must make the same investment in sophisticated diagnostic equipment if they expect to be able to diagnose and repair these complex cars, says Molla.

If you drive an expensive European car, consider checking out specialty shops that focus on one or two foreign makes. Mechanics at these outfits are often as well or better trained than those at the dealer and they usually charge less. Meanwhile, most Japanese and Korean models are serviceable by independent repair shops, says Molla.

8. “I may send your car somewhere else for repairs — which will cost you.”

Let’s say you’re taking your car in for several repairs at once — replacing the battery and headlamps, changing the oil, and repairing the fuel-injection system. Some independent shop may not have the facilities or expertise to do them all in-house, and if so, it may pay another shop to do all or part of the work. This kind of auto-repair outsourcing can add significantly to the final price tag on the job, since your mechanic will have to charge a premium for the work he subbed out.

“If I have to carry all of the equipment in order to fix everything on a vehicle, it would make no sense,” says Sulkala, especially if he doesn't do that type of work on a daily basis. For example, he’s not asked to upholster cars often, so when a customer requests that he says, “I’ll bring it someone I know and trust who has that expertise.” As a result, the customer might incur additional costs. But, he adds, the price charged is at a discounted wholesale rate and not at a retail door rate.

When you take your car in for repairs, ask if all the work will be done on-site before you agree to anything. If your mechanic tells you he needs to subcontract some of it, tell him not to do those repairs and take the car yourself to a shop that can handle the rest of the job.

9. “The less you know about your warranty, the happier I am.”

Confusion about your warranty is good for a repair shop. After all, it’s not in an independent mechanic’s best interest to tell you when a repair is under warranty because if he’s mum, he can charge you for it. Dealerships, meanwhile, make little money on warranty repairs, so they look to get as much non-warranty work as possible.

The way dealership warranties often work is that if you get the car repaired somewhere else and something goes wrong as a result of that repair, the cost of fixing the problem will no longer be covered by the warranty. So say you get an oil change at a quick-service franchise shop and the mechanic does something wrong that eventually damages your engine; the dealer doesn’t have to honor your warranty when your engine is finally repaired, says Gillis. But some dealers like to take it a step further by making it seem as if you have to bring your car to them for all repairs or risk losing your warranty protection.

Don’t fall for it. Taking routine work such as oil changes, tire rotations, and even your 10,000-mile checkups to the less-expensive chains won’t jeopardize your warranty in most cases. Nor will emergency repairs that would normally be covered under the warranty. Just be sure to keep all your receipts, says Gillis. That way, if the dealer tries to claim you have an engine problem because you failed to get an oil change, for example, you can prove otherwise.

10. “You have more power here than you think.”

If you feel you’ve been wronged by an auto mechanic, you can take action. File a complaint with your state’s Better Business Bureau and the attorney general’s office. This will help unsuspecting consumers who check on the reputations of potential car mechanics to avoid shoddy repairmen.

In some states, you have even more recourse; in California, BAR will attempt to resolve each complaint it receives. To check if your state has a similar agency, contact your state highway department. Finally, if your auto-repair garage is endorsed by the AAA, contact the organization. If your complaint is egregious enough, or joined by others, the outfit may lose the AAA’s seal of approval. “This is an exceedingly rare event,” says Sinclair. “Shops work hard to obtain and retain their AAA certification and would bend over backwards to correct any problems that may lead to a loss of AAA’s ‘seal of approval’.”


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Tuesday, February 14, 2012

Acura Says Seinfeld/Leno Commercial Did the Job

CHICAGO -- Is Acura happy with the response to the Super Bowl commercial featuring Jerry Seinfeld and Jay Leno vying for the upcoming NSX sports car?
You betcha.

Moments after the Super Bowl ended, Acura's Web site crashed.

Mike Accavitti, American Honda's chief marketing officer, estimates that the Web site was down for about 10 minutes because of a 3,000 percent increase in traffic.

Accavitti said the ad on Acura's Web site received 16 million views from Jan. 30, the day it was posted, to Feb. 6, the day after the Super Bowl. He was interviewed Tuesday during an Acura press event prior to the opening of the Chicago Auto Show.

In the humorous commercial, Seinfeld and Leno try to bribe the man who holds the rights to the first 2015 NSX supercar.

The NSX concept debuted last month at the Detroit auto show and created quite a buzz. Sales begin in about three years.

Why draw attention to a car that's three years away from production?

"This direction you are seeing with Acura isn't by accident," Accavitti said. "This is a well thought-out, laser-focused plan that we have to get Acura noticed and get Acura on people's shopping lists because we have these great new products coming out."

The redesigned 2013 RDX crossover and the newest edition to the Acura line, the compact 2013 ILX sedan, will be in showrooms this spring.

"The traffic driving that we did with the commercial delivered the results we were looking for," Accavitti said. Besides the NSX, RDX and ILX, people coming to the Web site were clicking on Acura's other models, too.

Said Accavitti: "People are talking about Acura who never talked about Acura, and that was our intent."

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