An Update From A Car Buyer

Follow Up Comment: A little update to my situation and a sober warning for other buyers looking at used cars. Before paying for the car in full I had it thoroughly checked out by a mechanic. Apparently the entire transmission was in dire need of work and was going to cost approximately $3000 to repair. Of course I took the car immediately back to the dealer and got my deposit back. I hope my experience reminds people that a clean Carfax report does not mean a car is in good shape mechanically.

Queen of the Road: Sorry to hear about that. You took all the right steps as a savvy car buyer. Unfortunately, Carfax will only record an incident if the car is taken to a large commercial repairshop. All the mom and pop ones most likely won’t report it.

Let us know if you need car prices for whatever you find later.

Toyota considers using American base for exporting to Middle East and Asia

Increasingly sluggish SUV sales, rising material costs and the strengthening Yen are all reasons for why Toyota plans to begin shipping automobiles manufactured in the United States to the Middle East. The credit crunch coupled with increasing oil prices has forced many Americans to move away from giant, gas-guzzling SUVs into more energy efficient sedans. Today oil reached a new high of over $129 a barrel with no immediate slowdown in sight.

Currently, the Avalon is being exported to the Middle East and Toyota plans to begin shipping Sequoias to an area where demand for family vehicles has steadily increased. In the United States, Toyota’s sales for the Sequoia fell 30%, which is a strong statement to be made about the dynamic US automotive market. Sequoias should begin to ship this year and there is the possibility that Sienna minivans could begin exporting to China as early as 2010.

What does this mean for the consumer who still needs a large family SUV and can foot the cost of increasing gas prices? Prices for large SUVs should begin to dramatically decrease as inventories pile up and dealers scramble to get their vehicles off their lots. Check out AutoBrag.com’s New Car Price Search Engine to find an incredible deal on Toyota Sequoias in your area.

A 2010 deadline forces manufacturer to work overtime

After losing $1 billion on the development of the EV1, General Motors completely dropped any serious discussion on building a green vehicle. However with gas prices hitting new highs and competitors starting to adjust production to consumer demands, GM is starting to feel the pinch in their pocketbook - the auto manufacturer recorded a $15 billion loss in 2005.

That’s enough to get anyone to shift gears from their current business model into a more consumer-centric one. SUVs are losing their appeal as gas prices continue to rise. GM has recently decided to drop production on a new sedan and minivan in order to support the $8.1 billion research and development budget focused primarily on green vehicles.

One of the biggest obstacles for GM will be trying to cram years of research and development into a short timeframe with the promise of an electric vehicle in 2010. In order to get the Volt into production, GM is going to have to push their 22,000 engineers to the limit to develop an incredible battery for a an incredibly hyped electric vehicle. Ford and Chrysler have already started to put out hybrid vehicles and Toyota is leading the pack with hybrids in both their Lexus and mainstay Toyota fleets, so this could be a do-or-die scenario for the American giant. Can GM successfully migrate from gas guzzler to gas free and still produce a reliable vehicle? We’ll have to wait and see how things unfold.

Question: Hey, I recently bought a used 2005 nissan minivan with 28k miles from a mitsubishi dealer over the internet…I took a flight there and drove it back 700miles. After I got in the van I noticed the odemter was not working right, it was unreadable, but I thought it was cold/stuck…about 200 miles down the road it came on perfectly clear and said 78k (50k more)…I called the dealer and they were claiming it was not working right and I should take it to a nissan dealer…I took it to a nissan dealer and they said it was working….when I got back home I inspected the van more throughly and found it to have water damage BIG TIME…it looks likes it was under water about 3 ft high, the cd player doesnt work along with several radio buttons and defrost, etc……I stopped payment from my bank and notified the dealer. They said “oh yeah, it was wet when we got it, it took us a whole day to clean out” but claim it’s their problem as the carfax report checks out clean and the miles thing can be fixed they claim, they refuse to pick the car up. What should I do? I have the phone call recorded if you want to hear it. Thanks

Queen of the Road:  Terrible, Terrible, Terrible!!! That is the kind of stuff that makes people have a terrible impression of car dealers.  I’m really sorry about what happend.

This is the first thing I want you to do right away.  There is an amazing blog on the internet called The Consumerist www.consumerist.com that is THE best consumer advocate site.  They get millions of readers and really take bad businesses to task.  Write to them with a detailed description of what happened. Email tips@consumerist.com their editor is Ben Popken ben@consumerist.com senior editor is Meghann Marco marco@cosumerist.com and associate editor is Chris Walters chris@consumerist.com 

Secondly, what state are you living in and what state is the dealership in.  We will contact a few attorneys on your behalf and see what they can do.  Believe it or not there are some great lawyers in the business of protecting car consumers.  For some information about the Lemon Law visit http://www.lemonlawamerica.com/

In our experience, Carfax does NOT show everything but it is the most reliable tool out there for now. Let’s help you out of this mess and in the mean time if you need prices on any new or used cars let us know.  Shame on those guys.  Now let’s make them fix the problem.

Follow Up Comment:  Thanks for your help…the dealer has offered to meet me half way on driving the car back, but won’t refund any of my expenses…I think I might just take that offer so this is done with….I think I found a car in dallas, tx, let me know if you think this is a good deal,2007 Nissan Quest Base, 21.5k miles $15995 + $83 doc fee. I will keep you updated on the other dealer, thanks again.

Queen of the Road:  For a 2007 Nissan Quest Wagon with 21,500 miles, prices can range from $15,050 (being in above average condition) to $14,400 (being in average condition) and $13,800 (being below average condition). With this specific model expect them to charge an additional +$1600-1700.

$15995 + $83 doc fee sounds about right, but I would assume that it’s not in above average condition and aim for $16,000. Good luck with the current car situation and let us know how it goes.

Question: Not sure if this is the right place to ask this, but…
My wife and I are looking for a used 2004 Honda Odyssey EX-L, with decent/low miles….I’ve noticed there are lots of people in Atlanta selling lease returns for good prices so i’m guessing that honda has lease auctions there…Is there anyway to find out of there’s lease auctions in my area or a way to buy it wholesale? Thanks!

Queen of the Road: This is the best place to ask! What’s your ballpark for “low miles” on the Odyssey EX-L? For auctions, you can go to public auctions, but the only disadvantage for you is that these sort of auctions have cars from towing companies, police confiscation and damaged cars that dealers won’t bother trying to resell. I don’t recommend buy a car there. I do recommend you spend a little more money by looking into another kind of auction.

Now the auctions worth attending are the Manheim auctions for dealerships (where the good ones are). In order to be able to purchase from this private auction, you’ll need to hire someone from a big or small dealership. The reason is because you have to be a dealership to purchase vehicles from Manheim auctions. In addition, there is zero to little chance of people that are not dealers or salesmen to attend these auctions. We’ve often had people tell us they’ve gone to auto auctions but these are not the same as Manheim.

Locally, we see “Open To The Public Auctions”… they are usually a group of local dealerships who pull their unwanted cars and auction them off. There is a perceived “value” in buying cars at auctions so if local dealers can sell their excess inventory by setting up an auction then it makes more business sense. Remember, if  anyone can go to the best auctions then what is the incentive for people to establish dealerships (overhead costs…etc) if there is no path to profit.

Question: Do you know if an engine replacement devalues a car? Does this show up on carfax?

Queen of the Road: Hello there.  If the car has aged and has a heavy number of miles, it is practical to replace the engine. However, if the car is fairly new and you replace the engine, it won’t help you sell. It’s likely to show up on Carfax if you replace the engine at a dealer or a franchise mechanics shop that reports it to carfax. Small time mechanics don’t report to carfax. So if you replace the engine with a family-owned or smaller repair shop, it may not pull up on the carfax report.

Question:  Ok, here’s another I’m looking at:

Hyundai Veracruz.
2007 Veracruz SE AWD

I don’t think I can get any other rebates as I currently have a Santa Fe I will probably want to trade in. I’m constantly getting letters from them to trade it in (wonder if that means they’d give me a great price for it.  )

I seen other sites which state you can get $3k under invoice (that includes a rebate) but anything tips or realistic prices (in Colorado)?

Queen of the Road:  I don’t recommend you do a trade in. I’ve never heard a good trade-in story… ever! That’s just another tactic dealership use to makes extra off you. I recommend you sell your car privately. What car are you trading in? I’ll tell you what your car should be selling for and you can compare that to the trade in quote they give you. Highly unlikely that it’ll match.

As for the Veracruz, I don’t have the car in AWD, did you want the non-AWD anyways? I haven’t found any rebates on this style yet.

Question:   Is it reasonable that I would have to pay $23,615 plus a $498 dealer fee and of course, sales tax for a 2008 Prius with option #2?

Queen of the Road:  That’s a very good question! First of all, you can bargain that price of $23,615 down more.
For a 2008 Toyota Prius 4dr Hatchback (1.5L 4cyl gas/electric hybrid CVT),

The Lowest Internet Price: $22,745
MSRP: $23,837.00
ePrice $22,745.00
Savings: $1,092.00
% OFF MSRP: 4.58 %

2nd Lowest Internet Price: $23,075
MSRP: $23,759.00
ePrice $23,075.33
Savings: $683.67
% OFF MSRP: 2.88 %

As for the dealer fee, the dealership simply added an extra $500 in profit to that sale. ‘Dealer Fees’ or ‘Dealer Handling Fee’ are simply a way to disguise added profit that should be negotiable as part of the sales process. You’re definitely within your rights to demand that the fee be eliminated or you’re walking away from the deal. Just walk out the door when the word “everybody pays a dealer fee” comes out of their mouths.

Question: What is the best looking color for the 2008 Mitsubishi Lancer GTS in your opinion?

MuscleCarGuy: Color preference is a personal issue. My preference is black, although it is the worst color to keep clean everyday. I always say that my next car won’t be black, but my last 3 were black and probably the next one will be too. I also like the gray and silver because dust and small scratches are not as noticeable.

Question:   I’m looking to buy. Any suggestion on where to purchase? What auction(s) do you use? Is it better to buy it from a dealer (probably would pay more) vs individual? I don’t have experience at car auctions. Thanks

Queen of the Road:   Have you tried looking through craigslist, your local classifieds or autotrader? Those are good resources to use for getting an idea of what’s in your local market.  Then come ask your friendly AutoBragBlog about how much the car is worth in the wholesale market.  This gives you the “floor price” since the wholesale is what most dealerships pay to obtain the used vehicle. The average margin on used cars in the U.S. is about 10%, so if the wholesale is $15,000, expect the dealer to ask for $16,500.  Your goal… as well as ours is to get you in that car for as close to $15,000 as possible.  Many private parties will sell their vehicles below wholesale so there are deals to be had.  Make sure to inspect the car with a certified mechanic.

The answer to ‘who it’s better to buy from’: Private Party from a price standpoint. However, it’s only “better” to buy at the dealer if you need to trade in your used car and/or if you are upside down on your loan. Private parties don’t take trade ins. Also, if you’re paying cash, private is the way to go. BUT remember to have the vehicle inspected and use CarFax or equivalent to check for the history of the car.