New Cars: Better Deals Than Used?

accord

A used car is always a better buy than a new car. Right?

Not so fast.

Weird things are happening in the automotive world right now, and they’re all stemming from the fact that our economy stinks right now.

Fewer people are buying cars, and when they do, many are choosing to buy used. But since people aren’t buying many new cars, fewer used cars are getting traded in. The demand for used cars is increasing while the supply is decreasing, causing the prices for used cars to rise. 

And when the makers of new cars end up with much more supply than people are demanding, prices drop.

The Associated Press reports that the average cost of a used, dealer-certified 2008 Honda Accord EX sedan was $21,544 earlier this month. A brand-new 2009 model was reported to cost $80 less.

Throw in the zero- or low-interest financing available on many new cars, compared with 6 or 7% on used cars, and you just might end up saving thousands of dollars by buying new.

Like I said, these are crazy times.

Will your next car purchase be a new or used vehicle? If you plan to buy used, will you want a certified used car?

-tgriffith

The cool new diesel GM won’t build

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GM has developed a 4.5-liter diesel engine for the Chevrolet Silverado and GMC Sierra pickups.

It’s an engine that could raise those trucks’ fuel economy into the mid to high 20s – higher than the new two-mode hybrid system in the trucks, which is rated at 21 mpg.

The engine has cylinder heads that eliminate the intake and exhaust manifolds. It’s truly an innovation should GM take pride in.

And they won’t build it.

Or perhaps the correct wording is they can’t build it. While GM struggles for survival by cutting costs and trying to reduce brands, innovations such as this new diesel are getting put on hold. That’s unfortunate, because the possible benefits of such an engine are huge.

It’s easy for observers of the auto industry (bloggers included) to immediately criticize GM for moves such as this. Certainly the people at GM know how badly they need innovation, especially the kind that makes pickups border on the fuel efficiency of a sedan.

The fact is, though, GM just can’t afford to move on with the development of this engine, which has already tested as quietly and smoothly as a gasoline engine. They’ve already received $13.4 billion in government loans, and they hope to receive another $16.6 billion. That’s money GM needs just to say in business… they simply can’t afford to innovate right now.

Some people will say they can’t afford NOT to innovate, and there’s some truth to that. A joint venture is a possibility, in which GM would work with another company to build the engines for them. But even if such an agreement were made today, it would be at least a year before the engines were in production.

While I truly believe this engine is exactly the innovation GM has needed for quite some time, I can’t help but wonder if it’s come too late.

Would you be interested in buying a light-duty diesel truck that achieved fuel mileage in the high 20s?

-tgriffith

Did your car brand win one of these prestigious awards?

BMW: Prestigious or cool?

BMW: Prestigious or cool?

You can finally rest easy, because Kelley Blue Book has released its 2009 Brand Image Awards.

If you’re like me, you lie awake at night wondering what image your car projects to your family, friends, and co-workers.

You ask yourself questions such as, “Am I driving the most rugged truck?” “Is my car the coolest one on the block?” And, “I sure hope my car shows my friends that I appreciate a good value. But what if it doesn’t?”

If you drive a Toyota, you can relax knowing that everyone you know has labeled you as a value hunter who loves your family. In addition to taking home KBB’s Best Value Brand award, Toyota also snagged Most Family Friendly Brand.

Any Dodge or Chevy truck owners out there? I’m sorry to tell you that you don’t have the truck perceived as the most rugged. You might as well be driving a Tonka if you don’t have a Ford parked in your driveway. Of the 12,000 people surveyed for this study, Ford is perceived as the Most Rugged Truck Brand.

Award-winning Cadillac interior

For those of you hoping you can have the Coolest Brand, the Best Performance Brand, and Best Luxury Exterior Brand all in one, you’re in luck if you own a BMW! If you own a Cadillac, you’ll have to settle for knowing people perceive your ride as the brand with the Best Interior Design. If that’s a little too low on the testosterone scale for you, this won’t help: Cadillac is also perceived as the Most Comfortable Brand. So if you’re planning a long road trip and want a comfy ride with a pleasing color palate, you might want to hang on to that CTS.

Mercedes owners can revel in the fact that their cars are perceived as the Best Prestige Brand. Apparently you should never confuse “prestige” with “cool,” but I’m pretty sure only the good folks over at KBB know exactly what the difference is.

One award category remains: Best Exterior Design Brand-Non Luxury. Mazda drivers: I’m sorry to say you don’t drive a car perceived as having the best exterior design. Neither do you Saturn drivers. Or you, Chevy owners. If you drive a Nissan, though, congratulations on being the envy of the neighborhood! 

What do you think of Kelley Blue Book’s 2009 Brand Image Awards?

-tgriffith

Is Jaguar going after Porsche with an all new roadster?

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I don’t think Ford ever fully understood the Jaguar brand.

When the U.S. automaker sold the fabled British brand to India’s Tata Motors, I admit at first I was even more skeptical about Jag’s future.

But when I heard that Jaguar is in the final design stages of an all-new roadster, called the XE, my fears subsided. I was especially excited because 10 years ago Ford put the brakes on a promising roadster concept called the F-Type (pictured above), instead deciding to focus on the ill-fated X-Type wagon.

Ratan Tata, owner of Tata Motors, hopes to lead Jaguar through the economic recession and emerge with a game changer. He says Jag “needs something shiny and new,” which I’d call a huge understatement, but absolutely correct.

The XE is expected to debut at the 2011 Geneva Auto Show.

According to Motor Trend, it will use a 5.0-liter AJ-V8 Gen III engine – 385 hp in naturally aspirated form and 510 horses with a supercharger. European buyers may have the  choice of the XE with the 272-hp version of the new 3.0-liter V6 diesel that will soon debut in the XF sedan. Imagine a Jaguar that could deliver sub-6-second 0-60 performance while getting 35 mpg.

Jaguar is slowly coming back, with the exceptional XK, the sporty XF, and an all-new redesigned XJ expected in 2010. If they can exploit their success of recently overcoming Lexus in the J.D. Power vehicle dependability study and produce a roadster that can hang with a Porsche 911, they’ll have completed their transformation back to an elite carmaker.

And we’d have a little car company in India to thank for that.  

Do you think Jaguar can make a roadster that will compete with a Porsche 911?

-tgriffith

The best new cars for around $15,000 are…

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I think everyone should consider looking at cars in the sub-$15K category, even if they can afford considerably more. For their value, fuel efficiency, and fun factor, these are my picks for the best new cars you can get for about $15,000. 

2009 Mazda MAZDA3

The car is low maintenance, fun to drive, extremely comfortable, and safe. It’s roomy enough for five and gets a whopping 32 mpg. 

2010 Kia Soul

Certainly aimed at the younger crowd, the Soul is a crowd pleaser even before it hits showrooms this Spring. Our friends at carsforgirls.com called it an “urban chic compact crossover-SUV.” Yep, sounds about right!

2009 Honda Fit

 

If you’re a Harry Potter fan, you might remember the tent that looks ordinary from the outside, but inside it’s actually more of a mansion. That’s how the Fit is. Somehow, once you’re inside it’s more like you’re in an SUV than a 35-mpg compact.

2009 Suzuki SX4

The only car under $15K that comes with all-wheel drive standard also has a peppy 143-hp engine and standard navigation. The one drawback is a hit on fuel economy when compared to these other cars, but sometimes the security of AWD is worth it.

2009 Honda Civic

You get front-seat side airbags, full-length side curtain airbags, active front head restraints… plus the legendary Honda reliability. The Civic, even in base dress, just doesn’t have a drawback.

If you had a $15K budget, would you rather buy a new car from this list, or a used car for the same price?

-tgriffith

The Best TV Cars Ever!

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Not long ago I chose my favorite movie cars of all time, and needless to say, not everyone agreed with my choices. Now I want to know about your favorite TV cars ever! First, though, here are my choices:

KITT: 1982 Pontiac Trans Am, “Knight Rider”

Forget the Mustang GT500 in the pitiful remake of the classic “Knight Rider” – the original KITT was cooler on so many levels!

The General Lee: 1969 Dodge Charger, “The Dukes of Hazzard”

Remember how Luke and Bo would leap into the car right through its open windows? Or jump the car through barn walls? In this case, the car wasn’t just part of the show, it MADE the show!

1975 Pontiac Firebird, “The Rockford Files”

Jim Rockford lived in a trailer and drove a gold Firebird. Could he have solved his cases without the car? Maybe. But I don’t think as many people would have watched him do it!

Stair car, “Arrested Development”

Driving a portable staircase is plain funny, especially when it’s the family’s main mode of transportation. Here’s a nod to an under-appreciated classic!

Mach 5, “Speed Racer”

Hey, I never the said the cars on this list were all going to be real. The Mach 5 has been around since 1967, was the star of a recent movie, and was even put through a “road test” by Road & Track magazine. Zero to 60 in 0.6 seconds!

Which do you think are the best cars ever featured in a TV show?

-tgriffith

Scanning the Auto Blogosphere

Terrafugia's Transition in flight

Terrafugia's Transition in flight

The auto-blog world offers lots of coverage of a few big stories this week. As we noted in our last post, Congress will consider a “Cash for Clunkers” bill that would offer a voucher of $3,000-5,000 to anyone trading in an older car for a new one assembled in North America that costs less than $35,000 and gets at least 27 mpg on the highway. New-car deals get sweeter and sweeter, eh?

The government also earned a lot of auto-blog coverage today by approving a $5 billion plan to provide help to automotive parts suppliers, which have been hurt badly by the Big Three’s cuts in North American vehicle production. The Detroit News has lots of details.

Another topic that’s gotten lots of coverage today has to do with the latest J.D. Power vehicle dependability study results. Surprisingly enough, Buick and Jaguar both managed to outscore perennial winner Lexus this year, which took third. eGMCarTech has full results and the press release.

Two more stories generated auto-blog buzz this week. A number of folks published stories on the debut flight of Terrafugia’s Transition flying car (above). It’s still got a long way to go before you’ll find one at a local dealer, and the Transition doesn’t look particularly graceful airborne, but the (very short) video looks promising.

MR2 fans are getting into a lather over another story reported this week: Toyota is considering a performance hybrid based on a special version of the Prius’s powertrain that will carry on the name of Toyota’s much-loved roadster. Auto Express’s “artists’s impressions” look pretty hot.

We’ll conclude this week’s article with a couple of quick bits about the Big Three that suggest the times really are a’changing.

First, GM CEO Rick Wagoner said Tuesday that he thought increasing the federal gasoline tax to price gas at $4 per gallon is “worthy of consideration” (you’ll see that quote in almost every article on this topic). While gas taxes are regressive and therefore unfair, Europeans’ generally much higher gas taxes have driven them to select much more fuel efficient and environmentally friendly cars as a group. And that wouldn’t be such a bad thing here, would it?

Finally, as Chrysler happily points out on its own blog, the state of Michigan’s Department of Environmental Quality has awarded a Clean Corporate Citizen award to the Global Engine Manufacturing Alliance (GEMA) plant in Dundee, MI. The GEMA plant is a joint venture of Chrysler, Hyundai, and Mitsubishi, so they can’t take all the credit, but it’s nice to see Chrysler participating in an exceptionally clean, efficient, and low-impact manufacturing process.

Anything you’d like to see get more – or less – coverage here on the CarGurus Blog? Let me know.

-Steve Halloran

Will the Feds Give You $5,000 to Help Buy a New Car?

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Will the government give you $5K to get rid of this?

Finally, an idea that has potential to help consumers buy cars!

We’ve heard endless stories about the government helping the automakers and the automakers offering vouchers to employees… but up until now there’s been very little help for you and me in buying a new car.

And really, nothing’s going to help automakers more than making it easier for us to buy cars.

A “Cash for Clunkers” plan has been introduced by Representative Betty Sutton (D-Ohio) and co-sponsored by Representatives Bruce Braley (D-IA), John Dingell (D-MI), and Candice Miller (R-MI). Officially known by the convenient acronym Consumer Assistance to Recycle and Save (CARS) Act, it would provide vouchers of between $3,000 and $5,000 to consumers who trade in vehicles at least eight years old for ones that get better fuel economy.

A few limitations are attached to the proposed bill, including a stipulation that the new car must be assembled in North America and achieve 27-30 mpg on the highway. Also, the car must cost less than $35,000.

I’ve been known to voice my opposition to federal bailout money for the automakers, but this is an idea I can get behind. It accomplishes three things:

Stimulates the economy by investing in citizens, not companies Helps convince consumers to buy from companies who build cars in North America (not limited to the Big Three) Has a positive impact on the environment by getting older cars off the road (traded-in cars must be scrapped under the CARS act, not resold).

According to Consumer Reports, a similar measure in Germany has resulted in a 21% increase in auto sales. That’s something automakers in the U.S. would love to see!

If your car was at least 8 years old and the government gave you $5,000 toward a new car, would you trade in your current car?

-tgriffith

Will Toyota Cut Prius’ Price or Let Honda Insight Be Cheapest Hybrid?

2010 Honda Insight

2010 Honda Insight

Looks like Honda is changing the dynamics of the hybrid wars.

The new Honda Insight, priced in the States at just over $19K, comes in well below the Toyota Prius’ starting price of nearly $23K.

Rumors are beginning to circulate that Toyota will cut the price on the current Prius to match the Insight’s, but there has been no confirmation of that from the bigwigs at Toyota.

Is a lower price on the way for Prius?

A price reduction sure makes sense to me, as the Prius’ reign as king of the hybrids is being challenged by the Insight and the new Ford Fusion hybrid. The other option Toyota has is to stuff all the technology it can into the Prius and hope buyers see the value and fork over more money for it.

That’s a tactic we know will happen, as the third-generation Prius is expected to offer, among other things, a solar panel on the roof that will power fans to keep the car cool when parked in the sun. I’m guessing that’ll be a popular feature among celebs in Los Angeles! (You can check out the third-generation Prius here.)

It’s also possible that Toyota will offer the Prius in two versions: one that is essentially the current model with a lower price that matches the Insight’s, and one with technology and safety upgrades priced at a premium.

One thing is for sure: Selling hybrids is going to become more difficult as competition stiffens and more diesels enter the market.

What do you think: Buy a hybrid or skip the hype?

-tgriffith

Rare Video of a Nissan GT-R Crash

If any proof is needed that inexperienced drivers can get into some serious trouble with powerful cars, this video is it.

In the video, it looks like an over-zealous Nissan GT-R driver is pushing the limits of his car through some mountain twisties. At night. With other cars.

As I’m sure the car gurus who read this blog know, a powerful car is only as powerful as its driver. Piloting a GT-R at high speeds through the corners isn’t as easy as a video game might have someone believe! That’s a lesson the driver of this ill-fated GT-R learned the hard way. Ouch!

Would you feel comfortable taking a car like the Nissan GT-R and pushing it to its limits?

-tgriffith