Archive for April, 2010

How to value used cars

  The Kelley Blue Book has been the definitive source for consumers and auto retailers alike to assess used car values for many decades. Put simply, this reference serves as an excellent guide to determine just what that used car is worth. So just how does the Kelley Blue Book value preowned cars? There are many factors to consider when placing a monetary value on a used vehicle. Some are quite obvious; such as the car’s age and how many miles are showing on the odometer. But did you know that location plays a role as well? When researching this source online, one of the first things you’ll be asked to do is to enter your zip code. Here’s why: There will be different values placed on certain types of vehicles based on geographic location. For example, a 4-wheel-drive SUV will be …

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Hundreds of terminated GM dealers prepare to get back to business

  Tom Allen’s General Motors dealership used to employ 49 people. Between the Detroit giant’s bankruptcy and the termination notice he got last May for his Chevrolet and Cadillac lines, 26 employees have either been laid off or left. But in March, GM reversed course and notified Allen that his Monroe, Mich., store was one of 666 dealerships chosen to live on. Now in the final stages of finalizing his franchise reinstatement, Allen is already lining up interviews to start hiring again. The word “caught on like wildfire” through his local region when the reinstatement came through, Allen said: “They say bad news travels fast — well, this good news travels very fast.” Across the United States, hundreds of dealers like Allen that have spent the past year in limbo are preparing to get back to business. Negotiations with GM are proceeding at …

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Used car dealers swarmed Capitol Hill yesterday

  Auto dealers swarmed Capitol Hill yesterday, asking their Senators to exempt them from scrutiny by the proposed Consumer Financial Protection Agency. They’ve already won an exemption from the House. If the Senate gives them a free pass, too, it will hurt consumers and violate the principle that everyone selling loans should have to compete on a level playing field. Community banks and credit unions generally offer lower rates on auto loans than dealers do, and with cleaner disclosure. They’d still be covered by the CFPA. Exempting the dealers from any new rules on fair lending would give them a leg up on these attractive competitors. Such an outcome would also profit the large national banks and Wall Street firms that bundle and resell dealer loans, says Raj Date, chair of the Cambridge Winter Center for Financial Institutions Policy. For more on this, …

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Ford posts profit of $2.1 billion in the first quarter

  Ford Motor Co.’s first-quarter profit of $2.1 billion may be as good as it gets this year as the automaker faces rising costs to introduce new models. Earnings beat analysts’ estimates and spurred Chief Executive Officer Alan Mulally to forecast a “solid” 2010 profit, a year ahead of his previous prediction. Future quarters may not be as strong, Chief Financial Officer Lewis Booth said today. “It would be unwise to think of $2 billion as a running rate,” Booth told reporters in Dearborn, Michigan. “We’ve got a lot of new product launches so you’ll see some launch expense and we do expect some headwinds from commodities” prices. The executives cited challenges such as a “fragile” economy after posting a fourth straight quarter of net income, the longest streak since 2005. Booth said the Ford Motor Credit finance unit was unlikely to “keep up …

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Used car sales are booming

  The US used car market is booming, with a sharp rise in vehicles’ residual values benefiting carmakers and rental car operators. Used vehicle prices jumped 16.3 per cent in the year to March, far above the overall inflation rate of 2.3 per cent, the US labour department reported. A used-car price index compiled by Atlanta-based Manheim Consulting reached a record high in March. The jump is due partly to improving demand, but also reflects a shortage of vehicles created by sharp cuts in leasing over the past two years and last summer’s cash-for-clunkers scheme, which encouraged owners to trade in old cars for more fuel-efficient new ones. The old cars had to be scrapped. Tom Kontos, chief analyst at Adesa, a vehicle auction group, said “dealers continue to bid aggressively for available units needed to meet solid retail demand in the midst of …

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Automaker Volvo reports first quarterly profit in over a year

  Volvo Friday reported its first net profit in six quarters, but maintained its cautious outlook. “The European market shows signs of gradual improvement,” Chief Executive Leif Johansson said, adding that in North America demand for new trucks has been low while demand for used trucks has increased. The Swedish company, which sells trucks under the Mack, Renault and UD Trucks brands as well as its own name, reported a net order intake of 43,936 trucks in the first quarter, up from 38,166 the previous quarter. In the three months to March 31, the company swung to a net profit of 1.68 billion Swedish kronor ($231.22 million) from a net loss of SEK4.23 billion in the same period a year ago, beating forecasts of a SEK68.3 million net loss. Volvo, the world No. 2 truck maker by sales behind Germany’s Daimler …

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Cars are flying off auto dealer lots

  The on-again, off-again love affair between Floridians and their cars is back on. AutoNation posted turbocharged first-quarter earnings, which the Fort Lauderdale-based auto sales giant said were fueled in part by a 29 percent spike in revenue in Florida compared with last year. “First and foremost, the credit environment has improved,” said Mike Jackson, chairman and chief executive officer of AutoNation, which posted improved sales around the country. Banks and other lenders are again willing to approve loans for car buyers after having closed the spigots last year. And as the housing market in Florida is stabilizing, consumers are feeling more confident. “People don’t go out and spend $30,000 unless they feel more secure overall. They’re feeling more secure about their jobs, and when they come in [to the showrooms,] the credit environment is much better for them,” said Jackson, who runs the …

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New and used car sales soared in March

  New and used car sales soared in March, with both monthly and year-over-year improvements, the Rochester Automobile Dealers’ Association Inc. reported Thursday. Area dealers sold some 3,468 new vehicles last month, up nearly 78 percent from 1,952 in February and nearly 11 percent from 3,125 a year ago. New-vehicle sales typically rise from February to March, RADA historical data shows. Some 2,031 used cars and trucks were sold in Monroe County last month, up more than 41 percent from 1,439 in February and up nearly 8 percent from 1,884 in March 2009. Used car sales also typically improve from February to March, data shows. Monroe County dealers sold 5,499 vehicles last month, up more than 62 percent from 3,391 in February and nearly 10 percent from 5,009 in March 2009. Some 12,041 new and used cars and trucks have been sold in Monroe …

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GM and Chrysler show increasing new car sales growth

  The two automakers saved from collapse last year by billions of dollars in government loans offered evidence Wednesday of what they and the Obama administration said was proof of their turnarounds, even as the market for new vehicles remained weak, The New York Times’s Nick Bunkley reports from Detroit. A new White House report projected that taxpayers would lose significantly less than previously forecast in the multibillion-dollar bailouts of General Motors and Chrysler. Officials would not give a specific forecast on Wednesday, but the Treasury estimated in December that it could lose about $30 billion of the $82 billion in aid given to the auto industry since December 2009, $62 billion directly to G.M. and Chrysler. But a senior administration official who spoke on condition of anonymity said it now appeared possible that the Treasury could recover nearly all if not …

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Some new cars may be cheaper than used cars

  As people struggle to make their dollars go farther during rough economic times, many are giving used cars a look. It makes sense to assume that a near-mint condition used car would cost less than a new one. Or does it? I fact, there are cases in which new cars are cheaper. I have heard from several people who bought used cars recently, and when they tell me how much they are paying it sounds high. I wonder if they could have possibly gotten a new car for less. Well, turns out it’s true. I have been madly scrolling through a list on the Edmunds.com site of new cars that cost less than a year-old used version of the same model. The figures are based on typical transaction prices and finance rates for a 60-month loan. There are great cars on the …

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