Car Dealers Challenged by the Internet

While there is no doubt that the Internet has benefited the average consumer. After all, it has simplified the shopping process in many ways, while at the same time arming consumers with pricing information and product reviews.

However, this same technology has made survival much tougher for a number of dealers and automakers. In fact, the ongoing shifting border between consumer education offered by sites such as TrueCar.com and the need for the car industry to make a profit has possibly lead to some honest-to-goodness conflict between TrueCar and American Honda.

TrueCar makes a profit by earning a commission from dealers for each buyer it directs to that dealer. The rumor is that Honda has threatened its dealers that if they use below-invoice price sites, such as TrueCar, they could possibly lose the marketing assistance money that the parent company normally provides to its dealerships.

Fighting this rumored battle, both TrueCar and Honda have distributed releases clarifying their relative positions while failing to name the other.  Fortunately, this should have little impact on buy here pay here dealers, as the whole issue is only relevant to the sale of new vehicles, not used ones.

GM Retaining Former Pontiac Buyers


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Since the end of the Pontiac era, GM and industry experts have wondered if the company could retain former Pontiac loyalists. After all, the only place you can now get yourself a Pontiac is through a private seller, used car dealership, or via buy here pay here car financing.  Well, those worries have been unfounded so far. According to new stats released by Edmunds.com, as many as 40% of Pontiac owners are staying within the GM brand.

The numbers from Edmunds are a little lower than an earlier R.L. Polk & Company study. Still, Edmunds says GM is keeping more former Pontiac buyers than it has since 2007. A majority of these buyers are turning to Chevrolet vehicles,. There was quite a surge in January and February of 2011, when GM tossed an incentive package at Pontiac owners to encourage them to stay under the umbrella. The incentives worked, since 28.1 percent of the Pontiac owners who traded up over that period made the jump into a Chevy.

Those buyers who abandoned GM have stayed loyal to domestic automakers, with less than 17% buying a  foreign product. This is good news for an automaker needing all the help it can get. If former Pontiac buyers had jumped ship enmasse, GM may have taken much longer to emerge from government control.

Association Wants To Preserve Historic Cars

The Historic Vehicle Association wants cars, trucks, and vehicles of all descriptions to have the same historical preservation status as homes, boats, and planes. The Association, started in 2009 by Hagerty Insurance, is lobbying for laws that protect historically significant vehicles, allowing them to stay on the road.

These are not the typically used cars that show up on Buy Here Pay Here lots.  But problems arise when the group tries to decide which vehicles are historically significant. Is a milk truck from the 30s as significant as an 1898 Sears and Roebuck two cycle or is a Marmon Meteor more important than any Nash or Hudson still running?

Another question is this: will new laws help encourage more cars to be preserved. Unless someone is going to pony up some mullah, restoring a car is an expensive hobby. Perhaps only time will tell.

You find out more at Hagerty Insurance.

Car Loans Galore Ruffles Used Car Feathers

Car Loans Galore specializes in arranging auto loans for people with poor credit. The company, in a move to help people make responsible auto buying decisions, launched a series of educational videos. That video series seems to have ruffled more than a few feathers within the used car dealer segment.

The company has received a large volume of letters requesting that they stop producing the videos. The next video is set to focus on the tricks that used car salesmen use to boost profits. ”We did not enter into this endeavor to slander or demean an entire industry segment, what we are aiming for is the proper education of the consumer. We don’t just stick to instructions and warnings on buying a used car; we cover new car buying, car loans, etc. Our intention was truly not to ruffle anyone’s feathers, but if these guys are getting riled up at us telling the public the truth; then perhaps they are afraid of being exposed. They apparently have something to hide from the consumer,” said a company spokesman.

With Car Loans Galore digging in its heels about the video series, it may be interesting to see how things shake out. Be sure to stop back here for future updates on the story.

Gen Y Flocking To Japanese Automakers

Brand loyalty is formed in youth. It is the same for cereal as it is for cars. The up and coming car buyers are Gen Y and their brand loyalty is being closely watched. So far, they are buying more Japanese cars.

The 18 to 27 year old demographic has a definite preference for Scion, Mitsubishi, and Mazda. 21% of Gen Y buyers purchased a Scion in the last two years. Mazda, in third, sold to 10.7% of those buyers. Honda made an appearance as the third most popular vehicle behind the Scion tC and the Mitsubishi Lancer.

These young, chic cars are in vogue right now. Most Gen Y’ers do not have to worry about carrying children around. Soon it will be minivans and crossovers for them. Check back in about 5-7 years to see where their preferences lie, when most of these cars have ended up on buy here pay here lots.

Cities With The Most Buyers Dedicated To American Makers


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Call it patriotic or buying American to support our economy. Either way, there are certain cities that are more apt to sell cars that are made by the Big Three in Detroit.

In general, the entire Midwestern section of the country is more apt to buy from the Big Three. Detroit and St. Louis are the cities with the largest numbers of domestic car buyers and 67% of the buyers there stay true blue. Cleveland, Ohio came in third at 59 percent.

The study conducted by The Detroit News did not include any information as to whether those buyers were aware that most of the cars made by the Big Three have foreign components. In some cases, they are at least 30% foreign made, while the majority of Hondas and Toyotas sold in the U.S. contain at least 75% American made components according to the National Highway Traffic Safety Administration (NHTSA). Makes you stop to think, doesn’t it?

IIHS Study Shows Support For Red Light Cameras


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The Insurance Institute for Highway Safety released the results of a recent study showing what it claims is widespread support for red light cameras across America. If you call releasing results from 14 cities and only having 13 of those show a majority of  support, then yes, the support is widespread. Here are the cities polled and the percentage of support.

  • Bakersfield, Calif. 68%
  • Baltimore, Md 67%
  • Chandler, Ariz. 75%
  • Chicago, Ill. 65%
  • Garland, Texas 66%
  • Long Beach, Calif. 48%
  • Phoenix, Ariz. 74%
  • Portland, Ore. 68%
  • Raleigh, N.C. 62%
  • Sacramento, Calif. 71%
  • San Diego, Calif. 64%
  • Santa Ana, Calif. 54%
  • Toledo, Ohio 58%
  • Washington, D.C. 78%

Red light cameras are a prickly topic. Courts assume that they are flawless and it often costs more to dispute the images than the ticket, so they are rarely challenged. Nothing made by humans is flawless, so how many wrongful tickets have been issued?

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Ford To Stop Producing Ranger In The U.S.

Ford has been producing the Ranger series since 1965. It began as a styling package for the F series, then, in 1982, it became a small truck to compete with the imports from Japan. At the end of this year Ford will stop producing the Ranger for the American market, ending a popular model.

With the end of the Ranger as a separate model, Ford is going to be absent from the small truck market. The only option will be a V6 version of its F-150 series, or to buy a pre-owned model from a used dealer or buy here pay here car lot. Ford sold 7 million Ranger units over the run and trucks continue to be a popular vehicle on the used truck market. With that in mind, hopefully, Ford will reenter the small truck market in the near future.

MINI’s Countryman Awarded Car of the Month

The 2011 MINI countryman has been named the Car of the Month for June by the NADA. The award was given for the car’s fuel efficiency, roominess, sporty performance, attractive European styling, and safety features. The car’s safety features garnered it a ”Top Safety Pick” from the Insurance Institute for Highway Safety (IIHS). The award comes from NADAguides website.

The car’ features can include a 16-valve, 4-cylinder engine that offers 181 horsepower and 177 lb-ft of torque, one year’s free subscription to SIRIUS radio, accelerator and steering programs, a seven-airbag system with side-seat and side-curtain airbags, cornering brake control, electronic brake force distribution, dynamic stability control, and roof crush strength that exceeds 4 times its weight. An average Countryman costs less than $26,000 with a full loaded model coming in under 30k. 

MINI is known for the tight handling and quick acceleration of its cars. The Countryman is billed as a compact crossover, but does not give up any of the nimbleness a MINI is known for. These are great cars and the Car of the Month designation is proof of that.  But remember:  these cars were new for the 2011 model year, so you may have a little
time to wait before they become available for buy here pay here
financing
.

Click here for more from NADAGuides, a leader in used vehicle information services.

Is Your Car Lying To You?

It may never tell you that your sexy or anything like that, but your car may be lying to you all the same. Late model vehicles are equipped with a fuel economy gauge. Edmunds.com tested  several different models and found that all of them were equipped with inaccurate gauges.

On average the gauges were off by 5.5%, with one model being wrong by a staggering 19%. Each vehicle tested, erred on the high side, so it showed better fuel economy than the car actually got. The website test drove five fuel-efficient cars from L.A. to Vegas and back under three different driving conditions: back roads at 45-60 mph, city streets, and highway speeds of 70-75 mph. During the 1,550 miles traveled the fuel economy was monitored by tracking how much gas it took to go a certain distance, then comparing that to the fuel economy gauge.

So, what did the auto makers say about this: Ford replied that it was too difficult to find the right engineer to respond, BMW and Volkswagen refused to respond, and Roger Clark, senior manager of GM’s energy center, said that the fuel economy gauges are ”dead nuts accurate”. He said the problem is not with the gauge, but with gasoline. The biggest fluctuation occurs because ethanol, which is blended with gasoline in varying amounts, contains less energy and lowers fuel efficiency. Hmmm…