Tag Archives: Automotive sales

Beware Of Deceptive Auto Ads

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The Federal Trade Commission (FTC) is cracking down on automobile dealerships around the country who have been running ads that mislead consumers into thinking the dealership will pay off the remaining loan balance on their existing car when they trade it in. These dealerships then add the cost of the old car loan into the price of the new loan. The buyer ends up with a loan that they must pay off for a longer period of time because they are paying off their old car and new car at the same time. This is known as negative equity auto trade ins. In some cases, dealers force customers to pay off the old loan in cash before they could get their new car.

The dealers named in the FTC’s complaints include:

  • Billion Auto, Inc., in Sioux Falls, South Dakota
  • Frank Myers AutoMaxx, LLC, in Winston-Salem, North Carolina
  • Key Hyundai of Manchester, LLC and Hyundai of Milford LLC, in Vernon and Milford, Connecticut
  • Ramey Motors, Inc., in Princeton, West Virginia

Three of the cases allege violations of the Truth in Lending Act (TILA) and its implementing Regulation Z for failing to disclose certain credit-related terms, and the complaints in two of the cases allege violations of the Consumer Leasing Act (CLA) and its implementing Regulation M for failing to disclose certain lease related terms.

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Slow Sales Stop Chevy Volt Production

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General Motors Co. has announced that they will stop production of the Chevrolet Volt hybrid vehicle for five weeks to allow their surplus of inventory to be depleted. This will be the third time that production of the Volt has been stopped for at least a month since the car first went on sale in December 2010. The lack of interest in the Chevy volt is being blamed on several factors:

  • A recent NHTSA investigation into battery fires resulting after crash testing.
  • The lack of charging stations in some states.
  • Electric car technology is still relatively new and problems need to be solved before it can be attractive to the mass market, the biggest complaints being lack of range and performance.
  • The production of electric vehicles by other automobile manufacturers.

GM hoped to sell 10,000 Volts last year, but ended up selling just over 7,600. Some feel the promotion of the electric vehicle by the Obama administration has failed. Even as gas prices continue to climb and government incentives are used, it is still not enough to get consumers to buy electric cars. The plant shutdown is expected to lay off almost 1,300 workers, and slow down companies that supply parts and batteries for the Volt.

Getting The Best Deal On Your New Car

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For many buying a new vehicle can be a daunting task, and with dealers selling vehicles at record high prices, the average consumer needs to do their research in order to get the best price. With the internet, a little research, and some luck, you should be able to find the vehicle that suits your needs at a price you can afford. Edmunds.com, for example, offers services that give true market values, predicts pricing trends, and offers calculators that let consumers do their research before setting foot on a car lot. Below are some factors that can affect the price of a new vehicle.

  • When Sales Are Slow: Car salesmen are more likely to give deeper discounts to get your business. Rainy days, holiday periods and shopping during the week, are times when a car sales person may be willing to give you an extra discount just to close the deal.
  • End Of The Month: If a sales person is short of their monthly quota to receive their sales bonuses, they may be willing to give customers discounts in order to meet the quota.
  • End Of The Year: As year end quotas approach, and new models start rolling in, dealers and manufacturers may offer discounts, cash rebates, and lower interest incentives just to get the cars off the lot.
  • Redesigned And Discontinued Models: If the manufacturer has completely redesigned one of their models, they are usually willing to offer bigger discounts and incentives to get rid of the outdated models. If the vehicles has been discontinued completely, the savings are usually even better.

Automobile Sales Strong In New Year

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New car automobile sales continue to climb in January, as car makers and analysts predict that 2012 could be the best year auto manufacturers have seen since 2007. The industry’s annual selling rate rose to 14.18 million as sales increased over 11% from January 2011. The strongest sales were seen in small cars, which rose to almost 20%, while truck sales increased less than 4%. Toyota, Honda, Nissan, Suzuki, Mazda, Mitsubishi, Subaru, and Isuzu all posted modest gains despite inventory shortages from the earthquake and tsunami in Japan at the end of March and Thailand floods in October. Chrysler had an impressive monthly sales increase of 44%, with Volkswagen close behind reporting a 40% gain. General Motors saw a drop of almost 6% mostly due to inflated sales in 2011 from big discounts, and Chevrolet Volt sales suffered in December after a government investigation into battery fires.

Companies Fined Over Auto Harness Price Fixing

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A two year investigation by the U.S. Justice Department, has found evidence that a small group of automotive harness suppliers were working together to control prices for wiring harnesses and other crucial components. It was found that as many as a dozen companies globally, had secret agreements to fix prices and controlled the allocation of parts to automakers. In addition to a $470 million fine, several company executives will be serving prison terms of up to two years. These penalties follow a separate $200 million fine imposed by the Justice Department on Furukawa Electric Co. in November.

Over 45 suits have been filed in federal court against the companies involved. American suppliers, as well as auto dealers and consumers who believe they have paid higher prices because of the price fixing, have begun taking legal action separate from the Justice Department probe. The ongoing investigation is the largest the Antitrust Division has ever pursued.

Autonomous Automobiles And Legal Liability

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In 2012 when Google first tested their self driving car, they said that “even though the project is still in the experimental stage, it would provide a glimpse into the future of what automobiles will be able to do.” They felt that self driving cars would make it safer for motorist on the roads, improve fuel efficiency of vehicles and increase the number of people being transported.

Now, just a little over a year later, automobile technology has come one step closer to driver-less vehicles. Automobile manufacturers are already using autonomous technology to assist and in some cases correct drivers actions; but technologist, legal scholars and government regulators are debating the legal implications of the technology. They all agree that there is a potential to reduce human error and allow better fuel efficiency, but question of legal liability, privacy and insurance regulations still need to be addressed. According to O. Kevin Vincent, chief counsel of the National Highway Traffic Safety Administration, “the federal government does not have enough information to determine how to regulate driver-less technologies.” The technology relies heavily on global positioning satellite data and other systems, which are vulnerable to jamming by malicious computer hackers.

Google has already been lobbying states to permit autonomous driving, which indicates that the company may hope to introduce such vehicles soon. Nevada became the first state to legalize driver-less vehicles last year, , and similar laws have now been introduced before legislatures in Florida and Hawaii. It is expected that a similar bill will be introduced in California soon.

Wireless Technology Makes Autos Safer And Smarter

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Automobile manufacturers like General Motors, Ford, and Mercedes Benz are showing off some new technology that will allow customers to remotely track their cars, diagnose mechanical problems, and help drivers avoid collisions. The plan is to use the internet and develop new automotive technology that will give vehicles intelligence. Your automobile will not only get you to where you need to go, but will have the intelligence to be self aware of what’s happening around it and to it, and could even monitor how the driver is doing.

OnStar is encouraging developers to create apps that use its wireless service to control cars in new ways. The company already offers:

  • Automatic crash response
  • stolen vehicle tracking
  • turn-by-turn navigation
  • roadside assistance
  • real-time data such as mileage, fuel levels, oil life and tire pressure
  • remotely unlock doors, honk horns, shine lights, and start the engine

OnStar is also working with RelayRides, a neighbor to car-sharing service which will launch later this year on Apple’s iOS. The new app will allow car owners to unlock their cars remotely after the person renting their vehicle arrives, or even track where a renter has taken their car.

Most electric vehicles already use similar technology which allows customers to manage their car’s recharging cycles, and it is expected that over half of all new vehicles will be similarly equipped by 2016. But the growing volumes of information processed by the new technology not only creates distractions for drivers but also raises issues of privacy.

New Salvage Title Law Protects The Auto Consumer

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California is working to keep potentially hazardous salvaged vehicles off the road with the implementation of the states first salvage title law. The new law, scheduled to go into effect starting July 1, 2012, requires all new and used car dealers to report and check vehicle titles through the National Motor Vehicle Title Information System (NMVTIS). The data base will be be maintained by the U.S. Department of Justice, and all insurance agencies, salvage yards, car dealerships, tow companies, body shops, and state motor vehicle departments will be required to report any salvage, junk, or flood title vehicles. Automobile dealerships, or anyone selling more than five used cars a year, must acquire the vehicle history report through the NMVTIS, and any salvaged or repaired salvaged vehicles will be branded. Private sales are not required to have the NMVTIS report, so buyers should be extra cautious when buying privately. Information on vehicles can be obtained through the NMVTIS, AutoCheck®, or CarFax. Currently, almost 90% of the U.S. DMV data is represented in the NMVTIS system.