Car Buying Online

There’s been such a wave of car consumers getting more informed about hybrid cars and cutting down our emissions that someone just had to do one better.

Hybrid prices are coming down and people are getting more comfortable with them everyday and then Renault-Nissan and Project Better Place annouce their strategies for an 100% zero emissions car with a new battery and more power by 2011.

A little confusing for the consumer to keep up with but great for the planet!

Announcement:

“Renault-Nissan and Project Better Place pursue their strategy of zero-emission vehicles in Denmark

The Renault-Nissan Alliance actively supports the initiative of Project Better Place which announced today its second deployment in Denmark.

Renault will provide Danish customers with 100% electric vehicles at European standards in 2011, providing zero emission mobility while at the same time offering driving performance similar to a gasoline engine.

Nissan, through its joint venture with NEC, has created an advanced lithium-ion battery pack that both meets the requirements of this electric vehicle and can be mass-produced.
In Denmark, the conditions necessary for electric vehicles to be successfully mass-marketed are being brought together. The Danish government will provide tax incentives on 100% electric vehicles, Renault will supply the electric vehicles and, Better Place Denmark will construct and operate an Electric Recharge Grid across the entire country.

This announcement follows the January 21st 2008 signature of an MOU in Jerusalem by Renault and Project Better Place for the first mass-marketed electric vehicles. This second deployment illustrates the major role played by the Renault-Nissan Alliance to bring to mass-market zero-emission cars.”

If they can come up with a decent battery and power system I think people might hold out for a bit before they go hybrid and jump right to zero emission, but then there is the price…

rom AutoNews24h.com

US auto dealers are doing their best to fight the slowing auto sales over the past year which dropped by 6.3% this February from this time last year. Heavy dealer incentives and low cost financing on slow moving models are starting to roll out at most auto dealerships as outlined by Forbes.com.

Autodata, a statistical data provider says, “automakers are hoping better incentives will lure buyers to showrooms. Last month, the average rebate topped $2,435, or 8.4% higher than a year earlier, according to Edmunds.com.”

“No doubt, it is a buyer’s market for cars and it likely will continue,” says Dana Johnson, senior vice president and chief economist for Comerica Bank. “Auto sales will likely continue to soften and automakers will respond by offering better deals, and car buyers will find more willingness of new-car sales people to negotiate.”

To find the market’s best 2008 auto deals, we calculated cash rebates as a percentage of the base MSRP. We then identified the best deals among pickup trucks, minivans, SUVs, convertibles, sedans, coupes and wagons. Financing was not measured, as most incentives offer buyers an either/or option.

Edmunds.com analysis of February incentive deals, which include cash rebates, low finance rates and special lease deals as a percentage of average sticker price for each segment shows large trucks averaged the highest, at 14%, and luxury sports cars averaged the lowest, at 2.9%.

The 2008 Nissan Titan pickup offers the highest rebate–$5,000–17% of the $30,100 base Manufacturer Suggested Retail Price. Buyers of the Mitsubishi Endeavor may choose a $3,500 rebate, 13% off the $27,599 base MSRP.

Family sedans aren’t exempt. Both the Mitsubishi Galant V6 and the Hyundai Sonata have rebates of $3,000 each, representing discounts of 16% and 11%, respectively.

And there are bargains among convertibles, like the Saab 9-3 and the Chrysler Sebring; both offer rebates of $2,500, or discounts of 6% and 9%, respectively.

Numbers Game

Recent interest rate cuts by the Federal Reserve made it possible for automakers and lending institutions to offer lower-cost loans. The national average for new car loans is 6.77% for 36 months, down from 6.86% a week ago, and 7.14% for 72 months, down from 7.19% a week ago.

Many automakers are offering low or no-interest financing. You can’t mix cut-rate financing with cash rebates, however; you have to choose one or the other. The Nissan Titan, for example, offers qualified buyers the option of 0.9% financing for up to 60 months and 1.9% for up to 72 months, or the $5,000 cash rebate.

Luxury automakers have also dropped rates. Audi and Infiniti are offering 2.9% financing for 60 months on select models and BMW is offering 3.9% for the same term on select 3- Series models.

The discount fever has even spread to high-end luxury makers like Bentley, which just this week began offering low-financing rates on select models. Buyers can choose from an array of terms, including 4.99% for 60 months or 6.39% for 84 months.

Some automakers are taking more drastic steps to boost sales. Subaru is offering on its 2008 Forester a combo package that includes a $2,000 cash rebate for buyers who secure financing through Subaru’s lending agency. The same buyer can take advantage of low financing rates from zero to 4.9% over a 12- to 72-month period. That’s a bit unusual, because cash rebates are typically offered as an option for low-finance rates.

Car buyers who don’t mind buying a 2007 model will find even deeper discounts, particularly on gas- guzzling SUVs and pickup trucks. Toyota, for example, is offering a $5,000 rebate on the Tundra pickup; that’s 23% off the $21,395 base MSRP.

Dealers want to move these vehicles off the lots to make way for 2009 models that will begin to roll into dealer lots as early as this spring. That means many deals are in effect only through March. Some incentives, though, are renewed and some are replaced with new and better deals.

“It’s a car buyer’s market,” says Jesse Toprak, executive director of industry analysis for Edmunds.com, “and that will likely be true for months to come.”

No matter how many times people write about the subject of buying a car versus leasing a car, we always seem to se another article regurgitate the same information in one way or another. But when I came across this article at Edmunds.com I thought it would be great to add it to our blog because it clearly illustrated the the economics of the “buy vs lease” argument. No more, I think he thinks point of views but actual numbers to help you make the choice from your budgets view point.

I removed the touchy feely parts so we can get right to the nuts and bolts of the argument:

“In this article, we are going to focus on the economics of the three different scenarios. To get information for specific makes and models of cars, use Edmunds.com’s True Cost to Own which projects buying and related costs over a five year period. We’ll look at start-up costs for the initial purchase (or lease) and how the costs change over the subsequent five years.

Later in this article, we’ll look at what you have left after five years of leasing or buying. What you’ll see is that the full economic picture isn’t revealed until you look at a five-year span of car-related expenses. This timeframe was chosen because the five-year mark is when people typically change cars.




The Three Common Car Ownership Experiences

The three scenarios we’ll be looking at in this article are as follows:

-A new car purchase
-A leased car
-A used car purchase

In some cases we needed to estimate and project figures to complete the comparison. Sales tax and DMV fees were based on Southern California rates, where Edmunds.com is located. Expenses for people living in other sections of the country will probably be lower.

New Car Purchase

Owning a new car has traditionally been the preferred choice of the American public. However, the cost of new cars has risen faster than the earning power of most people. As the cost of new cars has risen, the length of loans has increased. Cars were once financed for two or three years, meaning that when the car was fairly new it was completely paid off. Now, however, new car loans are stretched as long as five or six years (60 and 72 months) to keep the monthly payments lower. In our example, we’ve chosen a three-year loan so we can more easily compare it to a three-year lease contract. Furthermore, the best interest rates are offered on shorter loans; a six-year loan would probably carry a higher interest rate.

For the purposes of these examples, we assumed that the owner would drive 12,000 miles a year. Here is how the expenses stacked up for the first year of ownership of a $20,000 new car.

New Car Ownership — First Year ( 3-year loan @ 6%)

Down Payment = $3,000
Monthly payment $608.00 per month = $7,296
Insurance = $1,140.00
Maintenance & repairs = $100.00
DMV Fees (included in monthly payments for first year) = $300.00
TOTAL = $11,536

In the above example, the buyer made a down payment of $3,000 to reduce the monthly payments. This required a large lump sum of money to drive away in the car. Clearly, during the first year of ownership, the costs were very high.

What happens over the five years the owner drives this car? For three years, the payments are high. However, there isn’t the big hit of the $3,000 down payment each year. Then, once the loan is paid off, the car is still fairly new and expenses are lower. By the end of the five years, here’s how the totals look:

New Car Ownership — Five Year Total ( 3 year loan @ 6%)

Down Payment = $3,000
Monthly payment $608.00 per month = $21,888
Insurance = $5,700
Maintenance & repairs = $1,100
DMV Fees ($300 included in monthly payments for first year) = $1,000
TOTAL = $32,388

As you can see, quite a lot of money went toward interest — $18,900 was financed (sales tax and DMV fees were $1,900) and yet the total amount of the 36 car payments was $21,888. This means a total of $2,988 was spent on interest. A significant amount of money was spent on insurance. Yearly DMV fees started high but leveled off over time and only added up to $1,000 for the five years.

When viewing car expenses, it’s important to consider them in light of how long you usually keep a vehicle. In the above example, the car belonged to the owner after three years. If he wants to continue driving the car, he can do so, and without a monthly payment (assuming it is still in good operating condition). His only expenses will be for insurance, gas, maintenance and repairs, and DMV fees.

Vehicle Leasing Expenses

As the cost of new vehicles has risen, the popularity of leasing has also increased. Leasing presents several advantages that can be appreciated now that we’ve looked at the ownership scenario. Here are the main economic benefits to leasing:

Low — or no — down payment
Lower monthly payments
Lower sales tax (tax is only paid on the amount of the car’s value used — over three years this is half the amount of the car’s total value)

The three points listed above are beneficial because it means you can get a car without a big shock to your budget. You pay little money out of pocket, and you make smaller monthly payments. Keep these points in mind as you look at the numbers. Again, we chose a $20,000 vehicle and examined the cost of a three-year lease, assuming it would be driven 12,000 miles a year.

New Car Lease — First Year ( 3 year lease @ 6%)

Down Payment = $1,000
Monthly payment $350.00 per month = $4,200
Insurance = $1,380
Maintenance & repairs = $100
DMV Fees (included in monthly payments for first year) = $300
TOTAL = $6,680

You will quickly notice that the out-of-pocket expenses of leasing a car, $6,680, is less than the $11,536 spent on a new car during the first year, despite the fact that insurance on a lease car is usually higher. In the second year of leasing the costs drop, but not dramatically (the reduction is due to the absence of the $1,000 drive-off fees and lower DMV fees). However, in our five-year scenario, a second three-year lease must be initiated. This would require paying drive-off fees again, which would be at least $1,000. Also, since it is three years later, the lease payment will probably be higher, too. So, for the remaining 24 months of the five-year cycle, we have increased the monthly payments to $385. Additionally, when the second lease begins, the DMV fees rise for the first year.

New Car Lease — Five Year Total (Two 3-year leases @ 6%)

Down Payment = $2,000
Monthly payment $350 /month for 36 months = $21,840
$385 /month for 24 months
Insurance = $6,900
Maintenance & repairs = $800
DMV Fees (included in monthly payments for first year) = $1,230
TOTAL = $32,140

Looking at the figures above, you’ll see that maintenance costs are only $800. This is because, in the first three years of a car’s life, we’re assuming that only a brake job and oil changes are required (everything else is covered by the warranty). Even tires usually don’t wear out on a car that is leased for three years.

Used Car Ownership

After the shock of seeing the cost of new car ownership and the expense of leasing, it’s time for some good news. In this example, we assumed that a person bought a used car for $10,000 by making a $2,000 down payment and paying off the balance over three years at an 8 percent interest rate (used car loans are financed at higher rates).

Used Car Ownership — First Year (3-year loan @ 8%)

Down Payment = $2,000
Monthly payment $285 per month = $3,420
Insurance = $850
Maintenance & repairs = $300
DMV Fees (included in monthly payments for first year) = $200
TOTAL = $6,570

As you can see, the first year expenses are not exceptionally low. But at the end of three years the picture improves — the car is paid off and expenses remain almost level. We increased the maintenance and repairs cost for each ensuing year. However, the cost of insurance can be lower than when buying or leasing a new car, particularly if you opt to waive theft and collision coverage and go with just liability (once the loan is paid off).

The real savings of owning a used car comes from all the years of potential service it provides after it’s paid off up until “the wheels fall off.” Over five years the totals look like this:

Used Car Ownership — Five Year Total (3-year loan @ 8%)

Down Payment = $2,000
Monthly payment $285 per month = $10,260
Insurance (rates drop after first three years) = $3,430
Maintenance & repairs = $2,700
DMV Fees ($200 included in monthly payments for first year) = $650
TOTAL = $18,390




Comparing Ownership Scenarios

So far, the used car scenario looks best at $18,390 for five years. Leasing comes in second with a five-year total of $32,140. New car buying appears to be the most expensive at $32,388. However, the two people who bought their cars now own them and can benefit from the value in the cars. They will benefit either by continuing to drive the cars and getting practical value from their purchase, or they might decide to sell their cars.

We’ve estimated that the person who bought a new car will have a car worth $7,000 after five years. The person who bought a used car for $10,000 will have a car worth $2,000. The person who is leasing has no equity, and in another year, will have no car. If the value of the cars are figured back into the new and used-car buying formula, a different result is revealed.

New Car Ownership - Adjusted Total

-Cash out-of-pocket = $32,388
-Value of the car now owned = $7,000
-Adjusted cash out-of-pocket = $25,388

Used Car Ownership - Adjusted Total

-Cash out-of-pocket = $18,390
-Value of the car now owned = $2,000
-Adjusted cash out-of-pocket = $16,390

Lease Car - Adjusted Total

-Cash out-of-pocket = $32,140
-Value of the car now owned = $0
-Adjusted cash out-of-pocket = $32,140

Conclusions

Now we see that leasing becomes the most expensive way to drive — in the long run. Here’s how leasing compares to the two ownership scenarios:

Leasing vs. Buying New — Using the figures presented in this article, it is $6,752 more to lease a new car over a five-year period, than it is to buy the same car outright. This breaks down to $1,350 more per year to lease rather than to buy a new car.

Leasing vs. Buying Used — It is $15,750 more to lease a new car over a five-year period than it is to buy and operate a used car for the same amount of time. This is an additional yearly cost of $3,150.

Buying Used vs. Buying New — Not surprisingly, it costs a lot less to buy and drive a used car over a five-year period than a new car. In this example, it is $8,998 less for five years or $1,799 less per year.

The figures we’ve presented here indicate that buying a car — whether it is new or used — is more economical than leasing a car. However, some people might point out that, while driving a used car costs less, the pleasure of driving an older car is lower, too. To be fair, you can’t put a dollar value on the fun of driving a new car. As we said before, the benefits of new/leased/used vehicles can be argued many different ways. The purpose of this article was to look at the numbers involved in typical examples and let the figures speak for themselves.”

With the ever growing concerns about gas consumption and the environment, learning about how we can save gas is a real hot topic. I came across someone who was truly into gas savings and wrote a bunch of great articles that I think would be beneficial to our readers.

Also, take a look at his website in the author bio after the article, he has some more great information that will help you save money at the pumps.

“A Costly Mistake at The Gas Pump You Can Avoid!”

“The costly mistake many drivers make when filling their car with gas is to overfill it by topping it off. When the gas pump nozzle clicks off, do you stop or do you keep pumping? Are you trying to add more gas your tank after the shutoff trying to stuff as much in as possible? Are you pumping more gas after the shutoff to round your total cost to the nearest full dollar amount? If either of these scenarios are true, or if any other reason causes you to top off your tank you have developed a bad habit that is costing you money and is contributing to air pollution.

Most gas stations are equipped with pumps that have vapor recovery systems to recover gas vapors keeping those vapors from getting into the air. If you top off your tank it will cause you to pay for gas that is drawn back into the gas station’s vapor recovery system.

The extra gas you are trying pump may be drawn back through the vapor recovery system into the station’s tanks. Then in essence you are paying for fuel that is not going into your tank but is going into the gas station’s tanks. This, of course, raises your cost of gas.

When you overfill your gas tank it is almost a certainty that gasoline will evaporate or will be spilled. If either of these or both of these occur it means buying gas that is not getting into your car. That has to hurt you in the wallet.

There are more undesirable situations that can happen when overfilling your gas tank. Gas expands as it warms up. This is certainly something to keep in mind in the summer or in areas with warm weather. Gas in underground tanks will be cooler than the air as the ground insulates it from the heat. As the fuel in your tank gets warmer it expands. As the fuel expands it has to have more room.

If you overfill your car, there is no room for the fuel to expand. As the gas expands it has to go somewhere. It could easily find it’s way into the vapor collection system of your own car. This may foul the vapor system causing it to malfunction.

The fuel that expands is lost gasoline that you have paid for. You paid for gas that you are not able to use. The result: your cost of gasoline goes up. But that is not the end of your increased costs! If the expanding fuel ends up in your car’s vapor collection system it will negatively affect the system. If that occurs your vehicle will become much less efficient.

A vehicle that runs inefficiently burns more fuel which translates into spending more money on gas. That is a double hit in the wallet, once for the fuel that is lost directly and second for the additional gas your vehicle uses because it is running inefficiently.

Gas vapors add toxic substances such as benzene to the air. This is a major contributor to days that are designated ozone warning days. Fuel vapors are detrimental for your health and harmful to you if inhaled. When you overfill your tank you end up with vapors added to the air right where you are pumping. This will cause you to inhale toxic fumes.

The next time you stop to fill your vehicle, when the pump stops don’t try to add any more gas, your tank should be quite full. Don’t overfill it! Don’t top it off! You will save yourself fuel and money but you will also contribute to preserving your good health and preserving the environment!”

Scott Siegel is the author of a 143 page manual of industry insider information on saving gas and money at the pump (beatthegaspump.com). Visit us to learn how you can get better gas mileage. Find out how to increase gas mileage.