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Archive for April, 2014

Used Cars to Get Cheaper

Used_car_dealers_on_the_Industrial_Estate_-_geograph.org.uk_-_766208Used-car prices may be lower in the coming years as the number of used cars in the market increases.

According to statistics from Manheim, a large company specializing in used-car auctions, there are only 1.7 million vehicles in 2013 that exited from their leases to the used-car market.

These are the vehicles that were leased in 2010 or 2011 when people were still recovering from the recession and credit standards were tight. Such low supply of used cars causes the prices to stay high.

In Motley Fool’s report, only 19 percent of U.S. retail new-vehicle sales were leased in 2010 and 20 percent in 2011.

But the number has started rising and this could mean that used-car prices will also begin to go down.

As the economy started improving in 2012, new-vehicle sales grew by 13 percent and 7.6 percent in 2013.

As this implies that used-car supplies are increasing, Manheim predicts that the number will rise to 2.1 million in 2014 and 3 million in 2016.

These may all sound good to buyers, but not so to automakers. Expensive used cars lead many buyers to buy a new vehicle instead since the latter costs just a few thousand dollars more.

One thing automakers can do to cushion the negative impact of lower used-car prices is offer more certified pre-owned vehicles—those that come with extended warranties. This help keep used-car prices strong while the certifications give buyers peace of mind about used-car shopping.

Photo credit: Eric Jones / Wikemedia Commons / CC BY-SA 2.0




 


 

Buying the Latest Car Models May Not be that Cool Anymore

flickr-8612213078-originalDreaming of having the latest Toyota Camry parked at your garage before it goes on sale in the market? How about the newest Chevrolet Corvette Stingray Z06? Buying the hottest cars these days looks cool. But with a lot of recalls happening recently, a study implies that the idea may not be so cool anymore.

One of the biggest recalls now is by General Motors which involved 2.6 million vehicles. It included at least nine models, some of which date back to 2003. But this is not typical of any recall which usually happens in the early life of a vehicle model.

A global financial advisory firm called Stout Risius Ross or SRR did a study for Yahoo Finance and it suggests that new and redesigned models are likely to experience problems than models that have been on the road for some time. “The data we’ve analyzed indicates new-production vehicles demonstrate an elevated level of recall risk,” Neil Steinkamp, managing director of the firm, told Yahoo Finance.

Let others be the guinea pig.

Not buying a particular model immediately after it just rolled out of the assembly line do make sense. Consumer advocates have been encouraging buyers to avoid new models as much as possible and consider buying vehicles that have been test-driven for at least a year or two.

The study by SRR, which analyzed sampling recall data of the 6 car-making giants (Toyota, Chrysler, Hyundai, Ford, Honda and GM) dating from 1990, presented a pattern:

First, 64 percent of vehicles went through at least one recall during their first production year.

The Buick Encalve underwent seven recalls in 2008 and 2009, the first two model years. The rate dropped to one recall per year in the next three years.

The Ford Escape was subject to 11 recalls when it first rolled out in 2001. The recalls dropped to zero in the succeeding years. But in 2013, the redesigned model was recalled at least seven times.

Lastly, the Honda Pilot had seven recalls. Its final two years, 2007 and 2008, saw only one recall per year. But when Honda introduced an all-new Pilot in 2009, the recall rate went up to two per year and three per year for the 2011 model.

Wait for at least a year.

Recalls do not necessarily imply that the vehicles involved are not that safe anymore compared with the others. In fact, manufacturers that recall vehicles look like they are more aware of and more serious about safety and quality policies than those who won’t recall their defective units.

Recalls may, however, cause unnecessary inconvenience. They require you to visit your dealer, which is usually out of your schedule, for repairs. You would also have to wait for your vehicle until it is fixed (usually paid for by the manufacturer).

In any case, Yahoo Finance recommends doing some research and trying to trace the first production year of a vehicle you’re interested to buy. It will also help to specifically check the safety and reliability backgrounds of a vehicle before deciding to purchase.

Photo credit: Joseph Brent / CC BY-SA 2.0

 


 

Improve Your Credit Without Doing Much

3600542728_c01d5b0766_bA lot of people overthink about and spend so much time trying to get a stellar credit. It’s true that an impressive credit will get you a great car loan deal. But rebuilding your damaged credit and achieving a good credit score do not have to put you at your wit’s end. How can that be possible? Credit.com shares some lazy, easy tips which require you to do almost nothing.

1) Set up an auto-pay system.

Thirty-five percent of your creditworthiness is determined by your payment history. That’s the biggest chunk. That means timely, sufficient payments certainly build up credit. But if you have records of late payments, you will need to concentrate on paying them up so you can see substantial improvement on your credit. Setting up an auto-pay scheme through your checking account helps you avoid missing a payment. It also removes the hassles of paying your bills and debts separately by yourself.

2) Ride on someone else’s good credit.

This is one of the laziest tricks here. All you have to do is talk to a family member, close friend or relative with good credit and ask if they could sign you up as an authorized user of one of their credit accounts. Your main responsibility is to keep the account in good standing. Otherwise, the effort will be futile and even damaging to both your credit and the primary user’s.

In auto loans, the chances of a borrower with bad credit to get approved for a car loan can be increased by getting a cosigner. The cosigner must have good credit standing. While this allows the borrower with bad credit to immediately get an auto loan, it also gives him or her the chance to make timely payments and improve his or her credit over time—something he or she might never be able to do without someone with trustworthy credit.

3) You don’t really have to shop for new credit.

Did you know that hard inquiries, which stay in your credit report for at least 2 years, make your credit look bad? Every time you apply for a car loan, a lender would check up on your credit as it evaluates your application—and that’s considered as a hard inquiry. So, multiple credit applications won’t really help improve your credit. Credit.com says refraining from applying for a new credit does your credit a favor.

4) Let your credit history age.

Lenders look at the age of your credit history, which accounts for 15 percent of your credit rating, when evaluating your application. The older the history, the more reference lenders have in assessing your likely payment behavior. They will also be more confident to write you an auto loan. Credit.com’s advice is to just “keep using credit responsibly.” This also means you should be wise when closing certain credit accounts.

Photo credit: Edward Leung / Flickr / CC BY 2.0

 


 

2014 Chevy Impala Under Probe Over Braking Issue

1024px-2014_Chevrolet_Impala_LTZ_--_2012_NYIAS_1The U.S. National Highway Traffic Safety Administration has opened an investigation on General Motors’ 2014 Chevrolet Impala after receiving a complaint on the car’s emergency braking system.

According to the NHTSA, the complainant reported being rear-ended after his rented Impala’s “driver assist system inappropriately activated emergency braking, bringing the vehicle to a complete stop.” The car was running 40 mph before the collision occurred.

The automatic braking system, which has become a common safety feature in today’s cars, automatically activates the brakes when the vehicle’s sensors detect a possible collision.

In his report, the driver said he heard three to four beeps from the forward collision avoidance system of the Impala before the brakes brought the car to a complete stop, causing it to be struck from behind. He also said that he experienced the glitch three or four times before.

General Motors have been notified about the incident and the complaint. It said it is now cooperating with the NHTSA’s initial investigation, which involves over 60,000 Impala units in the United States.

GM is now adding 35 safety investigators as it restructures its engineering operations in response to a massive safety recall of some 2.6 million Chevys and other models.

 


 

The Most Practical New Cars in the 2014 NY Auto Show

9680393695_27ca9a9f20_zFinance media company Wall St. Cheat Sheet listed down seven debuts at the 2014 New York International Auto Show that will “fill the garages of most people on earth.” That’s in contrast with the concept cars that are often unreal and less likely to be driven. So without further ado, here are some familiar models that will offer practicality and more for 2015.

2015 Ford Focus

Aside from the 2015 Mustang, Ford Motor Company also presented a couple of new Focus models at the New York Auto Show. Aside from an improved exterior styling, the Focus sedan will arrive in the market in late 2014 with a 1.0-liter 3-cylinder EcoBoost engine paired with a manual transmission. This makes the Focus, the best-selling car in the world for two consecutive years now according to J.D. Polk, a more fuel-efficient car. Mpg estimates are not yet out, though.

2015 Honda Fit

If it is fuel economy you are most concerned with when buying a vehicle, you might like the new Honda Fit. This subcompact is powered by a 130-hp engine matched with a continuously variable transmission or CVT. Because of this system, the 2015 Fit can return 41 mpg on highways.

2015 Subaru Outback

The 2015 Subaru Outback was presented at the New York auto show with refreshed exterior styling and more spacious interior. It can deliver 175 horsepower and 33 highway mpg with a 2.5-liter 4-cylinder boxer engine. The new Outback is set to arrive in summer of 2014.

2015 Dodge Charger

It might not be obvious at first but Dodge did make the new Charger more practical for 2015. The Wall St. Cheat Sheet noted that the 2015 Charger is less bulky and look less like a gas guzzler in effect. It can now return 31 mpg on the highway. Dodge will start selling the new Charger in the last leg of 2014.

2015 Nissan Murano

Nissan presented the 2015 Murano with its sport concept sedan version at the New York auto show. Arriving in dealerships in late 2014, the new Murano not only sports an attractive exterior but also delivers improved fuel economy. By reducing the crossover’s weight by 130 pounds, Nissan was able to push its fuel economy to 28 highway mpg.

2015 Toyota Camry

The most popular car in the U.S., as the Wall St. Cheat Sheet introduces it, is redesigned for 2015. The Toyota Camry is extra stylish but there’s actually no big news about what’s under the hood. Steering and suspension are revamped, though, which improved the overall responsiveness of the midsize sedan. Expect the Camry to be on sale in late 2014.

2015 Hyundai Sonata

At the center of Hyundai’s presentation at the New York auto show is an orange 2015 Sonata Sport which houses a 2.0-liter 245-hp engine and flaunts quad exhausts. The 2015 Hyundai Sonata is technically a midsize sedan but with the generous space it offers, the EPA is classifying it as a large car. With still impressive fuel economy and a more attractive appearance, the new Sonata is a good choice for a roomy family vehicle. It will hit the market in summer 2014.

Photo credit: SMADEIMEDIA Galleria / Flickr / CC BY 2.0

 


 

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