The Truth About Cars » High Finance http://www.thetruthaboutcars.com The Truth About Cars is dedicated to providing candid, unbiased automobile reviews and the latest in auto industry news. Mon, 22 Dec 2014 22:21:32 +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 » High Finance http://www.thetruthaboutcars.com/wp-content/themes/ttac-theme/images/logo.gif http://www.thetruthaboutcars.com/category/news-blog/high-finance/ Ally Leaves Government Ownership, US Treasury Exits Auto Industry http://www.thetruthaboutcars.com/2014/12/ally-leaves-government-ownership-us-treasury-exits-auto-industry/ http://www.thetruthaboutcars.com/2014/12/ally-leaves-government-ownership-us-treasury-exits-auto-industry/#comments Mon, 22 Dec 2014 11:00:27 +0000 http://www.thetruthaboutcars.com/?p=963794 With its GMAC Financial leather jacket burning in the closet while a supermodel lip-synchs in the tub, Ally Financial is at last free from government ownership. The Detroit News reports the U.S. Treasury sold its remaining 11.4 percent stake in the lender Friday, six years to the day the Bush II administration made the decision […]

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With its GMAC Financial leather jacket burning in the closet while a supermodel lip-synchs in the tub, Ally Financial is at last free from government ownership.

The Detroit News reports the U.S. Treasury sold its remaining 11.4 percent stake in the lender Friday, six years to the day the Bush II administration made the decision to rescue the automotive industry from certain doom; the Treasury held 74 percent to start. The sale — 54.9 million shares at $23.25 per share — brought in $1.3 billion, adding to the $19.6 billion recovered from three separate investments totalling $17.2 billion.

Overall, the bailout recovered the $60 billion invested under the Obama administration, though said administration didn’t include the $10 billion lost in that time, nor the initial $25 billion pumped into the ailing industry in the final days of the Bush II era.

The stake sale also follows a similar action a year earlier, when the department sold its last shares in General Motors. The sale drew a loss of the aforementioned $10 billion from a total investment of $49.5 billion.

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Trucks, SUVs Best Premium Sedans In Over $50K US Segment http://www.thetruthaboutcars.com/2014/12/trucks-suvs-best-premium-sedans-50k-us-segment/ http://www.thetruthaboutcars.com/2014/12/trucks-suvs-best-premium-sedans-50k-us-segment/#comments Mon, 15 Dec 2014 14:00:03 +0000 http://www.thetruthaboutcars.com/?p=961313 Keep those Benzes, BMWs and Audis in the garage, son: $50,000-plus trucks and SUVs are where it’s at for the ballers and players these days. TrueCar says trucks and SUVs account for six of the top 10 best-selling vehicles in the United States market, specifically the segment where transaction prices of $50,000-plus are the norm. […]

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Keep those Benzes, BMWs and Audis in the garage, son: $50,000-plus trucks and SUVs are where it’s at for the ballers and players these days.

TrueCar says trucks and SUVs account for six of the top 10 best-selling vehicles in the United States market, specifically the segment where transaction prices of $50,000-plus are the norm.

The biggest of them all? The Ford F-150, whose projected 2014 volume of 189,776 “will likely surpass total U.S. volume of luxury car benchmarks including BMW’s combined 3, 5 and 7 Series sales or total deliveries for the Audi brand this year.” The Blue Oval will see revenue of $10.8 billion from those high transactions, making up a third of an estimated $33.2 billion for the overall F-Series portfolio.

The demand for looking California and feeling Minnesota is helped in part by a recovering U.S. economy, improved vehicle quality, and a growing supply of cheap gasoline, which is helping the $50,000-plus transaction segment, as well: approximately 8.1 percent of total 2014 sales will transact at that level, up from 6.6 percent in 2013.

Finishing out the podium per TrueCar is Fiat Chrysler Automobiles’ Ram truck lineup, with sales of 76,266 at the $50,000 transaction level, Mercedes taking third with its E-Class at 67,006.

TrueCar 2014 50K USD Transaction Table

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Richardville: Michigan Doesn’t Allow ‘Predatory Lending’ http://www.thetruthaboutcars.com/2014/12/richardville-michigan-doesnt-allow-predatory-lending/ http://www.thetruthaboutcars.com/2014/12/richardville-michigan-doesnt-allow-predatory-lending/#comments Mon, 15 Dec 2014 12:00:40 +0000 http://www.thetruthaboutcars.com/?p=961257 Michigan Senate Majority Leader Randy Richardville of Monroe, the senator behind the bill that would allow auto title loan companies to do an end-run around the state’s title loan ban by posing as pawnbrokers, proclaimed the 276-percent interest loans the title companies would provide consumers weren’t predatory. The Detroit News reports the outgoing senator said […]

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Randy Richardville, King of Financial Slavery in Michigan Since 2014

Michigan Senate Majority Leader Randy Richardville of Monroe, the senator behind the bill that would allow auto title loan companies to do an end-run around the state’s title loan ban by posing as pawnbrokers, proclaimed the 276-percent interest loans the title companies would provide consumers weren’t predatory.

The Detroit News reports the outgoing senator said as much before reporters last week during the state legislature’s lame-duck session, adding that he isn’t trying to “ram the bill” through said session, despite introducing it the day after Election Day, and making sure it could bypass committee on the way to the floor for vote.

Richardville also said bank and credit union representatives were meeting with those in the pawn industry to reach a compromise on the bill, which was news to one of the bill’s opponents, Michigan Pawnbrokers Association president Mark Aubrey:

The Michigan Pawnbrokers Association has not been contacted by any agency for compromise. There is no middle ground here. Title lending has no place in the Pawnbroker Act and no place in the pockets of Michigan’s consumers.

Should the bill — No. 1138 in the Senate, No. 5954 in the House — pass, a loan of $1,000 that adds $360 of interest in 12 months — based on a cap of 3 percent per month — would pull in $2,760 within the same period at an interest rate of 276 percent annually, thanks to a 20 percent so-called “usage fee” charged monthly.

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Aston Martin Plans To Raise Financing For Portfolio Expansion http://www.thetruthaboutcars.com/2014/12/aston-martin-plans-raise-financing-portfolio-expansion/ http://www.thetruthaboutcars.com/2014/12/aston-martin-plans-raise-financing-portfolio-expansion/#comments Mon, 15 Dec 2014 11:00:10 +0000 http://www.thetruthaboutcars.com/?p=961225 Aston Martin is preparing to crowdfund the old-fashioned way — shares and bonds — its portfolio expansion, per sources close to the automaker. Reuters reports the funds will be used to expand the Aston portfolio to include crossovers, hybrids and premium sedans, as well as add three years to the company’s ongoing recovery plan, with […]

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Aston Martin is preparing to crowdfund the old-fashioned way — shares and bonds — its portfolio expansion, per sources close to the automaker.

Reuters reports the funds will be used to expand the Aston portfolio to include crossovers, hybrids and premium sedans, as well as add three years to the company’s ongoing recovery plan, with the planned deadline to come in 2020. The fundraising plan — based on debt- or equity-raising options made to current investors — would bring in £100 million – £150 million ($156 million – $234 million USD).

The news comes as Aston Martin bids farewell to 2014, which began with a recall of 17,590 units over counterfeit accelerator pedals from a Chinese supplier. Last month, the automaker was granted an exemption from United States safety regs for the DB9 and Vantage. It also gained a new CEO this year, when Andy Palmer left Renault-Nissan to take up where Ulrich Bez left off upon retirement in 2013.

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GM Investing $5B To Modernize, Double Mexican Production http://www.thetruthaboutcars.com/2014/12/gm-investing-5b-modernize-double-mexican-production/ http://www.thetruthaboutcars.com/2014/12/gm-investing-5b-modernize-double-mexican-production/#comments Fri, 12 Dec 2014 14:00:04 +0000 http://www.thetruthaboutcars.com/?p=959265 General Motors will invest $5 billion through 2018 into its Mexican facilities to help double production capacity. Reuters reports $1.4 billion of the $5 billion has spent, according to GM Mexico president Ernesto Hernandez, with the rest coming over the remaining three years. The investment will add 5,600 jobs, and help modernize the subsidiary’s facilities […]

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General Motors will invest $5 billion through 2018 into its Mexican facilities to help double production capacity.

Reuters reports $1.4 billion of the $5 billion has spent, according to GM Mexico president Ernesto Hernandez, with the rest coming over the remaining three years. The investment will add 5,600 jobs, and help modernize the subsidiary’s facilities in Coahuila, San Luis Potosi, Mexico State and Guanajuato.

The investment raises the total figure invested into the nation’s booming auto industry in the first two years of Pena Nieto’s presidency, now at $19 billion. Mexico is currently the seventh largest producer in the world, up from eighth place in 2013.

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Ferrari May Follow FCA Out Of Italy For Fiscal Reasons http://www.thetruthaboutcars.com/2014/12/ferrari-may-follow-fca-italy-fiscal-reasons/ http://www.thetruthaboutcars.com/2014/12/ferrari-may-follow-fca-italy-fiscal-reasons/#comments Thu, 11 Dec 2014 14:00:50 +0000 http://www.thetruthaboutcars.com/?p=958433 Just as Fiat Chrysler Automobiles left Italy to escape the tax man, Ferrari is considering the same as it moves closer to leaving the nest by next October. Bloomberg reports the automaker is also considering remaining in Maranello, though a change in its fiscal address wouldn’t affect manufacturing and engineering operations. A final decision either […]

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Just as Fiat Chrysler Automobiles left Italy to escape the tax man, Ferrari is considering the same as it moves closer to leaving the nest by next October.

Bloomberg reports the automaker is also considering remaining in Maranello, though a change in its fiscal address wouldn’t affect manufacturing and engineering operations. A final decision either way could come in the next few months, per the publication’s anonymous sources.

Such a move would prove devastating to Italy beyond the nation’s economy, as Ferrari is considered a national treasure. Milan Bicocca University professor of public finance Ugo Arrigo said the move would show investors and companies alike that the country and its fiscal system as uncompetitive; Italy’s corporate rate is 31.4 percent, whereas the United Kingdom — where FCA calls its fiscal home — has a rate of 21 percent, soon to be 20 percent.

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Trade Group: CFPB Non-Bank Oversight Threshold ‘Too Low’ http://www.thetruthaboutcars.com/2014/12/trade-group-cfpb-non-bank-oversight-threshold-low/ http://www.thetruthaboutcars.com/2014/12/trade-group-cfpb-non-bank-oversight-threshold-low/#comments Thu, 11 Dec 2014 13:00:03 +0000 http://www.thetruthaboutcars.com/?p=958417 A trade group representing lenders is finding the Consumer Financial Protection Bureau’s proposal to regulate non-bank auto lenders too much to bear. According to Automotive News, the American Financial Services Association says “the threshold the CFPB proposes for larger participants in the automobile finance market is too low,” and could disproportionately drive up compliance costs, […]

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A trade group representing lenders is finding the Consumer Financial Protection Bureau’s proposal to regulate non-bank auto lenders too much to bear.

According to Automotive News, the American Financial Services Association says “the threshold the CFPB proposes for larger participants in the automobile finance market is too low,” and could disproportionately drive up compliance costs, push out smaller lenders from the auto finance game, and make things more difficult for the consumer as far as credit goes.

The threshold in question defines said participants as those originating 10,000 or more auto loans and leases in a given year, a definition that could fit 38 lenders representing 91 percent of all non-bank institutions. The AFSA suggests a threshold of 50,000 loans and leases in a given year, excluding smaller players while putting the oversight upon 17 lenders, or 86 percent of the non-bank market.

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Michigan Bills Could Open Door To Auto Title Lenders http://www.thetruthaboutcars.com/2014/12/michigan-bills-open-door-auto-title-lenders/ http://www.thetruthaboutcars.com/2014/12/michigan-bills-open-door-auto-title-lenders/#comments Wed, 10 Dec 2014 14:00:09 +0000 http://www.thetruthaboutcars.com/?p=957929 Auto title lenders, whose practices are aligned with those dealing in payday loans, furniture leases, and cheaply made wheel-and-tire rentals, may soon be able to profit off of Michigan consumers should a bill in the state senate be passed. The Detroit News reports a bill sponsored by Senate Majority Leader Randy Richardville of Monroe, Mich. […]

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Dirtbag America Auto Title Lending Store and Krispy Kreme 2012

Auto title lenders, whose practices are aligned with those dealing in payday loans, furniture leases, and cheaply made wheel-and-tire rentals, may soon be able to profit off of Michigan consumers should a bill in the state senate be passed.

The Detroit News reports a bill sponsored by Senate Majority Leader Randy Richardville of Monroe, Mich. — with an identical bill led by Rep. John Walsh of Livonia in the state House — would add a loophole to a century-old pawnbroker law to allow those affected to charge a 20 percent monthly “usage fee” to consumers, instead of the 3 percent charged now.

The state’s pawnbrokers are among those opposed to the bill, stating that such an increase would only lead to more defaults, affecting consumers “in an adverse way,” according to American Jewelry and Loan vice president Seth Gold.

As for who is in favor, two opposing lobbyists have found Georgia-based Select Management Resources to be the primary backer of Michigan Senate Bill No. 1138/House Bill No. 5954.

Should the bill go through, auto title lenders could act as pawnbrokers in Michigan, going around a ban of their usual business model in so doing. Further, a loan of $1,000 would go from accumulating a manageable $360 in interest over 12 months, to an insane $2,760 over the same period.

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Explosive Growth For Long Term Auto Loans In Q3 2014 http://www.thetruthaboutcars.com/2014/12/explosive-growth-long-term-auto-loans-q3-2014/ http://www.thetruthaboutcars.com/2014/12/explosive-growth-long-term-auto-loans-q3-2014/#comments Mon, 08 Dec 2014 22:21:25 +0000 http://www.thetruthaboutcars.com/?p=957042 Red-hot auto sales and increasingly pricey cars are generally seen as a sign of a resurgent economy and a consumer base that is finally prospering after years of stagnant wages and poor prospects. But according to data from Experian, much of the growth may come from practices generally regarded as financially unhealthy. In particular, major […]

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Red-hot auto sales and increasingly pricey cars are generally seen as a sign of a resurgent economy and a consumer base that is finally prospering after years of stagnant wages and poor prospects. But according to data from Experian, much of the growth may come from practices generally regarded as financially unhealthy.

In particular, major growth in loans lasting 73-84 months occurred in Q3 of 2014. These long term loans were once unheard of in the United States, but are now seen as a way to lower monthly payments on vehicles that may not be affordable for consumers on a more traditional 36, 48 or 60 month loan.

New vehicle loans lasting between 6 and 7 years grew an astonishing 23.7 percent year over year, with used vehicle loans for the same term growing 18 percent in that same period. The average amount financed was up nearly 4 percent to $27,799 for a new vehicle, and roughly 3.5 percent for pre-owned  vehicles, to $18,656. Leasing, another way for consumers to manage lower payments on a pricier vehicle, grew 7.1 percent year over year, to account for nearly 30 percent of all vehicle financing.

With the average age of vehicles pushing 11 years, many consumers are finally replacing their old car now that the economy appears more stable. While the lower payments may be easier to manage, the downside is that the consumer may very well be underwater on their loan before the vehicle is paid off, and trading it in well only lead to a further debt burden as they must pay off the “negative equity” on their old car, as well as a loan on a new one. But the unprecedentedly long loan terms point to a subset of buyers who are likely stretching themselves beyond what many would consider financially prudent.

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Aluminum Mainstreaming May Mean More Dent & Ding Policies http://www.thetruthaboutcars.com/2014/12/aluminum-mainstreaming-may-mean-dent-ding-policies/ http://www.thetruthaboutcars.com/2014/12/aluminum-mainstreaming-may-mean-dent-ding-policies/#comments Thu, 04 Dec 2014 14:00:30 +0000 http://www.thetruthaboutcars.com/?p=955409 Planning to buy a new 2015 Ford F-150 soon? You might be purchasing a dent-and-ding policy for your ride, too. Automotive News reports the aluminum pickup has created an opportunity for F&I departments to sell dent-and-ding polices, playing on the notion that the metal isn’t as tough as steel when it comes to such things. […]

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Planning to buy a new 2015 Ford F-150 soon? You might be purchasing a dent-and-ding policy for your ride, too.

Automotive News reports the aluminum pickup has created an opportunity for F&I departments to sell dent-and-ding polices, playing on the notion that the metal isn’t as tough as steel when it comes to such things. Ford begs to differ, as the F-150’s “high-strength, military-grade, aluminum-alloy body is more dent and ding resistant” than the outgoing steel-paneled model, per representative Mike Levine.

However, the increased use of aluminum would mean those polices would cost a pretty penny. EFG Cos. executive vice president Cliff Eller says repairing the panels with paintless dent removal would be more labor-intensive and time-consuming than doing the same for steel panels, with the aforementioned increase likely to push the cost of an average claim upward.

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Lyft, Uber Et Al Impact US Medallion Market http://www.thetruthaboutcars.com/2014/12/lyft-uber-et-al-impact-us-medallion-market/ http://www.thetruthaboutcars.com/2014/12/lyft-uber-et-al-impact-us-medallion-market/#comments Thu, 04 Dec 2014 11:00:51 +0000 http://www.thetruthaboutcars.com/?p=955337 Transportation network companies like Lyft and Uber are making an impact on the United States livery market, particularly in cities where medallions are sold. The New York Times reports the price of medallions in cities such as New York, Chicago, Boston and Philadelphia are falling as more people opt to use TNCs to get around, […]

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Transportation network companies like Lyft and Uber are making an impact on the United States livery market, particularly in cities where medallions are sold.

The New York Times reports the price of medallions in cities such as New York, Chicago, Boston and Philadelphia are falling as more people opt to use TNCs to get around, leading drivers to wonder why they should bother purchasing or leasing a medallion at all. In New York, the price for one of the 13,437 medallions available fell 17 percent between the spring of 2013 and October of this year, landing at $872,000. Philadelphia, meanwhile, can’t sell a single medallion for its asking price of $475,000, and aims to try again at $350,000.

Nailing down how things are proves to be difficult, due to the low number of sales/leases, or posting inaccurate numbers by omitting most sales. For New York, it’s the latter; they omit sales that go for $10,000-plus below the previous month’s average. Over in Chicago, weekly lease rates for medallion taxis are falling alongside the number of medallion sales in the Windy City, while others jump-ship to Uber or Lyft.

Drivers in New York also face a challenge from the new green “boro taxis” that serve fares in northern Manhattan and the boroughs surrounding Manhattan, with medallion owners having gone as far as the courtroom to rein in the green taxis, only for the ruling to fall in favor of the defendant.

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Mahindra Buys Majority Stake In NEVS http://www.thetruthaboutcars.com/2014/12/mahindra-buys-majority-stake-nevs/ http://www.thetruthaboutcars.com/2014/12/mahindra-buys-majority-stake-nevs/#comments Tue, 02 Dec 2014 15:00:55 +0000 http://www.thetruthaboutcars.com/?p=954745 Ever wondered what Indian curry and Swedish meatballs tasted like together? You will soon enough, thanks to a new deal between National Electric Vehicle Sweden and Mahindra. SaabsUnited reports Mahindra & Mahindra purchased a majority stake in NEVS in an agreement that keeps Mahindra’s identity secret until the agreement is made final. Though NEVS’ administrator […]

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Ever wondered what Indian curry and Swedish meatballs tasted like together? You will soon enough, thanks to a new deal between National Electric Vehicle Sweden and Mahindra.

SaabsUnited reports Mahindra & Mahindra purchased a majority stake in NEVS in an agreement that keeps Mahindra’s identity secret until the agreement is made final.

Though NEVS’ administrator Lars Eric Gustafsson wouldn’t confirm Mahindra as the party purchasing the stake, he said the deal would finance operating costs — to the tune of €5 million ($6.2 million USD) per month until the agreement is finalized, which is expected to occur February of 2015. Gustafsson added that NEVS was in talks with another Asian manufacturer about the possibility of a joint venture.

Meanwhile, the company is still undergoing reorganization, granted by the Vänersborg District Court in Vänersborg, Sweden late August of this year. NEVS petitioned for an three-month extension Monday.

As for the Saab name, NEVS plans to renegotiate the brand agreement with owner SAAB AB once its finances are more stable. The company lost the name after filing for creditor protection.

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GM Victim Compensation Program Deadline Extended http://www.thetruthaboutcars.com/2014/11/gm-victim-compensation-program-deadline-extended/ http://www.thetruthaboutcars.com/2014/11/gm-victim-compensation-program-deadline-extended/#comments Tue, 18 Nov 2014 13:00:24 +0000 http://www.thetruthaboutcars.com/?p=946618 The victims and families affected by the February 2014 General Motors ignition switch recall can breathe a little easier, as the deadline to file a claim with the victim compensation program administered by attorney Kenneth Feinberg has been extended. Autoblog reports the deadline is now January 31, 2015, per a recommendation to GM by Feinberg. […]

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The victims and families affected by the February 2014 General Motors ignition switch recall can breathe a little easier, as the deadline to file a claim with the victim compensation program administered by attorney Kenneth Feinberg has been extended.

Autoblog reports the deadline is now January 31, 2015, per a recommendation to GM by Feinberg. The move would allow both parties to be able to reach “every eligible person impacted” by the switch at the center of the February 2014 recall.

Since the window for accepting claims opened in August, a total of 2,105 were filed through last Friday, including 217 fatality, 128 severe injury and 1,760 less-severe injury claims. Among them, 72 claims were found eligible for compensation (33 fatality, 5 severe injury, 34 less-severe), while 292 claims (27 fatality, 30 severe injury, 235 less-severe) were under review.

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Report: US Median Income Could Soon Outpace Falling Car Prices http://www.thetruthaboutcars.com/2014/11/report-us-median-income-soon-outpace-falling-car-prices/ http://www.thetruthaboutcars.com/2014/11/report-us-median-income-soon-outpace-falling-car-prices/#comments Mon, 17 Nov 2014 15:00:18 +0000 http://www.thetruthaboutcars.com/?p=946258 Consumers looking for a new car may not need to take their wallets to the hospital afterwards should prices continue to fall and incomes continue to rise. According to Edmunds, the Auto Buyer’s Affordability Index found that a consumer whose income matched the U.S. household median of $54,457 could afford 54.1 percent — $16,448 — […]

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Woman Receiving Car Keys For Her Death Ride 1969 Extravaganza

Consumers looking for a new car may not need to take their wallets to the hospital afterwards should prices continue to fall and incomes continue to rise.

According to Edmunds, the Auto Buyer’s Affordability Index found that a consumer whose income matched the U.S. household median of $54,457 could afford 54.1 percent — $16,448 — of a new vehicle with an average transaction price of $30,382, as recorded in October 2014.

ABAI publisher Requisite Press stated that while the current percentage was still high, “transaction prices have recently begun to weaken under ideal conditions for strength,” such as the rise in income among consumers. There, the ABAI found said income had climbed 3.8 percent above the 52.1 percent value reported in April of this year, corresponding to an extra $653 in spending ability.

The publisher adds that should the center hold, the U.S. median household income would continue to outpace automotive pricing, a status not seen since 1980. President Phil Kelton explains:

New-car affordability is likely to improve in the coming days if we can avoid an income slowdown. The selection of affordable models is best increased by competition, but a sustained improvement in affordability will certainly give it a boost.

As for taking advantage of this burgeoning reality, Requisite Press suggests consumers “maximize their buying power” along every step of the car-buying process, with a suggestion to follow the 20-4-10 rule: 20 percent down, four-year loan term max, 10 percent of income spent on car payments.

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Ferrari To Pay $2.8B For Its Freedom From FCA http://www.thetruthaboutcars.com/2014/11/ferrari-pay-2-8b-freedom-fca/ http://www.thetruthaboutcars.com/2014/11/ferrari-pay-2-8b-freedom-fca/#comments Fri, 14 Nov 2014 14:00:08 +0000 http://www.thetruthaboutcars.com/?p=945081 Set to be its own master within a year’s time, Ferrari must first pay its dues before freedom calls, all to the tune of €2.25 billion ($2.8 billion USD). Automotive News Europe reports the payment will come from a sorting of affairs between the brand and parent company Fiat Chrysler Automobiles, consisting of “distributions and […]

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Set to be its own master within a year’s time, Ferrari must first pay its dues before freedom calls, all to the tune of €2.25 billion ($2.8 billion USD).

Automotive News Europe reports the payment will come from a sorting of affairs between the brand and parent company Fiat Chrysler Automobiles, consisting of “distributions and transfers of cash from Ferrari” among other transactions prior to the October 2015 separation.

CEO and Ferrari chairman Sergio Marchionne says 10 percent of the sports car brand will be made to the public between Q2 and Q3 of 2015, while 80 percent will be given to FCA’s investors; brand vice chairman Piero Ferrari will hold onto the remaining 10 percent.

The spinoff is part of an overall capital raising plan, which includes a $2.5 billion convertible bond set to mature in 2016, and underwritten by JPMorgan Chase, Goldman Sachs, Barclays and UBS. The plan will net FCA approximately €4 billion ($5 billion).

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Takata Issues Newer, Wider Annual Loss Forecast For FY 2014 http://www.thetruthaboutcars.com/2014/11/takata-issues-newer-wider-annual-loss-forecast-fy-2014/ http://www.thetruthaboutcars.com/2014/11/takata-issues-newer-wider-annual-loss-forecast-fy-2014/#comments Fri, 07 Nov 2014 13:00:16 +0000 http://www.thetruthaboutcars.com/?p=942449 The hits keep coming for Takata as its airbag debacle moves forward, this time with announcement that its annual loss forecast will grow wider than previously stated. Automotive News reports the new forecast calls for a loss of ¥25 billion ($218 million USD) during FY 2014, a ¥1 billion ($8.7 million) difference compared to the […]

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A sign board of Japanese auto parts maker Takata Corp's Annual General Meeting is seen on a street near the venue in Tokyo

The hits keep coming for Takata as its airbag debacle moves forward, this time with announcement that its annual loss forecast will grow wider than previously stated.

Automotive News reports the new forecast calls for a loss of ¥25 billion ($218 million USD) during FY 2014, a ¥1 billion ($8.7 million) difference compared to the forecast made in August; both figures are record losses for the automotive supplier.

Additionally, Takata will skip a dividend this year, the first time in eight years it has done so. The company took a ¥45 billion ($390 million) charge in Q1 2014 as a result of the airbag recalls, and has said future charges would be limited.

CFO Yoichiro Nomura apologized before the Tokyo Stock Exchange, saying his company hadn’t meant to worry its customers, automakers and investors who were all affected by its products. Takata shares declined 1.4 percent in trading, falling from ¥1,579 ($13.69) to ¥1,527 ($13.23) by the closing bell Thursday afternoon.

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Tesla Loses $75M In Net GAAP Income In Q3 2015 http://www.thetruthaboutcars.com/2014/11/tesla-loses-75m-net-gaap-income-q3-2015/ http://www.thetruthaboutcars.com/2014/11/tesla-loses-75m-net-gaap-income-q3-2015/#comments Fri, 07 Nov 2014 11:00:58 +0000 http://www.thetruthaboutcars.com/?p=942401 Tesla’s Q3 2014 earnings report had a few pluses (record deliveries of the Model S, high demand for the D trim sedans) and minuses (the third delay of the Model X, removal of brown and green from the Model S palette). The biggest minus, however, was its bottom line: A net loss of $75 million […]

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Tesla Model S at Tesla HQ

Tesla’s Q3 2014 earnings report had a few pluses (record deliveries of the Model S, high demand for the D trim sedans) and minuses (the third delay of the Model X, removal of brown and green from the Model S palette). The biggest minus, however, was its bottom line: A net loss of $75 million in GAAP income.

AutoNews reports the loss in Generally Accepted Accounting Principles income is double what Tesla lost in Q3 2013. Cash on-hand also decreased in the quarter, falling $304 million to $2.4 billion. Non-GAAP net income was $3 million, or just 2 cents per share based upon 142.7 million diluted shares.

Overall income from the 7,785 units delivered this period came out to $932 million in non-GAAP income, $852 million once GAAP is applied. Regulatory credits totalled $93 million, with $76 million in ZEV credits, thanks to the closure of additional contracts with a number of OEMs.

R&D spending climbed 28 percent over the previous quarter, hitting $119 million non-GAAP, $136 million GAAP. The expenses came as a result of work on the oft-delayed X, the D’s dual-motor drivetrain, and the new Autopilot semi-autonomous driving system.

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General Motors Stands To Lose $2B If Bankruptcy Protections Collapse http://www.thetruthaboutcars.com/2014/11/general-motors-stands-to-lose-2b-if-bankruptcy-protections-collapse/ http://www.thetruthaboutcars.com/2014/11/general-motors-stands-to-lose-2b-if-bankruptcy-protections-collapse/#comments Thu, 06 Nov 2014 14:00:45 +0000 http://www.thetruthaboutcars.com/?p=942057 Remember all of those bankruptcy protections sought by General Motors that were made against any and all future lawsuits linked to ignition-related accidents and fatalities that occurred prior to the automaker’s exit from said bankruptcy in July 2009? Guess how much it would owe if the shield collapsed? Bloomberg reports GM could be on the […]

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GM First Day as a Public Company Celebration

Remember all of those bankruptcy protections sought by General Motors that were made against any and all future lawsuits linked to ignition-related accidents and fatalities that occurred prior to the automaker’s exit from said bankruptcy in July 2009? Guess how much it would owe if the shield collapsed?

Bloomberg reports GM could be on the hook for as much as $2 billion if federal bankruptcy judge Robert Gerber of Manhattan rules in favor of the plaintiffs of a class action aimed at bringing said shield down.

The suit calls for damages to be paid due to lost resale value as a result of the February 2014 ignition switch recall, citing alleged fraud committed by the company during the proceedings, claiming executives knew of the issues affecting a handful of models made between 2003 and 2011. Bankruptcy attorney Chip Bowles explains:

In bankruptcy, you have to disclose your assets and liabilities. Those are basic requirements — and GM didn’t do it. It would be very easy for Gerber to say, “Guess what? If you know someone is a creditor you have to give them notice. If you fail to do so, they aren’t constitutionally bound by my orders.”

The collapse would only be the beginning: Aside from the 2.2 million vehicles that could be affected, another 9.6 million vehicles suffering similar ignition woes — 90 percent of which were made prior to the July 2009 reorganization — would likely see their owners wanting a part of GM.

A ruling could be made as early as late February of 2015.

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Tesla: Model X Delayed Until Q3 2015, D Models In High Demand http://www.thetruthaboutcars.com/2014/11/tesla-model-x-delayed-q3-2015-d-models-high-demand/ http://www.thetruthaboutcars.com/2014/11/tesla-model-x-delayed-q3-2015-d-models-high-demand/#comments Thu, 06 Nov 2014 13:00:55 +0000 http://www.thetruthaboutcars.com/?p=941801 Were you hoping to have a Tesla Model X next to your Model S sometime in the next few months? How does Q3 2015 sound? CEO Elon Musk informed investors during his company’s quarterly earnings call Wednesday that the electric SUV would be delayed until the aforementioned quarter to insure quality would be Job No. […]

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Were you hoping to have a Tesla Model X next to your Model S sometime in the next few months? How does Q3 2015 sound?

CEO Elon Musk informed investors during his company’s quarterly earnings call Wednesday that the electric SUV would be delayed until the aforementioned quarter to insure quality would be Job No. 1 as tooling and production step-up to handle both the S and the X:

In anticipation of this effort, we now expect Model X deliveries to start in Q3 of 2015, a few months later than previously expected. This also is a legitimate criticism of Tesla — we prefer to forgo revenue, rather than bring a product to market that does not delight customers. Doing so negatively affects the short term, but positively affects the long term.

In other news, Tesla is discontinuing two colors going forward — green and brown — and if you wanted a P85S, you’re out of luck there, as well: the highest-performing model will now be solely the P85D.

Speaking of the S, Q3 2014 sales have gone well for the automaker, with 7,785 units delivered overall and 907 delivered in a single day, the highest figures ever recorded in a quarter for Tesla. Most of the deliveries were in North America.

Demand for the 85D and P85D is also strong, meriting a boost in production capacity to over 2,000 units per week by the end of 2015.

Finally, the D is beating a path toward the Model 3. Per Jalopnik, Musk proclaimed that the dual-motor powertrain is a precursor to what could happen when the low-cost EV arrives, which may entail a FWD model followed by a D version.

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GM Offers Gift Cards To 700K Affected By Ignition Recall http://www.thetruthaboutcars.com/2014/11/gm-offers-gift-cards-700k-affected-ignition-recall/ http://www.thetruthaboutcars.com/2014/11/gm-offers-gift-cards-700k-affected-ignition-recall/#comments Wed, 05 Nov 2014 15:00:31 +0000 http://www.thetruthaboutcars.com/?p=941017 Just in time for Black Friday or Black Thanksgiving (for those heathens who really want Alex from Target to scan their cheap HDTV, instead of giving him the day off by voting with their wallets), General Motors will be giving their customers a $25 gift card if they bring in their vehicles affected by the […]

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Gift Cards Woo-Hoo

Just in time for Black Friday or Black Thanksgiving (for those heathens who really want Alex from Target to scan their cheap HDTV, instead of giving him the day off by voting with their wallets), General Motors will be giving their customers a $25 gift card if they bring in their vehicles affected by the February 2014 recall by December 1.

The Detroit News reports brochures about the gift card incentive began landing last week in the mailboxes of those who have yet to bring in their affected vehicle for a 30-minute part swap. Per GM representative Ryndee Carney, the promo went out to around 700,000 who haven’t ordered parts; those who did, but haven’t come in, weren’t eligible for the offer.

After said owners have their vehicles repaired, they will be given a code to redeem online for a $25 card from either Amazon, AMC, Applebee’s, Bass Pro Shops, Red Robin, Starbucks or Walmart, with delivery due between two to four weeks. Were all 700,000 to turn up, a total of $17.5 million would be given away in the promotion.

The National Highway Traffic Safety Administration is on-board with the initiative, encouraging GM to do everything it can to repair those affected vehicles. A similar program was offered by Toyota in 2010 during its unintended acceleration recall drive, one that made a huge splash with response rates, according to vice president of corporate communications, Mike Michels.

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Russian Billionaire Steps In To Keep The Nurburgring Alive http://www.thetruthaboutcars.com/2014/11/russian-billionaire-steps-keep-nurburgring-alive/ http://www.thetruthaboutcars.com/2014/11/russian-billionaire-steps-keep-nurburgring-alive/#comments Mon, 03 Nov 2014 12:00:17 +0000 http://www.thetruthaboutcars.com/?p=939649 Home to many a ‘Ring time, as well as one 24-hour FIA GT3 throwdown with as many competitors and fans as it can fit, the Nurburgring has found a new owner in Russian billionaire Viktor Kharitonin. Autoblog reports Kharitonin — founder of Russia’s largest pharmaceutical company, Pharmstandard — took over from previous owner Capricon, who […]

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Motorsports / 24h-Rennen Nürburgring

Home to many a ‘Ring time, as well as one 24-hour FIA GT3 throwdown with as many competitors and fans as it can fit, the Nurburgring has found a new owner in Russian billionaire Viktor Kharitonin.

Autoblog reports Kharitonin — founder of Russia’s largest pharmaceutical company, Pharmstandard — took over from previous owner Capricon, who paid €77 million ($96 million USD) for the track in a bankruptcy sale. Capricon couldn’t keep up with the monthly €5 million ($6.2 million) payments, however, which was when Kharitonin rode in to save the day.

Since then, the 1,342nd richest individual in the world has set up a holding company named NR Holding AG to oversee operations, as well as paid the next installment for December well in advance of the due date. Kharitonin’s company holds two-thirds of the Nurburgring, with German motorsports company GetSpeed maintaining the remaining third.

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Treasury: GM Bailout Suit Would Hinder Future Actions http://www.thetruthaboutcars.com/2014/10/treasury-gm-bailout-suit-hinder-future-actions/ http://www.thetruthaboutcars.com/2014/10/treasury-gm-bailout-suit-hinder-future-actions/#comments Fri, 31 Oct 2014 12:00:18 +0000 http://www.thetruthaboutcars.com/?p=938857 Should companies in the future need to be bailed-out by the federal government, they may not be so forthcoming with the necessary information if General Motors’ confidential documents linked to its own bailout see the light of day. Bloomberg reports the U.S. Treasury is doing all it can to protect the information submitted by GM […]

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Should companies in the future need to be bailed-out by the federal government, they may not be so forthcoming with the necessary information if General Motors’ confidential documents linked to its own bailout see the light of day.

Bloomberg reports the U.S. Treasury is doing all it can to protect the information submitted by GM prior to investing $49.5 billion into the automaker during the early days of the Great Recession:

Disclosure of the disputed information would also impair Treasury’s ability to obtain necessary information from companies in the future. [The] Treasury’s ability to act as a lender would be hampered.

The information is at the heart of a lawsuit filed by the Center for Auto Safety in 2011. Over 50,000 records were obtained thus far, but the advocacy group wants information on how much of a role the Treasury played in preventing pre-bankruptcy claims made against GM over vehicles linked to the February 2014 ignition switch recall from moving forward.

Clarence Ditlow, head of the Center for Auto Safety, disputed the idea that future companies in need of help would be dissuaded from “begging for billion in taxpayer dollars” were the desired documents revealed.

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GM Invests $63M Into Lansing Delta Township Expansion http://www.thetruthaboutcars.com/2014/10/gm-invests-63m-lansing-delta-township-expansion/ http://www.thetruthaboutcars.com/2014/10/gm-invests-63m-lansing-delta-township-expansion/#comments Fri, 31 Oct 2014 10:00:37 +0000 http://www.thetruthaboutcars.com/?p=938809 General Motors is gearing up to spend $63 million on expanding its Lansing Delta Township plant — home of the GMC Acadia, Buick Enclave and Chevrolet Traverse — as part of an overall $300 million improvement plan involving the automaker’s Michigan properties. The expansion will add 263,000 square feet in total to the 3.4 million […]

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2011 GMC Acadia Denali

General Motors is gearing up to spend $63 million on expanding its Lansing Delta Township plant — home of the GMC Acadia, Buick Enclave and Chevrolet Traverse — as part of an overall $300 million improvement plan involving the automaker’s Michigan properties.

The expansion will add 263,000 square feet in total to the 3.4 million square-foot plant, which first opened in 2006. The footage will be split into three pieces, with over 181,000 square feet going to the body shop to accommodate new robots and lean flexible tooling; 54,000 square feet to the paint shop for usage of improved body sealers and coatings; and 28,000 square feet for general assembly.

The investment is the second put into the plant since opening; Lansing Delta received $37 million in 2010 for tooling and equipment “to enhance the plant’s manufacturing capabilities.”

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FCA Spinning Ferrari Off From Parent Company By 2015 http://www.thetruthaboutcars.com/2014/10/fca-spinning-ferrari-parent-company-2015/ http://www.thetruthaboutcars.com/2014/10/fca-spinning-ferrari-parent-company-2015/#comments Wed, 29 Oct 2014 20:19:30 +0000 http://www.thetruthaboutcars.com/?p=938057 By this time next year, Ferrari will no longer be a part of Fiat Chrysler Automobiles, thanks to a plan announced today that will spin the exotic brand off from the rest of the Italo-American automaker. Bloomberg reports FCA will sell 10 percent of its stake to the public, giving the remaining 90 percent to […]

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By this time next year, Ferrari will no longer be a part of Fiat Chrysler Automobiles, thanks to a plan announced today that will spin the exotic brand off from the rest of the Italo-American automaker.

Bloomberg reports FCA will sell 10 percent of its stake to the public, giving the remaining 90 percent to the automaker’s own shareholders. The shares will be listed in the United States stock market, with Europe possibly receiving some of those shares, as well.

According to Morningstar analyst Richard Hilgert, the split “unlocks the value” in the Ferrari brand, which could be worth as much as $7.4 billion. He adds that the move helps pull Ferrari out of the shadow of FCA, citing “the street’s perception of low profitability to no profitability” regarding the automaker’s market performance.

Speaking of performance, FCA stock climbed to $11.56 Wednesday after opening at $11.31, falling to $10.85 at the closing bell. Ferrari stock, meanwhile, would go for $5.90/share for FCA shareholders.

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Tesla, US Bank Team For New Model S Lease Contract http://www.thetruthaboutcars.com/2014/10/tesla-us-bank-team-new-model-s-lease-contract/ http://www.thetruthaboutcars.com/2014/10/tesla-us-bank-team-new-model-s-lease-contract/#comments Wed, 29 Oct 2014 10:00:45 +0000 http://www.thetruthaboutcars.com/?p=937714 Want to own a Model S without worrying about a long-term commitment or how much it’ll hurt your bottom line? CEO Elon Musk has a deal for you. Reuters reports U.S. Bank will offer a lease with a 25 percent decrease in the amount paid per month. Per Musk, the bank was chosen due to […]

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Black Tesla Model S

Want to own a Model S without worrying about a long-term commitment or how much it’ll hurt your bottom line? CEO Elon Musk has a deal for you.

Reuters reports U.S. Bank will offer a lease with a 25 percent decrease in the amount paid per month. Per Musk, the bank was chosen due to having a “much lower cost of capital” than Tesla itself. As in previous leases, the lessee only needs to tap once on the vehicle’s touchscreen to agree the terms and conditions of the contract.

In addition to paying less per month a new Model S, Tesla will also offer its Happiness Guarantee to lessees who sign-on. The guarantee allows the lessee to return their vehicle to the automaker within three months if they find anything wrong with the product. However, Musk cautioned that if they wanted a new vehicle right away, they would need to wait a while. Lessees can also upgrade to a newer model after paying a pass-through fee.

U.S. Bank was chosen last year alongside Wells Fargo to enter into a partnership with the automaker to offer potential owners a 10 percent down payment on a new Model S purchase.

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