Big Money Coming To A Dealer Near You, 'Cash For Guzzlers" Bill Passes The Senate

BREAKING NEWS! BREAKING NEWS!

President Barack Obama will soon sign a $1 Billion Dollar bill, recently passed 91-5 by the U.S. Senate, will provide $3,500.00 to $4,500.00 cash vouchers to consumers who trade in their current vehicles for newer, more fuel efficient automobiles and here is the catcher, the trade-ins must be scrapped.

The bill hopes to provide a push to fuel lagging new vehicle sales in the U.S. auto market, the program will last about 3 1/2 months.

The program has been modeled after similar programs in Germany, France and China, which saw huge sales increases when the programs where released in those respective countries.

I will provide more details of the program as it is released.

Enjoy Today!

Kevin Kimbrough

That Car Guy

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Loose your job, GM and Ford say no problem, we’ll make your car payment...

Following in the footsteps of Korean automaker Hyundai, General Motors and Ford Motor Company, made announcements March 31, 2009 that it would make the car payments for customers who lose their jobs, up to 12 months.

Hyundai Motor Company has had a similar program since January, 2009 and states that its sales have risen 4.9%, its program initially stated that customers could return the vehicle without damaging the customer’s credit. It has since made a temporary change that states that Hyundai will make up to three months of car payments (leases and loans).

General Motors program called GM Total Confidence Program will provide payment protection for two years. The program will make nine vehicle payments of up to $500.00 a month for its new vehicle purchasers on vehicles purchased by April 30, 2009.

Ford Motor Company announced its Ford Advantage Plan that will make vehicle payments up to 12 months with a maximum payment amount of $700.00. Customers must purchase a vehicle by June 1, 2009 and the program will accept claims until December 31, 2009.

General Motors made an additional announcement regarding Trade-In protection to customers who sometimes end up owing more on a vehicle than its current value. GM said that it would provide limited trade-in protection on GM vehicles purchased with a finance contract up to six years and would further require that customer to be midway through the contract before the trade takes place. In a further major move GM began touting its 5 year/100,000 mile powertrain warranty as the “best coverage in the industry”.

General Motors is not stating that the government recently announced that it would back the warranties of its vehicles, should the company go into bankruptcy. Mark LaNeve, GM vice president of North America vehicles sales, service and marketing stated, “We’re not using the word government or using that level of detail” were just stating that the warranties are “fully backed”.

Ford is confident that the new program along with its current line of 0% financing offers on most of its vehicle line up will shrink sales declines in recent months as stated by John Felice, General Manager of Ford, Lincoln and Mercury. He went on to say that the current offer is low risk by Ford, which is buying insurance to cover potential payouts, he would not disclose the cost of the program but described it as nominal.

These programs are anticipated to bring confidence back into dealers’ showrooms and resuscitate life back into the ailing auto industry. GM and Chrysler have 60 and 30 days respectively to provide the Federal Government satisfactory plans to turn around its companies or face bankruptcy. The lifeline that they have lived on for the last few months has tightened considerably and is near being completely cut off.

The automakers immediately began touting the programs online and consumers should start to seem them in print and radio in the next couple of days. For complete details of these programs check the company websites and ask dealers for a complete copy of these programs so that consumers maintain any compliance issue.

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That Car Guy

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A New Scrap Vehicle Bill Has Been Introduced In Congress...

BREAKING NEWS! BREAKING NEWS!

A bill has been introduced in the U.S. House of Representatives would give consumers between $3,000.00 and $5,000.00 through 2011 by trading in older vehicles on more fuel/energy efficient transportation options.

The bill, written by Rep. Betty Sutton, D-Ohio, would give vouchers for buying new vehicles or using mass transportation in exchange for scrapping vehicles that are at least eight years old. The customer would have to purchase a 2009 model or newer and have better fuel economy than the vehicle being scrapped. In addition the vehicle purchased must have a fuel economy rating of 27 mpg on highways and light trucks would have to achieve a rating of 24 mpg.

This is the 3rd bill presented that deals with this subject this year. The proposal is supported by the Big 3 and the UAW, but the Alliance of Automobile Manufacturers (Import Association) does not support the bill as it has been written. It says that the bill offers unequal treatment of automakers, said Charles Territo.

The bill would provide a $3,000.00 voucher for using mass transit, up to $4,000.00 for buying vehicles assembled outside North America and up to $5,000.00 for buying vehicles assembled inside North America or any registered work vehicle. The Qualifying vehicles would require a suggested manufacturer's retail price of $35,000.00 or less.

Starting in 2011 model year, the bill as written would allow consumers to receive a $7,500.00 cash voucher for the purchase of a plug-in type electric hybrid vehicle that gets a minimum of 100 mpg.

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That Car Guy

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The hottest used cars these days... I don't really want to say I told you so...

I reported recently that the resale value of preowned used Chevrolets, Fords and Chrysler products would soon have dramatic increases in value. J.D. Power released its 10 used vehicles with the fastest-rising prices (May and June 2008) and low and behold look what popped up on the list among the Toyotas and Hondas. The good 'ol Chevrolet Aveo and Ford Focus, as the story indicated, these vehicles are flying off dealers lots and pricing is rising fast. It goes on to say economy models haven''t been big sellers for the past few years, car makers (domestic) have built relatively few of them.

As I said in my earlier report, all anyone has to do is the math, the Domestic output of fuel efficient vehicles has been low, now demand is high, simple supply and demand mathematics. The Imports will be less and the Domestic used vehicle values will increase as this demand continues to increase.

All of the sudden that Chevy Metro is worth some moola!

I really don't like saying I told you so, so I won't, however you folks should listen up, look at the great values on deals from the domestics and take advantage of them. I am not being pro Domestic or anything like it they have made major blunders in there product development and offerings to the public, but if you see a great value you should take it.

Lets see how the next reports look, maybe I will have to adjust my time lines, I will keep doing the math.

Enjoy Today!
Kevin Kimbrough
That Car Guy

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The imports will be less... the imports will be less.. Your import trade will have less value in 3 to 5 years.

It always amazes me when I hear consumers discussing vehicle values and they impress upon everyone that they know what they are talking about, as if in depth research and studying took place.

I recently took in a conversation about the same 'ol story that import values are better than domestic vehicles and that there friend is better off purchasing an import. Maybe now!, on some models, but what about when they want to trade there vehicle in 3 to 5 years. You see, blanket statements and comments without knowledge and understanding benefit no one, particularly when the person giving the advice has no idea or insight into what they are talking about, yet want to provide everyone around them with there advice and opinions.

This discussion led me to the understanding that in three to five years the trade in values for hundreds of thousands of vehicles will not be what they are now. GM, Ford and Chrysler have cut back production, Toyota, Honda, Nissan and other imports have increased production, in addition Toyota, Nissan, Hyundai, Kia and others have been selling vehicles to the rental car industry at record paces, while the domestics have cut back. Ah Ha, do you see where this is going, it doesn't take a rocket science degree to understand that there will be a supply and demand issue (economics 101) in the next few years and the domestics will rise again, almost like an NBA team (can you say Celtics) going into the tank, trim the roster add a couple of key players (vehicles) and win a championship.

Most people in the auto industry know that domestic quality is on par with the imports and in some cases far exceed there import competitors, yet the domestic manufacturers still do a poor job of communicating that fact. This perceived gap will decrease as more people have defected to the import players and they discover what is widely known throughout the industry, that the import you just purchased, has just as many or more recalls, quality issues, technical service bulletins issued because of minor problems and so on than the domestic competition.

Its coming, it will take a couple of years, but numbers don't lie, as a friend of mine always says, you do the math, the used vehicle value of imports in the coming years will plummet like a falling star. The domestic used vehicle values will once again rise up like a phoenix and shock everyone, except me, because I did the math, right here right now June 20, 2008.

Now I don't think for a second that someone at Toyota, Honda or Nissan has not at least considered what is taking place in the U.S. retail auto industry, yet sometimes everyone gets so focused on winning or being number one that they lose sight that sometimes your gains are temporary. The manufacturer in the best position in my opinion remains Honda, they don't get too caught up in being number one (in terms of numbers, quality yes) and there business model has been designed to have measured increases in market share. If they (import manufacturer) don't understand what is taking place here in the good 'ol USA, the import trade ins will be less... the import trade ins will be less! So the next thing that happens is deep, deep, deep discounting to move product off of dealer showrooms, value perception's start to change and buyers shift back to what is hot again. I think I see a Ford or Chevy in your future...

Some advice, take advantage of some of the crazy offers that the domestics have in play, 0% APR, the huge rebates etc... provided of course it makes since for you and your pocket book, you don't have to be afraid, you will be glad that you did, especially when you still have to pay full price or more for a import, you do the math.

Enjoy Today!
Kevin Kimbrough
That Car Guy

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Just who is Regina Lewis... and why is she an authority on the retail auto industry?

Just caught a glimpse of a segment about car deals "Cracking the car buying code- online" ooooooo ahhhhhh.... on the Today Show and Regina Lewis an AOL Consumer Advisor "Internet Specialist" was the expert authority on car deals. Her whole insight was that she talked with a salesperson, this is the expert that was choosen and her research, background and technical expertise is based on a conversation with a salesperson, not the sales manager not the general sales manager not the general manager but a sales person.

I looked her up and she says she is an AOL consumer advisor, TV contributor, tech trend expert and host of DIY Network's Tech out my house, what I failed to see is any reference to the retail auto industry, but maybe she visited a service department, oh, oh, oh, she purchased a car before, yea that makes her an expert. Her expertise is akin to "I read a law magazine and it said do this in court", the assumption by Regina Lewis is that we should take her word that what she is saying is indeed fact, but she flatm out has her facts wrong, kind of like practicing medicine without a license, maybe not that far but she is no expert, although in this case she did talk with a sales person.

There is no code, there is no secret society writing script and policy for dealers to follow, only the manufacturers whims and fancies. Although I believe that a consumer advocate should have a voice, but there view points should be based on fact and I grow tired that consumers have so much information that guides and steers them in the wrong direction and there view points continue to raise anxiety and fear when a consumer visits a dealers showroom. Articles and broadcasts continue to perpetuate the notion that a car dealer is withholding something, all because a consumer advocate who passes themselves off as an expert says, this is what a consumer should expect when they visit a showroom and when it doesn't happen, because it can't happen the dealer is the villain. When in fact the information was wrong.

Case in point, Regina Lewis says that "Location matters" her words: "Keep in mind, car deals often vary regionally, so when you're doing your online research, it's a good idea to type in multiple zip code[sic] (maybe an hour away or one state over). Could be worth the drive if the incentives are better."

FACT: There are regional, state, local and dealer ad group incentives, however they are geographically assigned by zip codes. if you do not live in the area in which the incentive is available, you don't get the incentive.... period, unless you lie and make up an address in a neighboring state and your taxes and paperwork is assigned to that new address and then you have to register and plate your purchase at your new address that you lied about and then you have to change your address and re-register and plate your vehicle and in some states you may have to pay the difference in sales tax possibly... OK, I think I made my point.

Regina Lewis presents this as an option when in fact it can't happen, however the car dealer is left trying to defend themselves and once again looking as if the are lying, because her expertise (using the term loosely) has created a bad experience for the consumer who is probably demanding the incentive that they can't get and does not understand why they can't get it because Regina Lewis said that they can get it...whew.

Regina Lewis states- "The real math"..."70 percent to 90 percent of customer rebates from car manufacturers trickle down as discounts to car buyers..."

FACT: 100% percent of customer rebates from car manufacturers trickle down to the consumer, if a dealer does not honor the rebate and keeps it as Regina Lewis is implying they would be in violation of there Sales and Service Agreement with the dealers respective manufacturer.

Regina Lewis states- "Going the eBay route"... "Many buyers feel they're paying $1800.00 less than the official Kelly Blue Book value of the vehicle (the industry standard for the going-rate of any given vehicle)

FACT: The key word here is 'feel'... a good deal is a state of mind and eBay much like any good sales tool creates an atmosphere in which consumers feel as if they WIN... I think this is eBay's new slogan... 'WIN it on eBay or something like that'. It doesn't mean that the deal they received was the best deal that they could have achieved somewhere else, perception is half the sales battle and many consumer oriented places go to great lengths to create the impression that they are the low price leader, when in fact they probably aren't. Regina Lewis goes on to state that Kelly Blue Book is the industry standard, in fact there are many books that are used to determine a vehicles value, NADA, Black Book etc... but a vehicles value to the dealer in which you are trading your vehicle looks at other criteria that is not in a book, a book is merely a guide, other criteria would be local auctions, and the dealers own success rate in selling a particular used vehicle. For instance a dealer who sells a lot of 2001 Ford F150's XLT's may be willing to pay a little more for your trade than someone who doesn't have a high demand at there dealership for that brand of vehicle, i.e the local Honda dealership.

I wholeheartedly believe that every consumer needs to do there research, however I tire of consumer advocates who continue to perpetuate half trues and false information that merely confuses consumers and further creates an atmosphere of distrust and anxiety between consumers and car dealerships.

If you choose to report on something please get the facts straight before you report, but of course it will take the major news bureaus and television news agencies to demand more from there experts but therein lies the problem, from what I see these agencies hire financial analyst, consumer advocates and other journalist, when in fact they should engage a real expert to report the facts in the respective field, particularly as it relates to the retail auto industry, I am continually amazed that these organization will continue to report on these automotive consumer issues and they do not engage the services of someone who has a background in the field, they would not do it in another field such as the medical profession or legal profession.

I would ask that consumers demand that they get the real answers to there questions not some watered down half true version from a non expert posing as an expert.

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