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Honda Confirms Takata Airbag Inflator Ruptured in Texas Crash

bestautolenders6On Thursday, Honda Motor Co. said that one of its vehicles equipped with airbags made by Takata Corp. was involved in a fatal crash in Texas. At the time of the announcement, the automaker did not say if the airbag inflator ruptured during the accident. On Friday, Honda confirmed that it did.

The crash happened on January 18 in Spring, Texas. 35-year-old Carlos Solis IV was behind the wheel of a 2002 Honda Accord sedan. Also in the car was an 11-year-old cousin. According to reports, the low-speed crash killed the driver but left the younger passenger unharmed. The cause of death has not been determined, but the county medical examiner’s preliminary report indicated that the victim suffered “blunt force injuries to the neck.”

The Solis family has filed a case against Honda, Takata and All Stars Auto Sales, the dealership from which the victim purchased the 2002 Accord. According to the lawsuit, Solis bought the car from the aforementioned used-car dealership in April 2014. The Accord collided with a 2003 Infiniti G35 sedan, and the lawsuit described the crash as “relatively minor.” However, the outcome was anything but—the lawsuit cited a police report which stated that a piece of metal from the airbag hit the driver in the neck.

Honda’s confirmation of the airbag’s rupture suggests that the defective Takata airbag inflators have claimed another life. Before the Texas accident, Takata airbags have been linked to five fatalities. The airbags deploy with excessive force and their inflators explode, spraying metal fragments that can fatally injure vehicle passengers.

Last week, Takata said it was working with Honda to find out the truth about the accident. The parts maker stressed that public safety remains its main priority. Takata has yet to determine the cause of the deadly inflator defect.

Honda said that the 2002 Accord involved in the Texas crash was among the vehicles called back in 2011 for a faulty driver’s side front airbag inflator, but has not yet been serviced by the time Solis bought it. A company spokesman said that Honda sent many recall notices via mail to the Accord’s original owner and admitted that it has not yet mailed notices to the current owner.

Solis purchased the Accord on April 25, 2014, long after the original recall. However, the car was again recalled as part of a regional campaign in June. Texas was among the high-humidity regions included in the regional callback.

Photo credit: Melissa Clark/ Flickr/ CC BY



Honda Rejects Longer-Term Loans as Means to Boost Sales

bestautolenders5Last week, a top U.S. executive at Honda Motor Co. expressed disapproval over a practice that many automakers use to boost sales—offering stretched-out auto loans.

At the recently concluded 2015 North American International Auto Show in Detroit, Honda’s U.S. sales chief John Mendel called the practice “stupid.” He said in an interview with Bloomberg that selling vehicles with extended-term auto loans is a stupid move for automakers and the industry itself.

Many automakers successfully boost sales by offering longer-term car loans to buyers. They give consumers the option to repay the loan for as long as 84 months. While extended-term loans seemingly make vehicles more affordable for buyers, it makes repayment more difficult. Mendel pointed out that the extended period makes it tougher for consumers to repay faster than vehicles lose their value.

He described such car buyers as “stretched so thin.”

Mendel said that Honda will avoid stretched-out auto loans, even as another Japanese carmaker threatens to take its place as the fifth-largest automaker in the United States. Nissan Motor Co. trails behind Honda, but has narrowed the latter’s lead to fewer than 20,000 vehicles last year.

Mendel said that rather than do what many competitors do, Honda will stick to offering auto loans that are 36 to 48 months long. These repayment periods will enable buyers to owe less than their vehicle is worth when the said vehicle is sold as a pre-owned unit. Mendel noted that this will help them sell more cars, since consumers in equity buy another vehicle.

He predicted that Honda’s U.S. sales will increase 2 to 4 percent in 2015, driven by demand for three new or refreshed SUVs. These are the compact CR-V, the subcompact HR-V and the mid-size Pilot.

There are people who agree with Mendel’s statement about stretched-out car loans, including Tom Webb. The chief economist at Manheim Consulting mentioned that the industry assumes more risk when automakers offer stretched-out loans with small down payments to consumers in less than ideal credit situations.

According to Experian data, more than one in four new-vehicle loans in October and November 2014 had term lengths of 73 to 84 months. Back in 2009 and 2010, new-vehicle loans at these lengths accounted for less than 10 percent of all new-vehicle loans.

2014 was a record year for U.S. auto sales. Automakers sold 16.53 million vehicles, up 6 percent over the previous year and the best sales record since 2006. Volume is expected to increase to 16.7 million in 2015.

Photo credit: Ian Muttoo/ Flickr/ CC BY-SA



Cheap Gas Leads to Great Deals on Alternative Fuel Vehicles

bestautolenders4With gasoline at its lowest price in almost six years, consumers are expected to favor gas guzzlers over alternative fuel vehicles. Even BMW admits that selling electric cars will be more challenging at a time when fuel is very affordable. However, cheap gas can also make hybrids and EVs more appealing for some buyers—at least in terms of sticker price.

Those who prefer more environment-friendly vehicles but are working with a limited budget should consider shopping right now. In a press release, TrueCar pointed out why the decline in prices at the pump proves to be advantageous for consumers in search of green cars: hybrids and electric vehicles offer the best savings in January.

Every month, TrueCar releases its “TrueSavings” report, where it evaluates current transaction prices and determines which vehicles allow the most savings for consumers. For this month, TrueCar’s list is topped by an alternative fuel vehicle. The vehicle that offered the most savings is the Ford Focus Electric. The hatchback has a manufacturer’s suggested retail price (MSRP) of $29,995 but the average transaction price is 16.1 percent lower at $25,168. For buyers, this means savings of $4,827.

Also found on the list’s top five are two other green rides: the Kia Optima Hybrid and the Toyota Prius Two. The hybrid variant of Kia’s mid-size sedan was on the number four spot. Its MSRP is $32,950, but the market average is $29,411. This 10.7 percent price drop allows savings worth $3,539. In fifth place was the Prius, recognized as the top-selling green car in the world. Its sticker price is $25,025, but its average transaction price is $22,498. Thanks to a 10.1 percent decline in price, Prius buyers can keep roughly $2,527 in their pockets.

TrueCar president John Krafcik explained that automakers offer hefty discounts because they want to move alternative fuel vehicles out of their lots. Through price cuts, they could clear out their inventories of green models in a time when people will be seeking less green vehicle options.

Gas prices may be low now, but many warn that these will not be low forever. One warning came from U.S. President Barack Obama. He told the public to enjoy cheap gas, as low prices will not last. Carmakers themselves are aware of this. Auto giants like General Motors Co. feature electric cars in their lineup and consider such vehicles a key part of their overall strategy.

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Many Jeeps Remain Unfixed More Than A Year After Gas Tank Recall

bestautolenders3More than a year after certain Jeep models were recalled due to risk of gas tank fires, there are still a significant number of affected vehicles that have yet to be repaired. Moreover, the number of fatalities continue to increase.

Jeep brand owner FCA US (formerly known as the Chrysler Group) said that it is addressing the situation as quickly as possible, but acknowledged that it is having a hard time locating drivers of the affected nameplates, which are between seven to 20 years of age and have possibly changed owners over time. The Jeeps covered by the recall are the Grand Cherokee models from 1993 to 1998 and Jeep Liberty models from 2002 to 2007.

The Auburn Hills unit of Fiat Chrysler Automobiles NV claimed that the aforementioned models met existing crash-protection requirements back when these entered the market.

In a December meeting in Washington, the automaker’s representatives told federal regulators that they are redoubling their efforts to fix the recalled vehicles and to encourage affected owners to bring their vehicles in for repairs. Part of FCA’s efforts to reach more customers is a new video outreach campaign. According to reports, the company started shooting a video starring a key official last week. In the video, FCA US’s senior vice president of regulatory affairs will discuss the recall process and urge owners of the recalled Jeeps to have their vehicles serviced.

The former Chrysler Group recalled the Jeeps in June 2013 because these could potentially catch fire when they are rear-ended. In the recalled SUVs, the gas tank is placed between the axle and bumper, instead of in front of the axle. The automaker initially did not want to issue a recall, but changed its mind after being urged by the National Highway Traffic Safety Administration (NHTSA). FCA CEO Sergio Marchionne then announced the company will deal with the issue by installing a trailer hitch, which will protect the gas tank in the event of a rear collision.

FCA may have agreed to call back the Jeeps but its recall efforts were too slow for safety regulators. NHTSA deputy administrator David Friedman learned that the company had fixed just 3 percent of the total number of recalled units six months after the recall was issued.

According to the Center for Auto Safety, six people have died in five crashes involving the recalled Jeeps. One of them was 23-year-old Kayla White, a pregnant woman from Michigan. Aside from the six most recent fatalities, regulators have previously determined 56 other deaths in 38 crashes.

Photo credit: order_242/ Flickr/ CC BY-SA




Crossovers and SUVs Dominate U.S. Auto Sales in 2014

bestautolenders2The final sales numbers for 2014 have yet to be released, but it is safe to say that utility vehicles were a hit with U.S. buyers last year.

In 2014, many consumers opted for SUVs and crossovers, and the figures prove it. According to The Detroit News, final sales figures would reveal that U.S. SUV sales for last year have exceeded 1.5 million for the first time since 2007. In that year, automakers sold 2.2 million SUVs in the country. Moreover, utility vehicles accounted for 32.5 percent of the 15 million vehicles sold in the U.S. through November.

Meanwhile, AutoData Corp. figures indicate that SUV sales in November 2014 rose 7.6 percent compared to the previous year and jumped 64 percent compared to 2009.

Including crossovers, total utility vehicle sales for 2014 are expected to surpass the 5 million mark for the first time. For the first 11 months of the year, deliveries were already almost 4.9 million. This figure is higher than 2013’s total, which is 4.8 million.

What helped buyers choose utility vehicles over sedans and fuel-efficient hybrids was not only the great selection of vehicles automakers offered but also the significant drop in gas prices. The wide selection of new or redesigned SUVs, combined with lower gas prices, were enough reason for people to consider purchasing the big gas-guzzlers.

America’s renewed love affair with utility vehicles has a lot to do with the selection that automakers provided U.S. consumers. The Detroit Three in particular certainly delivered, giving buyers more than enough options to choose from. Ford Motor Co. released a refreshed 2015 Lincoln Navigator while the former Chrysler Group—now known as FCA US—had the first full year of sales of both the 2014 Dodge Durango and Jeep Cherokee.

However, General Motors Co. had the most to offer in 2014. The largest U.S. automaker rolled out six new SUVs: 2015 Chevrolet Tahoe and Suburban; GMC Yukon and Yukon XL; as well as the Cadillac Escalade and Escalade ESV.

With roughly 45 percent of all utility vehicles sold in the U.S. coming from The Detroit Three, it is no surprise that America’s preference for SUVs and crossovers is most beneficial for them. These companies earn more from crossovers and large SUVs compared to smaller cars.

Consumers are expected to continue favoring utility vehicles this year. In the upcoming North American International Auto Show in Detroit this month, potential buyers will get to see even more choices in the utility vehicle department. These include the 2016 Ford Explorer, 2016 Honda HR-V and the 2016 Mazda CX-3.

Photo credit: order_242/ Flickr/ CC BY-SA




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