The Truth About Cars » Car Buying Tips http://www.thetruthaboutcars.com The Truth About Cars is dedicated to providing candid, unbiased automobile reviews and the latest in auto industry news. Sat, 20 Dec 2014 16:36:04 +0000 en-US hourly 1 http://wordpress.org/?v=4.0.1 The Truth About Cars is dedicated to providing candid, unbiased automobile reviews and the latest in auto industry news. The Truth About Cars no The Truth About Cars editors@ttac.com editors@ttac.com (The Truth About Cars) 2006-2009 The Truth About Cars The Truth About Cars is dedicated to providing candid, unbiased automobile reviews and the latest in auto industry news. The Truth About Cars » Car Buying Tips http://www.thetruthaboutcars.com/wp-content/themes/ttac-theme/images/logo.gif http://www.thetruthaboutcars.com/category/editorials/car-buying-tips/ Tow Rig Capsule Review: 1999 GMT800 Silverado 2500 3/4 Ton http://www.thetruthaboutcars.com/2014/06/tow-rig-capsule-review-1999-gmt800-silverado-2500-34-ton/ http://www.thetruthaboutcars.com/2014/06/tow-rig-capsule-review-1999-gmt800-silverado-2500-34-ton/#comments Wed, 04 Jun 2014 13:00:41 +0000 http://www.thetruthaboutcars.com/?p=832305 The last time I looked at my 1969 Chevrolet CST/10, it was a pile of disappointment. After reviving it and replacing a freeze plug, it proceeded to pop three more freeze plugs during warm up. Time was beginning to run out, my dad’s house had gone up to market and quickly sold. The truck was […]

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The last time I looked at my 1969 Chevrolet CST/10, it was a pile of disappointment. After reviving it and replacing a freeze plug, it proceeded to pop three more freeze plugs during warm up. Time was beginning to run out, my dad’s house had gone up to market and quickly sold. The truck was a long way away from driving out of Houston, and I needed to get it out of town. Time and money were a factor, I didn’t have time to spend money running a truck and trailer to Houston, just for the CST/10. Thankfully, three things lined up: A truck, a trailer, and a reason to drive to Houston. The truck is a customer’s, who loans the truck out in return for a few favors on the truck’s maintenance. The trailer came from my friend’s rally shop, which I moonlight at. And the Lone Star Region Porsche Club had invited me to partake in their refreshed autocross program at Houston Police Academy just before the closing deadline on my father’s house. Win-win, right? I packed the suitcase, tools and dog, hemorrhaged a gas pump to fill the truck, and blasted to Houston.

The biggest tool for this expedition was a venerable 1999 GMT800 Silverado 2500. A tried-and-true work truck, with no options other than power locks. Extended cab, with an eight foot bed – this is one of the longer wheelbase configurations, superceeded only by the four door “quad cab” with the eight foot bed.

The drivetrain is a gas 6.0L V8, the early all-cast iron version. Later 6.0’s and “LSx” truck engines moved to iron block and aluminum heads. The all-iron build of the early ones is a bit more stout against abuse. 300 hp and a flat 360 ft lb of torque work well at sea-level, providing excellent passing power and low end torque. To this day, it’s one of the friendliest gas engines in towing with its flat torque curve and excellent midrange power for highway use, and returns excellent fuel economy for a gas engine. I find the Ford 5.4 Modular and Dodge 5.7 Hemi from the GMT800 era were never quite as comfortable under load.

The transmission is a 4L80E, essentially a modernized overdrive version of the Turbo-400, the racetrack and workhorse hero for GM since the late 60’s. It also features a Tow/Haul mode, which changes the transmission mapping to ensure an easier day for the transmission and driver. Primarily, it holds third gear longer during climbs, and waits to lock the torque converter during hill climbs allowing the torque converter to torque multiply, allowing the 6.0L gasoline V8 to work harder under load. Four speed automatics seem archaic, but the gearing is well matched to for the 6.0.

Despite the air conditioning needing a recharge after a compressor replacement, the weather was pleasant enough for windows-down driving. In the GMT800’s, extended cabs do well with the rear vent windows open, which smoothly pull hot air out of the cab, negating the buffeting and noise with fully open windows. Cruise control was set at 70 mph, and three hours later, I arrived in my dad’s driveway.

trucks That weekend happened to be an impromptu Chevy truck convention. The charcoal short-cab/short-bed is my godfather’s, serving duty in Houston with my dad during his move. It’s a plane Jane Silverado 1500 half ton, with a 4.3L V6 and a 5-speed NV2500. The NV2500’s gearing allows the 4.3 to work well in its torque band, and even makes for a great short-distance tow rig with its compact dimensions and small turning radius. These positive attributes in the city detract from its appeal on longer drives. It simply doesn’t have the wheel base and weight for highway towing in adverse conditions. That said, it has towed 7 cars for me in the past six months.

Around town with the trailer unhitched, the Silverado 2500 rides well. The chassis soaks up irregular roads, never bucking and kicking -the rough and overly-stiff ride often associated with 3/4 and 1-tons is nowhere to be found. Think of something that rides like a firm Cadillac: It has the big-body teutonic feel with firm, well-controlled suspension movement. Brakes are excellent, with a firm and progressive bite from the hydraulically assisted power brakes — unique to the Silverado 2500 and 3500, as the regular Silverado 1500 uses traditional vacuum assist. This provides stronger brake boosting, and constant boost under heavy load where engine vacuum is low. The steering is well weighted, and with a direct but soft feel when centered. It’s never twitchy or sensitive, but does translate minor adjustments accurately. Sway bars thicker than Goldberg’s neck ensure that the Silverado 2500 feels well planted on the road.

And here’s the real trick of the GMT800 pickups: Supreme visibility. With a low belt line, and shorter overall height than most modern pickups, the GMT800s are very easy to drive in tight situations. Even when hitched to our 24 foot deck trailer, vehicle placement is a breeze. Interior ergonomics have always been great, for me. Everything is in excellent reach of the driver, and there’s ample storage. It’s basic GM plastics, but this 290,000 mile Silverado 2500 managed to stay pretty quiet inside. The gauge cluster is comprehensive and very easy to read. Real oil pressure, water temperature, voltage, and transmission temperature gauges flank the speedometer and tachometer. Dummy gauges, like “Cool” to “Hot” gauges you commonly see, are useless to me. They are often highly inaccurate, and wild swings in readings are not accurately counted by them, at times. With a comprehensive set of numbered gauges, a driver can spot a problem before it becomes detrimental. While mostly sharing the same cluster with the Silverado 1500 1/2 ton, the additional transmission temperature gauge for the Sivlerado 2500 and 3500 models is very much welcomed.

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But where these ingredients truly shine is on the highway with a load. Sunday, after the LSRPCA autocross, my dad and I packed up the CST/10 with boxes of spare parts, and loaded it onto the trailer.

The CST/10 weighs just under 5,000 pounds, and the trailer is about 2,400 pounds. Properly loaded, the chassis is largely unaffected by the weight. There’s more heave in the suspension over large movements, but the truck is rarely jarred by trailer movement. Braking stability is excellent “panic” stops proved stable, dead-straight, and with aggressive and effective ABS action. Everything is well-managed in poor weather, high winds and wet roads do not easily upset the Silverado 2500.

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The drive out of Houston was smooth. Thankfully, over the weekend my father and I recharged the A/C system. Life was much better after that, happily trucking along with the windows sealed tight. I took a 20 mile jog  to Cypress to visit my mother’s place, and stayed the night with a fresh start on Monday. This ended up being a good choice, as 15 miles outside of Cypress my trailer lost a wheel bearing – the hub cap had fallen off somewhere along the way. With no grease, the outer bearing fell apart, dumping the outer race and rollers on Highway 290, and quickly began to overheat. I caught it early after glancing at the mirrors to find plums of smoke coming out of the fender, and pulled aside.

Thankfully, I was only 2 miles past Hempstead, a podunk farming town off the main highway. And with an extra dose of luck, I managed to break down in front of a custom golf cart shop, which managed to have tons of space to drop trailer and backtrack to Hempstead. My dog, Quesa, happily wondered around the gravel parking lot, taking in every smell possible. Hempsted is still the old south, in the “yes sir, yes ma’am” tradition. It’s a place where you can leave a truck running while inside a parts store, to keep your dog cool, and not have to worry about anyone tampering with it.

 

10313830_10152176743973579_8805478268548247443_nBack on the highway, the Silverado 2500 is a smooth towing missile. With the cruise set at 70, we hummed down to San Marcos, where the truck would stay at a friend’s rally shop. A sleeping dog is a good sign of a smooth drive. Even with 20 mph crosswinds, the Silverado 2500 maintained a steady heading at all times. The overall fuel mileage for the entire trip, about 75% highway and 25% city, was 16.2 mpg, roughly $120. Not terrible.

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Though late, I rolled into San Marcos around sunset, and quickly unloaded the CST/10. Back to back, you can see the strong styling elements of the CST10 in the GMT800 Silverado.

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The price for one of these? Just a few grand, near me, anywhere from $2,000 to $5,000 for a fantastic and livable budget tow rig. Excellent road manners, ease of service under the hood, and low running costs — these old GMT800 trucks are one of the best used-truck buys out there. With only a minor compromise in ride softness compared to the Silverado 1500, the additional hardware is worth the 2500 nameplate and both are valued near the same. Truly the last of the modest fullsize pickups.

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New or Used? : The Unwelcomed Gift Edition http://www.thetruthaboutcars.com/2013/10/new-or-used-the-unwelcomed-gift-edition/ http://www.thetruthaboutcars.com/2013/10/new-or-used-the-unwelcomed-gift-edition/#comments Mon, 28 Oct 2013 12:00:26 +0000 http://www.thetruthaboutcars.com/?p=632138 I’ve written before for “New or Used?” regarding my ’04 Scion xB 5MT that I (mistakenly) ended up trading in towards my family’s 2013 Outback 3.6R last year. Since then I’ve been driving my wife’s ’06 Accord EX-L V6, now at 105k. It’s a nice enough car to drive, but was never “my” car, if […]

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I’ve written before for “New or Used?” regarding my ’04 Scion xB 5MT that I (mistakenly) ended up trading in towards my family’s 2013 Outback 3.6R last year. Since then I’ve been driving my wife’s ’06 Accord EX-L V6, now at 105k. It’s a nice enough car to drive, but was never “my” car, if you know what I mean (and I’m sure you do).


Due to my recently starting a new job, the wife has given the go-ahead to look for something new that’s modestly priced. I became smitten with a 2013 VW GTI 6MT and was mere seconds away from signing the lease agreement. I had completed the credit application, indicated the radio stations I like, and then started examining the P&S contract, but got that funny feeling you can get and pulled the plug. I don’t know what it was. Dealer shenanigans. Fee overload. Slight indecision perhaps, as I’m only driving a grand total of 8 miles per day for my new commute. (Do I really need to change cars??) Or perhaps it was the X factor.

The X factor is my father-in-law. Due to age and health he is no longer driving. My mother-in-law recently traded his minty 1986 928S4 to their contractor for some money owed. She is offering to give me his 2006 Cayenne S with 75k miles. I’m feeling pressure from the wife to accept it. I’ve offered to take it and sell it for them, but my wife feels that there is a sentimental thing going on, and they want to see us drive it. I really would have preferred that 928.

Sure the Cayenne a nice car, but again it’s not really “me.” Although I’m 6′ 3″ I like small cars with stick shifts that I can throw around, not heavy pseudo-SUVs that get 12 MPG city/. However, am I crazy to turn down a free Cayenne?? I have concerns because (A) it’s not my kind of car, (B) the Carfax has 3 accidents on it, (C) maintenance costs are going to be crazy. Supposedly the frame is fine, but I know he had more than 3 fender-benders (he should have stopped driving years ago), and we have two small children so I would want to verify that. Also the car has been immaculately maintained. He did pretty much whatever the dealer’s service department told him to do.

Part of me thinks I should drive it for 1-2 years and then trade it towards something I want, while the other part of me would be worried about being stuck with a 10 year old SUV with a bad Carfax. And of course the third part of me (if that’s possible) is sick of driving an automatic.

I’m getting some serious pressure to act on this soon. Any advice from you, along with the best and brightest, would be greatly appreciated.

All best,

Steve Says:

Any gift that comes with strings attached is not a gift. Ever. When family members give you something that you must absolutely positively keep under the penalty of (insert snubbing method here), then what you end up with is a family tie that will bind and gag you and your family. 

I’ll give you a personal example. My MIL is a truly generous person and, one day, she decided to give me and my wife a doghouse. The only problem was that we didn’t have a dog. So about a year later, we have a garage sale. The kid down the street just got a puppy and it just so happened that they were the same folks who Freecycled a trampoline to us the year before.

So what did I do? Well of course! I gave them the doghouse!

My wife goes outside about an hour later, and invariably asks where the doghouse is. I tell her what happened and she tells me in no uncertain terms that my MIL is going to be ticked off to the nth degree.

My response was, “And??? This is our house! Just tell her we exchanged it for the trampoline. If she complains then we know it wasn’t a gift ”

Is your wife an only child? Then take the car if, and only if, it is truly a gift with no strings attached. Thank your in-laws profusely for their generosity either way it turns out, and consider yourself a lucky man. Don’t complain. Not even if it isn’t ‘your’ type of car. Just be a mensch, and when this isn’t such a hot button issue, you can sell it and set up a fund to handle any health issues for your in-law’s. By that time you will also have a better perspective on the security of your new job.

If your wife has siblings, then you can’t keep this car. Don’t even try. Let them know that you hope your father-in-law will live for a long, long time. Then you can do the right thing for everyone.

Research the true market value of the vehicle. Post the vehicle for sale online.  Handle the transaction for your in-law’s. and then finally, thank them for thinking of you and your wife.

As for your desire to buy a stickshift, I’ll let the folks here sort that part of your life out.

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Life Lesson: Falling For The Roadrunner http://www.thetruthaboutcars.com/2013/10/life-lesson-falling-for-the-roadrunner/ http://www.thetruthaboutcars.com/2013/10/life-lesson-falling-for-the-roadrunner/#comments Tue, 08 Oct 2013 15:28:58 +0000 http://www.thetruthaboutcars.com/?p=614993 Like so many broken down old cars, the old Plymouth sat forlorn and alone at the far edge of the driveway. Even from a distance, it looked like it was a mess, its green paint was peeling away and the hood, which for some reason had a flat black square in the middle, was entirely […]

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Like so many broken down old cars, the old Plymouth sat forlorn and alone at the far edge of the driveway. Even from a distance, it looked like it was a mess, its green paint was peeling away and the hood, which for some reason had a flat black square in the middle, was entirely oxidized. Up close I could see that the interior was just as bad as the exterior. The dash pad was totally cooked and the vinyl seats had split wide open along their seams. My buddy Rick, however, insisted the car was cool and to prove his point he raised the hood to show me a tired old engine that he insisted was a 383 big block. I looked it over, noting the four barrel Holley double pumper without an air cleaner and the unpainted valve covers that had leaked an impressive amount of dirty black oil over the years, and tried to find something to be positive about. Finally I found it, bolted to the inner fender was a splash of faded purple and a sticker featuring a cartoon character. Its text proclaimed “Voice of the Roadrunner” and I knew in an instant, with all the certainty that 19 years of life experience had given me, that my friend had been right all along.

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I suppose now that I had driven by that house a million times over the years and never once noticed the old Plymouth that sat deteriorating in its driveway. It wasn’t until my friend Rick had gone to work for the man who owned the car that we became aware of its presence and after seeing it in the driveway thoughts of buying it soon swirled around inside our primitive, teen aged brains. Muscle cars were good and if we could score one we would be awesome.

We examined our situation. Rick had a job and a few dollars in his pocket but his family situation wasn’t stable and, since his single mother often struggled to make ends meet, he usually ended up using most of his paycheck to help the family get by. My family situation was a lot better, I certainly never wanted for any of life’s basic necessities, but I lacked a job and the drive it took to get one. As a result, the only money I had was what I could skim off the top of the gas money that my parents slipped me so I could “look for work.” Still, we were young and ignorant so we decided that between the two of us we could work something out with the car’s owner. Before we struck the deal, however, we needed to make sure the old car ran.

The car’s owner told us it needed an alternator so Rick and I pooled our meager resources and scraped together the $30 required to buy a rebuilt part at the local auto parts store. While we were there we also bought a new set of plugs and a can of starting fluid. Back at the house, we charged the battery while we worked on the car. Although neither of us were master mechanics, we managed to get the old alternator off and the new on back on without breaking anything important. The spark plug change went just as well, and within a couple of hours we had progressed to the point where we could add some old lawn mower gas to the car’s tank and start cranking.

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The Plymouth’s gear reduction starter gave a raspy growl and the big engine started to slowly turn. Inside the car, Rick pumped the gas pedal and I gave the open carb a shot of starting fluid. For a second the car chuffed, then fired and struggled to life. It ran for less than five seconds and then stopped as painfully as it had started. Rick cranked the engine again and the car stumbled back to life as I added another shot of ether. The car popped, sputtered and started to die again, but this time I thought to give it another shot of starting fluid before the engine quit and it struggled back to life. On and on the cycle went and between Rick pumping the gas and my occasional shots of starting fluid we managed to keep the car running long enough for our fresh lawnmower gas to make its way up from the fuel tank to allow the car to begin to idle on its own. It sat there, running rough and emitting a cloud of rich smelling black smoke out the back, but between the two of us we had done it. We had breathed life back into the old car.

The car’s owner was impressed and he gave us a hearty pat on the back for our efforts before inviting us up onto his porch to talk about price. He laid it out in simple, broad terms. He wanted $1000 and he wanted it in cash, up front. No payments, no working it off, just $1000 cash on the barrelhead, please. Rick and I looked at one another dumfounded and it suddenly dawned upon us that between the two of us we had never even seen $1000 in our lives. There was no way we could actually buy the car we had just repaired.

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A week or two later someone else came up with the cash and just as quickly as we had found and fixed it, the old Plymouth was snatched away. It was a bitter lesson, but like another cartoon character, the Grinch when he discovered the Christmas spirit, my brain previously two sizes too small, grew three sizes bigger that day. I have never forgotten that lesson. Cars, houses, and in the case of my sister when she thought she was going to fix one of her dead beat boyfriends a long time ago, if you are going to put your time, effort and money into something, make damn good and certain you have the title in hand. They are words to live by.

Thomas Kreutzer currently lives in Buffalo, New York with his wife and three children but has spent most of his adult life overseas. He has lived in Japan for 9 years, Jamaica for 2 and spent almost 5 years as a US Merchant Mariner serving primarily in the Pacific. A long time auto and motorcycle enthusiast he has pursued his hobbies whenever possible. He also enjoys writing and public speaking where, according to his wife, his favorite subject is himself.

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Tales From The Cooler: TTAC Writer Buys A Cool Car http://www.thetruthaboutcars.com/2013/06/tales-from-the-cooler-ttac-writer-buys-a-cool-car-2/ http://www.thetruthaboutcars.com/2013/06/tales-from-the-cooler-ttac-writer-buys-a-cool-car-2/#comments Thu, 20 Jun 2013 12:30:51 +0000 http://www.thetruthaboutcars.com/?p=492598 Car salesmen call buyers like me, “squirrels.” It seems like whenever I buy a new car, I pull a handbrake 180 turn at the last moment and purchase a completely different vehicle than originally planned. Last week I was so close to buying a new Mustang GT with the Track Package that a friend at Ford was […]

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Car salesmen call buyers like me, “squirrels.” It seems like whenever I buy a new car, I pull a handbrake 180 turn at the last moment and purchase a completely different vehicle than originally planned. Last week I was so close to buying a new Mustang GT with the Track Package that a friend at Ford was poised to set me up with an insider deal. The only problem was I seemed to have forgotten that this will not be my daily driver so why was I analyzing SYNC Packages, luggage space, resale value and the like?

I regrouped and asked myself two questions: which vehicle will have the soul of the two most fun cars I have ever owned, the 1994 Mazda RX-7 and the 1988 Honda CRX-Si? Why do I live in sunny San Diego and have never owned a convertible? The halogens went off in my head. As fate would have it, a dealer I know had just traded for the exact car I wanted. Say hello to my little yellow friend.

 

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I am now the proud owner of a flawless 2008 Honda S2000 with only 27,000 miles on its clock. It is an unmodified “little old lady’s car” that a middle-aged Arizona couple took amazing care of before trading it in. They told the dealer that they were sad to let go of their “baby.” And, yes, Rio Yellow was my first color choice so I could be seen by the distracted-driving, left-lane-blocking blockheads that infest our freeways.

After three days of ownership I can say that I made the right decision: the S2K is an absolute hoot to drive. It has the slickest gearbox I have ever rowed and the motor pulls like a V-8 above 6,000 RPM.  In the near future, and after a few runs up Palomar Mountain, I will write a “long-term test” story on my roadster.  I promise it will be the first review of an S2000 that does not include the phrases, “It handles like a go-kart.” or “It’s a four-wheel motorcycle.”

The GT would have looked great in the garage next to my wife’s 1968 Mustang, is a tremendous value and Jack Baruth says it is the best all-around ponycar ever built, but my S2000 is an affordable, no compromise, kick-ass sports car the likes of which may never be seen again.

 

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How To Buy A Used Car Part 4: Negotiating http://www.thetruthaboutcars.com/2012/08/how-to-buy-a-used-car-part-4-negotiating-3/ http://www.thetruthaboutcars.com/2012/08/how-to-buy-a-used-car-part-4-negotiating-3/#comments Fri, 24 Aug 2012 14:01:00 +0000 http://www.thetruthaboutcars.com/?p=457756   When it comes to buying a used car there are two basic negotiating mindsets. You can either be fair and decent or unfair and obnoxious. If you seek to chisel and deceive then chances are you will get a bad car. Only the desperate and deceitful are willing to put up with that type of BS. […]

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When it comes to buying a used car there are two basic negotiating mindsets. You can either be fair and decent or unfair and obnoxious. If you seek to chisel and deceive then chances are you will get a bad car. Only the desperate and deceitful are willing to put up with that type of BS.

Want a ‘great’ car? Then realize that many sellers respond extremely well to honesty and decency. Win – win is no sin. So, karma lovers, here’s some tips for negotiating the purchase of a used car by observing the Golden Rule.

Making the Offer

If you’ve followed parts one through three of this series congratulations! You’ve found a car that’s superior to 90-plus percent of what’s out there. Rejoice and let the seller enjoy the benefits of properly maintaining his car.

How to Value the Car

NADA tends to have high valuations while Kelly Blue Book overprices late model vehicles and underprices older ones. Contrary to reality, you can’t find many good $1000 cars regardless of what the Blue Book says. Nor should you get a 2000 Mercury Grand Marquis with over 200k+ for the NADA pie in the sky price of $5000. Stick with Edmunds private party values or, the ‘completed items’ section on Ebay if a comparable vehicle was sold there at ‘No Reserve’.

Negotiate After the Inspection, Not Before

Some folks believe that you should make an offer before the final inspection. I never do.

The reason is that sellers will then get stuck on an unrealistic price if there are major maintenance issues. A $5000 car that needs $1000 in maintenance was never a $5000 car in the first place.

Most sellers will get stuck on that ‘perfect’ number and reject any substantial adjustments. Therefore inspect first, and negotiate last.

How to Negotiate

Begin by declaring your intention to buy the car… so long as the repair costs are addressed in the price.

If these repairs are minor and you’re not interested in a long negotiation, immediately offer to split the difference for the repair costs and call it good. If, however, mission critical repairs run into the high hundreds to thousands of dollars, you have an “opportunity” ahead of you.

Summon the mechanic!

Ask your mechanic to fax the used car’s inspection report to the seller before you speak with them. At first, the seller (and possibly you) may be shocked by the numbers involved.

This can be especially true with older vehicles and luxury cars. However, with a little constructive conversation, even the most alarming repair costs should not kill the possibility of an amicable agreement.

Do The Right Thing

I like to start negotiations for cars with repair “issues” by giving the seller an opportunity to do the right thing. “Given what’s in front of us right now,” I ask. “What would be the fair way for both of us to resolve these repair costs?”

Worst case, the sellers stand pat. In that case, walk. Best case, the seller says they’ll simply lop-off the total bill from the asking price. If that happens, it’s time to shake hands and do the deal.

Compromise

Some sellers begin by offering to reduce the asking price by a very low number. They figure you’re there to haggle (hoping you won’t).

If the first offers by both parties aren’t getting any traction, it’s time to go through the inspection report– and the probable costs of repair– line by line.

Not all repairs are equal

Keep in mind some items are your financial responsibility. Unless it involves a major repair (timing belt, water pump, adjusting the valves, etc.), upcoming maintenance regimens are always down to you.

Don’t sweat the small stuff

In particular, oil changes, tune-ups and replacing filters that aren’t necessary right now should be removed from your list. By doing this from the onset you’re showing goodwill and fairness.

Find an alternative when you need to.

If the seller claims the cost of repair listed in your inspection is too high, ask them if they know of another mechanic who’d be willing to do it for less, and the type of guarantee they will offer. I’ve seen $450 repairs with 30-day guarantees turn into $200 repairs with a full year guarantee. If the car is worth it to you, it pays to explore alternatives that will benefit both of you.

It may take research and patience, but it can be done.

Tit-for tat works wonders

Finally, if you have experience repairing minor automotive issues, use that skill to create some wiggle room to help close the deal.

“You know, I think I could handle that myself. What do you think about us taking off x repair instead? Would a price of y make it a fair deal for both of us?”

Take it or leave it

If you can come to a mutual understanding, enjoy your ride! If not don’t beat a dead horse.

I like to back-out by thanking the seller for their time. Leaving a copy of the inspection report as a “gift” and telling them my final price, should they reconsider. Above all don’t sweat it. There are plenty of excellent used cars out there looking for a good home.

Let’s Recap

To get a great deal: research diligently, test drive patiently, let an expert figure out the unknowns, and negotiate in good faith. Do this and you’ll save unnecessary test drives and thousands of dollars in future repair costs.

You’ll also buy the cream of the automotive crop at an extremely fair price.

[Part one of our used car buying guide is here, part two is here, and part three is here.]

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How to Buy a Used Car – Pt. 3: Due Diligence (The Inspection) http://www.thetruthaboutcars.com/2012/08/how-to-buy-a-used-car-pt-3-due-diligence-the-inspection/ http://www.thetruthaboutcars.com/2012/08/how-to-buy-a-used-car-pt-3-due-diligence-the-inspection/#comments Fri, 17 Aug 2012 13:59:28 +0000 http://www.thetruthaboutcars.com/?p=457181 [Ed: Part one of Steve Lang’s updated used car buying guide is here, part two is here.] You can rigorously apply the tests described by previous installments of this series without encountering a single setback. However when it comes to buying a used car, it pays to assume one simple salient fact: you don’t know the complete truth. At least not […]

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[Ed: Part one of Steve Lang’s updated used car buying guide is here, part two is here.]

You can rigorously apply the tests described by previous installments of this series without encountering a single setback. However when it comes to buying a used car, it pays to assume one simple salient fact: you don’t know the complete truth.

At least not yet.

When it comes to pursuing the deeper truths about a used car an experienced mechanic will inevitably become your greatest ally and advocate. For most consumers finding a knowledgeable mechanic will be the most important step in the used car buying process.

Before we talk about that, I want to be perfectly clear on this point.

used car is guilty until proven innocent. Do not buy one without taking the car for a professional inspection.

If the seller doesn’t agree to let you do so you’re done. Period. No exceptions. Ever.

Now mechanics tend to divide into three categories: the shade-tree, the Nazi and the diligent professional.

Shade-tree mechanics are hobbyists on limited budgets. Due to the lack of equipment (or experience), they may not be familiar with the unique wear issues and maintenance needs for your vehicle. The shade-tree mechanic will look at the car’s basics, take it for a short test drive and call it good (or “not bad”).

The Nazi will attempt to perform every mechanical test known to wrenchkind. Submit the car to a standard of inspection that is rooted in la-la land. Then make you financially fearful of buying anything other than (cough! cough!) one of their vehicles.

Obviously the Nazi is a non-starter.

Often times these party members will work for dealerships (but not always), and are therefore pre-occupied with meeting their service department’s monthly quota of service hours and revenue.

Unless your next car has a prancing horse or bull at the front of it, you’re usually far better off with a diligent mechanic.

The diligent mechanic will work through a standard check list and then take the car for a test drive in a variety of operating conditions.

Diligent mechanics are experienced independent professionals with established roots in your community. To find one, I strongly recommend visiting the Mechan-X files at Cartalk.com.

I also can’t over-emphasize the importance of personal recommendations; especially from people who own the same model of car you’re considering buying. Many small to medium-sized repair shops will post testimonials on their “ego wall.”

Read them carefully.

Before the inspection takes place, write the list of the concerns you created during the test drive. When you deliver the car for inspection, go over them with the mechanic one-by-one. Make sure you both have a clear understanding of all your potential concerns.

This will provide a base line for the inspection to follow.

Some mechanics inspect used cars for a set fee. Others charge an hourly rate. In both cases, the post-list discussion should conclude with a confirmation of the probable inspection cost. Leave some leeway; you don’t want the mechanic to stop their investigations for the sake of a few bucks. (Leave your contact number for this possibility.)

The best way to build a healthy relationship with any mechanic is to simply try not to be one of “those” customers.

Just let them get on with their job. Don’t stare at the mechanic while they’re doing the inspection. In fact it’s best to leave the premises entirely. And don’t phone your mechanic two hours later and ask for a status report; wait for their call.

Once the inspection is completed, sit down for a one-on-one debrief with the mechanic who made the inspection (even if you have to come back on another day). I always prefer to speak with the actual mechanic or at least have them in attendance with the “service advisor.”

Let the mechanic speak without interruption. Some diligent mechanics will go on for quite some time; some will simply say “here’s my report.” Either way review the information and let him explain every issue and potential issue to you.

After they’re finished, don’t be afraid to say “I don’t have a clue what you’re talking about” or “Is this a sign of normal wear or abuse?”

Make your own list of trouble spots from this conversation. Note down the potential cost to repair and whether or not the issue is urgent or eventual.

Once you’re finished the play-by-play, ask a few general questions. I always ask “Did the owner do a good job maintaining this vehicle?” and “Did the owner use good parts or cheap parts?” Either of these inquiries usually invites a deeper insight with the mechanic.

If the used car has survived the inspection process without revealing any critical issues to your diligent mechanic, it’s time for the final negotiation with the owner.

 

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How To Buy A Used Car Part Two: The Test Drive http://www.thetruthaboutcars.com/2012/08/how-to-buy-a-used-car-part-two-the-test-drive-2/ http://www.thetruthaboutcars.com/2012/08/how-to-buy-a-used-car-part-two-the-test-drive-2/#comments Thu, 09 Aug 2012 16:59:50 +0000 http://www.thetruthaboutcars.com/?p=456083 [Editor’s note: Part One of Steve Lang’s updated guide to used car buying can be found here] Schedule the test drive for a time when there’s no rush. If it’s bad weather, reschedule. Take a little notebook, write a quick check list based on this article, and make notes. When you approach the car’s owner, be […]

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Picture Courtesy of Gameguru.in

[Editor’s note: Part One of Steve Lang’s updated guide to used car buying can be found here]

Schedule the test drive for a time when there’s no rush. If it’s bad weather, reschedule.

Take a little notebook, write a quick check list based on this article, and make notes.

When you approach the car’s owner, be friendly, polite and courteous. Do NOT try to “beat them down” to get a better deal on a test drive. Ever. While you have every right to ask direct questions, you have no more right to insult their car than one of their children.

 

Fluids

Open the hood and look at five big areas. Oil dipstick, coolant, power steering fluid, radiator cap and brake fluid.

Oil: Golden brown, light tan, a little dark, or even dark brown to light black are fine. The oil is just doing it’s job. A tar color or tar like consistency is not good.

Check the dipstick for level and color. Then check the oil cap on top of the engine (on most models) for anything that resembles milky crud. If it has a thick film of milky crud, that’s engine sludge, you’re done.

Coolant: Check the coolant reservoir for level. Most sellers pay attention to this. But a few don’t. Remove the radiator cap if it’s accessible. If you see crud on the cap, you’re done.

Power Steering and Brake Fluid: Check for the level. In the case of power steering, check for any heavy leakage around the hoses. If the power steering hose is saturated with oil, this could be a sign of a more expensive repair in the times ahead. Make a note of it.

 

The Tires And Body

Tires: First, check the tires. Pull the steering wheel all the way to the left (and then right later on) so you can see the entire tread. Uneven tire wear– marks on the side or deep grooves in the middle– may indicate suspension issues. And nothing screams “lemon” louder than cheap, bald or strangely worn rubber.

Doors: Next, open and close all the doors several times, including the trunk and hood. This will also give you the opportunity to inspect the seats and floor. On the doors, check for paint on the hinges and black moldings. If a door creaks, it’s usually no big deal. If a door has trouble closing, make a note of it if you later chose to have the vehicle inspected. It can signal anything from a broken hinge to frame damage.

Panel Gaps and Trunk: Have a quick look at the panel gaps, especially the hood and trunk. Unless you’re looking at an old Land Rover, they should all be even. Check for water leakage in the trunk. Damp and/or a mildew smell often indicates problems underneath if you live in an area where rust is an issue. Lift the trunk’s carpet and see if there is any water or damp residue underneath.

 

The Interior Features And Lights

When you climb aboard, don’t be put off by worn seats or busted radios. Most interior surfaces and parts can be repaired or replaced easily and cheaply.

Windows: Lower each of the windows first while the key is at the ‘on’ position, and fire up the car.

Engine: Do you hear any tapping or pinging sounds, or does it kick over with a smooth ‘vrooom’ and settle into an easy, quiet idle? Start it up again if you aren’t 100% sure.

Buttons: Test all the buttons and switches including the radio stations. Ask for help and have the owner turn on the ‘left’ signal and look at the front and rear to make sure the bulbs work. Repeat with the right.

Exterior Lights:  Then check the headlights along with the brights. Brake lights should be checked in the rear as well as reverse. This may be your only time to verify their proper operation before owning the vehicle. So take the time to do it.

Windshield Wipers and E-Brake: Finally have the fellow spray their windshield and make sure the wipers are in good order. Thank them for helping them you and then test the emergency brake to ensure that it’s operating properly. If you’re driving a stickshift you will want to do this later in the test drive on a steep upward incline.

Air Conditioning: Flip on the A/C. It should kick out cool air within fifteen seconds. With an older vehicle the performance of the A/C system should be one of the more critical concerns. (HVAC repairs can run as high as $500 to $1500.) When you’re on the road, test the heat and the A/C again to make sure the temperature and fan speed are constant.

Power Steering: Finally before going on the road lower your windows and turn the steering wheel all the way to the left and right. The motion should be seamless and silent. If there’s a lot of resistance, or the force required is uneven, the steering system may need anything from power steering fluid (cheap) to a power steering pump assembly (moderate) to a new rack (first born). Make a note of it.

 

The Drive

Shift: Now put the car in gear. Aside from a few models (older Mercedes in particular), a late or rough shift from park indicates that the car’s transmission may soon give up the ghost. If you experience very rough or late shifting, you’re done.

Brakes: Brake force should be quick and constant. Unless the brakes have been recently replaced (ask), you shouldn’t hear any squeaking sounds. Keep the driver’s window open during the first half of the drive.

Transmission: Drive the car through a variety of traffic conditions, inclines and speeds, for at least fifteen minutes. When going uphill, take your foot off the accelerator for a moment. Coast downhill as well. If the car’s transmission hunts, clunks or has trouble catching, the vehicle probably has a transmission or linkage issue. Make a note of it.

Engine: If you hear a lot of ‘clacking’ or other unusual engine noises on initial acceleration, the engine’s components may need attention. If there’s an oil gauge, keep an eye on it. It should show approximately 25 to 80 psi during acceleration, and 10 to 20 when idling. The coolant temperature gauge should hit a fixed point within ten minutes and never move.

 

Quick Stop

After about twenty minutes of driving, take the car to a gas station. Keep the engine on.

Gas release: Open the hood and the gas cover release to make sure they’re in proper working order. I also take this time to put $5 of gas in as a goodwill gesture.

Most folks will not have a car buyer as studious as you, and it’s nice to reimburse folks for an expense.

Transmission Fluid: Restart the car. If you know where the transmission dipstick is (and it’s a damn good idea to find out), check the level and color. Does it have bubbles? If the fluid is very dark brown or black, or smells burnt, it could be a sign of future transmission issues.

Final Oil Check: Turn the vehicle off and again, check the oil. If it’s not between the marks (too low or too high), or if the oil cap is milky brown, you’re done. I’ve dealt with more than a few cars that had their oil caps wiped clean before the test drive.

 

Last Inpsection And First Decision

After leaving the gas station, see if you can find a nice open parking lot or area where you can do a few ‘figure 8’s’.

CV Joints: Lower the windows and turn the steering wheel all the way to the left. Drive very slowly and see whether you have any ‘clicking noises’ near the wheels. If it does, you will likely need to have the CV axle replaced on that side. Now turn it all the way to the right side and repeat. The turns should be ‘click’ and noise free.

Decision Time: By this point, you should have a pretty good idea whether your next step is towards purchase or home sweet home. If you’re blowing it off, thank the owner politely and leave promptly, without engaging in any further discussion whatsoever. (“It’s not what I had in mind.”) Show them the gas receipt as a goodwill gesture and thank them.

If you’re ready to move forward, it’s time to schedule a professional inspection.

[Mr. Lang invites TTAC readers to share theirused car test drive advice below. He can be reached directly at steve.lang@thetruthaboutcars.com]

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How Much Did You Spend On Your Car? http://www.thetruthaboutcars.com/2012/04/how-much-did-you-spend-on-your-car/ http://www.thetruthaboutcars.com/2012/04/how-much-did-you-spend-on-your-car/#comments Tue, 03 Apr 2012 15:20:06 +0000 http://www.thetruthaboutcars.com/?p=437843 Car owners have a warped view when it comes to their automobile’s cost. When you ask someone the, “How much did you spend..”  question, their usual response is to take the price they paid and just let that be that. “Oh, I got this Mercedes for $50k.” They then will usually go about telling you […]

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Car owners have a warped view when it comes to their automobile’s cost.

When you ask someone the, “How much did you spend..”  question, their usual response is to take the price they paid and just let that be that.

“Oh, I got this Mercedes for $50k.” They then will usually go about telling you the options they chose, and other trivial realities related to the car.

But as we all know,  that’s not the question.

I’ve been thinking about this because after several years toiling all over Atlanta with my 1st gen Insight,  I am now spending a fair amount of time raiding the local press fleet cars. One car plus one review to write equals one less tank of gas… and a lot of other subtractions.

Less time obviously equals less wear on my primary driver. A 2001 Honda Insight which I bought three years ago for $4100. It had 145k back then.

Today? It has 187k. I do drive about 25k miles a week…. uh… make that a year.  But much of that is shuttling other cars to various mechanic and paint shops. The Insight also seats only two people. So when I head off to pick up cars at the auctions, I usually take a car fron the lot.But yes, that’s an expense. At least the IRS sees it that way.

However  for the sake of avoiding a calculation that resembles something from NASA, I will simply stick with the usual line items.

Purchase Price: $4100

Depreciation: 0

In Atlanta I could probably sell it for $5000. But I haven’t sold it yet, so I won’t make this a negative number.

Gas: $2300

42,000 / 55 mpg = 763. Gas has averaged about $3 a gallon in Atlanta. Keep up with the SWAG estimating, and you come to a nice round number.

Thank God I no longer drive old Lincolns.

Insurance:  $3165

This is where things are simple for most of you, but not me. The Insight is my work vehicle so my dealer insurance covers it as my primary ride. Since I would still need this insurance if I wasn’t shucking cars on the side, I’ll just let my actual insurance expense represent the Insight.

Maintenance: $87

That’s not a misprint. I bought another Inisght for it’s tranny and other related parts a bit over a year ago. Other than five oil changes (mostly free thanks to Bob is The Oil Guy), a tranny fluid change, and two air filters, I haven’t needed to do much of anything else… with maintenance that is.

Repairs: $595

The parts vehicle that I got for it’s tranny cost me $1850. Proceeds from it were $1485. $985 for the shell. $500 for the battery pack. The guy who bought the battery pack also managed to re-balance the battery on a Civic Hybrid which I later sold at auction for a $2500 gain. I won’t include that in the total. Or the good tires and other wear parts that I have for my ride.

We’ll keep it kosher. $1850 – $1485 = $365. Plus $230 for a botched repair (which was all my fault) and the total comes to about $595.

Total: $10,247

So my ride so far cost me about $3400 a year. Sounds good, but then again I’m also in the business.

But what if I wasn’t? What if I spent my days in a classroom? Or a research lab? Or a doctor’s office? What if I could trade in my dealer’s license and aluminum ride for a nice corner office with a Crown Vic parked as close to the nearest exit as possible?

If I lived close to work and remained a gearhead, that Crown Vic may not cost that much more than the Inisght.

What about you? How much has your primary driver cost you? Has it been worth it?

 

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Half-Price Bimmer: The Story Of A Man And His Search For The Perfect E60 http://www.thetruthaboutcars.com/2012/03/half-price-bimmer-the-story-of-a-man-and-his-search-for-the-perfect-e60/ http://www.thetruthaboutcars.com/2012/03/half-price-bimmer-the-story-of-a-man-and-his-search-for-the-perfect-e60/#comments Mon, 12 Mar 2012 18:06:42 +0000 http://www.thetruthaboutcars.com/?p=434713 Wherever the hollow tubes of the InterWeb may reach, there you will find the argument that “it’s always a better idea to buy a CPO used car than a new one.” The mean transaction price of a new car in the United States is about $29,000. That kind of money will get you a loaded-up […]

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Wherever the hollow tubes of the InterWeb may reach, there you will find the argument that “it’s always a better idea to buy a CPO used car than a new one.” The mean transaction price of a new car in the United States is about $29,000. That kind of money will get you a loaded-up Camcord, a discounted LaCrosse, or any number of other mass-market sedans… but can it get you the BMW of your dreams? A friend and former co-worker of mine decided to find out, using his own time and money.

(Dramatic voice) This… is his story.

My search is over; now the love affair can officially begin. I had decided on the 535xi because it falls into an unbelievable sweet spot for me. It has the twin-turbo inline six (that eliminated the 2007 5-series and the 2008/9 528xi). It could be found for around $30,000 with the CPO warranty (that eliminated the 550). It has the room to seat four adults comfortably (that eliminated the 335xi). It has the AWD (which eliminated older 650’s, M3s, and M5’s). And it has looks, tech, and power.

So then came the comparison stage, how to compare nearly one hundred 2008’s and 2009’s? After flailing about for a few days and repeatedly confusing cars, I settled on a grid analysis which would score each car on the criteria I considered important; price, miles, exterior color, interior color, premium pkg, cold-weather pkg, sport pkg, heated rear sets, navigation, carfax, CPO warranty end date, etc. Then I weighted each of these criteria based on their necessity. That process gave me a score for each car.

Not knowing what I would say or how the conversation would go, I nervously dialed the dealer that had my top-scoring Bimmer. After I made every mistake that a novice buyer can make in the first five minutes (including naming my price), the salesman told me the car was still on the lot but appeared to have been sold the previous Saturday. WHAT?! Impossible. I was certain he was blowing me off because I had asked for a pre-purchase inspection (PPI). I had a friend with a cell phone in a different area code call and ask about the car. Sold. Damn.

I got a little desperate, calling three dealerships, naming my price, confirming that the options listed in the ad were correct. I focused on cars that had been on the lot for a while, thinking maybe I could negotiate thousands off the price as the dealer would be glad to be rid of it. Not so. A particularly fetching Monaco Blue Metallic w/Natural Brown leather was firm at $32,000 even though it had been available for more than four months. It can’t go any lower, I was told, that’s what we have in the car. What a shame. Oh well, on to the next one.

After another near miss where I ended up perhaps being a bit too eager to buy what was, in retrospect, the wrong car, I cooled it on the phone calls for a few days. All incoming calls from the circling sharks were put off with lame excuses, just enough to get them off the phone. I’m sure I was labeled “luke-warm” on Post-It notes in New Jersey, Michigan, North Carolina, and New York. I deleted my initial grid analysis and started over.

I scrutinized my weightings; asking questions like, do I really care more about the cold-weather package than the CPO warranty end date, and do I care about Nav at all? Also, in this interval I dug into the 535, learning about the HPFP problems, the gremlins in the electronics, warrantied items, and perhaps more important, those items that are not warrantied; like the batteries (foreshadowing). I investigated independent BMW shops, locally and near dealerships I might call. I began reading articles on the psychology employed by salesmen. I learned the techniques that supposedly counter these tactics (silence is big). I compared Fair Market Value (FMV) on KBB’s and NADA’s websites to the Dealer trade-in price. I decided I would be myself; honest and direct. This may seem idiotic, but I have always been uncomfortable when I stray from the truth (though I still sometimes do). I simply refused to believe that I had to lie to succeed.

Now I was ready, renewed, and excited to start again. Maybe I was just a little wiser…maybe. At the top of the list were two; one a 2008, the other a 2009, both blue, both with brown leather, both with sport, cold-weather, and premium packages. The differences were small and/or inconsequential; the 2009 had fewer miles and a longer CPO warranty, and the 2008 had the 18″ wheels. The asking prices were just $200 apart. What swayed me toward the 2008 initially was BMW Financial’s incentives; first two payments and 1.9% APR for 48 months. The 2009 had a respectable offer of 2.9% APR for 48 months. At this point it was February 21st.

I called on the 2008. In my confusion, I had forgotten it was one I had already called on. The price had come down $900 to $32,000 and Bob, the salesman, was emphatic that they needed to get that out of the car just to break even. I was skeptical, and I was armed with some pretty good (as it turned out) estimates of what they paid, and what they put into the car to recondition it for CPO status. I knew how long the car had been on the lot. Finally, I knew that there were other cars. This last bit of knowledge proved to be the most crucial.

I was working against a clock, as well. Due to the impending expiration of the incentives and the 400-mile distance between me and the dealership, the upcoming Saturday, February 29, was the only day I could buy this car.

I explained to Bob that I would not buy the car without a PPI. He responded with details about the CPO program, and the singular excellence of this car. His sales manager was more direct: no PPI, period. I called on the other car, and was told that a PPI would be no problem. The next day, Wednesday, Bob called back. The CFO is involved, he said, and a PPI can be done if I’ll put down a deposit. Refundable? Yes. Done. Paperwork was faxed, signed, and returned. Interestingly, the paperwork I was asked to sign included the $32,000 price tag. I suppose they wanted me to think I had agreed to the price by signing. I was also asked to apply for the BMW financing. I guess they wanted to know if they would be able to sell me a car. (I think asking for the financing worked against them as you’ll see later on.) The inspection was scheduled for Friday morning, February 24th.

Thanks to a busy morning at work, I didn’t see the results of the inspection until 11:30 AM. Codes pulled from the computer showed 11 separate items. Uh oh. “Not to worry,” said the inspector, “I think it is all due to a dying battery. Ask them to replace it.”

Now I’ve got a problem. Maybe all of those codes are battery-related, but what if they aren’t? The timeframe is too short to replace the battery, recalibrate the ECU, and pull the codes again. I decided to ask for battery replacement and $1000 off the car. I was convinced the price was too high, and now I had a solid reason. Bob, who had repeatedly told me that he stood to make nothing off this car, stated that they wouldn’t give that much. Maybe the battery, but a grand on top was too much. “I will buy the car if you’ll do it,” I stated. The answer: No deal. End of the adventure.

I didn’t bother to call on the 2009. That could wait until the following week. The pressure that had built all week evaporated in an instant. I was disappointed, but I felt confident I had done the right thing. I’m pretty sure they were banking on using my desire for the car and my commitment to the process against me. I’m still not sorry I expressed how much I wanted the car. A month of research had tempered my enthusiasm. They just didn’t know that. Then the phone rang. I felt the anger start to build the moment I saw the number of the dealership come up on the caller ID. Didn’t they know that this was over, at least as far as I was concerned? Three rings went by, and I almost let it go to voice mail. Almost.

“It’s Bob. You’re not going to believe this (correct, I won’t), but the CFO and the sales manager are arguing over your offer.”

“I don’t have an offer. You turned it down. I have no interest in playing games.”

“No games. We’ll do 31k and the new battery if the offer is still valid.” You’d think I would have been happy to hear this, but I wasn’t. I said almost nothing. I didn’t trust myself to speak.

“Let me get back to you Bob. I’m not pleased.” This is where my friends and my wife were crucial. It took a while for me to calm down. Honestly, I’m not completely sure why I was so angry, but I finally realized that I was getting what I wanted. I accepted. The breakneck pace then accelerated. I raced home, making calls the whole way to address the logistics of driving to St. Louis on short notice (which I had canceled when my initial offer was refused). Then to the airport to pick up the rental car. Back to the house to pick up the wife and an overnight bag, and we were off.

As if to drive home the logic of buying German, the Malibu LTZ we rented would not let us take the key out of the ignition once inserted. Calls to the rental car company and a Chevy dealership service department were not helpful. Of course, this problem is probably an isolated incident. I have no idea if this is a common problem (Google didn’t think so), but it made me feel better about my decision.

When I finally arrived at the dealership, the car was right out front. I looked right past it because I thought it couldn’t look that good. Then I drove it. Wow! How could this car have sat for five months? I hope there is not an unhappy answer to that question somewhere in my future. The car is now mine. I own a 2008 BMW 535xi. Still can’t believe it!

Did my friend make the right decision, or was he blinded by the allure of the Roundel? You could get out your slide rule and make the argument either way, but let’s face it: new cars aren’t dishwashers. Emotion plays a role. No matter what happens in the years to come, my friend will walk out to the driveway knowing that he has the car he wants. That’s worth a little bit of money, hassle, and time, if you ask me.

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Hammer Time Rewind: Depreciation Kills http://www.thetruthaboutcars.com/2012/02/hammer-time-rewind-depreciation-kills/ http://www.thetruthaboutcars.com/2012/02/hammer-time-rewind-depreciation-kills/#comments Sun, 05 Feb 2012 21:38:08 +0000 http://www.thetruthaboutcars.com/?p=429627 From the good old days of 2007… “Is that yours?” Millions of car buyers spend billions of dollars hoping that this statement will be born of admiration rather than pity. When these words come out of a car dealer’s mouth at trade-in time, they can be especially hurtful– even if the salesman is as honest […]

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From the good old days of 2007…

“Is that yours?” Millions of car buyers spend billions of dollars hoping that this statement will be born of admiration rather than pity. When these words come out of a car dealer’s mouth at trade-in time, they can be especially hurtful– even if the salesman is as honest as their spiel is long. That’s the moment when most car buyers finally discover whether or not their automotive “investment” has walked off a cliff and fallen into the financial abyss known as depreciation.

Here’s how to avoid the freefall.

It simply can’t be stressed enough. Depreciation is the mother of all automotive operating costs. Even if gas soars to four bucks a gallon, depreciation STILL represents the biggest hit to the car owner’s wallet.

To wit: The average cost for a new car in these great United States currently hovers around $30k. After seven to eight years–  still a few years less than the ever-increasing average amount of time American new car buyers hold onto their whips– the car’s owner will be looking at a depreciation rate somewhere between 65 percent and 85 percent.

In other words, come trade-in time, they’re facing an average loss between $19,500 and $25,500. That’s before any considering of the “opportunity cost” (i.e. money lost by NOT investing the cash in a house/money market/alpaca farm). Or inflation.

Bottom line: if you want to avoid depreciation, forget about buying a new car… or even a near-new car.  Yes, a new car offers warranty-related peace of mind and late model vehicles can be purchased as certified pre-owned models. . But it’s an extremely expensive security blanket. A carefully-selected used car may need repairs. But in most cases, repairs of those expenses still cost a lot less than depreciation.

If you’re willing to forgo that new(ish) car smell, figuring-out your buying pattern is the next step. There are two basic buying types: Keepers (keep cars for the long haul) and Traders (trade them in after a few years).

Many Keepers are ready, willing and able to enjoy a vehicle for well over a decade. “Keepers” believe their car should be a cruising companion until the point where the perceived risk of owning it (usually the cash outlay for major repairs) outweighs the fact that ownership itself eventually costs them nothing/virtually nothing.

In the automotive world they are what we call “married.”

The key to being a successful Keeper: marry genuine quality, not reputation. Say what you will about “import bigots” and brand loyalty. The automotive market is a place where perceived reputation translates into dollars and cents.

Toyotas and Hondas routinely receive price premiums– even though many of their products fall far short in value and performance as compared to their peers. By the same token, overlooked or unloved models represent an excellent way to keep the hounds of depreciation at bay.

In most cases, car buyers get more bang for their buck (power, features, etc.), lower up-front costs, and lower depreciation costs simply by buying a used example of a less well known/accepted car. Mitsubishi, Suzuki, Buick– there are plenty of brands that sell excellent products that simply fail to capture the public imagination. The fact that these cars take a huge initial hit on depreciation works entirely in your favor, both buying and selling.

For example, if you’re looking at a midsized commuter, a 2004 Buick Century or 2004 Oldsmobile Bravada, both of which finished first in J.D. Power’s dependability study and received strong ownership ratings, will cost thousands less to purchase than a comparable Camry, Accord or Pilot. Remember: badge snobs must pay for the privilege.

The Trader is a different animal. They are looking at a shorter time horizon than the Keeper. They require a different strategy.

To avoid depreciation, Traders are best off buying a carefully vetted seven to nine-year-old car of their choice. At that point, depreciation has exacted the majority of its revenge.

With due diligence, Traders can get a superb return on their money. The average seven-year-old car kept for two years experiences minimal depreciation (20 percent or so). The average nine-year-old car experiences even less, and so on. It’s a simple but highly effective buying pattern.

And then there is the Sage. The Sage can buy nearly anything and make a buck at it. Yours truly has enjoyed hundreds of vehicles over the last few years– and it’s only taken huge chunks of my free time to do it. Mechanics, auto auctioneers, wholesalers, retailers and hobbyists will always have an edge when it comes to depreciation costs. We know what’s hot, and we know plenty of people who appreciate hotness.

Again, wisdom comes at a cost. Sages don’t pay for depreciation (much), but their insight requires years of hard work, money (mistakes are never free) and a feel for the auto biz’ cycles of fashion and fame.

Whether you’re a Keeper, Trader or Sage, remember: a car is an expense. It may excite you or be a daily nuisance, but it is still an expense. By minimizing depreciation you will avoid the single largest cost in the process. With that money you can save the world, buy groceries or save up for your next car.

 

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Hammer Time: If You Want A Deal, You Have To Pay For It http://www.thetruthaboutcars.com/2012/01/hammer-time-if-you-want-a-deal-you-have-to-pay-for-it/ http://www.thetruthaboutcars.com/2012/01/hammer-time-if-you-want-a-deal-you-have-to-pay-for-it/#comments Wed, 18 Jan 2012 15:45:47 +0000 http://www.thetruthaboutcars.com/?p=426679   BCA Auctions in Derby, UK; Courtesy of Zimbio.com I get a lot of emails from auto enthusiasts. About 60% of what I get comes down to this question. “Can you get me a high demand vehicle at a disgustingly low price at the auctions?” The short answer is no. Just as an athlete can’t contradict the […]

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zimbio.com  BCA Auctions in Derby, UK; Courtesy of Zimbio.com

I get a lot of emails from auto enthusiasts. About 60% of what I get comes down to this question.

“Can you get me a high demand vehicle at a disgustingly low price at the auctions?”

The short answer is no. Just as an athlete can’t contradict the laws of physics, I can’t control the free market aspect of a dealer auction. In my world a car is bid on by dozens of professionals until the last man pays the most. If you want a Toyonda or the latest and greatest wheels that are based on yet another ‘”Fast & Furious” ripoff, then you have to pay the premium.

As for unpopular cars, they are a different story.

I usually put unpopular cars into five distinct categories.

1) The Dented

Let’s say you have a nice large dent right where the hood, front bumper and quarter panel meet. We’re talking about an impact that pierces the paint and damages the body to the point where no pdr guy (paintless dent repair) can salvage those parts.

That hit will usually be a lot more expensive to repair than one where the driver’s door gets bashed in a good four inches and can’t even open.  Why? Because doors are kept in strong supply at most junkyards. On the other hand good quarter panels and hoods aren’t always easy to find. Even if you choose to go aftermarket, the costs are far more than what you would expect.

In many cases you may be looking at between $600 to $1500 for a complete repair job on what may seem to be minor damage. Heck, even a hood alone with a repaint is going to run around $400.  On the other hand doors can be bought for $75 to $200 and then re-sprayed for $100.

When it comes to damaged cars at the auctions, the question isn’t what. It’s where and to what extent.

In light of that you can sometimes get a deal on a good running car that got into a fight… and lost.

2) The Old

The definition of old has changed a lot over the past four years.

Back in 2008, any vehicle over 10 years was considered old. Now it’s closer to 15 years, and if it has good miles  and is in good overall condition, you still get plenty of competition for it.

I have seen 15 year old Nissan Maxima’s with low miles sell for over $3000. Then again. A 1996 Olds Cutlass Ciera with similar miles will more than likely get only a third of the Maxima’s price.

Can you buy a good cheap popular old car at a dealer auction? No.

Can you buy a good cheap ‘unpopular’ old car? You bet!

3) The Walmart Car

Cheap cars with cheap interiors. Tauruses, Stratuses, Windstars, older Galants and 626’s. They are good enough to get you back and forth wherever you need to go; so long as you choose the right powertrain. But they are also complete plasticized cost cutting commuters with no joy in their drive.

They’re also not cheap anymore.

When the buy-here pay-here dealer is looking a vehicle that they can finance for $700 down and $250 to $350 a month, they are looking squarely at the Walmart cars. Why? Because they cost thousands less at the auctions and replacement parts are usually cheap. Junkyards and aftermarket parts suppliers see to that.

The Walmart Car used to be a sweet spot at the auctions. Now they still can be found with rental and fleet companies. But you’re likely to get a better deal off a Walmart car that is a repo or one with an off color. Than to get a nice silver one from Avis that can be financed by JD Byrider at $300 a month for 60 months.

4) The ‘Issue’ Car

Branded titles. True miles unknown. Frame damage. Previous Canadian history. Repos. Salvage Titles.  Miles exempt.

All the things that make the general public recoil in horror may represent an excellent buying opportunity for those willing to do a bit of digging. I’ll give you a recent example.

I bought a 2003 Buick LeSabre with 45,000 miles for $3800 (plus auction fee) at a Carmax sale. It was announced on the block, “Branded Title”. Most dealers when they hear those two words automatically assume the worst. Flood damage.  Salvage/Rebuilt. Things of that nature.

The issue with this car was, “Exceeds Mechanical Limits”. This notation is usually reserved for those vehicles with five digit odometers.  Except the LeSabre has a six digit odometer. So why was it put on the title?

Because the DMV screwed up. It even said so in the Carfax history. Delaers at this sale are offered free Autochecks. A good provider of history as well… which is why I always use both services. The two services used in concert can help resolve a lot of issues.

I’ve managed to buy low mileage ‘true miles unknown’ cars that simply had the first two numbers on their odometer switched on a new title.  ‘Frame Damage’ cars that only needed a front quarter panel replaced. Repos that had been dealer maintained until the last new owner kept it for three months and 1500 miles.

Issue cars take time to find. But if you’re willing to do the research, they can be absolute steals.

5) The Ugly Body

Who wants a minivan? An old-school luxury coupe? Or a base model wagon with 27 dings and a stickshift?

Okay, the last one is a TTAC special. But in most cases the unfashionable car simply does not sell at a dealer lot. It sits or gets driven by the dealer out of pure pity.

Consumers buy with their eyes… and the same is true with dealers. While the consumer is buying their version of great transportation, most dealers are pondering two questions whenever a car goes on the auction block.

1) How much can I sell it for?

2) How long will this thing stay on my lot?

The key to success in selling retail goods is turnover and profit. Ugly cost money in the retail world on both sides of that ledger.

So if you can stomach the bass faced fascia on a Buick Riviera, it’s all you! Or in the case of my recent Christmas buys, it was just me. I got a supercharged version for only $815.

Now I just have to sell it.  Anyone interested? Anyone? Anyone? Beuller?

Questions about used cars? Feel free to email me at steven.lang@alumni.duke.edu . It may take a day or two (or five) but I always make it a point to write back. 

 

 

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Tesla Model S Pricing Analysis http://www.thetruthaboutcars.com/2011/12/tesla-model-s-pricing-analysis/ http://www.thetruthaboutcars.com/2011/12/tesla-model-s-pricing-analysis/#comments Thu, 22 Dec 2011 20:46:38 +0000 http://www.thetruthaboutcars.com/?p=423322 Tesla released the finalized features and pricing for the Model S sedan this week, with deliveries of the most expensive variants to begin in “mid-2012,” the others to follow by the end of next year. More than a few people who thought they were going to be able to buy a “premium electric sedan” for […]

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Tesla released the finalized features and pricing for the Model S sedan this week, with deliveries of the most expensive variants to begin in “mid-2012,” the others to follow by the end of next year. More than a few people who thought they were going to be able to buy a “premium electric sedan” for $50,000 seem miffed by the final pricing. Yes, there will eventually be a $50,000 car (after a $7,500 tax credit). But it won’t have full motor power, leather, nav, or the ability to use fast-charging stations. Tick off all the boxes, and the Model S pushes double the hyped number. But, let’s face it, these guys have to turn a profit and must pay at least as much for parts as the big established car companies, on top of that big expensive battery pack. So does the announced pricing seem reasonable?

First off, a caveat. Tesla released “full features and pricing,” but a few holes remain. The car has eight airbags, but what are the two beyond the typical six? Front knee airbags, rear side airbags, or counting each side curtain airbag as two (front and rear)? Does the base car have a leather-wrapped steering wheel or an auto-dimming inside rearview mirror? Are the external mirrors heated? Is obstacle detection standard, optional, or simply not available? None of these are pricey enough features to make a big difference in the following analysis, but be aware that the omissions, if they’re on the car, might be worth a few hundred dollars.

The big jumps from $50,000 are due to the optional battery packs. Three packs will eventually be available. The base car will have a 40 kWh battery pack good for a 160-mile range and a zero-to-sixty time of 6.5 seconds. How is acceleration affected? The electric motor appears to be a powerful 300 kW / 402 BHP unit in all cars, but only the highest capacity battery pack is capable of outputting enough energy per second to fully power it. The figures for the other two packs: 60 kWh / 230 miles / 5.9 seconds and 85 kWh / 300 miles / 5.6 seconds. With the largest pack another bottleneck is encountered. Step up to a “Performance” model, with the 85 kWh battery pack and a high-performance inverter, and the zero-to-sixty sprint drops to 4.4 seconds. One implication: with an electric car, it’s not enough to know the peak power output of the motor. The battery pack and inverter are also critical parts of the equation, and these aren’t always capable of providing the motor with sufficient energy.

To put the sizes of these battery packs in perspective, the Chevrolet Volt has a 16 kWH pack, while that in the Nissan LEAF is 24 kWh. So the increments between packs are as large as the entire pack in these smaller cars. And the lithium-ion pack in the new Prius Plug-in Hybrid? A mere 4.4 kWh, for which Toyota charges about $5,400 extra. Using Toyota’s math, even if we ignore the cost of the standard Prius’s 1.3 kWh NiMH battery pack (or at least assume it’s offset by the cost of a charging system), Tesla would charge about $24,500 to go from the 40 kWh to 60 Kwh and about $30,700 to go from 60 kWh to 85 kWh. Instead, they’re charging a mere $10,000 for each bump. So either Toyota is making a bundle, Tesla is losing one, or Tesla knows something about lithium-ion battery packs that Toyota does not. They certainly can’t be faulted for their battery pack pricing as much as it bumps the price of the car.

And that high-performance inverter? Another $10,000, plus an additional $5,000 to cover mandatory additional standard equipment (leather interior, air suspension, and 21-inch wheels) that costs $6,500 to add to the regular car. So the “quicker than a 911” Model S starts at $85,000.

Optional even on this top model: $750 metallic paint, $1,500 panoramic sunroof, $3,750 Tech Package (nav, rearview camera, xenon lights, power liftgate, passive entry, Homelink), $950 580-watt 7.1 audio system, and $1,500 for a kids-only rear-facing third row. Oh, and if you want a parcel shelf to hide your cargo (like the one standard in a Hyundai Accent) that’ll be another $250. Two further options ($1,500 for a second on-board charger, $1,200 for a high power wall connector to feed it) enable quicker battery charging. Include all of the listed items on the Performance model and you’re at $96,400. Of these options, the $3,750 price for the Tech Package seems to have prospective owners most in a tizzy, as the price seems a little high given the contents, at least some of which they thought would be standard.

Disregarded here, but certainly not elsewhere: the first 1,000 cars will be “Signature” models with a unique red exterior and white leather interior. These start at $87,900, a few thousand higher than a similarly equipped regular production Model S. [Ed: Residual value speculators, start your engines]

So, how does the non-intro car’s pricing compare to the Infiniti M35h I had last week, which has a 1.4 kWh battery pack? Add metallic paint, leather, and sunroof to the Tesla, to minimally match the M’s standard equipment, and it actually comes in nearly a grand lower, $53,650 vs. S54,595. But the Infiniti includes additional standard features. Adjust for these using TrueDelta’s car price comparison tool (where additional models can also be compared), and the Infiniti ends up with a $1,455 price advantage. Load the cars up further, adding nav and the high-end audio systems, and the Tesla comes out better, $57,600 vs. $61,745. A $2,850 adjustment for the Infiniti’s additional features leaves the Tesla with a $1,295 feature-adjusted price advantage. Coincidence that they’re so close? Probably not.

But the Infiniti with a combined power output of 360 horsepower gets to sixty in about 5.5 seconds. So it’s as quick as the standard Model S with the 85 kWh battery pack. Add this pack–also the only one that will be available initially–and the Tesla comes in about $20,000 above the Infiniti.

So, for equivalent range and performance in the Tesla (or if you’re getting one of the first cars) you’re going to spend quite a bit more. How you evaluate this depends on whether you tend to see the glass as half full or half empty. Does Tesla deserve congratulations for doing a surprisingly good job of absorbing the cost of the standard 40 kWh battery pack ($20,000 even at their “bargain” prices) and charging much less than Toyota per kWh for the larger packs? Or should they be taken to task for not delivering the capability of the 85 kWh car at the price of the 40 kWh car?

I’m personally inclined towards the former view. But then this is a purely intellectual exercise for me: I haven’t plunked down $5,000 to get in line for one. If I had, then I might be upset to not be getting the car I expected for the price I expected to pay, even if it always did seem too good to be true.

Michael Karesh operates TrueDelta.com, an online provider of car reliability and real-world fuel economy information.

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TrueCar Versus Honda: Online Car Buying Challenges Hit Home http://www.thetruthaboutcars.com/2011/12/truecar-versus-honda-online-car-buying-challenges-hit-home/ http://www.thetruthaboutcars.com/2011/12/truecar-versus-honda-online-car-buying-challenges-hit-home/#comments Wed, 21 Dec 2011 17:45:59 +0000 http://www.thetruthaboutcars.com/?p=422978 The rise of the internet has had myriad effects on everyday life, not the least of which has been its profound impact on consumer behavior. With ever more data being made available online, and with the rise of independent alternative media outlets like TTAC, car buyers in particular are fundamentally changing their relationship to the […]

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The rise of the internet has had myriad effects on everyday life, not the least of which has been its profound impact on consumer behavior. With ever more data being made available online, and with the rise of independent alternative media outlets like TTAC, car buyers in particular are fundamentally changing their relationship to the car buying process. Dealers have been noting for some time that the internet has created better-informed buyers who, armed with more information, are demanding the car they want at the best possible price, wreaking havoc on traditional car dealer tactics like upselling and opaque pricing policies.

But as the eternal dance between supply and demand shifts in favor of consumers, some dealers and OEMs are having a tough time adjusting to the new reality. At the same time, the need to make money off of online consumer education has created some tension for the new breed of consumer-oriented websites. This conflict has now broken out into the open, as the auto transaction data firm TrueCar has found itself locked in a battle with American Honda over the downward pricing pressure created by more widely accessible transaction data. And the outcome of this conflict could have profound impacts on the ever-changing face of the new car market.

Early last week, TrueCar CEO Scott Painter took to the TrueCar blog with an “Open Letter To The Automotive Industry,” in which he argued

Our world is changing. Unprecedented access to information and a massive shift in consumer behavior has resulted in a challenging new automotive retail landscape. It has also enabled a consumer appetite for data transparency. To hide from evolving consumer behavior is to deny change. At TrueCar, we embrace this opportunity. We also believe that transparency is the centerpiece of trusting relationships. Some in the industry disagree.

And indeed, from personal experience I feel comfortable saying that TrueCar does provide consumers with some highly valuable information by tracking vehicle transactions from several data sources and publishing the range of transaction prices on a local level. This clearly helps consumers navigate the often opaque and confusing world of dealer-level pricing, and facilitates a more efficient interaction between supply and demand. And if that’s all TrueCar did, it would be impossible to argue with the valuable service it provides.

But in order to fund its business model, TrueCar cannot simply give away data and hope everything pans out for the best. In order to generate profits, TrueCar works with “dealer partners,” allowing them to present a lower “haggle-free” price for the model being researched at no upfront cost. If the consumer buys that car, TrueCar gets a $299 commission from the dealer; if not, the dealer pays nothing. Dealers can tailor these “guaranteed lowest prices” based on TrueCar’s data, and they seem to generally beat non-“guaranteed” prices in the TrueCar “price curve” display by only a few hundred dollars. But by offering this service to its dealer partners, TrueCar has opened itself to conflict with OEMs, as this fiscally-necessary service muddies TrueCar’s role as a pure consumer service. Which is where the conflict with Honda comes in.

In his “Open Letter,” Painter mentions no OEM by name, and TrueCar’s EVP for Dealer Development Stewart Easterby tells TTAC

 We’re not trying to pick a fight… we very much value Honda/Acura. We have strong OEM relationships through our recent acquisition of Automotive Lease Guide, and we have lots of people on staff who have work for OEMs, so we generally have strong relationships with the industry.

But in an Automotive News [sub] piece published on the same day as Painter’s “Open Letter,” the TrueCar CEO claimed that American Honda was warning dealers away from advertising below-invoice “guaranteed lowest” prices. After talking to American Honda, AN updated its piece, noting that it had

incorrectly reported that Honda singled out TrueCar.com when the automaker warned dealers that they would put their local marketing payments from Honda at risk if they offered prices below invoice on Internet shopping sites

In fact, what had happened was that American Honda had simply warned its dealers that any advertisement of below-invoice prices could jeopardize the marketing assistance money Honda sends dealerships. American Honda’s Chris Martin clarified the automaker’s position in an emailed statement to TTAC, noting

Dealers who wish to receive marketing funds are expected to adhere to certain guidelines that govern dealer participation in its Honda Dealer Marketing Allowance (DMA) Program and its Acura Carline Marketing Allowance (CMA) Program.  Among the many advertising guidelines to which dealers must adhere to in order to receive DMA/CMA Funds, Honda dealers are restricted from advertising new Honda vehicles at a price below dealer invoice plus destination and handling charges and Acura dealers are restricted from advertising new Acura vehicles at a price below MSRP plus destination and handling charges.  Such guidelines do not limit a dealer’s discretion to advertise a new vehicle at any price if the dealer is not seeking DMA/CMA Funds.  Furthermore, the dealer is free to charge customers any price it chooses, in its absolute discretion, for a vehicle.

Martin goes on to identify the central bone of contention:

The development of third party websites used for advertising is not any different than advertising pricing in a traditional newspaper or on TV.

And here, American Honda has something of a point. Whereas TrueCar’s price curve is a pure reporting tool, simply reflecting otherwise available data, it’s not entirely unfair for Honda to characterize TrueCar’s service to dealer partners as an advertising service. In practice, the only real difference between this service and any other form of advertising is that TrueCar only gets paid if a car gets sold at the “guaranteed lowest” price offered by one of its dealer partners. If you accept that reality, Honda has some very valid reasons for threatening to withhold dealer marketing assistance, as Martin’s statement explains

The function of these [DMA] guidelines is three-fold. First, it encourages dealers to use the advertising money provided by American Honda for interbrand advertising.  That is, rather than providing funds to dealers so that they can engage in discount advertising against other Honda and Acura dealers (which does American Honda and consumers no good), American Honda wants dealers to use the funds to promote the advantages of Honda and Acura vehicles when compared with competing brands. Second, discount advertising is detrimental to the Honda and Acura brand images.  American Honda has no wish to pay for ads that portray its products as “cheap” or “low-end” vehicles.  This may be appropriate for other manufacturers; it is not appropriate for the Honda and Acura brands.

So far, so reasonable. TrueCar’s service may be more palatable than the local, low-rent “Check Out Our CRAAAAZY Prices!” ads you see on TV, but in practice there’s little meaningful difference. Besides, the choice belongs to dealers: either accept Honda’s money with the inevitable strings attached, or throw in your lot with the new lower-price, but potentially higher-volume TrueCar (or CRAAAAZY Prices!) strategies. But with its third rationale for its policies, Honda strays from this reasonable territory, and betrays a distinct bias against TrueCar, arguing

Third, American Honda believes that much discount advertising is bait-and-switch advertising, which is not beneficial to the consumer and reflects badly on the manufacturer that condones it.  Dealers that advertise vehicles for extremely low prices (as some do on the TrueCar site) may engage in either direct bait-and-switch tactics or using the automobile’s brand name to sell expensive accessories, service contracts and the like.

Memo to Honda: these practices are as old as the auto industry itself. Suggesting that these tactics will never be used at dealers who toe Honda’s DMA line is just as disingenuous as the implication that TrueCar’s dealer partners are more likely to use them. If anything, TrueCar’s major sin is that it makes below-invoice advertising easier for the OEM to monitor and therefore squelch than in the pre-internet days, when consistently maintaining these DMA standards would have required a survey of every local publication and TV/radio broadcaster (not to mention direct-mail marketing), a task that no automaker was or is equipped to do.

But Honda’s apparent antipathy towards TrueCar is just the tip of a growing resentment towards the site. In a speech cited in the AN piece published last Monday, AutoNation CEO Mike Jackson expressed the angst that appears to be spreading across the auto retailing industry, especially in light of its recent deal with Yahoo [sub].

The good deal that they’re pitching to the consumer is lower than average. So to the extent that everyone goes with the TrueCar price, it moves the average down. It’s a death spiral, and the question is whether they are powerful enough to unleash that dynamic in the U.S. marketplace.

But Jackson’s implication, that TrueCar can essentially manipulate the market in favor of consumers, simply doesn’t hold up to scrutiny. On an abstract level, you can’t repeal the law the law of supply and demand. As Painter puts it

They’re trying to say Hondas are worth more than invoice, but if everybody’s paying less than invoice, that’s not true

More practically, however, TrueCar’s own data seems to refute the industry’s fears. Specifically, Easterby tells TTAC

TrueCar represents two to three percent of new car sales… we’re flattered that people think we’re influencing the market, but at that share, we clearly aren’t. The 21st C consumer demands transparency in all products and services, that’s what the web has done. TrueCar reflects the market, just as Zillow reflects the market for real estate, rather than determines it.

Even more importantly, Painter insists

Our goal at TrueCar is to foster healthier relationships between manufacturers, dealers and consumers through data transparency. To deliver on this promise, we require a high standard from our 5,800 dealer partners – an upfront competitive price and a commitment to a great customer experience. A discoverable upfront price is the cost of getting noticed. Contrary to popular concerns this does not create a “race to the bottom.” The lowest price only secures the sale 19.2% of the time within the TrueCar network. The sale is still won by location, selection and good old-fashioned customer service. [Emphasis added]

So where does this all leave us? Clearly Honda has the right to withhold DMA money from dealers violating its reasonable conditions on that money. By the same token, dealers have the choice of pursuing higher volumes with less traditional advertising by choosing the TrueCar strategy, or continuing to follow the time-honored tradition of collaborating with the manufacturer. And here, TrueCar’s price curve, which it says is not populated by dealer partner data but from independent, anonymized sources, becomes the killer app: it’s so good (reflecting a claimed 90% of all new car transactions), it can’t help but draw ever more buyers, who will then be exposed to its dealer partner “advertisements.”

Ultimately, it’s difficult not to conclude that TrueCar (and sites like it) won’t continue to draw ever more dealers away from the old DMA agreements, especially as online research becomes more important to the car-buying process and as traditional advertising dollars flow from TV, radio and print towards the internet. And if dealers and brands are sufficiently hurt by downward pressure on pricing, the alternative is always there. This is how competition works, and because TrueCar has more fundamentally aligned itself with consumers and the power of the market, it’s tough seeing them not coming out ahead in this struggle. And if they do, car buying could be changed forever. Again.

 

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900 Miles And Runnin': Searching For Truth In A Rented Elantra http://www.thetruthaboutcars.com/2011/12/900-miles-and-runnin-searching-for-truth-in-a-rented-elantra/ http://www.thetruthaboutcars.com/2011/12/900-miles-and-runnin-searching-for-truth-in-a-rented-elantra/#comments Sun, 18 Dec 2011 18:13:28 +0000 http://www.thetruthaboutcars.com/?p=422744 Sometimes the stars align. Last week’s article about the “Consumer Watchdog” Elantra fuel-economy press release had ruffled some feathers and aroused my personal curiosity regarding the Elantra’s alleged thirst. And then — wouldn’t you know it — I found myself with a chance to run South and visit a few friends. The time frame was […]

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Sometimes the stars align. Last week’s article about the “Consumer Watchdog” Elantra fuel-economy press release had ruffled some feathers and aroused my personal curiosity regarding the Elantra’s alleged thirst. And then — wouldn’t you know it — I found myself with a chance to run South and visit a few friends. The time frame was short. Had to be there and back in 36 hours, covering about 435 miles each way. And the nice people at Enterprise were willing to rent me a 2011 Elantra for a two-day stretch at a total of $50.36.

This was my math: (900 miles/23.5 mpg) * $3.18 = $121.78. That would be the cost of running my Town Car. A mythical 40mpg Elantra plugged into the same equation would cost $71.55. Difference of $50.23. Clearly some sort of sign, right? Might as well rent the Hyundai and conduct a highly non-scientific test. Along the way, we’d ask the usual questions: How well does the Elantra hold up in rental service? Is this the class killer some people want it to be, or the mid-packer described in TTAC tests up to this point? Can’t this thing go any faster? What time is lunch?

Thursday, 1:59 PM EST, 7.8 miles: On the road just like I’d planned — and promised. My initial impressions of this 27,200-mile car hadn’t been positive. My personal experience with Hyundais of the past decade has been that they show signs of wear more readily than the equivalent Toyota or Honda, and this 2011 Elantra didn’t look to be an exception. The multiple rock strikes on the bonnet were all rusting and bubbling, the grey-fabric seats had obvious wear marks, the dashboard appeared to have some fade to it in spots, the cost-cut black paint had clearly suffered under Enterprise’s wash-it-with-a-wet-broom policy of car cleaning, and the carpet was wearing thin. On the positive side, the controls all looked and felt pretty new, including the steering wheel surfaces. Mechanically, this Elantra was in completely reasonable shape. I’d decided to mostly forego full-throttle escapades in favor of moving with traffic flow and keeping the little “Eco” light in the dashboard lit up. The old Car and Driver trick of lead-footing around Ann Arbor in a car for which they didn’t much care and then being shocked—shocked!—at the resulting mileage doesn’t have any place at TTAC, right?

Thursday, 5:15 PM EST, 209 miles: Making the run down Route 71 through Cincinnati to Louisville, the Elantra had reported an impressive 38.6 mpg running at an average 73 miles per hour. Needless to say, this is not very similar to the EPA test. My rental ride wasn’t a quiet car on the road, but it wasn’t unbearable, either. More annoyingly, my infamous 15,672-song, 160GB iPod, nicknamed “Kuang Grade Mark Eleven” for its ability to lock up pretty much every OEM iPod integration except for SYNC and UVO, had done a number on the Elantra’s USB port. Luckily, I could still use the port to charge ol’ Kuang while listening through the 1/8″ AUX jack. Sara Watkins was singing,

Wish I was in Nashville town
the sunny south you know

Actual Nashville forecast: 43 and rainy. My self-pitying reverie was interrupted by an odd Hoooooooooooooooooooooooooo noise. What the hell was that? A bad wheel bearing? It was coming from the front of the car, and it only showed itself at eighty-five miles per hour or above. Could feel it in the steering. I loaded the car a few different ways at speed to see if I could pop the noisy front wheel off… and finally I realized that the noise was being caused by a strong cross-wind. My feelings about the aerodynamic consequences of the Elantra’s mini-CLS styling were not positive at this point. On a hunch, I snuggled up to the back bumper of a tractor-trailer. This proven hypermiling technique is favored by insane Prius drivers who are willing to risk a solid airbag to the face in order to save a few pennies, but I use it as a cross-wind stability test since there is an area of strong buffeting about seven or eight feet off the trailer’s back door. Yup. The Elantra shook in these conditions like no other modern car I’ve driven. Another black mark in your copybook, Mr. Hyundai. Still, after more than three non-stop hours of driving I was neither fatigued nor annoyed. I’m still on your side, little fellow.

Thursday, 7:30 CST, 436 miles: An hour of murderous stop-and-go in Louisville had forced me to abandon my economy program and run between 85 and 95 for the Tennessee homestretch. Covering 430 miles in six and a half hours won’t exactly get me any props from Alex Roy, but that had included a rather leisurely stop for fuel and a quick jog around the gas station to keep my legs awake. The trip computer reported a solid 36.2mpg as I came to a halt south of Nashville, but the final verdict would be partially dependent on my total fuel fill numbers as well.

Friday, 1:30 CST, 468 miles: “I will see you tonight,” I told my son, and hung up. His bedtime is 9pm EST. Time to hustle.

Friday, 4:00 EST, 555 miles: Hustle, hustle, hustle, and I know I will need to be aggressive when I reach Louisville, too. This, combined with a little back-road goofing around for the amusement of my dinner companion, had resulted in what was so far the worst fuel-economy readout. I photographed it for posterity.

Even if that’s a few MPG optimistic, we are still talking about a car which easily beats 30MPG in damn-the-torpedoes driving. Time for the off-the-cuff comparisons. I like the Elantra after half a thousand miles, but it isn’t really a full-fledged freeway car in the American or European tradition. The equivalent Focus is far more confident and unshakeable at eighty or ninety, it feels more expensive and comfy inside, and it has a sniff of Euro-cachet about it. The Cruze is a boat by contrast. I’d rather drive the Cruze on a freeway trip but I’d rather own the Hyundai. My past experience with Elantras of the 2000-2002 vintage is that they are 100,000 mile cars, and that’s better than the Aveos I’ve seen. This one is probably at least a 150,000 mile car. It’s a pleasant traveling companion. Unfortunately, I can’t seem to keep an even temperature in the car, which forces me to twist the knob back and forth. Every time I do so, I imagine that my 1973 Gibson J-40, sitting in the backseat, is feeling the tiny but eventually deadly pinch of humidity change.

It occurs to me that Hyundai, as a company, could have used one more round of aggressive pricing. What I mean by that: The Elantra has always been cheap to buy, if not always cheap to own. This new car represents approximate parity with the class players, depending on how you weight your competitive chart. Had it been priced like the last Elantra, it would been an unbeatable proposition. Unfortunately, it seems to be pretty close to the Civic, Corolla, and Focus, if other TTAC reviewers’ comments on feature-adjusted pricing are correct. I would rather have seen them wait until the next round to announce that they are playing with the big boys. Oh, well. As Liz Phair sang, it’s nice to be liked, but it’s better by far to get paid.

Friday, 8:42 EST, 901 miles: Turns out that 34.0 is as bad as it got. Slow running in Ohio, combined with a relative lack of traffic, allowed the Elantra to bump back up to 35.7 overall by the time I sat down with my son to watch “Chuggington”. I’m neither sore nor particularly tired after the drive. LJK Setright once famously wrote that, for most reviewers, the faults of a car disappear after a hundred or so miles spent in the driver’s seat. After nine hundred miles, I am comfortable in the Elantra’s skin. A six-speed manual variant might serve my purposes well enough, although I would miss the Town Car’s imperial stability, perfect long-distance seating, peaceful isolation, and three-Mesa-Boogie trunk. I’d put it second place in my personal small-car pantheon, behind the Focus and ahead of the Cruze.

Saturday, 10:20 EST, 923 miles: The Elantra has taken 27.2 gallons total. It was slightly under a half-tank when I picked it up and slightly over a half-tank when I dropped it off. There’s nothing scientific about the resulting 35.5-ish MPG rating, but based on the way I drove it, the mileage and abuse the poor little car has suffered, and the entirely adequate performance from the engine and transmission, I’m giving “Consumer Watchdog” a thumbs down. Had I purchased this Elantra, I wouldn’t feel cheated in any way. They promised 40MPG under ideal conditions, and I’m getting 35-36MPG in conditions which were far from the test lab.

It’s an honest car, far from perfect, but worth a look when you go shopping. We will close with another set of lyrics from my second-favorite Nashville transplant, Miss Watkins:

You have kept my attention
And won my affection

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How To Buy A Used Car Part 4: Negotiating http://www.thetruthaboutcars.com/2011/08/how-to-buy-a-used-car-part-4-negotiating-2/ http://www.thetruthaboutcars.com/2011/08/how-to-buy-a-used-car-part-4-negotiating-2/#comments Fri, 12 Aug 2011 18:43:44 +0000 http://www.thetruthaboutcars.com/?p=406936 [Ed: Part one of Steve Lang’s updated used car buying guide is here, part two is here, and part three is here.] When it comes to buying a used car there are two basic negotiating mindsets. You can either be fair and decent or unfair and obnoxious. If you seek to chisel and deceive then chances are […]

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[Ed: Part one of Steve Lang’s updated used car buying guide is here, part two is here, and part three is here.]

When it comes to buying a used car there are two basic negotiating mindsets. You can either be fair and decent or unfair and obnoxious. If you seek to chisel and deceive then chances are you will get a bad car. Only the desperate and deceitful are willing to put up with that type of BS.

Want a ‘great’ car? Then realize that many sellers respond extremely well to honesty and decency. Win – win is no sin. So, karma lovers, here’s some tips for negotiating the purchase of a used car by observing the Golden Rule.

Making the Offer:

If you’ve followed parts one through three of this series congratulations! You’ve found a car that’s superior to 90-plus percent of what’s out there. Rejoice and let the seller enjoy the benefits of properly maintaining his car.

How to Value the Car:

NADA tends to have high valuations while Kelly Blue Book overprices late model vehicles and underprices older ones. Contrary to reality, you can’t find many good $1000 cars regardless of what the Blue Book says. Nor should you get a 2000 Mercury Grand Marquis with over 200k+ for the NADA pie in the sky price of $5000. Stick with Edmunds private party values or the ‘completed items’ section on Ebay.

Negotiate After the Inspection, Not Before:

Some folks believe that you should make an offer before the final inspection. I never do.

The reason is that sellers will then get stuck on an unrealistic price if there are major maintenance issues. A $5000 car that needs $1000 in maintenance was never a $5000 car in the first place.

Most sellers will get stuck on that ‘perfect’ number and reject any substantial adjustments. A good inspection will always yield both parties an offer based on the car’s condition.

How to Negotiate

Begin by declaring your intention to buy the car… so long as the repair costs are addressed in the price.

If these repairs are minor, immediately offer to split the difference for the repair costs and call it good. If, however, mission critical repairs run into the high hundreds to thousands of dollars, you have an “opportunity” ahead of you.

Summon the mechanic!

Ask your mechanic to fax the used car’s inspection report to the seller before you speak with them. At first, the seller (and possibly you) may be shocked by the numbers involved.

This can be especially true with older vehicles and luxury cars. However, with a little constructive conversation, even the most alarming repair costs needn’t kill the possibility of an amicable agreement.

Do The Right Thing

I like to start negotiations for cars with repair “issues” by giving the seller an opportunity to do the right thing. “Given what’s in front of us right now,” I ask. “What would be the fair way for both of us to resolve these repair costs?”

Worst case, the sellers stand pat. In that case, walk. Best case, the seller says they’ll simply lop-off the total bill from the asking price. If that happens, it’s time to shake hands and do the deal.

Compromise

Some sellers begin by offering to reduce the asking price by a very low number. They figure you’re there to haggle (hoping you won’t).

Provided the asking price minus 50 percent of the repair costs is acceptable, again, offer to split the difference.

If that doesn’t work for either or both of you, it’s time to go through the inspection report– and the probable costs of repair– line by line.

Not all repairs are equal

Keep in mind some items are your financial responsibility. Unless it involves a major repair (timing belt, water pump, adjusting the valves, etc.), upcoming maintenance regimens are always down to you.

Don’t sweat the small stuff

In particular, oil changes, tune-ups and replacing filters that aren’t necessary right now should be removed from your list. By doing this from the onset you’re showing goodwill and fairness.

Find an alternative when you need to.

If the seller claims the cost of repair listed in your inspection is too high, ask them if they know of another mechanic who’d be willing to do it for less, and the type of guarantee they will offer. I’ve seen $450 repairs with 30-day guarantees turn into $200 repairs with a full year guarantee. If the car is worth it to you, it pays to explore alternatives that will benefit both of you. It may take research and patience, but it can be done.

Tit-for tat works wonders

Finally, if you have experience repairing minor automotive issues, use that skill to create some wiggle room to help close the deal. “You know, I think I could handle that myself. What do you think about us taking off x repair? Would a price of y make it a fair deal for both of us?”

Take it or leave it

If you can come to a mutual understanding, enjoy your ride! If not don’t beat a dead horse. I like to back-out by thanking the seller for their time. Leaving a copy of the inspection report as a “gift” and telling them my final price, should they reconsider. Above all don’t sweat it. There are plenty of excellent used cars out there looking for a good home.

Let’s Recap

To get a great deal: research diligently, test drive patiently, let an expert figure out the unknowns, and negotiate in good faith. Do this and you’ll save unnecessary test drives and thousands of dollars in future repair costs.

You’ll also buy the cream of the automotive crop at an extremely fair price.

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How to Buy a Used Car – Pt. 3: Due Diligence (The Inspection) http://www.thetruthaboutcars.com/2011/08/how-to-buy-a-used-car-%e2%80%93-pt-3-due-diligence-the-inspection/ http://www.thetruthaboutcars.com/2011/08/how-to-buy-a-used-car-%e2%80%93-pt-3-due-diligence-the-inspection/#comments Wed, 03 Aug 2011 22:03:34 +0000 http://www.thetruthaboutcars.com/?p=405512 The post How to Buy a Used Car – Pt. 3: Due Diligence (The Inspection) appeared first on The Truth About Cars.

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[Ed: Part one of Steve Lang’s updated used car buying guide is here, part two is here.]

You can rigorously apply the tests described by previous installments of this series without encountering a single setback. However when it comes to buying a used car it pays to assume one simple salient fact: you don’t know the complete truth. At least not yet.

When it comes to pursuing the deeper truths about a used car an experienced mechanic will inevitably become your greatest ally and advocate. For most consumers finding a knowledgeable mechanic will be the most important step in the used car buying process.

Before we talk about that, I want to be perfectly clear on this point. A used car is guilty until proven innocent. Do not buy one without taking the car for a professional inspection. If the seller doesn’t agree to let you do so you’re done. Period. No exceptions. Ever.

Now mechanics tend to divide into three categories: the shade-tree, the Nazi and the diligent professional.

Shade-tree mechanics are hobbyists on limited budgets. Due to the lack of equipment (or experience), they may not be familiar with the unique wear issues and maintenance needs for your vehicle. The shade-tree mechanic will look at the car’s basics, take it for a short test drive and call it good (or “not bad”).

The Nazi will attempt to perform every mechanical test known to wrenchkind. Submit the car to a standard of inspection that is rooted in la-la land. Then make you financially fearful of buying anything other than (cough! cough!) one of their vehicles.

Obviously the Nazi is a non-starter. Often times these party members will work for dealerships (but not always), and are therefore pre-occupied with meeting their service department’s monthly quota of service hours and revenue.

Unless your next car has a prancing horse or bull at the front of it, you’re usually far better off with a diligent mechanic. The diligent mechanic will work through a standard check list and then take the car for a test drive in a variety of operating conditions.

Diligent mechanics are experienced independent professionals with established roots in your community. To find one I strongly recommend visiting the Mechan-X files at Cartalk.com.

I also can’t over-emphasize the importance of personal recommendations; especially from people who own the same model of car you’re considering buying. Many small to medium-sized repair shops will post testimonials on their “ego wall.” Read them carefully.

Before the inspection takes place, collate the list of the concerns you created during the test drive. When you deliver the car for inspection, go over them with the mechanic one-by-one. Make sure you both have a clear understanding of all your potential concerns. This will provide a base line for the inspection to follow.

Some mechanics inspect used cars for a set fee. Others charge an hourly rate. In both cases, the post-list discussion should conclude with a confirmation of the probable inspection cost. Leave some leeway; you don’t want the mechanic to stop their investigations for the sake of a few bucks. (Leave your contact number for this possibility.)

The best way to build a healthy relationship with any mechanic is to simply try not to be one of “those” customers. Just let them get on with their job. Don’t stare at the mechanic while they’re doing the inspection. In fact it’s best to leave the premises entirely. And don’t phone your mechanic two hours later and ask for a status report; wait for their call.

Once the inspection is completed, sit down for a one-on-one debrief with the mechanic who made the inspection (even if you have to come back on another day). I always prefer to speak with the actual mechanic or at least have them in attendance with the “service advisor.”

Let the mechanic speak without interruption. Some diligent mechanics will go on for quite some time; some will simply say “here’s my report.” Either way review the information and let him explain every issue and potential issue to you. After they’re finished, don’t be afraid to say “I don’t have a clue what you’re talking about” or “Is this a sign of normal wear or abuse?”

Make your own list of trouble spots from this conversation. Note down the potential cost to repair and whether or not the issue is urgent or eventual.

Once you’re finished the play-by-play, ask a few general questions. I always ask “Did the owner do a good job maintaining this vehicle?” and “Did the owner use good parts or cheap parts?” Either of these inquiries usually invites a deeper insight with the mechanic.

If the used car has survived the inspection process without revealing any critical issues to your diligent mechanic, it’s time for the final negotiation with the owner.

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How to Buy a Used Car Part Two: The Test Drive http://www.thetruthaboutcars.com/2011/07/how-to-buy-a-used-car-part-two-the-test-drive/ http://www.thetruthaboutcars.com/2011/07/how-to-buy-a-used-car-part-two-the-test-drive/#comments Mon, 25 Jul 2011 18:21:49 +0000 http://www.thetruthaboutcars.com/?p=404205 [Editor’s note: Part One of Steve Lang’s updated guide to used car buying can be found here] Schedule the test drive for a time when there’s no rush. If it’s bad weather, reschedule. Take a little notebook, write a quick check list based on this article, and make notes. When you approach the car’s owner, […]

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[Editor’s note: Part One of Steve Lang’s updated guide to used car buying can be found here]

Schedule the test drive for a time when there’s no rush. If it’s bad weather, reschedule. Take a little notebook, write a quick check list based on this article, and make notes. When you approach the car’s owner, be friendly, polite and courteous. Do NOT try to “beat them down” to get a better deal. While you have every right to ask direct questions, you have no more right to insult their car than one of their children.

First, check the tires. Pull the steering wheel all the way to the left (and then right) so you can see the entire tread. Uneven tire wear– marks on the side or deep grooves in the middle– may indicate suspension issues. And nothing screams “lemon” louder than cheap, bald or strangely worn rubber.

Next, open and close all the doors several times, including the trunk and hood. Check for paint on the hinges and moldings. If a door creaks, it’s usually no big deal. If a door has trouble closing, it can signal anything from a broken hinge to frame damage.

On the driver’s side, make sure that the VIN sticker or VIN plate hasn’t been removed behind the driver’s side windshield.

Have a quick look at the panel gaps, especially the hood and trunk. Unless you’re looking at an old Land Rover, they should all be even. Check for water leakage in the trunk. Damp and/or a mildew smell often indicates problems underneath.

When you climb aboard, don’t be put off by worn seats or busted radios. Most interior surfaces and parts can be repaired and/or replaced easily and cheaply.

Lower the window and fire up the car– a few times. Do you hear any tapping or pinging sounds, or does it kick over with a smooth ‘vrooom’ and settle into an easy, quiet idle?

Test all the buttons and switches including the radio stations. Bring someone with you or ask the owner if he can help you out with the remainder buttons and turn stalks. Have them turn on the ‘left’ signal and look at the front and rear to make sure the bulbs work. Repeat with the right.

Then check the head lights along with the brights. Break lights should be checked in the rear as well as reverse. This may be your only time to verify their proper operation before owning the vehicle. So take the time to do it.

Finally have the fellow spray their windshield and make sure the wipers are in good order. Thank them for helping them you and then test the emergency brake to ensure that it’s operating properly. If you’re driving a stickshift you will want to do this later in the test drive on a steep upward incline.

Flip on the A/C. It should kick out cool air within fifteen seconds of ignition. With an older vehicle the performance of the A/C system should be one of the more critical concerns. (HVAC repairs can run as high as $500 to $1500.) When you’re on the road, test the heat and the A/C again to make sure the temperature and fan speed are constant.

Finally before going on the road lower your windows and turn the steering wheel all the way to the left and right. The motion should be seamless and silent. If there’s a lot of resistance, or the force required is uneven, the steering system may need anything from power steering fluid (cheap) to a power steering pump assembly (moderate) to a new rack (first born).

Now put the car in gear. Aside from a few models (older Mercedes in particular), a late or rough shift from park indicates that the car’s transmission may soon give up the ghost. If you experience very rough or late shifting, you’re done.

Brake force should be quick and constant. Unless the brakes have been recently replaced (ask), you shouldn’t hear any squeaking sounds.

Drive the car through a variety of traffic conditions, inclines and speeds, for at least a half hour. When going uphill, take your foot off the accelerator for a moment. Coast downhill as well. If the car’s transmission hunts, clunks or has trouble catching, the vehicle probably has a transmission or linkage issue.

If you hear a lot of ‘clacking’ or other unusual engine noises on initial acceleration, the engine’s components may need attention. If there’s an oil gauge, keep an eye on it. It should show approximately 25 to 80 psi during acceleration, and 10 to 20 when idling. The coolant temperature should hit a fixed point within ten minutes and never move.

After about twenty minutes of driving, take the car to a gas station. Keep the engine on. Open the hood and the gas cover release to make sure they’re in proper working order. If you know where the transmission dipstick is (and it’s a damn good idea to find out), check the level. Does it have bubbles? If the fluid is brown or black, it could be a sign of future transmission issues.

Turn the vehicle off and check the oil. If it’s not between the marks (too low or too high) or milky brown, you’re done.

Finally, get a wet paper towel, wipe the dirt off the relevant reservoirs and check the coolant, power steering and brake fluids to make sure they’re at their proper levels. S-l-o-w-l-y open the reservoir tank and check the coolant’s color. If it’s a multi-colored muck or brownish black, note it down.

After leaving the gas station, see if you can find a nice open parking lot or area where you can do a few ‘figure 8’s’. Lower the windows and turn the steering wheel all the way to the left. Drive very slowly and see whether you have any ‘clicking noises’ near the wheels. If it does, you will likely need to have the CV axle replaced on that side. Now turn it all the way to the right side and repeat. The turns should be ‘click’ and noise free.

By this point, you should have a pretty good idea whether your next step is towards purchase or home sweet home. If you’re blowing it off, thank the owner politely and leave promptly, without engaging in any further discussion whatsoever. (“It’s not what I had in mind.”) If you’re ready to move forward, it’s time to schedule a professional inspection.

[Mr. Lang invites TTAC readers to share theirused car test drive advice below. He can be reached directly at steve.lang@thetruthaboutcars.com]

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“Volt Scam” Debate Misses The Point http://www.thetruthaboutcars.com/2011/06/volt-scam-debate-misses-the-point/ http://www.thetruthaboutcars.com/2011/06/volt-scam-debate-misses-the-point/#comments Wed, 01 Jun 2011 15:38:00 +0000 http://www.thetruthaboutcars.com/?p=397038 Mark Modica, a former Saturn dealer GM bondholder, has leveraged his financial loss at the hands of the government bailout into a blogging position at the National Legal and Policy Center, a conservative nonprofit that “promotes ethics in public life through research, investigation, education and legal action.” At the NLPC, Modica focuses on what he […]

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Mark Modica, a former Saturn dealer GM bondholder, has leveraged his financial loss at the hands of the government bailout into a blogging position at the National Legal and Policy Center, a conservative nonprofit that “promotes ethics in public life through research, investigation, education and legal action.” At the NLPC, Modica focuses on what he believes to be corruption surrounding the auto bailout, and has written a series of anti-GM posts that make TTAC look like a Detroit hometown newspaper (TTAC “bias police,” take note). Most recently, Modica has caught the attention of the auto media, including Automobile Magazine and Jalopnik, with a series of posts accusing Chevy dealers of “scamming” taxpayers by claiming the Volt’s $7,500 tax credit and then selling Volts as used cars. TTAC welcomes anyone seeking to cast more light on the bailout, but unfortunately, Modica’s attacks are too focused on making GM look bad and not focused enough on providing relevant information to the American people. Let’s take a look and see why…

In the piece that set off the current flap, Modica wrote

I recently set out to determine how honest General Motors is being when it claims that demand for the Chevy Volt is exceeding supply. It was not hard to discover that this is not the case as retail sales remain dismal. A web search on vehicle locator sites such as Autotrader and Cars.com exhibit sufficient supply of the Volt, one dealership within 70 miles of my location had six new Volts available for sale.

Even Ebay lists vehicles, many had no bids and one listing in Texas hadn’t even met reserve with only one day of bidding time remaining. But I discovered something far more disturbing during my search. Many Volts with practically no miles on them are being sold as “used” vehicles, enabling the dealerships to benefit from the $7,500 credit supplied by the American taxpayers on each car. The process of titling the Volts technically makes the dealerships the first owners of the vehicles, which gives them the ability to claim the subsidies.  The cars are then offered to retail customers as “used” vehicles.

The practice of dealerships purchasing from one another is not uncommon. “Dealer trades” are done all the time in the industry. What is very unusual is for the receiving dealership to be able to maximize profits at the expense of taxpayers by claiming tax credits of $7,500. It is also very rare for dealerships to part with any model that has higher demand than supply, as GM claims is the case with the Volt. In addition to qualifying dealerships for a $7,500 tax subsidy, the titling process also allows GM to record Volt sales even if the cars are sitting on dealership lots.

Modica’s attack is hamstrung from the start because his goal is to demonstrate that supply of the Volt exceeds demand. The simple truth is that the government’s tax credit, in combination with strong early-adopter demand and low production volumes, basically guarantees that Volt demand will outstrip demand in the short term. If Modica wants to prove that the market won’t support the Volt’s high price and complexity, he’s going to have to wait until production ramps up and the early adopters have satiated their “gotta have it” instincts.

Because he doesn’t appear to have the patience to watch the Volt fail on its own terms (which, it must be added, is not a foregone conclusion, depending on how GM handles production), Modica has to look twice as hard for potentially damning evidence. Since the availability of used Volts alone doesn’t say much about the supply-demand balance, Modica manufactures another “scandal”: that Chevy dealers are taking the $7,500 tax credit that the government intends for consumers, and then selling Volts as used cars with no tax credit.

This “scandal” quickly falls apart under the weight of its over-ambitious pretensions: after all, if demand for Volts is as weak as Modica wants to believe, surely absorbing the tax credit at the dealer level is a recipe for Volts languishing on dealer lots. Since Modica offers no evidence for high dealer inventory, his major thrust (proving that demand for the Volt is weak) falls apart. Furthermore, without a single case of a dealership claiming the tax credit and then selling a Volt to a customer under the pretense that it still qualifies for the tax credit, his research ends up well short of proving a “scandal.” As a result, Modica is left having to argue against dealers taking the credit on principle.

And here’s the tragedy: Modica is so focused on landing a political-economic “scandal,” he ignores the legitimate criticisms of both GM’s Volt-dealer policies and the government’s tax credit. Had he been less interested in the political side of things, Modica would have noted that GM’s hands-off approach to Volt dealers has led to dealers gouging early adopters. Sure, that storyline would have proven that short-term demand for the Volt was strong, but then Modica could have pointed to the contrasting situation at Nissan, where Leaf sales are pre-arranged online, cutting dealer markups out of the loop. This strategy also keeps Nissan dealers from taking the tax credit (at least in theory), and will prevent any “gouging fatigue” that could hurt Volt demand down the road.

From the other side of this issue, if Modica had been more interested in the politics of plug-in tax credits, he would have realized that manufacturing a poorly-proven “scam” was wholly unnecessary. As TTAC reported back in February, taxpayers have already lost some $7m worth of plug-in tax credits to fraud. In short, the Treasury Inspector General for Tax Administration has already proven that $33m of tax credits were claimed erroneously by everyone from prisoners to IRS employees ($7m of which is unrecoverable), offering Modica a well-documented scandal that has been undercovered in the mainstream media.

When industry and politics collide, the public deserves strong, independent information gathering and analysis to protect against inevitable abuses. But those who wish to take up that mantle have a responsibility to own up to their motivations: are they looking for legitimate issues regardless of their political or economic consequences, or do they set out with predetermined conclusions and gather up just enough information to support them? Unfortunately, Modica’s history and recent work seem to place him in the former category. Exploring the interaction between the US Government and the auto industry that it now interacts with more than ever, requires the ability to spot scandals without having to manufacture them. And the more you cover the inevitably tortured relationship between private business and public government, the more you realize that there are very few big scandals anyway… after all, free markets and fair governments almost always die the death of a thousand cuts rather than being taken down by a cartoonish scandal.

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Could This Be The Ideal Colorado Winter Car? http://www.thetruthaboutcars.com/2011/01/could-this-be-the-ideal-colorado-winter-car/ http://www.thetruthaboutcars.com/2011/01/could-this-be-the-ideal-colorado-winter-car/#comments Fri, 21 Jan 2011 21:30:50 +0000 http://www.thetruthaboutcars.com/?p=381392 I moved to Denver over the summer and am now experiencing the joys of proper snow driving for the first time in the 29 years since the State of California saw fit to give me my first driver’s license. With just a ’92 Civic and a ’66 Dodge A100 in my personal motor pool, I […]

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I moved to Denver over the summer and am now experiencing the joys of proper snow driving for the first time in the 29 years since the State of California saw fit to give me my first driver’s license. With just a ’92 Civic and a ’66 Dodge A100 in my personal motor pool, I figure it’s time for me to start shopping for something with four driven wheels. In fact, I need something that can do four-wheel burnouts on dry asphalt!
I could do what everyone else in the state— including my wife— did and just buy an Outback, but I was thinking more along the lines of a Scout… or maybe a BMW 325iX… or an AWD Justy. At the top of the list, however, sits the 15-years-before-its-time/the-fools-weren’t-ready-for-it AMC Eagle, a car that came about when the cash-strapped folks in Kenosha decided to drop a Concord body atop Jeep-based running gear. You see quite a few of them around here, but I hadn’t seen one that I needed to buy. That is, until I got tipped off about this excellent ’82 SX/4 (you can go here to see some photos, but do not attempt to install the American Greetings software that allows you to look at full-sized images. Trust me). Why, yes, a rally-ized Eagle coupe with hot-rodded 390, 4.10 gears, and manual-body Torqueflite sounds like a great idea! I’d probably have to cut out at least part of the full roll cage, since whacking one’s dome on a steel bar in a minor fender-bender isn’t my idea of fun, and I don’t feel like wearing a helmet on the street. OK, fine, it’s actually a very, very stupid idea, but still: I must have this car!

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TrueDelta Crosses Over http://www.thetruthaboutcars.com/2010/12/truedelta-crosses-over/ http://www.thetruthaboutcars.com/2010/12/truedelta-crosses-over/#comments Thu, 16 Dec 2010 16:54:12 +0000 http://www.thetruthaboutcars.com/?p=377480 I’ve got three kids, so no M Coupe or other common object of pistonhead lust for me. Since 2003 I’ve been stuffing the brood into the back of a Mazda Protege5 while casually looking, off and on (mostly off) for a suitable three-row people hauler. Most people don’t spend six years looking for a car, […]

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I’ve got three kids, so no M Coupe or other common object of pistonhead lust for me. Since 2003 I’ve been stuffing the brood into the back of a Mazda Protege5 while casually looking, off and on (mostly off) for a suitable three-row people hauler. Most people don’t spend six years looking for a car, but I’ve never found the right one at the right price. The right one being quite nice, since I’m picky (about cars at least). And the right price being low, because I’m cheap.

The search grew more active recently. My wife quit her “real job” to help improve our site, TrueDelta.com. With both of us now working at home, we didn’t need as many cars. And none of those we owned really fit our needs. With our parents aging, we’ve started visiting each set at least twice a year—a 700-plus-mile drive each way. The cars have also been aging, such that driving 700 miles had begun to push our luck. Oh, and the kids also seem to be growing.

The “inca gold” (impossible to lose in a crowded parking lot, even if you want to) PT Cruiser was the first to go, sold it to a grandmother from Detroit who shares my wife’s taste in cars. The Lexus GS 400 acquired from my father three years ago is also on the block, but I haven’t been trying too hard to sell it before having another car to replace it.

So, at least eight years after the typical parent I finally got serious about getting something into which the family could comfortably fit. I’ve always liked the size and interior packaging of the Ford Freestyle, and it has been reasonably reliable based on responses to TrueDelta’s survey. So I limited my search to this model and the less tastefully styled but more powerful Taurus X that replaced it.

Both were offered with either a bench or two captains in the second row. In case I wanted to carry all three kids with the third row folded or in conjunction with two grandparents, I wanted the bench. All-wheel-drive would be nice for the snow in Michigan, but front-wheel-drive maintains traction pretty well in these vehicles, so either would do. The wife strongly desires leather, with heat. After watching the kids bake in the back of the Mazda, I felt we should find one with the optional rear HVAC. Finally, I don’t like how these vehicles look with the two-tone paint standard on the lower trim levels. Only the Limited was available with monotone paint, so I hoped to find one attractively priced.

Usually you can pay less buying a car from an owner rather than a dealer. For reasons that escape me, there doesn’t appear to be a good FSBO site for cars. There haven’t been many FSBOs on AutoTrader since they eliminated the free ad option years ago. Even most of the cars on Craigslist are posted by dealers. Despite the Internet’s potential for connecting buyers and sellers, have people given up on selling cars themselves?

I found a car that met my criteria early on, a 2006 Freestyle Limited AWD with nearly all options and 42,000 miles, for $13,900. But it was already sold. Another for eight-and-change had 96,000 miles. My wife vetoed that one—she didn’t want to have to repeat this process in just a couple of years.

Methodical person that I am, I put the key variables into a spreadsheet (8 cents a mile, $1,000 for all-wheel-drive, $650 for rear HVAC, and so forth). A couple cars came close to the one I had missed, but tended to have fewer features—and were also already sold. Reasonably priced Taurus Xs have been in especially short supply. They’re also much less likely to have a bench in the second row.

Lesson learned: if you spot a great deal, jump on it right away, or someone else will.

Tuesday afternoon I decided to take a quick look at AutoTrader, and there it was: a dealer only 70 miles away had just listed a loaded 2008 Taurus X AWD with 30k miles, certified with an extended warranty, totally clean Autocheck report, for $17,900. More than I’ve ever spent on a car before, but a quick entry into the spreadsheet confirmed the steal. Even with no adjustments for being certified, a sunroof, or the nav system, the Taurus X was better than the best deals I’d found thus far. Which were all Freestyles. No other Taurus X Limited had come close.

I called Scott Seiler, Internet sales manager for Brondes Ford in Maumee, Ohio—and was told there was already a deal on the car. Too late, again? Not this time. Scott called back a few minutes later to report that the other deal had fallen through. After making a weak attempt to negotiate the price—Scott was well aware that $17,900 was a “stupid price” (his own words)—I gave him my credit card info to hold the car. Minutes later I was on my way to Ohio, with snow still on the roads and, if I could nevertheless maintain the speed limit, an estimated time of arrival minutes before closing time.

This being my lucky day, the highways were free of snow, ice, and traffic. I called en route to give Scott the rest of my info, so he could get the paperwork together. During this call Scott overheard someone offering to buy the car from the salesman at a neighboring desk. He informed them it was sold.

I arrived still fully expecting a catch. They’d washed the car and put it into the brightly lit service lane—so much for the dangers of buying a car after sunset. The Taurus X could hardly have been cleaner. I found a broken release for the left side second-row seat, but the warranty will take care of that. Also found nearly new tires—they’d been replaced recently at a cost of over $600.

The paperwork was ready when I arrived, lacking only my signature. It included no unexpected fees. The business manager made no attempt to “rust and dust” me. Apparently there are some outstanding dealers. One reliable tell-tale: Scott has been with this dealership for 27 years, and attested that their employee turnover is very low.

One surprise once in the business office: the dealer had had the car for 400 days. The original asking price: $24,900. The general manager had been driving it, and they had depreciated the car in their tax return. Which might explain the low, low selling price. Or not. But I have yet to find another explanation.

In my earlier rush I hadn’t bothered to perform a nationwide search on AutoTrader, to see how the car truly stacked up. Back home, I discovered that it had been the cheapest Taurus X Limited AWD with under 45,000 miles in the entire country. The next closest was $2,100 more, had another 14,000 miles, had fewer options—and had buckets in the second row.

So I’m feeling quite lucky. The right car, at the right price, in the right place. What are the odds?

Michael Karesh owns and operates TrueDelta, an online source of automotive reliability and pricing data

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2010 Consumer Reports Survey Analysis: Part Two: EcoBoost Oddity http://www.thetruthaboutcars.com/2010/11/2010-consumer-reports-survey-analysis-part-two-ecoboost-oddity/ http://www.thetruthaboutcars.com/2010/11/2010-consumer-reports-survey-analysis-part-two-ecoboost-oddity/#comments Wed, 03 Nov 2010 18:50:20 +0000 http://www.thetruthaboutcars.com/?p=371335 In Part 1, we found that, despite its large overall sample size, Consumer Reports’ has serious gaps in its coverage. But what about the reliability ratings they can provide? An FAQ asserts CR’s ability to split results by engines, drive types, and so forth. At first glance, this appears valuable, as CR’s reliability scores often […]

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In Part 1, we found that, despite its large overall sample size, Consumer Reports’ has serious gaps in its coverage. But what about the reliability ratings they can provide? An FAQ asserts CR’s ability to split results by engines, drive types, and so forth. At first glance, this appears valuable, as CR’s reliability scores often differ from powertrain to powertrain. But are these differences valid? Should you avoid the V6 in the Camry or insist that your Flex be EcoBoosted?

In his review of CR’s latest results last week, Jack Baruth noted that the 2010 V6 Camry is rated worse than average. Dig a little deeper, and this rating appears based on problems with squeaks and rattles, power accessories, and the audio system…all involving parts shared with the other Camry variants. The implied problems with the V6 powertrain? They don’t exist. All of the powertrain-related systems receive top marks.

The Ford Flex EcoBoost that leads its class is predicted to have reliability 60 percent better than average. Not mentioned in the press release: the Ford Flex AWD sans-boost is predicted to have reliability 16 percent worse than average—nearly bad enough for the half-black blob and a non-recommend. A 76-point difference is huge. A solid red blob and a solid black blob, best and worst ratings, are 90 points apart. The source of this massive difference? It’s not a pair of turbos.

CR’s predictions are based on however many of the three most recent model years they have sufficient data for. The EcoBoost was new for 2010, so the prediction for 2011 is based entirely on the 2010. In contrast, the prediction for the sans-boost also incorporates data on the 2009. Should first-year glitches unrelated to the powertrain have any more bearing on the 2011 sans-boost than on the 2011 EcoBoost? In CR’s formula, they do.

Second, even looking at only the 2010s, the sans-boost fares much less well than the EcoBoost. This would justify a more pessimistic prediction, except that, just as with the Camry (and nearly every other case I checked), the differences between the powertrain-based variants have little or nothing to do with the powertrains. Owners of the 2010 sans-boost Flex reported far more problems with squeaks and rattles, body hardware, power equipment, and the audio system—all involving parts shared with the EcoBoost.

This is far from an isolated anomaly. For every case like BMWs with the turbocharged six (with its notoriously unreliable fuel pump), there are a number of others like the Toyota Camry, Ford Flex, Hyundai Genesis (a lower V8 score can be traced to the Technology Package offered with both engines, but more often ordered with the V8), and Mercedes-Benz C300 (where non-powertrain problems common enough to earn the 2010 a solid black blob go away when AWD is added). Key takeaway: the differences in CR’s ratings for different powertrains often are not due to powertrain-related parts. When there are such differences, it’s critical to check the system-level blobs.

In an FAQ, CR provides an explanation for a similar (though only half as large) discrepancy between the very closely related Chevrolet Equinox and GMC Terrain [brackets mine]:

The Terrain had slightly [about 40 percent] more [reported] electrical, audio, and paint and exterior trims [sic] problems… We believe, though, in the accuracy of our data, and we have a commitment to report the experiences our subscribers share with us. In some cases, they report different reliability experiences with closely related models.

In fewer words: our data are accurate because we believe in the accuracy of our data.

Unless Ford performs far more thorough quality control on the boosted Flex, an unexplained 76-point difference should not happen. A miniscule sample size might explain it, but CR’s sample size isn’t small. The problem, then, is their methods. Ask the wrong question, and it doesn’t matter how many people answer it.

The problem with CR’s key question: it asks car owners to report problems they considered serious. Letting each respondent decide whether or not a problem is serious enough to report opens the door wide for bias. Not CR’s bias, at least not directly. But any bias the car owner might have, and have honestly. Love the car? Treated well by the dealer? Warranty paid for the repair? Then even a failed transmission might not seem “serious.” Especially not if it happened almost a year ago—the impact of this subjective wording is magnified by the annual (in)frequency of the survey. At the other extreme, many CR subscribers report minor problems like rattles and squeaks. If EcoBoost owners love their Flex considerably more than sans-boost owners do, a large difference in reliability—as reported by CR—might result.

In response to a blog comment critical of CR’s methods, a staff member recently argued:

The reliability survey asks if the owner had a problem requiring repair. The way it is constructed, it is objective… To use your example, if Fox News questioned viewers about political views, it would yield a certain, slanted response. However, if Fox News asked viewers if their TVs needed repairs in the past year, either they did or didn’t, regardless of political persuasion.

This would be a valid defense—but only if the survey is truly constructed to maximize objectivity. CR’s is not. The way their key survey question has actually been worded—for years—introduces so much subjective variation that even large sample sizes cannot compensate. A massive 76-point difference can be elicited where none objectively exists—and then be ignored when reporting results. Most models differ from one another by much less.

Michael Karesh owns and operates TrueDelta, an online source of automotive pricing and reliability data.

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Editorial: Do Not Buy A 2011 Mustang 5.0 http://www.thetruthaboutcars.com/2010/08/editorial-do-not-buy-a-2011-mustang-5-0/ http://www.thetruthaboutcars.com/2010/08/editorial-do-not-buy-a-2011-mustang-5-0/#comments Tue, 31 Aug 2010 18:23:04 +0000 http://www.thetruthaboutcars.com/?p=364321 What you see above is the cutaway of the Ford 5.0L mill, taken from the 2010 New York Auto Show. Formerly known as the Coyote V8, the 5.0-packed 2011 Mustang GT hit the showroom floors, winning rave reviews with every journalist lucky enough to get their hands on one. While blogging for TTAC at the […]

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What you see above is the cutaway of the Ford 5.0L mill, taken from the 2010 New York Auto Show. Formerly known as the Coyote V8, the 5.0-packed 2011 Mustang GT hit the showroom floors, winning rave reviews with every journalist lucky enough to get their hands on one. While blogging for TTAC at the New York Auto Show, I hit up the Five-Oh engine displays at the Ford booth.  It was a thoroughly technical and suitably beautiful exhibit.  Only problem was, it gave away a secret that nobody should know.  Camera in hand, I did the deed: a picture tells a thousand words, but this TTAC Editorial still needs about 800 words to go with.

Take a gander at the 5.0’s combustion chamber, highlighted in red. It’s a strange little bump. And nothing more, right? Sure, unless you read between the (casting) lines: its proof that the 5.0 Mustang shall receive a significant improvement in the near future. Yes, Dearborn’s got a trick up its sleeve: direct injection.

I spoke with one of the well-versed product specialists, a booth babe in true TTAC style, aside from the fact that he was most certainly not a “she.” No, I never asked if he came with the car, but I did challenge him to explain the 5.0’s tempting cylinder head design. And while he never said anything quotable, the look on his face was picture perfect: if I told you, I’d have to kill you.

Typical auto show banter between savvy product specialists and bored car hacks?  Perhaps. But the fact remains, nobody should buy a Mustang GT until that casting bump turns into a hole for a fuel injector. But what’s the big deal?

Direct fuel injection, as opposed to (intake) port fuel injection, is the latest technology in the advancement of the internal combustion engine.  It’s one of many advancements that proves the piston engine gets better with age, and beats the dubious “Moore’s Law” argument of Tesla fans. And the proof is already on the street: owners of late model diesels, EcoBoost Fords several GM products like the Cadillac CTS already know the drill: direct injection gives more power, more economy and lower emissions with zero changes to the driving experience. It is the textbook definition of having your cake and eating it too.

Geek Alert!  Let’s get detailed: a port fuel injection vehicle has the fuel injector placed in the intake manifold, usually at the end of the runner, behind the intake valve. Direct Injection places the injector in the red circle from the picture above: so there’s no more mixing of air and fuel in the intake.  The benefit is simple:  injecting the fuel at a very high pressure (2000psi, compared to 10-60 psi) directly into the combustion chamber produces a cooling charge. Much to the joy of mechanical engineers everywhere, “cold” fuel gets shot into a hot combustion chamber: Thermodynamics wins.  This helps reduce engine knock, so higher ignition timing and/or compression ratios can be implemented. Just like sane doses of Nitrous Oxide on a motor, the extra cooling charge afforded by Direct Injection is a huge win by itself.

The doubters might mention the Jaguar XF makes “only” 385 horses with its direct injected 5.0L mill, which is less than the current Mustang’s 412 ponies. But both 5.0s come from different engine families.  And when you consider the Jag’s power bump from port to direct injection, the improvement is real.

Even if my theory is correct, there’s no guarantee that the direct injected Mustang shall be any more powerful than the current model.  Ford can pull a fast one: de-tuning the direct injected 5.0 for a multitude of reasons. Thanks to drive-by-wire and traction control nannies, the direct injected 5.0 can easily give 80% of a day’s work and nobody will notice.  Considering damn near every vehicle today has power robbing torque management built into its DNA, why would Ford up the Mustang to its full potential?

Go back to 1986: the year that port fuel injection (@200hp/285tq) took the 5.0’s game to refined places the Holley four-barrel (@210hp/270tq) of 1985 couldn’t even imagine.  Torque went up, but the 1986 Mustang lost 5% in peak horsepower. Cue the modestly-redesigned 1987 Mustang: a quickie head swap to ye olde F-150 parts turned the Mustang’s EFI 5.0 (@225hp/300tq) into the real deal. That’s a healthy 7 and 11% increase in hp/tq over 1985’s tried and true Holley carburetor.  All of which signaled the end to our fascination with glorified toilet bowls on engines. For the better!

Imagine if the direct injected 5.0 pulls a “1987” on us: the 412hp/390tq we see today will be nothing compared to the 441hp/433tq of our near future. It’s entirely possible. But will history repeat itself?  Don’t say I didn’t warn you.

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Price Analysis: 2010 Volvo S60 And 2011 Saab 9-5 http://www.thetruthaboutcars.com/2010/06/price-comparison-2011-volvo-s60-versus-2011-saab-9-5/ http://www.thetruthaboutcars.com/2010/06/price-comparison-2011-volvo-s60-versus-2011-saab-9-5/#comments Tue, 01 Jun 2010 14:29:06 +0000 http://www.thetruthaboutcars.com/?p=357757 In recent years Sweden’s car makers have staked out an uneasy position above the mainstream brands but below the premium European marques. With profits elusive, both were recently sold by their American owners. And both are about to introduce new sedans that they badly need to sell well. How does the pricing of the new […]

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In recent years Sweden’s car makers have staked out an uneasy position above the mainstream brands but below the premium European marques. With profits elusive, both were recently sold by their American owners. And both are about to introduce new sedans that they badly need to sell well. How does the pricing of the new 2011 Volvo S60 and 2010 Saab 9-5 compare? Has either been priced aggressively to pump up sales?

I’ve come across remarks that the Saab is considerably more expensive than the Volvo. And it is, especially before adjusting for its roughty $4,250 in additional standard content (based on TrueDelta.com’s car price comparison tool). The Volvo starts at $38,500, the Saab at $48,390. In both cases only the top trim level will be available initially, with others to follow.

But this isn’t a valid comparison. They’re both sedans powered through all four wheels by 300-horsepower turbocharged sixes, but the 9-5 is much larger than the S60, with 15 inches more overall length (197 vs. 182) and over five inches more rear legroom (38.8 vs. 33.5). The Volvo S60 really competes with the Saab 9-3, while the Saab 9-5 really competes with the Volvo S80. So each requires a comparison with its own peer group.

For the enlarged Saab 9-5, this means other midsize luxury sedans. After similarly loading up both cars (the default comparison at TrueDelta.com), the 2011 BMW 535i was about $15,000 more than the new 9-5. Even after adjusting for remaining feature differences the BMW is about $13,900 more, a sizable premium but one that history has proven many people will pay. The 2010 Mercedes-Benz E350 4Matic is not quite as pricey, about $10,200 more before feature adjustments, and about $8,000 afterwards. The 2010 Audi A6 3.0T is closer still, about $5,300 more than the Saab before feature adjustments, and about $5,700 more afterwards.

Moving beyond the pricey Germans, the redesigned 2011 Infiniti M37x lists for virtually the same as the Saab before adjusting for remaining feature differences, but is about $3,000 more afterwards. A Lexus GS 350 AWD? About $1,800 less than the Saab, but also a little more compact. And the 2010 Volvo S80 T6, which has failed to meet sales expectations? It’s about $600 more before feature adjustments and about $900 more afterwards. Close, but it offers considerably less rear legroom, and needs to be closer to the Saab in size. From these comparisons, Saab appears to have priced the new 9-5 about even with the Volvo (which few buyers pay remotely close to sticker for) and not far from the Infiniti and Lexus. If the car sells, it won’t be based on an aggressive pricing strategy.

The new Volvo S60 goes up against the 3-Series and the other aspirants to the BMW’s crown. It replaces a model that has been on life support in the U.S. for the past three model years. Here as well the BMW costs quite a bit more. Specifically, a similarly loaded up 2011 335i xDrive lists for about $7,200 more. With the 2010 Audi S4 the difference is even larger, about $10,000. But then Volvo hasn’t blessed the new car with its late, lamented R moniker. The closest American competitor, the Cadillac CTS 3.6 AWD, is about $4,000 more than the Volvo after a series of price increases over the past few years.

On the other hand, a 2010 Infiniti 2010 G37x lists for about $4,900 less before feature adjustments, and still about $2,900 less afterwards. (The Japanese offer no other 300+ horsepower AWD sedans in this lower-midsize entry lux class.) Saab deprived the 9-3 of its V6 for 2010. Going back to the 2009, the 9-3 Aero was about $2,500 more expensive than the new S60—but massive $6,500+ rebates were required to get them off dealer lots. And what about the Volkswagen CC, which shares a coupe-like roofline with the new S60? In VR6 form it’s within $1,000 of the Volvo. The Volvo’s interior should be considerably nicer than the VW’s, and in general it should have a more premium look and feel. But is this a sign that the Volvo is aggressively priced, or that the VW is overpriced? More likely the latter.

So, with the new cars both Saab and Volvo appear to have maintained their pricing position from the past decade or so. They’re much less expensive than comparable German cars, but are at best even with and are often more expensive than Japanese competitors. This pricing strategy hasn’t helped them sell many cars in the U.S. in recent memory. So, unless the new cars are highly desirable to car buyers—they’ve really got to be outstanding in some highly relevant way—they’re not likely to sell much better than the cars they replace.

Of the two, the Volvo has the better shot, even a much better shot. Its brand is stronger, with a clearer identity and broader awareness and consideration. Its company’s future is (relatively) more secure. The new sedan’s more dramatically styled. And it’s simply easier to sell a $40,000 car than a $50,000 car.

But even $40,000 is a stretch for these brands. Neither should count on selling many new S60s or 9-5s with the top trim level, and each needs to introduce lesser trims before the public fixates on the introductory pricing—if it hasn’t already.

To run your own price comparisons: Car price comparisons

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The Truth About Consumers Digest http://www.thetruthaboutcars.com/2010/05/the-truth-about-consumers-digest/ http://www.thetruthaboutcars.com/2010/05/the-truth-about-consumers-digest/#comments Mon, 10 May 2010 20:55:00 +0000 http://www.thetruthaboutcars.com/?p=356124 With strong new auto safety legislation being debated in congress,the role and scope of government regulation in the auto industry is becoming a hotly-contested issue. But one important consideration is being left out of the discussion: the role of private “regulation” of the auto industry. Even as the new legislation was being drafted, we were […]

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With strong new auto safety legislation being debated in congress,the role and scope of government regulation in the auto industry is becoming a hotly-contested issue. But one important consideration is being left out of the discussion: the role of private “regulation” of the auto industry. Even as the new legislation was being drafted, we were treated to an object lesson in non-governmental regulation when the non-profit Consumer Reports issued a “do not buy” warning for the Lexus GX after it exhibited lift-off oversteer on a test course. Because CR performs independent testing on a wide variety of dealer-example vehicles, it was able to detect this error, which prompted Toyota to stop sales and production of the model until a fix was released. Throughout the incident, NHTSA played second fiddle to CR, merely checking the non-profit’s work. The lesson: a subscriber-based, non-profit is the real front line of US auto regulation. But, as the Wall Street Journal [sub] reports, Consumer Reports is being shadowed by another organization called Consumers Digest… and you don’t want to make the mistake of confusing the one with the other.

Consumer Reports is owned by the not-for-profit Consumers Union, and it jealously guards its credibility. CR buys all the vehicles it tests to ensure that they are not OEM-fettled for flattering performance, and refuses to allow its awards to appear in manufacturer advertising. As head of testing David Champion puts it to the WSJ,

We do not want to be beholden to the manufacturers in any way. We don’t want to be seen as selling our names to manufacturers

The same can not be said for its doppelganger, Consumers Digest. Like CR, CD puts out a regular report with “best buy” recommendations of certain vehicles. Like CR, the CD publication runs no advertising, but instead of relying on consumer subscriptions, CD has a very different source of revenue: licensing its awards for advertising purposes. As an example, the WSJ points out that GM received no fewer than 15 CD “Best Buy” awards, and GM has paid the magazine to use those ads in its marketing and advertising efforts. Though GM refused to reveal how much it paid CD to license its 2010 awards, but CD says the traditional fee is $35k for the first award and $25k for each award thereafter.

Of course, CD swears that this troubling business model in no way affects the decision to award “Best Buy” kudos to a given manufacturer. Editor Rich Dzierwa tells the WSJ that there is

no pressure on the editorial staff to consider products, to consider vehicles because either they have been licensees or because there is a possibility that they will be. Licensing comes after our review process

Of course there’s evidence that this isn’t the whole story, namely that CD’s award page lists all winners of its “Best Buy” award but only offers links with further information for models that have paid CD licensing fees.

Not that GM is sweating the appearance of being the major benefactor of an award mill. GM executive director of marketing Paul Edwards tells the WSJ:

We had done some research in terms of what resonates [with consumers] and what doesn’t, and Consumers Digest scores near the top

Now, why would that be? Would it be because Consumers Digest is widely available and read by millions? Not likely, considering the WSJ’s revelation that CD

has no subscribers, runs no ads and is only available in certain bookstores and retail shops

Could this under-earned “resonance with consumers” have something to do with the fact that the name “Consumers Digest” sounds incredibly similar to the name “Consumer Reports,” possibly the best-known source of reliability and quality data in the country? There sure isn’t an overabundance of alternate explanations.

Granted, Consumers Digest isn’t the only company out there peddling awards and surveys to automaker marketing departments. According to an unnamed automaker,

J.D. Power charges as much as $300,000 for copies of a survey, and the same amount to use the awards in ads

And there are plenty of other examples of firms that generate marketing materials for a fee, while insisting that the fees in no way affect the outcome of their surveys and awards. What makes the Consumers Digest example so especially galling though, is the similarity between its name and Consumer Reports. Given that CR is the closest thing to a private auto regulator in this country (and the only “regulator” that regularly tests random vehicles), this would be akin to founding a fuel efficiency-rating organization named The Environmental Protection Association, and accepting fees from automakers to feature the “EPA ratings” it generates in advertisements.

Luckily, private regulation doesn’t come down to a single agency, but rather relies on whole networks of private actors to inform consumers and citizens. By informing the public of the differences between CR and CD, the WSJ (and now, TTAC) are themselves regulating the regulators, separating the wheat (CR) from the chaff (CD). Ultimately though, the best reliability data comes from consumers themselves as well as their non-profit watchdogs. TTAC contributor Michael Karesh may not have a dedicated test track or the budget to regularly buy vehicles for testing purposes, but his TrueDelta site solicits data from the actual owners of vehicles, providing an instant, unfiltered and broad sense of a model’s reliability profile. Databases like TrueDelta, as well as well-funded, non-profit regulators like CR are crucial to maintaining a well-informed car-buying public, which in turn is crucial to healthy market function. By exposing the less-scrupulous operators in the field of automotive awareness, we hope TTAC is contributing to this end as well, in its own distinct way.

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Consumer Reports Annual Auto Issue: The Good, The Bad, And The Green http://www.thetruthaboutcars.com/2010/03/consumer-reports-annual-auto-issue-the-good-the-bad-and-the-green/ http://www.thetruthaboutcars.com/2010/03/consumer-reports-annual-auto-issue-the-good-the-bad-and-the-green/#comments Mon, 15 Mar 2010 18:52:43 +0000 http://www.thetruthaboutcars.com/?p=348989 That Bible of the intelligencia, Consumer Reports, has released its 2010 Annual Auto Issue, and once again, denizens of Cambridge, Austin, Berkeley, Eugene, and their sister university towns all over the land are parsing its pages, seeking cars that will maximize their utility. Or maybe I’m projecting. Anyway, with apologies to Michael Karesh and True […]

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That Bible of the intelligencia, Consumer Reports, has released its 2010 Annual Auto Issue, and once again, denizens of Cambridge, Austin, Berkeley, Eugene, and their sister university towns all over the land are parsing its pages, seeking cars that will maximize their utility. Or maybe I’m projecting. Anyway, with apologies to Michael Karesh and True Delta, here’s a summary of the work of the wonks from Yonkers and East Haddam.

“Top picks”–the best in each of ten categories, is COTY based on systematic analysis. The best car overall is the Lexus LS 460L, with “an outstanding 99 out of 100 in our road test…” This V8-powered, preternaturally quiet rolling living room “isn’t exactly fun to drive,” but it does “deliver brisk acceleration and a relatively good 21 mpg overall” (same as the porky Accord V6), says CR. Best sports sedan: the Infiniti G37 for the fourth year in a row–test score 95; Best in greenitude: the Prius. Chevy takes the honors in both SUV (Traverse) and pickup (Silverado) categories.

The other Top Picks: Elantra SE (small sedan), VW GTI (sporty car), Nissan Altima (family sedan), Forester (small SUV), and Mazda5 (family hauler).

More big news: Hyundai jumps from ninth to fourth place overall among the manufacturers, confirming the Buddhist view of the world that everything changes. (I know, I know, but somehow, I can’t wrap my mind around Hyundai’s ascent. They should at least change their name, like Datsun did.) The CR overall manufacturer scores factor in reliability on the one hand, and road test scores–everything else–on the other. Hyundai earned 73 out of 100 points despite less than stellar road test scores, where it tied Toyota (74/100) for eighth place. You might think Hyundais must be particularly reliable to pull themselves up from these mediocre road tests, but the reliability graphs, while good, have fewer filled in red dots than Honda (77 overall) and Subaru (ditto).

While Asian manufacturers soar, the Americans… well, it hasn’t been this bad since the British burned down Washington during the War of 1812. Two decades ago, the MIT-based authors of The Machine that Changed the World predicted we would overtake the Europeans in reliability by the end of the ‘90s. But the ‘90s ended with our manufacturers still dominating CR’s list of “used cars to avoid.” That trend continues, with Chrysler scraping bottom (46/100), most of its models having below-average reliability or low road test scores, followed by GM (57), with “spotty” reliability and “too many older models [with] subpar performance.” Ford earns an encouraging 64, despite “some older models” that drag down its score.

Meanwhile, the Euros have us all–even Ford–beat, despite the downgrading of MB (69) and BMW (67) for their “frustrating controls.” Reliability in MB and VW (72)–long a stain on German engineering–has improved. CR notes that the VWs Golf and CC now have “excellent” reliability, and the Jetta 2.5 is “above average” (B). But reliability is ebbing in some Beemers.

In another noteworthy development,  “Older cars have become far more reliable than they were even five years ago,” according to CR. “There has never been a better time to buy [used].” That may be, but for Toyotas and Hondas, there’s no good reason to buy used if you can afford new, because depreciation is strictly linear, says Greg Nowell, a professor at the State University of New York, Albany.

Nonetheless, don’t assume that all cars from top manufacturers are up to the standard—check the reliability tables! says CR, noting that 2000-2003 Honda Odysseys have unreliable transmissions.

Odyssey slushboxes notwithstanding, in terms of reliability, Honda sweeps the “best of the best” used cars, 2000-2009, topping 6/9 categories, with Lexus ES, Infiniti M35, and Miata taking “upscale cars,” “luxury cars,” and “sports & sporty cars,” respectively.

GM dominates worst of the worst ‘00-09, with 16 out of 33 entries, mostly trucks and vans–17 if you count the Korean “Chevy” Aveo. The rest: six Chryslers (Sebring fans will smile to know that their fave convertible made the list), five VWs, the Audi A6 Allroad, Kia Sedona, Lincoln Aviator, Merc R-Class, and Mini Cooper convertible.

CR’s “owner satisfaction” scores are interesting because they sometimes sharply diverge from the stereotype of CR’s subscribers, reflecting, perhaps, a greater diversity of demographics, as well as that different people love their cars for very different reasons. Owner satisfaction may be about cost and reliability, but it is just as likely to reflect love, however irrational. For example, in first and third place, we have the Dodge Challenger V8 (92% of owners would buy it again), despite a lousy road test score, and the base Corvette and the Porsche 911 Carrera S (89%, each), despite the former’s underwhelming reliability.

But the Fusion hybrid takes second place (91%) and the Prius takes fourth (88%). Can we infer that greenitude inspires love—especially when it comes with a patriotic flavor? Does this reflect CR’s demographics? We’ll examine those questions in a subsequent article.

Scraping bottom in the buy-it-again category, at 37%, is the Sebring (4-cyl sedan), followed by the Nitro (38%), the Caliber (45%), and two Chevies, the 5-cyl. Colorado (45%), and the Cobalt sedan (49%).

Top fuel economy scorers: Prius (44mpg), the oxymoronically-named Smart ForTwo Passion (39), which is also the slowest car to 60 mph, (14.6 sec), Honda Insight EX (38), VW Golf TDI manual (38), Civic Hybrid (37), Fusion hybrid (34) and on down through several others to the Mini manual (33).

Best values, in order: Fit, Prius, Golf (2.5), Civic EX, Jetta TDI, Elantra SE, Corolla LE, Camry LE (4-cyl), Forester 2.5X, and Camry Hybrid. Worst values include the Wrangler Unlimited Sahara, the Hummer H3, and the Cayenne S.

Cars you’re most likely to be caught dead in: the Aveo and the Kia Rio, as well as the 4790 lb. Dodge Dakota—but not the Smart–proving that safety is more than just having more metal than the other guy. (Consumer Reports did not use my glib phraseology on this matter, or anything even remotely resembling it.)

Several notable “Highlights from the auto track:”

* The ’10 Taurus’ score sagged slightly due to “new styling that compromises visibility and accommodations.”

* CR’s Fusion test car had what Ford said was a glitch in the software that interfered with braking. A test driver “hit the pedal and didn’t feel the car stopping as it should have.”

* CR tested smart throttles on the MB E350 and the VW Jetta Wagon, and “…even with the accelerator wide open, hitting the brakes immediately disengaged the throttle and allowed us to stop the car safely.”

And finally, this: Consumer Reports has suspended its recommendation of eight Toyota models, based on the unintended acceleration problem. The models are all those that have been recalled: the ’05-’10 Avalon, the /’09-10 Matrix, the ’07-’10 Tundra, the ’08-’10 Sequoia, and some versions of the ’07-’10 Camry, and the ’09-10 Corolla and RAV4.

Consumer Reports buys its test cars anonymously from dealers, and conducts more than 50 tests and evaluations on each car.  Reliability assessments are based on subscribers’ experience with 1.4 million vehicles, assessed in an annual questionnaire.

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