I recently heard an article on KJZZ radio in Phoenix about Eco Driving . It is a very interesting concept. Almost like going through drivers ed all over again. The reporter on KJZZ drove the same course 3 times and improved her MPG by about 20%. The other interesting thing is that when they drove the route, it added about 10% to the time for the trip. If your trip normally takes 20 minutes, it will now take 22 minutes. I would believe that your trip done with normal driving habits could sometimes take the same 22 minutes if you had raced up to stoplights and had to spend extra time waiting for the light to change.
Over the course of a year that 20% can add up to real savings in money and gasoline. This organization claims that anyone driving any car can with some training and driving tips can achieve almost the same rate of improvement.
I also read about a venture between Microsoft and Fiat. They have created a Blue and Me computer system that is offered on some cars built by Fiat and Ford. You then download software for your home computer that works with data that can be downloaded from the car. This then analyzes your driving habits and offers advice as to how you can improve your MPG. This sounds like a good idea. I have always preached that the easiest and most cost effective adjustment to improve fuel economy is to the driver of the car.
October 24, 2008
October 23, 2008
Auto Finance Debacle
I have been in the automobile business all my life. The used car dealership I run has been selling and financing cars for over 50 years. I understand that the term of the loan has to be long enough for the payment to be affordable, yet short enough so the customer can attain an equity position when he wants to trade and before the car completely depreciates.
I watched in disgust as the mortgage bailout bill was passed. This bill was proposed by most of the same people who had helped create the mortgage mess. I had wondered when the automobile and credit card lenders would try to arrange their own bailout. The automobile lenders knew they were cutting their own throat. Most people want to get a new car every 2-3 years. A car will typically lose around half of its value in 3 years. Most car loans are 5-6 years and are usually made with a small down payment. When the typical new car buyer drives his car off the showroom floor he owes $4,000-$5000 more than it is worth. This means that when the customer wants to trade up, he owes more than the car is worth. When he wants to trade, the difference between what the car is worth and what is owed is added into his next car loan starting a vicious cycle.
The captive auto lenders have gone along with this in order to help sell the product, even though the know a lot of these loans will blow up in their faces. The borrower knows that credit is easy to get. He will dump the present car on the lender and get one through another bank or finance company.
Typically the lender uses the stream of payments from current customers to fund new loans. If enough of the current loans default, the stream of money coming in isn’t enough to fund new loans. I would believe this is the root of the auto lenders problem, a problem that they foresaw, helped create and did nothing about. Why do they deserve the governments help and support?
I watched in disgust as the mortgage bailout bill was passed. This bill was proposed by most of the same people who had helped create the mortgage mess. I had wondered when the automobile and credit card lenders would try to arrange their own bailout. The automobile lenders knew they were cutting their own throat. Most people want to get a new car every 2-3 years. A car will typically lose around half of its value in 3 years. Most car loans are 5-6 years and are usually made with a small down payment. When the typical new car buyer drives his car off the showroom floor he owes $4,000-$5000 more than it is worth. This means that when the customer wants to trade up, he owes more than the car is worth. When he wants to trade, the difference between what the car is worth and what is owed is added into his next car loan starting a vicious cycle.
The captive auto lenders have gone along with this in order to help sell the product, even though the know a lot of these loans will blow up in their faces. The borrower knows that credit is easy to get. He will dump the present car on the lender and get one through another bank or finance company.
Typically the lender uses the stream of payments from current customers to fund new loans. If enough of the current loans default, the stream of money coming in isn’t enough to fund new loans. I would believe this is the root of the auto lenders problem, a problem that they foresaw, helped create and did nothing about. Why do they deserve the governments help and support?
October 16, 2008
Industry auto lending practices
4 or 5 years ago, in an effort to bolster sales, the auto industry made it easier for a customer to qualify for a car loan. The standards were relaxed. If you looked at the customers budget, you could understand that this car was costing too large a percentage of his paycheck, but he was allowed to buy it anyway. 2 years later, food, gasoline, rent and everything has gone upin price. The customer isn't keeping up with expenses. He can't afford the $500 plus he is paying per month for the car and insurance payments. He gives the car back to the finance company, and buys a car that he is paying $300 per month on. His credit isn't quite as good as it was, but at least he can pay his rent and still get back and forth to work.
As an auto lender, I look very carefully at every customer who comes to our dealership. I would like to sell a car to every person who walks in, but I know that isn't possible. And besides, I don't want to pushe someone over the edge and cause him to lose everything.
As an auto lender, I look very carefully at every customer who comes to our dealership. I would like to sell a car to every person who walks in, but I know that isn't possible. And besides, I don't want to pushe someone over the edge and cause him to lose everything.
Its been a long time
I almost forgot I had started this blog. Things have been busy and writing gets put off. I finally remembered and decided it was time. A lot of things have happened in the car business in the last 3 months. The Van Tuyl organization is playing monopoly on east Camelback road. The only new car stores they do not own between 12th st and 16th st are Courtesy Chevrolet and Coulter Cadillac. They bou7tght the old Mel Clayton property and put the Fordfranchise with the Lincoln Mercury dealership at 13th st and Camelback. I am not sure what will happen on the corner of 16th st.
At least 5 new car dealerships in teh Phoenix area have closed, several more have closed the satellite lots and shrunk back to the original dealership. 15 used car dealerships have closed up that I know of. There is an opinion that 35-40% of the dealerships that were in business in 2007 will not be here in 2009.
The flooring companies that lend money to dealerships for inventory are tightening up. If you are in default, they are not cutting anyone any slack. They come in and take the inventory, and thedealership is virtually out of business.
The automobile lenders have become overly protective of their money, in order to get a car financed, you almost have to be able to pay cash for it. If you don't have a 700 isaac score and a large down payment you are not going to be qualified to finance a car.
I just got an issue of a magazine called Auto Finance Executive. I don't remeber seeing it before but on the cover was an article titled "Zero Sum Game" or "How 0% Financing Undermined The Auto Finance Industry" The article speaks of how in the summer of 2001 auto sales were slowing down. After Sept 11,2001 sales went down 23% the first week. GM came out with its "Keep America Rolling Plan" or)% financing on cars. It worked cars sold like hotcakes. Forfd and Chrysler soon followed suit. This pushed buyers to get new cars before they normally would have. Terms were pushed out to 60 and 72 months. After a couple of years of this even Hyundai gave in to the 0% deal.
One of the reasons GMAC is in trouble is because over 35% of the car loans they made 06-08 are.9% interest or less. this means that they are losing money on every one of those loans. The magic of 0% has worn off for the manufacturers, but the consumer has been conditioned that this si the way he wants to buy a car. The consumer now hesitates when he is told he has to pay a down payment and interest when he buys that new car. Sales of new cars in 08 are expected to be about 2 million less than in 07.
But the industry will most likely not learn, when this recession bottoms out, the 0% deals will be back again.
At least 5 new car dealerships in teh Phoenix area have closed, several more have closed the satellite lots and shrunk back to the original dealership. 15 used car dealerships have closed up that I know of. There is an opinion that 35-40% of the dealerships that were in business in 2007 will not be here in 2009.
The flooring companies that lend money to dealerships for inventory are tightening up. If you are in default, they are not cutting anyone any slack. They come in and take the inventory, and thedealership is virtually out of business.
The automobile lenders have become overly protective of their money, in order to get a car financed, you almost have to be able to pay cash for it. If you don't have a 700 isaac score and a large down payment you are not going to be qualified to finance a car.
I just got an issue of a magazine called Auto Finance Executive. I don't remeber seeing it before but on the cover was an article titled "Zero Sum Game" or "How 0% Financing Undermined The Auto Finance Industry" The article speaks of how in the summer of 2001 auto sales were slowing down. After Sept 11,2001 sales went down 23% the first week. GM came out with its "Keep America Rolling Plan" or)% financing on cars. It worked cars sold like hotcakes. Forfd and Chrysler soon followed suit. This pushed buyers to get new cars before they normally would have. Terms were pushed out to 60 and 72 months. After a couple of years of this even Hyundai gave in to the 0% deal.
One of the reasons GMAC is in trouble is because over 35% of the car loans they made 06-08 are.9% interest or less. this means that they are losing money on every one of those loans. The magic of 0% has worn off for the manufacturers, but the consumer has been conditioned that this si the way he wants to buy a car. The consumer now hesitates when he is told he has to pay a down payment and interest when he buys that new car. Sales of new cars in 08 are expected to be about 2 million less than in 07.
But the industry will most likely not learn, when this recession bottoms out, the 0% deals will be back again.
August 7, 2008
Mileage to the Max!
I saw an article in the Arizona Republic on Wednesday August 5th, that I couldn't believe. It seems that there are 19 Prius owners who work for the Arizona Republic. They organized an unofficial mileageathon. The course was 19 miles long. As an occasional Prius driver, my wife has one< yu tend to get an attitude about driving. A little slow on the takeoff, gradually slowing down so you can roll up to the traffic signal so you don't stop completely. Just doing everything to maximize the number on your real time mileage per gallon computer. The winner of this race, the one with the highest MPG got 70.6 MPG. The 2nd place got 61.7 I know someone who regularly gets around 50MPG on his commute from Mesa to Phoenix with 4 people in the car. My wife and I don't get that many miles per gallon, but she is using about half the fuel she used in her previous SUV.
The course that we have to follow is to get the best mileage possible out of hte cars we drive and to find another way to fuel these cars. When we think of the billions of gallons of oil we use in this country, an interesting fact to consider is that less than 50 % of the oil we use actually goes into cars. The rest is used in plastics and other industrial uses.
Very soon there will be a movement of people using electricity, hydrogen and other fuels to power the cars. I even hears of one that runs on compressed air. What the mind can concieve, it can usually achieve.
The course that we have to follow is to get the best mileage possible out of hte cars we drive and to find another way to fuel these cars. When we think of the billions of gallons of oil we use in this country, an interesting fact to consider is that less than 50 % of the oil we use actually goes into cars. The rest is used in plastics and other industrial uses.
Very soon there will be a movement of people using electricity, hydrogen and other fuels to power the cars. I even hears of one that runs on compressed air. What the mind can concieve, it can usually achieve.
By Jove, I think it works!
I mixed the fuel additive in the gas tank of the Durango last Saturday August 2nd. Since that time I have driven 230 miles. Most of is was normal driving about half freeway and the rest surface streets. I was driving back from auto auction when I made a bad decision and turned north on 7th st from Buckeye road. Traffic was moving normally until I got to the bridge next to Chase Field. Little did I know that there had been an early baseball game that day. It took 4 signal lights to get past the traffic light and onto the bridge because there were so many baseball fans heading north on 7th st. Normally from that point it should take about 5 to 7 minutes to get to our sales lot. That afternoon it took almost 30 minutes because there were so many cars on the road. I am sure this had a bad effect on the fuel mileage.
Lo and behold. The two mileage readings I took with the HHO generator attached to the car were just under 12
MPG. When I filled up the tank this evening it took 17.43 gallons and I covered 230 miles.
The MPG had risen to 13.19 I am sure it would have been a trifle better if I hadn't gotten stuck in traffic.
We will be trying this magic potion in several other vehicles next week. From wht I have heard, I believe that there will be an improvement in mileage on these vehicles too.
Lo and behold. The two mileage readings I took with the HHO generator attached to the car were just under 12
MPG. When I filled up the tank this evening it took 17.43 gallons and I covered 230 miles.
The MPG had risen to 13.19 I am sure it would have been a trifle better if I hadn't gotten stuck in traffic.
We will be trying this magic potion in several other vehicles next week. From wht I have heard, I believe that there will be an improvement in mileage on these vehicles too.
August 5, 2008
Car Buyer Beware New Scam
I have heard some reports of a new scam that is being used in Phoenix and the surrounding area. If you are answering an ad through the newspaper, Green sheet or craigslist and the price seems too good to be true, it probably is. A person buys a car. Gets the car titled and registered in his name. A few days later he goes to MVD and says he has lost the title. He now gets a duplicate title, but has the original also. Now he has two titles to the same car. He uses the duplicate title to get a title loan on the car. The amount usually is around 50% of the cars wholesale value. He gives the title loan store the duplicate title, because the title loan store will check to see if they are lending money on the most recent title. The individual now has a loan on the car and he also has a clear title on the car. He sells the car to an unsuspecting buyer, when this person tries to transfer the title, he finds out he doesn't have a good title. There is not a lot he can do outside of going to MVD and filing a complaint on the seller. If he has a good address and phone number for the seller he can contact him, and file charges. If the person doesn't transfer the title right away, he will find out about the other title later on when the title loan store has filed a stolen car report on the car after the loan wasn't paid.
I have friends at a 2nd party title company. They tell me that they have had car dealerships take these cars in trade with titles that are not the most current title and have liens on them. If you are looking at a car from an individual take down the sellers name, address and phone number and the ID number, and the title number they have for the vehicle in question. The ID number is on the dash board on the drivers side of the car. Make sure the ID # on the car matches the one on the title. It will cost $8.00 at MVD and a little more at a 2nd party title company to do a search to find out if there is a more recent title issued on the car. If it comes back that there has been another title issued after the one you had looked at, It is the cheapest insurance you ever bought. In that case you can walk away from the deal and be happy that you saved a lot of money and trouble.
If you are public spirited and want to do the right thing, call the police dept in the city you are in, tell them what is happening and they will probably go over undercover to try to buy the car, if they buy it, they will then arrest the seller for fraud and possible other charges.
I have friends at a 2nd party title company. They tell me that they have had car dealerships take these cars in trade with titles that are not the most current title and have liens on them. If you are looking at a car from an individual take down the sellers name, address and phone number and the ID number, and the title number they have for the vehicle in question. The ID number is on the dash board on the drivers side of the car. Make sure the ID # on the car matches the one on the title. It will cost $8.00 at MVD and a little more at a 2nd party title company to do a search to find out if there is a more recent title issued on the car. If it comes back that there has been another title issued after the one you had looked at, It is the cheapest insurance you ever bought. In that case you can walk away from the deal and be happy that you saved a lot of money and trouble.
If you are public spirited and want to do the right thing, call the police dept in the city you are in, tell them what is happening and they will probably go over undercover to try to buy the car, if they buy it, they will then arrest the seller for fraud and possible other charges.
August 4, 2008
The Experiment: Success or Failure
The Durango was driven 424 miles to establish a baseine MPG wich was 14.24MPG. This included city and highway driving by several drivers. The test I did with the HHO generator was 19.3 miles using 1.61 gallons of fuel or 11.98 MPG. We did another short test and drove 54 miles and used 4.9 gallons of fuel or 11.7 MPG. It seems with the generator in use the mileage goes down.
The reason I stopped using the generator was twofold. I wanted to refill the device with distilled water, but the filling cap didn't want to open and turned when I tried to open it. The top of the device is a flexible rubber lid with holes drilled in it, with the various fittings glued in place. It is rather a crude device, it functioned as advertised, but didn't seem to live up to the claims. Part of this is due to the computer controls. The computer in the car tells the injectors how much fuel to put into the cylinder for optimum combustion. With the HHO generator running, you are injecting a rich fuel mixture in to the cylinder, because the computer isn't aware of the HHO gas that is being used. We will need to figure out how to fuel the oxygen sensors into thinking the fuel mixture is richer than it actually is, therefore sending less gasoline into the cylinder . This must be possible, it is just determining how it is done.
The good news is that since I have a baseline mileage on this vehicle, I started another experiment with it. I had asked a friend of mine to provide a product called ee-oil. This is a fuel additive that has been very thoroughly tested and is supposed to get 5-10% better fuel economy. That might not sound like a lot, but if you go from 20 to 22 MPG, if you have a 20 gallon tank, that is 40 miles farther per tank. I you use 1 tank of fuel per week, in a year you will actually be able to drive almost 2,100 miles further on the same amount of fuel. At 22 MPG you would save almost $380 in fuel costs. I believe that my math is being conservative because i have heard some users claim a lot higher fuel savings. I have driven the Durango about 100 miles since I refilled the tank and added the fuel treatment. I will be reporting the results this weekend.
I hope the results are better than I expect.
The reason I stopped using the generator was twofold. I wanted to refill the device with distilled water, but the filling cap didn't want to open and turned when I tried to open it. The top of the device is a flexible rubber lid with holes drilled in it, with the various fittings glued in place. It is rather a crude device, it functioned as advertised, but didn't seem to live up to the claims. Part of this is due to the computer controls. The computer in the car tells the injectors how much fuel to put into the cylinder for optimum combustion. With the HHO generator running, you are injecting a rich fuel mixture in to the cylinder, because the computer isn't aware of the HHO gas that is being used. We will need to figure out how to fuel the oxygen sensors into thinking the fuel mixture is richer than it actually is, therefore sending less gasoline into the cylinder . This must be possible, it is just determining how it is done.
The good news is that since I have a baseline mileage on this vehicle, I started another experiment with it. I had asked a friend of mine to provide a product called ee-oil. This is a fuel additive that has been very thoroughly tested and is supposed to get 5-10% better fuel economy. That might not sound like a lot, but if you go from 20 to 22 MPG, if you have a 20 gallon tank, that is 40 miles farther per tank. I you use 1 tank of fuel per week, in a year you will actually be able to drive almost 2,100 miles further on the same amount of fuel. At 22 MPG you would save almost $380 in fuel costs. I believe that my math is being conservative because i have heard some users claim a lot higher fuel savings. I have driven the Durango about 100 miles since I refilled the tank and added the fuel treatment. I will be reporting the results this weekend.
I hope the results are better than I expect.
July 17, 2008
The Great Experiment Fuel from Water
We did it. The test has begun. Our test vehicle is a 98 Durango which is not famous for getting great mileage. The car was driven a total of 424.3 miles over a 10 day period. Some city and some freeway driving, and several different drivers. This took a total of 29.798 gallons of fuel. I filled up the tank again this morning and the mechanics installed my water to fuel device. After the device was installed I realized that I needed distilled water for this device. I started looking and went to several convenience stores and one grocery store in what turned out to be a vain attempt to purchase the distilled water. On the way home this evening I finally got lucky by stopping into a drug store. By this time I had driven another 19.3 miles. I topped off the tank and found that I had used another 1.911 gallons of gas or 11.98 MPG, only about 2 miles of this was freeway driving, the rest was city streets.
When I bought the water I stopped in the parking lot and filled up the device and added the necessary baking soda. The device has a threaded plug for the filler opening. I am not sure why, but it seems like the threads were stripped. The plug just didn't want to go back in, but I got it in far enough to seal the opening. There is another opening in the top that allows you to adjust the amount of air being drawn through this device. After starting the car, I looked at it and could see bubbles forming and coming up, it almost looked like the water was boiling. I adjusted the valve, but it seemed like the draw was trying to collapse the top, so I opened it up a little further. I haven't noticed any difference in the performance yet, but I have only driven it a few miles so far.If the literature is correct, I should achieve a 25% increase in MPG or about 17.8 MPG.
My thinking has gotten involved in this though. There is a tube out of the device that connects to the vacuum port on the manifold. This is how the Brown's Gas ( a combination of Hydrogen and Oxygen gets into the combustion chambers. Acthally this is a controlled vacuum leak, you are getting more air into the fuel mixture than is called for, so the engine is running a little leanre, therfore better gas mileage. The other question I have is when you add this additional fuel to the mixture, how does the computer in the car know this and lean the gasoline mixture?
I will be impressed if this does give the mpg boost as claimed. More next week.
When I bought the water I stopped in the parking lot and filled up the device and added the necessary baking soda. The device has a threaded plug for the filler opening. I am not sure why, but it seems like the threads were stripped. The plug just didn't want to go back in, but I got it in far enough to seal the opening. There is another opening in the top that allows you to adjust the amount of air being drawn through this device. After starting the car, I looked at it and could see bubbles forming and coming up, it almost looked like the water was boiling. I adjusted the valve, but it seemed like the draw was trying to collapse the top, so I opened it up a little further. I haven't noticed any difference in the performance yet, but I have only driven it a few miles so far.If the literature is correct, I should achieve a 25% increase in MPG or about 17.8 MPG.
My thinking has gotten involved in this though. There is a tube out of the device that connects to the vacuum port on the manifold. This is how the Brown's Gas ( a combination of Hydrogen and Oxygen gets into the combustion chambers. Acthally this is a controlled vacuum leak, you are getting more air into the fuel mixture than is called for, so the engine is running a little leanre, therfore better gas mileage. The other question I have is when you add this additional fuel to the mixture, how does the computer in the car know this and lean the gasoline mixture?
I will be impressed if this does give the mpg boost as claimed. More next week.
July 11, 2008
I'm Back
It has been too long since I posted anything. I have been busy with the dealership, the radio show, family and friends. Someone told me that life is what happens while you are planning what you want to do. I am doing research and testing on running a car on water. This involves splitting the water to hydrogen and oxygen and injecting the resulting gas into the air intake of your car. Supposedly this will increase your miles per gallon 20-30 percent. If you have been getting 16 MPG you should achieve 20MPG or more. I am currently driving a vehicle to determine the current MPG it is getting. Next week I will install the device and see if there is really an increase in the distance I can go on a tank of gas. I am looking forward to finding out.
Car Buyer Beware
It sounds too good to be true. A decent looking car, it doesn't really have a whole lot of miles, and even though it does have a few flaws it sounds cheap. You looked on Craigslist.com and found cars that seemed like a bargain, and priced mostly under $3,000 they were affordable. This was a car dealer that I know of. He sold lots of cars, for reasonable prices. When things were going good, people would stream onto his lot to look at and purchase cars. Most buyers came with cash or cashiers checks, bought the car and left. The problem came up when the people running the dealership didn't see eye to eye about business practices. All of a sudden the lot was vacant, and phone numbers are disconnected.
Since our lot is located very close to this other dealership, we have talked to several of their customers who are having problems getting titles and license plates. Others say they were promised repairs, but they weren't completed.
A couple of the people said they had filed complaints on this dealership hopefully they will be able to make things right.
The moral to this story is " caveat emptor" or buyer beware. Do your homework, call the better business bureau and get the statistics on the dealership. Check out the Arizona Independent Automobile Dealers Association (AIADA) for some very good tips. Find out if there have been complaints and if they have been properly handled. Look around at the place of business, what does it look like. There are many car sellers who advertise on craigslist,com who are what we refer to as curbstoners. These could be individuals who buy and sell cars without benefit of a dealers license. If you buy from one of these you have little or no protection if something goes wrong. It could be a licensed wholesale dealer who is retailing cars, which is not permitted under his license. It could be a retail dealer who doesn't do the title work properly or pay sales tax on the transaction. You could be buying a car that was wrecked and rebuilt.
In Phoenix, everyone needs a car but be careful how you buy it.
Since our lot is located very close to this other dealership, we have talked to several of their customers who are having problems getting titles and license plates. Others say they were promised repairs, but they weren't completed.
A couple of the people said they had filed complaints on this dealership hopefully they will be able to make things right.
The moral to this story is " caveat emptor" or buyer beware. Do your homework, call the better business bureau and get the statistics on the dealership. Check out the Arizona Independent Automobile Dealers Association (AIADA) for some very good tips. Find out if there have been complaints and if they have been properly handled. Look around at the place of business, what does it look like. There are many car sellers who advertise on craigslist,com who are what we refer to as curbstoners. These could be individuals who buy and sell cars without benefit of a dealers license. If you buy from one of these you have little or no protection if something goes wrong. It could be a licensed wholesale dealer who is retailing cars, which is not permitted under his license. It could be a retail dealer who doesn't do the title work properly or pay sales tax on the transaction. You could be buying a car that was wrecked and rebuilt.
In Phoenix, everyone needs a car but be careful how you buy it.
May 31, 2008
Scholarship Winner
Daniel Chandler of Glendale in the winner of the $500 scholarship we are awarding this afternoon at our Customer Appreciation Day celebration. Daniel graduated Raymond S. Kellis High School last December . His Junior and senior year he was an "A" student. I spoke with his counselor there and she had nothing but good things to say about him. His pastor and another teacher at the school also had a good opinion of him He is applying to ASU and Southern University and plans to major in business.
Daniel is the son of Audrey Hudson and is one of 10 children in the family. In speaking with him I immediately was impressed with his attitude and style. I am proud to be honoring him with this scholarship.
Daniel is the son of Audrey Hudson and is one of 10 children in the family. In speaking with him I immediately was impressed with his attitude and style. I am proud to be honoring him with this scholarship.
May 15, 2008
Misleading Advertising
I was reading a “Hot Button Bulletin” from the Better Business Bureau in
“Guaranteed Credit? We doubt it! Advertising in the Auto Trader, Auto Mart, Newspapers etc have contained phrases like “Everyone Approved”, “No One Turned Down”, “Bad Credit, Bankruptcy, Repossessions, Etc. Waived”, “ Bad Credit, No Credit, We’ll Get You Financed!”
Arizona Attorney General Ad Guidelines say:
CREDIT AVAILABILITY: A dealer should not use claims such as “everyone financed”, “no credit rejected”, “we finance everyone”, or similar statements unless the dealer can and is willing to extend such credit to any individual, under any circumstances.
The BBB code of advertising addresses the issue in the same manner:
“NO CREDIT REJECTED” The words “no credit rejected” or similar terms should not be used unless true, since they imply that consumer credit will be extended to anyone regardless of the person’s credit worthiness or financial ability to pay.
In other words ads that use these terms say that you will extend credit to the homeless guy who lives under the bridge, to the student with no job or income, the person with no down payment. There cannot be any stipulations!!
These terms are used to draw customers to toe lot thinking they will be able to get a car when the chances are stacked against them getting one unless they do meet certain qualifications.
At Consolidated Auto Sales we do approve a good percentage of the customers who come in. We do also reject a few because they do not meet the criteria we want in a customer. It could be time on the job, time at the address, down payment, credit or a lot of other things. But obviously we are in the business of selling cars, so telling a customer they can’t have the car they want does cut into our income. The other side of that coin is “ I would rather look at a car on our sales lot, rather than looking for it because the customer isn’t making the payments!”
May 7, 2008
Customer Appreciation Day
On Saturday May 31st we will be having our Customer Appreciation Day. There will be food, drink, deserts, jump castle for kids, prizes and fun. We will be awarding scholarships to 2 deserving high school seniors who are graduating this spring. There will also be a prize for the person in attendance who purchased a car furthest back. Last year 3 customers came in who had purchased a car in 1943. That was our 2nd year in business and 65 years later we are still here.
This is our way of thanking our customers, past, present and future for their continued support. If you haven't been here in the past, this would be a perfect time to come in and look around. We are a no pressure car dealership, and on a day like this, there will be less emphasis on sales. It is more of an opportunity to let people know who we are and what we do. To look at our facility and inventory, and meet the staff.
I invite you to come in and visit with us on May 31st.
This is our way of thanking our customers, past, present and future for their continued support. If you haven't been here in the past, this would be a perfect time to come in and look around. We are a no pressure car dealership, and on a day like this, there will be less emphasis on sales. It is more of an opportunity to let people know who we are and what we do. To look at our facility and inventory, and meet the staff.
I invite you to come in and visit with us on May 31st.
May 3, 2008
Fuel Economy Gas Savings
There is a great article in the "Arizona Republic" about improving your gas mileage. The interesting thing is that Jim Stack is pictured with the Article. He was the guest on
"Frank Auto Advice" last Saturday, April 26th. We spoke of the hybrid, hydrogen and all electric cars. Anything but the standard gasoline powered car most of us drive every day.
Since the advent of the instant MPG readings in cars, I have tried to get the number as high as possible. I remember reading a book about driving many years ago. The chapter I remember spoke of driving a limousine. The aim was to drive as if your passenger had a full glass of champagne on the tray in the back compartment. You didn't want to spill a drop, this meant easy acceleration and braking. Just what this article recommends to get better mileage. I know that the a car driven by one person can achieve more or less MPG when driven by someone else, it has to do with a persons style of driving.
I read that Nissan is having a problem selling the Titan trucks and the Armadas. Ford, Chevy and Dodge have also reported that truck and SUV sales are down. Could this have to do with gas mileage?
I know that we are seeing people who want to trade the gas guzzlers for something that gets better MPG. They say that history repeats itself. I remember in the gas crunch days of the 70's that the car companies cut back on the large cars and ramped up on the smaller more fuel efficient cars. In the past 7 or 8 years I have noticed that even the small economy cars have grown in size and weight. The Sentra has grown from 2392 lbs in 1999 to 2513 in 2006. The Tacoma pu has grown from 2580 lbs in 1999 to 3180lbs in 2006. The public wants the luxury and size but can't pay for the fuel to run it.
I like the Europen system of car design and manufacture. There are no cafe standards to deal with, they manufacture the cars that people want to buy. In Europe people have been paying $4.00 per gallon or more for years. The pocketbook helps decide what someone will buy. They still have the gas guzzlers for those who want and can afford to drive them, but the government doesn't dictate what they have to build.
I know that the trend will now be toward downsizing the cars again, I wish they would get the cars that run on other than gasoline, then the problems would be over.
"Frank Auto Advice" last Saturday, April 26th. We spoke of the hybrid, hydrogen and all electric cars. Anything but the standard gasoline powered car most of us drive every day.
Since the advent of the instant MPG readings in cars, I have tried to get the number as high as possible. I remember reading a book about driving many years ago. The chapter I remember spoke of driving a limousine. The aim was to drive as if your passenger had a full glass of champagne on the tray in the back compartment. You didn't want to spill a drop, this meant easy acceleration and braking. Just what this article recommends to get better mileage. I know that the a car driven by one person can achieve more or less MPG when driven by someone else, it has to do with a persons style of driving.
I read that Nissan is having a problem selling the Titan trucks and the Armadas. Ford, Chevy and Dodge have also reported that truck and SUV sales are down. Could this have to do with gas mileage?
I know that we are seeing people who want to trade the gas guzzlers for something that gets better MPG. They say that history repeats itself. I remember in the gas crunch days of the 70's that the car companies cut back on the large cars and ramped up on the smaller more fuel efficient cars. In the past 7 or 8 years I have noticed that even the small economy cars have grown in size and weight. The Sentra has grown from 2392 lbs in 1999 to 2513 in 2006. The Tacoma pu has grown from 2580 lbs in 1999 to 3180lbs in 2006. The public wants the luxury and size but can't pay for the fuel to run it.
I like the Europen system of car design and manufacture. There are no cafe standards to deal with, they manufacture the cars that people want to buy. In Europe people have been paying $4.00 per gallon or more for years. The pocketbook helps decide what someone will buy. They still have the gas guzzlers for those who want and can afford to drive them, but the government doesn't dictate what they have to build.
I know that the trend will now be toward downsizing the cars again, I wish they would get the cars that run on other than gasoline, then the problems would be over.
April 25, 2008
Stolen Car Found -Phoenix Police do wonders
Yesterday morning a gentlemen came into our dealership looking for a car. He wanted to look at one of the cars. He said he had good credit so he didn't want to fill out any paperwork. After the 2nd request he let us look at his drivers license. The salesman got up to get the keys to the car, and went with the customer to look at the car. The customer got into the car, the salesman handed him the keys. When he started the car, he put it into gear and drove off.
We called the Phoenix Police who had a car here within 3 minutes. Officer Monson did an excellent job finding out what happened and asking the right questions of us. After the person was gone with the car, we realized he had picked up the copy of his license and took it with him as he walked out of our office. I had given my cell phone number in case the car was recovered after hours. We gave our descriptions of the suspect, gave the officer the description of the car and the report was filed. This was about 10:30 in the morning. Around 4:00pm a call came to my phone from the Police department. They had located the car behind a small apartment complex less than a mile from our business and had three suspects in custody. We went to the scene, the officers there were very professional and pleasant. They had noticed a car in the parking lot with no license plate and had stopped to investigate. According to the suspects in custody, a person matching the description of the suspect had been there earlier, but had left. We didn't get our guy, but we got the car back undamaged and no worse for the wear.
This was the first auto theft like this we have had in over 20 years, so we talked about what happened, and how things could have been differently. Some changes have been made that will help in the future.
Thanks again Phoenix Police. I know that most stolen cars are recovered, but I don't remember one being recovered this quick.
We called the Phoenix Police who had a car here within 3 minutes. Officer Monson did an excellent job finding out what happened and asking the right questions of us. After the person was gone with the car, we realized he had picked up the copy of his license and took it with him as he walked out of our office. I had given my cell phone number in case the car was recovered after hours. We gave our descriptions of the suspect, gave the officer the description of the car and the report was filed. This was about 10:30 in the morning. Around 4:00pm a call came to my phone from the Police department. They had located the car behind a small apartment complex less than a mile from our business and had three suspects in custody. We went to the scene, the officers there were very professional and pleasant. They had noticed a car in the parking lot with no license plate and had stopped to investigate. According to the suspects in custody, a person matching the description of the suspect had been there earlier, but had left. We didn't get our guy, but we got the car back undamaged and no worse for the wear.
This was the first auto theft like this we have had in over 20 years, so we talked about what happened, and how things could have been differently. Some changes have been made that will help in the future.
Thanks again Phoenix Police. I know that most stolen cars are recovered, but I don't remember one being recovered this quick.
April 9, 2008
Fuel Economy
I have driven several models of the hybrid car. The Honda Insight, and several different years of Prius. They are quite expensive to buy and maintain, but you do save considerably at the pump. A friend of mine purchased a Prius a year or so ago. He did the studies of cost versus gas savings. He said he would have to keep it a long time for the savings to equal the additional cost of the hybrid over a standard vehicle. I purchased a 70,000 mile Prius. I noticed some warning lights that were on and that it didn't operate quite right. Even though I employ 5 mechanics and have access to lots of repair information about many vehicles, we had to sent this to Toyota for repair. The problem was a bad computer. The computer in this car was listed at close to $4,000. The computer in the average car is several hundred. I wonder what other expensive things lie waiting to break in this car.
Gasoline prices are at an all time high. Gasoline is taking a bigger bite out of your wallet. The most logical solution for this problem is to drive less. Combining errands and going out once rather than 3 or 4 times. There is also the old rule I learned in drivers ed many years ago. If you accelerate as if you had an egg between the pedal and your foot, you accelerate more slowly and smoothly thus getting better mileage. When I am driving a car that is equipped with the instant MPG feature, I try to get it to read as high as possible. This corresponds with teh slower and smoother acceleration.
Gasoline prices are at an all time high. Gasoline is taking a bigger bite out of your wallet. The most logical solution for this problem is to drive less. Combining errands and going out once rather than 3 or 4 times. There is also the old rule I learned in drivers ed many years ago. If you accelerate as if you had an egg between the pedal and your foot, you accelerate more slowly and smoothly thus getting better mileage. When I am driving a car that is equipped with the instant MPG feature, I try to get it to read as high as possible. This corresponds with teh slower and smoother acceleration.
April 3, 2008
Buying a Lemon Revisited!
I spoke with my friend who purchased the damaged car yesterday. Things came out reasonably well. A lawyer had been retained and the seller will be giving the sale price plus attorney fees back. The title and registration fees, the extra key, the new floor mats, the little goodies you get for a new car to personalize it, these expenses aren't included in the settlement. You could ask for those extras, but if the seller gets upset he may change his mind and not go through with the deal.
Consider the expense tuition in the school of life. This unlucky buyer has now repurchased her former car and is driving it again. At this point there are no plans to purchase another car in the near future.
Consider the expense tuition in the school of life. This unlucky buyer has now repurchased her former car and is driving it again. At this point there are no plans to purchase another car in the near future.
March 29, 2008
Frank Auto Advice
The new talk show has a name. A name that describes what I will be giving. Nuggets of information that you can use when you are thinking of buying or fixing a car. Bits of information that could save you some money. Part of the first show will be devoted to some of the ways dealerships will try to get a few extra dollars from you. Some of the things they sell that you can get in other places for less.
Tune in on Saturday afternoon between 2:00 and 3:00pm on KPHX 1480 AM Progressive Talk Radio. I am sure you will enjoy the show.
Tune in on Saturday afternoon between 2:00 and 3:00pm on KPHX 1480 AM Progressive Talk Radio. I am sure you will enjoy the show.
March 27, 2008
Four Square- tool of the new car salesman
The four square is a piece of paper that is broken in four parts. They are labeled payment, down payment, price and trade. By filling these blanks in, you are giving the salesman information about what you think you can afford. Never in this equation are the words number of payments or interest rate mentioned. The following was taken from "Confessions of a Car Salesman"
They never mention the term they are asking you to sign up for, the longer the term, the more money you will pay. The best way to approach the dealership is to be able to say I am approved for $15,000 or some amount, this is the car I want, can you sell it for that price? This involves going to your bank or credit union beforehand and getting approved for the loan. Most credit unions can also sell you a warranty, that will be just as good, but cost less than the one the dealer will try to sell you.
The next step in my training involved the use of the "4-square work sheet." Michael told me the 4-square was my friend, it was the salesman's tool for getting "maximum gross profit." As the name implies, the sheet is divided into four sections. When you have a prospect "in the box" (in the sales cubicle) you pull out a 4-square and go to work.
The information about the customer is written along the top together with the make, model and serial number of the car they want to buy. Then the salesman writes the sticker price of the car in large numbers in the upper right square on the worksheet. Michael stressed that the price of the car should be written in large clear numbers to give it a feeling of authority. He added that we should always write "+ fees" next to the price of the car (This includes license fees and sales tax.).Another description of the four square can be found at The Consumerist
They never mention the term they are asking you to sign up for, the longer the term, the more money you will pay. The best way to approach the dealership is to be able to say I am approved for $15,000 or some amount, this is the car I want, can you sell it for that price? This involves going to your bank or credit union beforehand and getting approved for the loan. Most credit unions can also sell you a warranty, that will be just as good, but cost less than the one the dealer will try to sell you.
It's Showtime, Radio Talk Show Coming Soon!
We have been negotiating for several weeks and it's final. We will be hosting a talk show on KPHX radio 1480 on your AM dial. 2:00-3:00 pm on Saturdays. The first show is scheduled for April 5th. It will be fun and informative. I will be giving information on how to buy a car, what your car is worth, what to expect when you go into a dealership. Some information about bills that are in the Arizona House and Senate.
This is not going to be a repair oriented show. There are several of them and they do a good job. A car or truck is one of the biggest investments anyone makes outside of a home. The more information you have, the better decision you can make on what you are buying. I know that there are people being taken every day when they buy a car, if I can prevent that happening to one or two of them, my mission will be accomplished.
I will also be having guests from time to time. They will be sharing their knowledge with you also. Looking forward to hearing from you.
Remember KPHX 1480 AM 2:00-3:00 Saturday afternoons in Phoenix.
This is not going to be a repair oriented show. There are several of them and they do a good job. A car or truck is one of the biggest investments anyone makes outside of a home. The more information you have, the better decision you can make on what you are buying. I know that there are people being taken every day when they buy a car, if I can prevent that happening to one or two of them, my mission will be accomplished.
I will also be having guests from time to time. They will be sharing their knowledge with you also. Looking forward to hearing from you.
Remember KPHX 1480 AM 2:00-3:00 Saturday afternoons in Phoenix.
Progressive autox prize
I was reading about a $10 million prize to design a car that gets 100 MPG. This sounds pretty spectacular. When you realize that the Model T Ford averaged 25 MPG almost 100 years ago, what does that say about our current technology. I know that there are other ways to power cars. You can power any internal combustion engine with hydrogen. The byproduct is water vapor. The exhaust is actually cleaner than whey the air entered the combustion chamber. The only problem with this is the storage container for the hydrogen gas. This is very costly to design and build. The other problem is that there aren't very many places to buy a tank of hydrogen.
There are impressive developments in fuel cell vehicles, this takes the hydrogen, converts it to electricity, which in turn powers the vehicle. Mercedes Benz has some test vehicles that are already in use. These are really nice, but wouldn't it be nice to retrofit the millions of cars that are on the road, rather than having to build all new?
I really think it wil be a good idea to get these cars on the road and lessen the dependence on oil.
There are impressive developments in fuel cell vehicles, this takes the hydrogen, converts it to electricity, which in turn powers the vehicle. Mercedes Benz has some test vehicles that are already in use. These are really nice, but wouldn't it be nice to retrofit the millions of cars that are on the road, rather than having to build all new?
I really think it wil be a good idea to get these cars on the road and lessen the dependence on oil.
March 22, 2008
Buying a used lemon!
I was speaking with a friend yesterday evening. He related something that makes me very angry. A mutual acquaintance had been looking for a particular make and model car. This car was something that this person had wanted for several years. She found one that was for sale by an individual. Looked at it, drove it, took it to the mechanic the seller used who gave the car a clean bill of health. She went to the bank, got a loan for nearly $20,000 and bought the car. A few days later, she took the car to the dealership for that make of car to have the oil changed etc. The service writer called her to come in and talk to them about the car she had just purchased.
The person who sold her the car had taken it into this dealership several months before and it had been severely damaged. She was told that they didn't really consider the car safe to drive, and that they wouldn't work on it for her. She was given an estimate that ran close to $10,000 to restore athe car to a roadworthy condition.
This is after being told by another mechanic that the car was fine. This is after taking possession and paying for the car. She now has a very expensive lemon on her hands. She is deciding what she can do , if anything, to get her money back. I do not know all the facts of this case, but it is ugly.
In Arizona, there is very little protection for the consumer in this situation. This buyer and seller will most likely end up in the courts. When buying from a car from an individual or dealership Either take a trusted mechanic with you, or take the car to the mechanic. This is one reason why you might want to consider using a licensed automobile dealer when purchasing a car. At least you have protection under the law if you are sold a defective product.
The person who sold her the car had taken it into this dealership several months before and it had been severely damaged. She was told that they didn't really consider the car safe to drive, and that they wouldn't work on it for her. She was given an estimate that ran close to $10,000 to restore athe car to a roadworthy condition.
This is after being told by another mechanic that the car was fine. This is after taking possession and paying for the car. She now has a very expensive lemon on her hands. She is deciding what she can do , if anything, to get her money back. I do not know all the facts of this case, but it is ugly.
In Arizona, there is very little protection for the consumer in this situation. This buyer and seller will most likely end up in the courts. When buying from a car from an individual or dealership Either take a trusted mechanic with you, or take the car to the mechanic. This is one reason why you might want to consider using a licensed automobile dealer when purchasing a car. At least you have protection under the law if you are sold a defective product.
phone messages
I find that telephones are a very necessary part of modern life. They allow us to stay in contact with friends, relatives and business contacts. The complexity of the phone system tends to bother me at times. When you call a contact on one phone system, you get a message "we will play music until we locate the user you are calling. Another system uses a message " you can press a button to leave a message or just wait for the tone" Even though these messages are useful, they tend to get aggravating. I have been using phone systems since you had to put your finger in a disk with letters and numbers on it in order to make a phone call. I think I have pretty good knowledge of how a these systems work.
I have noticed a trend that I do not quite understand. I make a phone call to talk to someone. The phone answers, and I have to listen to someones favorite music. What this music is and how long it goes on varies from person to person. I am not sure where this trend started or why. Is it that they want you to know what their favorite song is? Does this song represent a message that they want you to hear? I am not really sure.
When I make a phone call, I want to contact the person I am calling, convey a message, get a response and then go on about my business. In 99 our of 100 cases, I am not really interested in listening to music. I consider myself to be a well rounded person who appreciates music, but some types of music, I would just rather not listen to. To force someone to listen to something they don't particularly want to hear, as a requirement to speak with you, could be considered rude or selfish. If you want to talk to me, you need to hear part of my favorite song and waste your air time in order to do it.
A message if you aren't available to take a call is good. A message between the phone connecting and you answering is not so good.
I have noticed a trend that I do not quite understand. I make a phone call to talk to someone. The phone answers, and I have to listen to someones favorite music. What this music is and how long it goes on varies from person to person. I am not sure where this trend started or why. Is it that they want you to know what their favorite song is? Does this song represent a message that they want you to hear? I am not really sure.
When I make a phone call, I want to contact the person I am calling, convey a message, get a response and then go on about my business. In 99 our of 100 cases, I am not really interested in listening to music. I consider myself to be a well rounded person who appreciates music, but some types of music, I would just rather not listen to. To force someone to listen to something they don't particularly want to hear, as a requirement to speak with you, could be considered rude or selfish. If you want to talk to me, you need to hear part of my favorite song and waste your air time in order to do it.
A message if you aren't available to take a call is good. A message between the phone connecting and you answering is not so good.
March 18, 2008
trade ins
Every person who buys a car knows that at some point he will want to get rid of it. He will get tired of driving the same old set of wheels. Many times as a customer is in visiting and making a payment I get the question. When can I trade this car in? Something we always have thought about. My response is when it is about half way paid for.
I decided that I should get a little more specific. I am working on a "Trade In Guarantee", This would let you know at the time of sale, when you could trade it in and get another. No if's, and's or but's. It will be a formula that says exactly when you would be eligible to get another car. We will be rolling this out on the first of April. I can't wait to get it out to you.
I decided that I should get a little more specific. I am working on a "Trade In Guarantee", This would let you know at the time of sale, when you could trade it in and get another. No if's, and's or but's. It will be a formula that says exactly when you would be eligible to get another car. We will be rolling this out on the first of April. I can't wait to get it out to you.
Field Trip
Several weeks ago my wife led a field trip to Los Angeles with 50 high school students. Since there are several male students in the group, I went along as a chaperon. She teaches sewing, clothing design and marketing. We toured FIDM, Fashion Institute of Design and Merchandising, to show what they taught, see the campus etc. We also went to Woodbury University, a small private school that specializes in teaching fashion design, architecture and business. This is a way to let students know what is out there, and that there are many schools to choose from. Fidm also has a large fashion show that is held in an aircraft hangar. It is a huge production and very enlightening if you have never been to one before. Several thousand spectators, a number of clothing designers and lots of models. booming sound system and lots of lights. I am always impressed at the designs that they come up with. What you see on the runway is what people will be wearing next year.
We went to Hollywood Boulevard and did the tourist thing. Took a tour of Grauman's, now Mann's Chinese theatre. The students had never seen anything quite like it. I was also impressed. We also visited Rodeo drive, to see the high dollar shops. It is amazing what they have to offer, if you have to ask a price, you shouldn't be there. We also stopped at the beach for a few minutes. Some of these students had never been there before.
My point is the students. I think about when I was that age, and there isn't a whole lot of difference. We didn't have all the electronic toys that we have now. I remember the car stereo going from 4 to 8 track and then cassette. I still have a few 8 track cartridges and player just in case. Getting back on point. There are still the students that are very obedient, outgoing and helpful. There are still the ones who are impolite and want their way and can't cooperate. and every type in between.
This is the third time I have made this trip, and it renews my faith in humanity. Even though things change, they still stay the same. I was looking at a 20 year old newspaper last week. I noticed when reading the articles, that if you changed the names of the people involved, you would be reading current events.
You do read about the teens and young people getting in trouble, but for the most part they are good people and we do have hope for the future.
We went to Hollywood Boulevard and did the tourist thing. Took a tour of Grauman's, now Mann's Chinese theatre. The students had never seen anything quite like it. I was also impressed. We also visited Rodeo drive, to see the high dollar shops. It is amazing what they have to offer, if you have to ask a price, you shouldn't be there. We also stopped at the beach for a few minutes. Some of these students had never been there before.
My point is the students. I think about when I was that age, and there isn't a whole lot of difference. We didn't have all the electronic toys that we have now. I remember the car stereo going from 4 to 8 track and then cassette. I still have a few 8 track cartridges and player just in case. Getting back on point. There are still the students that are very obedient, outgoing and helpful. There are still the ones who are impolite and want their way and can't cooperate. and every type in between.
This is the third time I have made this trip, and it renews my faith in humanity. Even though things change, they still stay the same. I was looking at a 20 year old newspaper last week. I noticed when reading the articles, that if you changed the names of the people involved, you would be reading current events.
You do read about the teens and young people getting in trouble, but for the most part they are good people and we do have hope for the future.
March 8, 2008
Our Customer Base
I was speaking with a current customer last week. She is a young lady in her mid twenties. She mentioned her grandfather. I got to thinking about him and realized that I have known him for over 30 years. Between him, his children and grandchildren they have purchased at least 20 cars over the last 30 or so years.
This isn't the only family we have this type of relationship with. This doesn't happen by chance. It happens one person at a time, one car at a time. The word of mouth from one friend to another is the most valuable advertising you can get. Today a customer I have been dealing with for years, brought his sister in, who was looking or a car. Because of our relationship, the sister was in and out with her new car in record time.
We still believe in that old fashioned one on one. We sit down with the customer, talk about what he is looking for, what we have to offer and how we can come to an agreement. That plus th fact that you are dealing with the same team from down payment until the final payment when you collect your free and clear title.
This isn't the only family we have this type of relationship with. This doesn't happen by chance. It happens one person at a time, one car at a time. The word of mouth from one friend to another is the most valuable advertising you can get. Today a customer I have been dealing with for years, brought his sister in, who was looking or a car. Because of our relationship, the sister was in and out with her new car in record time.
We still believe in that old fashioned one on one. We sit down with the customer, talk about what he is looking for, what we have to offer and how we can come to an agreement. That plus th fact that you are dealing with the same team from down payment until the final payment when you collect your free and clear title.
February 26, 2008
Private Party Pitfalls
A car is one of the largest purchases that a person ever makes. Some people like buying a car from a private party. If you ask why, you will be told they can get a better deal and save a few dollars. One of my customers traded in a truck that he had purchased on a street corner from an individual. This was an older truck, it didn’t look pretty, but it ran well and did that job that it was intended to do. We found out when we tried to sell it that the ID plate in the dash had been replaced. The number plate from a wrecked vehicle had been installed over the real plate. The id number was different from the one that was on the frame of the truck. He had unknowingly purchased a stolen truck. He then realized why his insurance company called his 2 wheel drive truck a 4 wheel drive.
This is just one of the problems you could face when buying a car from an individual. The car could have mechanical problems, could have been wrecked and rebuilt. There could be a lien on the car that wasn’t listed on the title. The title could have been forged. The best advice I can give when buying a car from a private party is to make sure the party you are buying it from is the party listed on the front of the title. If this is not the case, chances are you are most likely dealing with a “curbstoner”. This is a person who buys and sells cars to make a few extra dollars on the side. These people do not want to put the title of the car they are selling in their own names because they are only allowed by law to sell 3 cars per year. In this case there is the possibility that the car had been sold more than once between the person whose name is on the title, and you the potential buyer. Legally, if someone got a ticket driving the car and didn’t pay the fine, it could come back to bite you when you tried to register the car. If you do have a problem you are stuck with it.
The advantage from buying from a dealer is that the dealer is licensed and bonded. If there is a mechanical problem you have an implied warranty. If there is a title problem, he must correct it. You have legal recourse.
A large percentage of private party transactions turn out to be good, but if it turns out to be bad, it could be your worst nightmare.
I would like to hear your story, good or bad, about buying a car from an individual.
February 9, 2008
Education
My wife is a high school teacher and has been teaching for quite a while. Until you know and live with a teacher you do not realize the amount of work they do. They are required to have a lesson plan for each class every day. The plan is detailed to the degree it teaches various standards that are in the curriculum. A math lesson could also include language. A history lesson could include math. She is given one "prep hour" this is a class period for her to grade papers, do lesson plans etc. She rarely gets the days work done in that period because of other things like working for the student club that she moderates. The students different than in my day. The school wants to give every child an education and they give the student the benefit of the doubt if they are absent or late. the only problem is that you cannot force a child to learn. You can present the knowledge, but if the child doesn't absorb it, what can you do.
The students know that as long as they attend one class per day, they are counted as being at school. When a student has 5 or 6 classes per day, but only attends one, is that child really getting an education?
A student has to miss 10 class periods in a row in order to be dropped from the class. If they miss 8 and then attend three in a row, the clock is reset. That student will get an incomplete, but won't be penalized.
The students know the rules and some take full advantage. I am not saying all the students are there for social life and not for an education, but some of them definitely are. The classes are like any life situation. There are a small percentage of really good ones, a middle class that are around average and then the other small percentage that are there because they have to, not because they want to learn.
When the teacher has to spend time disciplining these students who don't want to be there, they are taking time that could be used to help and educate the people who really want to be there.
It is no wonder that a newly graduated teacher only lasts 5 or 6 years before burning out.
The students know that as long as they attend one class per day, they are counted as being at school. When a student has 5 or 6 classes per day, but only attends one, is that child really getting an education?
A student has to miss 10 class periods in a row in order to be dropped from the class. If they miss 8 and then attend three in a row, the clock is reset. That student will get an incomplete, but won't be penalized.
The students know the rules and some take full advantage. I am not saying all the students are there for social life and not for an education, but some of them definitely are. The classes are like any life situation. There are a small percentage of really good ones, a middle class that are around average and then the other small percentage that are there because they have to, not because they want to learn.
When the teacher has to spend time disciplining these students who don't want to be there, they are taking time that could be used to help and educate the people who really want to be there.
It is no wonder that a newly graduated teacher only lasts 5 or 6 years before burning out.
February 2, 2008
Automobile Debt Increases
I read an article in the Arizona Republic this morning taken from the LA Times that spoke of automobile debt. Debt that in most cases exceeds the vehicles worth. "todays average car owner owes $4,221 more than the car is worth at the time it is sold-up from $3,529 in 2002" . 45% of the car loans made today are longer than 6 years. Most cars are traded in between 24 and 36 months. This means that in order to get another car, the buyer needs to come up with cash to cover the negative equity, or the negative equity needs to be added to the new loan.
There was a time many years ago when you needed 33% down to buy a car and the balance had to be paid off in 2 years. It sounds terrible, but this was the era when a new car cost $3,000. The other side of the equation was that around $1.00 per hour was an average wage.
As inflation has kicked the price of a base car to over $10,000 you can see what has happened. You can probably buy the $10,000 car with $500 plus tax and title, the salesman has also sold you an extended warranty and credit life. You now owe about $14,000 on this car. The sad part is that the car depreciates faster than you can reduce the balance.
This doesn't sound too bad, but if you want something besides a Chevy Aveo, Hyundai Accent or Kia Rio be prepared to spend $15,000 up.
This state of the auto loan industry is very near the state of the housing mortgage industry. When you have no concept of having any equity in something its very easy to walk away. We see consumers who are looking for another car and buried in their present car. We ask what they will do with the present car, and the response is we are giving it back to the bank. Most lending institutions are realizing this and tightening up their standards on term, credit rating etc, but this is like putting a bandaid on a 3" gash in your arm. It will help, but not a lot.
My advice is the same as always. Get the car you want, put as much down as possible and pay it off as quickly as possible. that way when you do want to trade, your car will be worth more than is owed.
There was a time many years ago when you needed 33% down to buy a car and the balance had to be paid off in 2 years. It sounds terrible, but this was the era when a new car cost $3,000. The other side of the equation was that around $1.00 per hour was an average wage.
As inflation has kicked the price of a base car to over $10,000 you can see what has happened. You can probably buy the $10,000 car with $500 plus tax and title, the salesman has also sold you an extended warranty and credit life. You now owe about $14,000 on this car. The sad part is that the car depreciates faster than you can reduce the balance.
This doesn't sound too bad, but if you want something besides a Chevy Aveo, Hyundai Accent or Kia Rio be prepared to spend $15,000 up.
This state of the auto loan industry is very near the state of the housing mortgage industry. When you have no concept of having any equity in something its very easy to walk away. We see consumers who are looking for another car and buried in their present car. We ask what they will do with the present car, and the response is we are giving it back to the bank. Most lending institutions are realizing this and tightening up their standards on term, credit rating etc, but this is like putting a bandaid on a 3" gash in your arm. It will help, but not a lot.
My advice is the same as always. Get the car you want, put as much down as possible and pay it off as quickly as possible. that way when you do want to trade, your car will be worth more than is owed.
January 22, 2008
HB 2494 sale contingent on financing approval
I am not one who thinks more regulation is a good thing, but in this case, it could be a good idea. HB 2494 deals with automobile sales. I am not going to quote the full bill. but will paraphrase it. The bill says that when a customer signs the contracts to purchase a car, he will also sign a paper that says the car dealer must find a financial institution who will buy this contract at the terms stated in the contract. If the contract can be sold on those terms, the buyer is obligated to keep the car. If the contract cannot be sold on the original terms, the deal will be canceled. The dealer must return the customers down payment and trade in if there was one. the buyer must return the car. I would like to see language in the bill to say that the car must be returned undamaged in its original condition, or the buyer would have to pay for repairs.
The process of " spot delivery" has been around in the car business for years. The buyer looks at and likes a car. He wants to buy it and so the dealer writes a deal and the customer drives away. The deal is usually written with low down payment and payments for a very long term. Then the car dealer shops the contract to many financial institutions starting at the best and going down to the sub prime if need be in order to get the deal approved. Some times in order to get the deal approved, the down payment,term and payment amount and interest rate will be changed. The customer may see a payment go from $300 to $400 , down payment change from $1,000 to $3,000. Any variation so the lender will buy the deal.
The reason the dealer wants the customer driving the car, is that the neighbors will see it, he will get used to driving the new car, the family will want to keep it etc. In other words, the customer is out of the buying mode. If the customer went to the dealer, filled out an application and was told to come back in 2 days, when the loan was approved, and take delivery of the car. How many would come back? How many would go somewhere else to buy a car?
Right now if you take delivery of a car, and the deal cannot be approved, you are under no obligation to change the terms and keep the car, but most people don't know this. The dealer must give your trade and down payment back. If you have been driving the car for four or five weeks, they can hit you up for mileage driven. It is illegal for the dealer to sell the car you traded in before your loan is funded by a finance company.
This is just good common sense, but there are people who fall in love with the car, and will give more down payment or change other terms even though they may not be able to afford those payments.
The process of " spot delivery" has been around in the car business for years. The buyer looks at and likes a car. He wants to buy it and so the dealer writes a deal and the customer drives away. The deal is usually written with low down payment and payments for a very long term. Then the car dealer shops the contract to many financial institutions starting at the best and going down to the sub prime if need be in order to get the deal approved. Some times in order to get the deal approved, the down payment,term and payment amount and interest rate will be changed. The customer may see a payment go from $300 to $400 , down payment change from $1,000 to $3,000. Any variation so the lender will buy the deal.
The reason the dealer wants the customer driving the car, is that the neighbors will see it, he will get used to driving the new car, the family will want to keep it etc. In other words, the customer is out of the buying mode. If the customer went to the dealer, filled out an application and was told to come back in 2 days, when the loan was approved, and take delivery of the car. How many would come back? How many would go somewhere else to buy a car?
Right now if you take delivery of a car, and the deal cannot be approved, you are under no obligation to change the terms and keep the car, but most people don't know this. The dealer must give your trade and down payment back. If you have been driving the car for four or five weeks, they can hit you up for mileage driven. It is illegal for the dealer to sell the car you traded in before your loan is funded by a finance company.
This is just good common sense, but there are people who fall in love with the car, and will give more down payment or change other terms even though they may not be able to afford those payments.
January 14, 2008
Another New Job
I have been a member of and involved with the Arizona Independent Automobile Dealers Association for many years. The organization was founded in Arizona in 1963. Our dealership was one of the first members. This is an organization that helps promote the use car industry. There are over 1000 used car dealer licensees in the Phoenix area. These individuals make a large contribution to the economy of our City and State.
The members stand by a Code of Ethics and promise fair dealings with the public. I have sat on the Board of Directors of this group in the past. I am again serving, this time as the Chairman of the Legislative Committee. This position involves learning what bills are being proposed to the House and Senate and what their effect will be on our industry. If a new law will be good for the public and our industry, we will support it. If we see a bill that has a good intention, but has an unintended bad effect somewhere in the economy, we will try to point this out to the lawmakers, so they can repair the problem before the bill gets passed.
I have been involved with this work in the past and find it interesting. The quote I have always heard is that the two things you don't want to watch being made are laws and sausages. I was a licensed real estate agent many years ago. I remember when the real estate contract of sale was one very long sheet of paper. Today it is seven or eight pages. Every time someone gets taken advantage of and goes to court with someone to settle a grievance a new clause is put in the contract to protect others from being taken advantage of in the same way.
I look forward to the legislative session that is getting underway and will be reporting on some of the bills and how they will effect the public and your rights and duties as they involve automobiles.
The members stand by a Code of Ethics and promise fair dealings with the public. I have sat on the Board of Directors of this group in the past. I am again serving, this time as the Chairman of the Legislative Committee. This position involves learning what bills are being proposed to the House and Senate and what their effect will be on our industry. If a new law will be good for the public and our industry, we will support it. If we see a bill that has a good intention, but has an unintended bad effect somewhere in the economy, we will try to point this out to the lawmakers, so they can repair the problem before the bill gets passed.
I have been involved with this work in the past and find it interesting. The quote I have always heard is that the two things you don't want to watch being made are laws and sausages. I was a licensed real estate agent many years ago. I remember when the real estate contract of sale was one very long sheet of paper. Today it is seven or eight pages. Every time someone gets taken advantage of and goes to court with someone to settle a grievance a new clause is put in the contract to protect others from being taken advantage of in the same way.
I look forward to the legislative session that is getting underway and will be reporting on some of the bills and how they will effect the public and your rights and duties as they involve automobiles.
Subscribe to:
Posts (Atom)