In sharp contrast to most of the rest of the industry, Honda showed a dramatic increase in sales over a year ago in June. Helped by their environment-conscious image and small-car excellence, American Honda sales were up almost 18% over last year. The Honda Civic posted record June sales, and the fuel-efficient Fit had it’s best month ever. And, in what may be nothing more than a sign of the times, the sales of Honda’s premium division Acura were down over 16% from a year ago.

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Filed under: The Car Business

The latest J.D. Power rankings of initial quality reveals some interesting things to the objective observer. These figures represent the number of problems per 100 vehicles. Here are the 2008 rankings for the 36 top nameplates:

1. Porsche: 87 2. Infiniti: 98 3. Lexus: 99 4. Mercedes-Benz:104 5. Toyota: 104 6. Mercury: 109 7. Honda: 110 8. Ford: 112
9. Jaguar: 112 10. Audi: 113 11. Cadillac: 113 12. Chevrolet:113 13. Hyundai: 114 14. Pontiac: 114 15. Lincoln: 115 16 Buick: 118 —Industry Average: 118
17. Acura: 119 18. Kia: 119 19. Nissan: 124 20. Volvo: 124
21. BMW: 126 22. GMC: 127 23. Mazda: 127 24. Volkswagen: 128
25. Hummer: 132 26. Subaru: 133 27. Scion: 138 28. Dodge: 141 29. Chrysler: 142 30. Mitsubishi: 149 31. Saab: 149
32. Suzuki: 152 33. Saturn: 157 34. Land Rover: 161
35. Mini: 163 36. Jeep: 167

So, Infiniti continues the sensational roll it has been on since the release of the first G35, moving up from 9th in 2007, Land Rover continues in it’s traditional category ‘terrible’, and VW is below average as always despite being the slowest depreciate-or of all( brand loyalty carries some HEAVY weight!).

The rate of improvement in these ratings has been steady for years, and this year it is an impressive 6% overall.

One immediately noticeable fact to a math gee-…um, fan like myself is that the bad ones are REALLY bad, with Saturn, Land Rover, Mini, and Jeep coming out with truly abominable scores.

More on this coming soon…

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Filed under: CAR FU, The Car Business

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Filed under: About CAR FU

Many times I have witnessed a woman drive into a dealership, park, walk around for a while, and finally go up to the receptionist and ask for some assistance. I find this curious, as women directly influence 75% or more of ALL car sales. To watch trained attack-jackals…er, sales associates, virtually ignore her because they believe that she is not the decision-maker is almost surreal. No one can just ‘walk around’ out there!! Who does she think she is?

Why do these professional salespeople, both men and women, often ignore female customers? A lot of it is due to the fact that the auto business is decades behind the rest of the business world in customer service practices, and has shown few signs of catching up. So, maybe they are surprised to see a woman out of the kitchen. Wait until they hear about that whole ‘voting rights’ thing!

The NADA has estimated that a woman will bring along a man with her to buy a car 78% of the time. Is it because she needs to be helped through the negotiations? Does she need to have her trembling hand held as she signs documents? Does “all this money talk” just confuse her? Well…..NO. It is because if she doesn’t bring him, he will blather on and on for weeks– maybe years–about the deal she could have had, if only…..

I support any man who wants to change a tire for a woman (this is one of our inalienable rights, as pack-animals), but to presume to handle the finances and negotiations for ‘the little lady’ is nothing short of ludicrous. In fact, in most deals involving married couples, the woman is in charge of the final decision. Perhaps men instinctively know that we can often become mesmerized by shiny, fast moving objects and make poor decisions. Without the steadying influence of our better halves, many of us would be living outdoors, under a lean-to, foraging for sustenance. Of course, we would have some really cool cars.

Women are particularly sensitive to time-wastin’ and bull-shootin’, and being disrespected on top of it all makes enduring a difficult and expensive process that much more grating and demeaning.

My advice, to any woman who feels that she is not receiving the attention or respect due her, is to simply announce, loudly, that the car is for you, you are the only decision maker, and you want to buy a car TODAY!! That will get their attention! Then, torture them for hours solely for entertainment.

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Filed under: CAR FU, For Women

The worst thing any car salesman ever has to do is explain to a customer that the car they are trading in isn’t worth much money. Or any money. This is how the conversation often goes:

Sales Manager: “What’s he tradin’ ?”

Salesperson: (handing over a form) “This one here…”

SM: “Ouch. What does he think it’s worth?”

SP: “$11,500.”

SM: “Where did he get that number from?”

SP: “ I dunno. “.

SM: “Let’s open him up a bit…” (scribbles on paper, hands it to SP)

SP: “Oh…oh, no, no, no…you’re kidding, right?”

SM: “Just take it out there. Now.”

The difference between what folks think their cars are worth and what they are actually worth is dramatic. The Kelley Blue Book (kbb.com) assesses the values of cars in various geographical markets. They are very good at what they do, so good that many credit unions use the retail KBB to determine how much to loan on a purchase (CU’s usually use retail numbers for their figgerin’, while banks use wholesale figures), and many dealers use Kelly as a pricing guide.

But one thing that Kelley does not accurately measure–and barely pays lip service to– is the real trade-in value. The problem is this: In the real world, a car is worth exactly what it can be sold for at that very moment in time. The sun goes down, the sun comes up, the car is worth less money.

There is actually another Kelley product, one that many dealerships use to value and manage their used car inventories. Unlike most credit unions, banks base their financing formulas on wholesale value rather than retail, and they respect the numbers issued by this other book enough to base their financing on them. This other book(really a software program) is known as ‘Karpower’, and it takes into full account the costs of reconditioning and the necessary replacement of wear and tear items. It is a far more accurate measure of value….but it is still not the BEST measure of value.

The only real way to determine a cars value is to answer this question: How much can I sell this for in the next ten minutes? Only dealer auctions provide any real-world perspective. Using this criteria, the amount that can be fetched at the next available auction is the actual value of the car (minus costs of transportation and auction personnel).

With the typical labor cost for mechanics at or near a hundred dollars an hour, any bill for any work can run to a thousand dollars or more very easily. The used car department pays the service department for the work, the expense is added to the base cost of the vehicle, and the amount left between the asking price and the amount already invested is the margin. The smaller the margin between the KBB retail price, a price many buyers are well familiar with, and the amount the dealership has invested in the car–how much they are “in it for.”–the less bargaining room they have. In other words, the more they give that guy for his trade-in, the less they will be able to bargain with you on the same car!

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Filed under: Buying a Car, On Depreciation, The Car Business