Used car buying tips to stay clear of lemons

admin - Friday, 22 October 2010 08:52

  Sales of used cars are way up. So far almost four million more have been sold this year than last. But buying a used car is never a good deal if you end up with someone else’s headaches.

More people are buying used cars in this down economy. As a result, used cars are in short supply and prices are up.

“People are looking for value now. And used cars, especially late-model used cars, are better values than new cars,” Rik Paul said.

But consumer reports says you have to shop carefully. First, narrow down your choices to a reliable make and model. That translates into less time and money spent at the repair shop.

“The reliability information that Consumer Reports gathers shows that some models are generally more reliable than others. It’s hard to go wrong with a Honda, for instance. The Accord, the Civic, the CR-V, and the Pilot are all very reliable,” Paul said.

Next, you want to find a car that’s been well maintained. Ask for records so you can see if the recommended maintenance was done as well as any repairs.

Taking a test drive is also important. You want to see if the car drives smoothly and that there are no unusual noises. Take the car on highways and local roads, too. Ideally you want to spend up to a half-hour driving the car so you have enough time to size it up.

“You should also look over a used car very carefully. Telltale signs of damage are rust or corrosion like this or a door that doesn’t close properly,” Paul said.

Also check the engine and under the car for any oil or coolant leaks. If you find any, steer clear. But most importantly, have an independent mechanic check out a used vehicle before buying it.

“If someone won’t allow a car to be inspected, consider that a red flag and move on,” Paul said.

And is it better to get a certified used vehicle? They can cost you hundreds or even thousands of dollars more.

“If you focus on getting a reliable car that’s well-maintained, and you have it inspected by an independent mechanic, you can skip going the certified-car route,” Paul said.

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High used car prices may boost new car sales

admin - Wednesday, 20 October 2010 08:52

  New-car sales could get a boost from an unusual quarter, which the market hasn’t seen in a while: used-car prices are so high, they’re starting to bump heads with new-car prices. That may motivate some used-car shoppers to make the jump to new cars, since the price difference has shrunk.

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That’s according to Tom Kontos, executive vice president, customer strategies and analytics for used-car auction firm ADESA.“Strong new vehicle sales in September support the thesis that some car shoppers are gravitating towards new vehicles when faced with a choice of paying relatively high prices for used cars versus affordable new vehicles, as long as financing and available inventory are not prohibitive factors,” Kontos said in a written report this week.

According to ADESA, used-car prices are down a bit from record highs in April, but they’re still higher than a year ago. A seasonal decline is to be expected this time of year, in part because the fall is the strongest season for new-car sales. However, used prices have a solid floor beneath them that will keep them from falling far, ADESA said.

That solid “floor” is supply and demand. The drop in new-car sales in 2008 and 2009 means fewer low-mileage used cars today, and therefore a lower supply. At the same time, demand is slowly recovering as the U.S. economy recovers. Lower supply and higher demand spell higher used-car prices.

But as Kontos pointed out, there’s also an upper limit on used-car prices, and that’s the point where relatively new used cars start competing with discounted new cars.

ADESA reported that the average wholesale price for a used vehicle in September was $9,830. That was down 1.7 percent from August 2010, but 1 percent higher than September 2009.

In the latest cycle, used-vehicle prices bottomed out at an average of $8,628 in October 2008, the firm said. Values fell the most for used trucks, since on top of the recession, gas prices had spiked. Today, used truck prices are up percentage-wise more than used cars. For instance, prices for used minivans were up almost 8 percent in September from a year ago. However, that’s because used trucks had more ground to make up.

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Chrysler to start selling the Fiat 500 in early 2011

admin - Sunday, 10 October 2010 08:52

  Now that Chrysler has overhauled or refreshed most of its cars and trucks, consumers will soon give the automaker feedback on whether restyled sheet metal and upgraded interiors are good enough to boost sales of five brands while competitors continue to downsize.

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General Motors and Ford have been drastically reducing brands — they’ve sold or killed eight brands in recent years — with the thinking that fewer brands means more efficiency in advertising and dealer support, as well as more clarity for consumers.

Chrysler, by contrast, split Ram trucks from Dodge during its 2009 bankruptcy, giving the Fiat-controlled company four brands to manage — Chrysler, Dodge, Jeep and Ram — with more brands on the horizon.

Later this month, Chrysler will select about 200 dealers to sell the diminutive Fiat 500 later this year. In August, CEO Sergio Marchionne also said that as many as five Alfa Romeo models could be offered in the U.S. beginning in late 2012.

Chrysler is confident in its plan even though some question Chrysler expanding its brand portfolio, which will eventually leave the relatively small automaker — it has captured 9.5% of all U.S. sales so far this year — with six brands.

“You’re seeing brands such as BMW, Cadillac and Lexus talking about adding” subcompact cars, said Joseph Veltri, Chrysler vice president for product planning. “You either spread one brand very thin or make sure your brands are narrow and sharply focused. We’ve chosen the latter course.”

Chrysler is about to show off its strategy with great fanfare — and 16 new or revamped products — in the coming months, too.

Chrysler plan: Make every brand count

While Chrysler has consolidated its four U.S. brands under one roof at more than 80% of its 3,200 dealerships, the automaker is trying to differentiate each brand’s image to consumers.

Each brand is led by a president and CEO with profit and loss responsibility for vehicles sold under that name.

They are Michael Manley for Jeep, Ralph Gilles for Dodge, Olivier Francois for Chrysler and Fred Diaz for Ram. Laura Soave is the head of the Fiat brand for North America.

“Adding brands does add complexity,” said Dan Cheng, head of A.T. Kearney’s automotive practice in Southfield. “You must clearly understand: Who are the customers for my product? What do they need? What type of experience do I want my customers to have?”

Chrysler’s newest brands — Ram and Fiat — are distinct cases.

Ram trucks already had a relatively distinct identity in truck buyers’ minds. During the next few years, Ram will sell a new Fiat-based small commercial van that will compete with the Ford Transit Connect.

Fiat, which will initially sell just one car in the U.S., the 500, represents Chrysler’s effort to sell competitive small cars, a segment from which it has been absent.

The integration of Chrysler and Fiat technology and product development was an essential element in the government’s rescue package. Launching the Fiat 500 in the U.S. gives Chrysler a much needed toehold in the subcompact car segment.

Joseph Veltri, Chrysler vice president for product planning, acknowledges Chrysler still needs to cull its product lineup to eliminate vehicles that are so similar that some shoppers see little difference.

“We will be moving away from badge engineering vehicles,” Veltri said. “It’s not like in the past where every brand gets the same thing like where we had (Jeep) Compass and Patriot arguably stepping on each other’s toes.”

While GM and Ford have used their brand consolidation to shrink their dealer networks, Chrysler terminated about 25% of its pre-bankruptcy dealers on the grounds that it wanted all brands under the same roof.

Yet the 160 to 200 Fiat dealers who could be identified as early as next week, a Chrysler spokesman said, are expected to have a separate showroom, even though they will initially sell only one model — and that isn’t likely to generate a profit.

“After those first two years, they will bring in five models of Alfa Romeo,” said Detroit area dealer Dan Frost, who has applied for one of the few Fiat franchises to be awarded in Michigan. “Even at 30 or 50 cars a month, I’m not going to make any money. I will have no service revenue to speak of. I have no leases coming back in. But if you can hold on until Alfa Romeo comes in, then there’s a business case.”

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