Used car sales are on the rise. (Photo Credit: CC BY/Thomas R Machnitzki/Wikipedia)

After a five-month nosedive, used vehicle sales went up in November, reports Automotive News. According to the Manheim Used Vehicle Value Index, the wholesale used vehicle marketplace rebounded last month, although it still hasn’t reached November 2010 levels.

Retail used car sales up 3.4 percent in November

The Manheim Used Vehicle Value Index, which measures changes in used car prices, is constantly adjusted for model mix, mileage and time of year. It began in January 1995 with a 100 rating. Last month’s index was 123.8, up from 122.8 in October but down from 124.3 in November 2010.

Overall, retail used car sales went up by 3.4 percent in November 2011. Particular strength was noted among certified used cars financed via subprime auto loans. Among other important points brought out by the Manheim study:

• Even though auction sales of retired rental cars rose, prices remained steady.
• Commercial fleet vehicle prices rose for mid-sized, pickups and cargo fans after a weak October.
• Pickup and minivan sales have gone up more than compacts over the second half of 2011.

Used car buyers setting aside more cash

According to market research company CNW Research, consumers are setting aside more money for their used car purchases, which could mean A) That they may eventually realize they have enough cash for heavily discounted new cars, which will in turn drive down used car prices; or B) They’ll make larger down payments on used cars, which won’t be ideal for dealerships because it will eventually drive down used car prices.

Less financing means decreased loan commission

Dealerships lose out on significant loan commission money when consumers finance less of their automotive purchases. Only by lowering used car prices can dealers bring in more shoppers. Experts believe that this will lead to a “more rational” used car pricing structure than was on display in the first half of 2011.

The mobile boon

Increased used car sales activity can also be attributed to a booming mobile app market for used car information. Car Deal Expert, KBB.com and CarFax are among the industry leaders in providing consumers with prices, news and information regarding used cars. Having information available via smartphone has spurred sales, experts agree.

2011 AM Used Car Market Conference commentary

Sources

About.com Used Cars

Automotive News

CNW Marketing Research

Manheim Used Vehicle Value Index

Ally Financial will begin offering an innovative new type of auto loans on Tuesday. (Photo Credit: CC BY/Caitlin Regan/Flickr)

Ally Financial (formerly GMAC Financial Services) is preparing to originate auto loans that should please any car buyer who has suffered through an upside down loan. The Detroit Free Press reports that Ally will offer car loans in America’s five most highly populated states that will enable borrowers to sell their cars back to Ally after four years at a price that will at least cover the remaining loan balance.

Buyer’s Choice starts Tuesday

General Motors and Chrysler dealers in California, Florida, Illinois, New York and Texas will begin offering Ally Financial’s Buyer’s Choice auto loans beginning Tuesday, Nov. 1. Loan terms will range from 60 to 84 months, and borrowers will have the option of selling the car back to Ally after 48 months. If consumers believe they can get a better sale price for the car on their own, they may still exercise that option, said Tim Russi, Ally Financial’s North American executive vice president of operations.

“This tries to appeal to the consumer who really likes having an arrangement where he owns the vehicle, but still wants to know its market value when he considers replacing it,” Russi said.

New loans, more leases

Many industry experts believe that the potential loss Ally could take with this new type of car loan would force the financier to issue fewer leases. Russi countered that by setting repurchase price in advance, Buyer’s Choice will protect Ally from the problems inherent in most conventional leases.

Ally Financial’s credit rating has improved twice this year, which Standard & Poor’s notes as a good sign. This comes despite the fact that the company’s residential home mortgage arm continues to lose money. Overall, the company reported $113 million in second-quarter profit, the sixth straight profitable quarter since the financial crisis. An initial public offering is coming soon, a sign that the company is optimistic about the future.

“Ally Buyer’s Choice is a true differentiator in the market and provides great flexibility and choice for consumers,” said Russi. “Ally is committed to bringing industry-first products to market that offer consumers more choices and help dealers sell and service more vehicles.”

When Ally Financial filed for an IPO

Sources

Ally Financial Auto Financing

Detroit Free Press

PR Newswire

New cars can be worth more in value. CC by quinn.anya/Flickr

As the auto industry undergoes a profound transformation, new cars may be a better investment than pre-owned vehicles. Low interest and no interest financing for new cars is creating an unusual auto loan environment. Classic assumptions about new versus used cars aren’t always correct. Depending on the make and model, there are some vehicles that actually cost less over time when bought new rather than used.

Offers of free financing from auto lenders

If a buyer isn’t paying for a vehicle in cash, it might be a better idea to get a loan for a new car than a used one right now. There are very low loan rates for new vehicles because of the interest rates from the recession. According to Edmunds.com, the average rate for an auto loan was a mere 4.16 percent in December. Strangely enough, more than 15 percent of auto loans are virtually devoid of interest. After the government bailout, General Motors is now doing well. In fact, of all the auto loans offered by the company, 50 percent of them have 0 percent financing. Not everyone can get 0 percent financing though. It is necessary to have really good credit. That means at least a 650 and usually 700 FICO score is required.

How you can get a new car that costs less than a used car

While average interest rates for new car loans are about 4 percent, rates for used cars are still about 8 percent. The price gap between new and used cars isn’t much, either. It has gotten smaller. About 700,000 used cars were taken out of the system in 2009 with the “cash for clunkers” program. The financial crisis and credit crunch that hit new car sales so hard affected the amount of used cars being traded in. With such cheap deals on five-year loans for new cars, a one-year-old vehicle is often going to be more expensive than a new model.

Which new cars are cheaper than used cars?

Edmunds.com compared the 7.7 percent interest rate of used cars with the 0 percent interest rate on new cars to make a list of new cars cheaper than used cars. Some of the vehicles on the list include the Audi S4 Premium Plus Quattro Sedan, with a savings of $1,020; the Honda CR-V EX with a savings of $1,320; and the Toyota FJ Cruiser base model, also with a savings of $1,320.

Sources

Market Watch

Money Watch

Edmunds.com

Former President George W. Bush defends his auto bailout decision in his new memoir, “Decision Points.” (Photo Credit: Public Domain/Susan Sterner/The White House)

In the new memoir “Decision Points,” former U.S. President George W. Bush stands behind his decision toward the tail end of his presidency to extend a $17.4 billion auto bailout. Automotive News reports that President Bush knew just four days after GM announced it was near bankruptcy – on Nov. 11, 2008 – that he would have to bail out both Chrysler and General Motors. Mr. Bush says he made the “too big to fail” decision earlier that most people realize, and that he told then President-elect Barack Obama of his decision before even the president’s advisers knew.

The ‘Decision Points’ in saving America from collapse

President Bush writes in “Decision Points” that saving American workers and families from economic collapse were important factors in his auto bailout decision. He also claims he considered what he’d be passing on to the Obama administration. The auto bailout package that was put into effect was actually less than what Bush favored, writes Automotive News. He’d wanted a $25 billion plan, but Senate Republicans balked at the price. In order to make the $17.4 billion version to work, President Bush diverted money from TARP that had been intended for Wall Street.

Poor industry management forced the president’s hand

In the automotive chapter of “Decision Points,” Mr. Bush bemoans “decades of poor management” on behalf of the automotive industry. This mismanagement “saddled automakers with enormous health-care and pension costs.” Couple that with a general unresponsiveness to changes in the global automotive industry and American automakers found themselves on the outside looking in as foreign manufacturers captured greater market share.

GM wanted a bailout first, but Bush said no

Then General Motors CEO Rick Wagoner approached President Bush about obtaining bailout money, but Bush said no at first. It was only later that George Bush reversed his stance. He says in “Decision Points” that his path of action became clear when he began to understand just what automaker bankruptcies would do to the American economy.

“My economic advisers had warned that the immediate bankruptcy of the Big Three could cost more than a million jobs, decrease tax revenues by $150 billion and set back American’s GDP by hundreds of billions of dollars,” the former president writes in his memoir.

Even with a bankruptcy, auto loans may be within reach

Sources:

Automotive News

The “Decision Points” to auto bailout woes

The first Ford factory built in Michigan, dating back to 1903. (Photo: CC BY/Joseph Hollick/World 66)

If there is a power in the automotive industry that has weathered the storm of the recession, the mantle belongs to the Ford Motor Company. Ford was the only major U.S. Automaker to avoid bankruptcy in 2009, and the company also declined to accept auto bailout money. Today, according to Automotive News, Ford plans to invest $850 million and add 1,200 back by 2013 to Michigan, the traditional heart of America’s automotive industry. In addition, $400 million in state incentives (tax breaks) will back the move toward future prosperity.

Ford brings jobs and pride to Michigan

The 1,200 jobs that Ford will bring to Michigan include 900 hourly factory positions and 300 salaried engineering and manufacturing jobs. Locations like Ford’s Van Dyke Transmission plant, Sterling Axle, Livonia Transmission and the Dearborn Truck Plant will receive the greatest influx of new blood, reports Automotive News. The cash investment will be dedicated primarily to expanding the production of six-speed transmissions.

The $400 million in tax breaks over 15 years is a key element of the package for Ford, said the company’s president of the Americas, Mark Fields.

“Without bringing a package of job-retention tax incentives to the table, this kind of investment would have been much more difficult,” he said. “Promoting investments in technologies, facilities and our workforce ultimately will help revitalize manufacturing in Michigan and help Ford compete with the best in the business worldwide.”

More staff indicates a more positive outlook

In order to meet the continued demand for popular models such as the Fiesta subcompact and Super Duty pickups, Ford’s workforce expansion is necessary. For Michigan, it is more than welcome during tough economic times. Considering that U.S. car and light truck sales numbers were down to 10.4 million in 2009 — the lowest level since 1982 — Ford’s confidence in a brighter future is inspiring to all the communities who depend upon the automotive industry for their well-being. Ford told Automotive News that sales of 11.5 million to 12 million are anticipated for 2010, which is a step in the right direction, even if it is below the 16.8 million annual rate of 2000 through 2007.

Make the right move with low-rate auto loans from Car Deal Expert

Sources:

Automotive News

Men like these want to get you excited about buying a Ford. (Photo Credit: CC BY-ND/bisgovuk/Flickr)

Surviving the black plague of global recession was no small task for the Ford Motor Company, but it emerged from the smoking crater in which companies like General Motors continue to wallow. The auto bailout may have kept other automakers afloat, but it did a great deal of damage to reputations in the process. Ford took the brave route and declined to accept Troubled Asset Relief Program money, and that move has paid off in respect from peers and consumers. Now Automotive News reports that that same respect has earned Ford the 2010 “Marketer of the Year” award from Advertising Age magazine.

Ford was in trouble like the all the rest

When dark economic times came to the automotive industry, Ford was as deep in the hole as many of its competitors. In 2008, the company lost $14.6 billion. However, “the brand that Henry built” didn’t give in to temptation like the rest of Detroit auto row. Turning down TARP funds was “worth more than $1 billion of coverage and customer interest,” said Ford marketing chief Jim Farley to Automotive News. “If I had to go out and advertise, it would be that kind of bill in paid media. It’s a once-in-a-lifetime thing.”

‘$1 billion in free goodwill’

Ford’s refusal to take TARP funds helped its image, but Advertising Age didn’t give the company the 2010 Marketer of the Year award for what they chose not to do. Ford has earned its place as the number two automaker in United States sales. Ford’s 17 percent share of the automobile and light truck market through September places the company only behind General Motors in sales, but Ford’s reputation is light years ahead. A hot new version of the Fiesta and crackling advertising campaigns have boosted the automaker that has held the American imagination since the Great Depression. U.S. yearly sales increased 19 percent through September, nearly double the industry-wide increase of 10 percent, writes Automotive News. Ford’s $4.7 profit over the first half of 2010 is the largest increase over such a period since 1998.

Find low-rate auto loans with Car Deal Expert

Sources

Automotive News

Getting excited about Ford en Español

Luxury car sales, especially for Mercedes, are surprisingly up for this year. Image from Wikimedia Commons.

Surprisingly enough, luxury car sales are climbing. The economy may seem dismal, but car sales in general are beginning to increase. One of the few luxury car brands that didn’t post a gain was Volvo. The embattled Swedish car line has seen sales slip. Mercedes Benz has gained the edge overall, finally overtaking Lexus in sales for the first time in months. U.S. domestic luxury brands Cadillac and Lincoln have seen huge increases as well.

Luxury car sales increase

After several years of dismal economic news, perhaps the rich are feeling lucky enough to buy new cars. Several luxury brands have posted enormous gains. Cadillac has posted a gain of 43.8 percent in the first nine months of 2010, according to USA Today. During that time, other luxury brands also posted big gains. Infiniti, Acura, Audi and Porsche all sold nearly 25 percent more cars since September, 2009. BMW and Lexus both increased sales by almost 10 percent since September, 2009, and even Lincoln, a nearly forgotten brand, had an increase of more than 6 percent in that time. Ford Motor Co. is turning attention to Lincoln in the new year. Only Volvo did not post an increase in sales for luxury vehicles.

Mercedes outsells Lexus

Sales have increased for luxury cars greatly over the past year, but September, 2009, saw a significant drop in auto sales overall. Though Cadillac may have posted a 43.8 percent gain for 2010 so far, since September, 2009, it has only increased sales by 11 percent, according to Automotive News. Mercedes managed to sell the most luxury cars since that time, increasing sales by 22 percent since January of 2010. Lexus sold more cars by volume than Mercedes until September, when Mercedes managed to sell more cars than Lexus overall.

Fewer incentives

Sales incentives among luxury brands are not being offered as much anymore. Despite those obstacles, more people are buying high end autos and getting larger auto loans — a sign of greater economic confidence.

Sources

USA Today

Automotive News

Vintage vinyl dash of a 1976 AMC Matador. Notice the lack of crack. (Photo Credit: Public Domain/CZmarlin/Wikipedia)

Imagine there are cracks in your car’s vinyl dashboard. If you think covering them with masking tape and coloring the tape to match the dash is copacetic, shake yourself. Real vinyl dashboard repair isn’t difficult, and it’s cheap. True, it’s more expensive than masking tape and a magic marker, but it should be. Go cheap with your car long enough and it will start batting its wipers at the more responsible-looking owner at the end of the bar.

Vinyl dashboard repair: Fear not the crack

A standard vinyl dashboard is ultimately just vinyl fabric over foam padding. Excessive sun exposure can cause sun damage, and using harsh cleaners and protectants is a bad idea. According to Popular Mechanics, these elements can suck the vinyl-chloride plasticizer from the dash surface. That’s what causes vinyl to become brittle and begin to crack. Using a simple soft rag and warm water is the best way to clean it.

Repair a cracked dash fast

Small cracks may not seem like a big deal at first, but once the cracks spiderweb, the whole dash may need replacement. That will hurt your wallet. Slapping a shag fabric dash cover over the problem will make people think you’re a stunt driver in the remake of “Scream, Blacula, Scream.” Rather than going blaxploitation retro, take the simple but effective road to vinyl dashboard repair. According to eHow, you’ll need a utility knife, painter’s tape, silicone caulking and vinyl paint. Here’s the procedure:

1. Carve the crack into a “V” shape to make room for the caulking.
2. Clean dust and debris out of the crack with rag and water. Let it dry completely.
3. Use the tape to mask off either side of the crack.
4. Apply the silicone caulking into the crack. Let it dry for 15 minutes, then remove the tape. If the crack is small, move to the next step. If the crack is large, consider giving texture to the silicone with a vinyl repair kit before the caulk is completely dry. Then remove the tape.
5. After two hours, paint the crack with vinyl paint. Let the vinyl paint dry for a few hours, and you’re back on the road.

Sources

eHow.com

Popular Mechanics

Related Video:

Cheaper car insurance is so popular, it has even inspired some to mimic a certain industry pitch-woman. (Photo Credit: CC BY-SA/Rob Speed/Flickr)

Auto insurance protects drivers in the event of accidents, vandalism or theft. It is tied to a car’s market value. The best way to ensure that you pay less for good coverage is, of course to drive safely, observe the rules of the road and maintain good credit. But there are other things consumers looking for lower auto insurance rates can do to tip the scales in their favor.

Get multiple rate quotes

J. Robert Hunter of the Consumer Federation of America tells Edmunds.com that “You can easily wind up paying double from one company to the next,” so don’t be afraid to shop around. Further research through a site such as the National Association of Insurance can confirm that some of the lower-priced insurance policies actually offer some of the best customer service.

Don’t jump at full coverage

Instead of carrying full- or low deductible-coverage for such things as comprehensive and collision damage, going with higher deductibles or dropping comprehensive and collision altogether can save a great deal of money. Hunter says that going from a $250 to $1,000 deductible can save from 25 to 40 percent on total premium cost. And if the car is older, dropping comprehensive and collision coverage is advisable.

If you aren’t sure, Hunter suggests adding the deductibles and multiplying the result by 10. If the vehicle is currently worth less than what you come up with, the coverage is inadvisable. The average insurance carrier only files a claim once every 11 years, so dropping comprehensive and collision on less valuable vehicles isn’t much of a gamble.

Reaping the discounts

If you drive infrequently and use the car for pleasure purposes only (rather than for work), there are discounts to be had. Not only that, but membership in various professional organizations may entitle you to additional savings. Safety and anti-theft devices will also translate into lower premiums. Being a good student or a senior citizen doesn’t hurt, either.

Pay in full and don’t allow coverage to lapse

Paying your insurance premium in installments can be convenient, but there will inevitably be an administrative fee of $10 to $15 per installment attached. If you are able, pay the full premium up front and save. And keep paying for as long as you plan to drive. Many insurers will charge exorbitant rates if there is even a brief coverage lapse.

Great rates on auto loans never lapse at Car Deal Expert

Sources:

Edmunds.com

Interest rates are slowly climbing as less-qualified buyers are accepted for new car loans. (Photo Credit: CC BY-SA/The Truth About.../Flickr)

Bloomberg reports that new car loans are becoming easier for consumers to obtain. Auto industry experts view this as an indicator that new car sales may continue to grow, something the United States hasn’t seen since “Cash for Clunkers.”

New car loans making gradual return

Ford Motor Company chief economist Ellen Hughes-Cromwick told Bloomberg that credit across the automotive industry has begun to flow more readily. But it could take a year or more before significant gains are noted. “We should see consumer credit begin to evidence some recovery,” she said, “but it is a slow go.”

Retailers see bests sales in over a year

New car retailers surveyed by the Automotive News Data Center such as Group 1 Automotive and CarMax Inc. reported that September sales of new vehicles rose significantly. The adjusted annual rate was 12.2 million, which reflects the most successful sales pace since August 2009. But there’s still ground to cover – the annual average from 2000 to 2007 was 16.8 million. A consistently high unemployment rate is largely to blame, reports the U.S. Department of Labor.

Lack of credit isn’t to blame

Peter DeLongchamps of Houston-based Group 1 Automotive told Bloomberg that new car loans are available for more interested customers than in recent months. “But for current sales levels to increase, we need additional showroom traffic.”

More subprime new car loans

According to CNW Research, the number of subprime new car loans issues was up almost 10 percent in September 2010, which reflects the highest increase in such loans since February 2008. From January through September 2010, 6.8 percent of all new vehicle sales were of the subprime variety in terms of credit, which is 5.7 percent higher than the total in 2009.

Higher interest rates mean credit is loosening

Data compiled by Edmunds.com for major automakers like Ford and GM support the idea that new car loans are moving at an elevated pace, following the recent lull. September data from Ford shows that new car buyers got a 5.23 percent average APR on new car loans, up from 5.07 the previous month. GM showed only a modest rise, from 5.23 in August to 5.25 percent APR in September, said Edmunds. The increase in average APR means that less-qualified buyers are securing loans.

Qualify for a great new car loan at Car Deal Expert

Sources:

Bloomberg