April 24th, 2010
Recently a friend asked me what I thought the worst scam was in the car business.
That was like asking what car was the best car – too many choices and no focus. I had to think for a long time. I decided to eliminate outright fraud and choose from the many common practices in the market place. I chose “Spot Deliveries”.
Spot Deliveries, in themselves, are not scams but how they’re used often turn into scams. On weekends, bank lending departments (including the manufacturers’ lending arms) are not open and therefore cannot approve loans or leases. In the interest of selling a vehicle on weekends, many dealers will do a tentative loan approval. The new buyer is happily off driving his new vehicle. Although, this usually happens on weekends, it can also occur on extra busy weekdays as well, if the dealership is backed up and doesn’t feel they have the time to get approvals on the spot.
If, on the next business day, the loan or lease is either disapproved or approved at a higher interest rate by the lending institution, the dealer will contact the buyers to have them return the car with rental charges or sign a corrected loan or lease at a higher payment, causing significant headache and upset to the driver. At the time of the original delivery, if the possibility of this loan change or increase in payment (based on the credit score) is not discussed, as often happens, this results in even more weeping and gnashing of teeth.
MORAL OF THE STORY – If you’re not paying cash and your credit is less than perfect (scores over 700 to 740 depending on the lender), don’t take delivery of a vehicle on a weekend or at a very busy dealership, unless the loan or lease has been previously finalized and approved. Better yet, get a referral to a good broker you can trust and stay out of dealerships altogether, unless accompanied by your broker.
Tags: ripoffs, scams
Posted in Vehicle Scams | 32 Comments »
April 12th, 2010
With the advent of CARFAX and other similar vehicle history websites, used cars can be checked before purchase for adverse information like salvage titles, accidents, etc which may lower the resale price of an owned vehicle. With reported accidents or salvage titles, some banks won’t even finance a vehicle.
Thus, if you purchase a vehicle and later have an accident with an insurance claim, police report, or reported body shop collision repair, your value may be much lower than the normal book value, thereby increasing, even after repairs, the total cost of ownership during your period of use.
By contrast, if you lease the same vehicle and have the same accident and again do the same repairs, you can still return the vehicle to the lessor without extra charges. The vehicle is still worth less, but the lower value only affects the owner/lessor (the bank, leasing company, or manufacturer).
Thus “potential” diminished value is another good reason to lease instead of buy.
PS – If you need a Carfax report either to see what your current vehicle looks like prior to sale or what your potential next used car looks like, to buy or to lease, call me. If I do it, it’s free – If you do it, it’s $35.
Tags: Carfax, vehicle leasing
Posted in Leasing | 127 Comments »
April 11th, 2010
As of April 6th, many Toyota new car leases (especially the RAV4) continue to have historically record-low interest rates that can lower payments by $75 or more per month. The only difficulty is that the inventory of most Toyota models with these incentives are rapidly diminishing, reducing your color choices especially among lower cost models. Call me soon to greatly increase your chances of getting what you want.
Tags: Low Toyota lease payments
Posted in Leasing, New Cars | 1 Comment »
April 10th, 2010
There are many myths and prejudices about leasing or buying vehicles. Whether to lease or buy a vehicle has always been a difficult question to answer. It depends on many things. But without knowledge about leasing itself, the answer eludes many who listen to unfounded rumors and base their decisions on them. Having someone on your side you trust who can explain, compare, and recommend alternatives will help you choose the best alternative.
To read more about this topic, click to read article. This article does not even address one of the biggest reasons to lease – higher deductions on your taxes, if you use your vehicle for business more than 50% of the time. I’ll discuss that in a later article.
Tags: lease vs buy, lease vs finance, Vehicle, vehicle financing, vehicle leasing
Posted in Leasing, Vehicle Lease vs Buy | 12 Comments »
April 3rd, 2010
My son recently mentioned that he wanted his next car to be a particular model of Toyota RAV4, without the very visible rear spare tire carrier. This is the 2010 RAV4 Sport model. He likes that cleaner look better than the other models. There is no tire carrier because this model uses run-flat tires. After speaking with several reliable tire suppliers, I learned the following things not explained fully by Auto Manufacturers or Tire Manufacturers about run-flats. After learning more about these tires, I told my son that he might want to rethink his choices a bit.
THE PROS – (1) Four run-flat tires remove the need for a spare and save the car manufacturers considerable space, weight, and cost in their design. (2) Tires that can be driven over 50 miles after a puncture without any vehicle damage eliminate a driver’s inconvenience of stopping on a highway to change the tire.
THE CONS – (1) Run-flat tires can cost over 60% more than regular tires. Only one run-flat tire is produced for the 2010 RAV4 Sport and four tires cost about $912 installed compared to $576 for four regular tires on the other RAV4 models. (2) Run-flat tires typically last only 1/2 as long (20k miles) as regular tires (40k miles). (3) Run-flat tires generally have no Road Hazard Warranty available, while regular tires do. (4) Run-flat tires, in most instances, can’t be repaired if punctured but must be replaced. (5) Replacing one tire on an all-wheel-drive vehicle usually requires replacing all four tires to keep from damaging drive components, due to differing tire diameters on the remaining wheels.
When I relayed this to my son , he chose the less expensive (in more ways than one) base model 2010 RAV4.
MORAL OF THIS STORY -
Before you buy or lease your next new or used vehicle, check to see if it has any kind of spare tire. To my knowledge, the only manufacturers that now or in the past have run-flats on some of their models are Acura, BMW, Honda, Lexus, Mazda, and Toyota. Happy motoring.
Tags: tires
Posted in Cars General, Vehicle Costs | 1 Comment »
April 1st, 2010
Your used car is probably more valuable this year than last year. Late model low mileage vehicles are in very short supply compared to last year because not as many people are buying new cars to replace them. So now’s a good time to look at replacing your current car, truck, SUV, or minivan.
To read more about USED CAR VALUES, click to read my article.
Tags: Used Car, Used Car Prices, Vehicle
Posted in Used Cars | 13 Comments »
April 10th, 2009
Click Here to see my April 2009 newsletter
Tags: Used car auctions, You are what you drive
Posted in Newsletters | 1 Comment »
April 10th, 2009
Click Here to see my latest article explaining how actual values relate to Blue Book values.
Posted in General | No Comments »
February 6th, 2009
Here is an excellent chart showing a comparison of Manufacturer Warranties for all new car makes sold in the USA.
View Chart
Posted in General | 1 Comment »
February 4th, 2009
Here’s a recent article that talks about 6 myths of our Domestic Vehicle Manufacturers negatively affecting their current reputation. Some of the best vehicle values out there today can be found in certain domestic autos.
click here to view article
Tags: US Cars
Posted in Cars General, General | 9 Comments »