Auto Warranty News

Could be related to cooling of housing market, analysts say.

An article in  Reuter’s today says the luxury car and SUV markets are facing a decline, reflected by a dip in sales.

Driven by aging baby boomers at the peak of their earnings power and dominated by European and Asian brands, the luxury segment of the U.S. auto market has grown by 20 percent since the start of the decade.

That growth, which came despite a pullback in the pace of less-pricey auto sales over the same period, brought the luxury segment to about 12 percent of 16.9 million vehicles Americans bought in 2005.

But luxury car sales are down about 4 percent this year, and some analysts are seeing a potentially worrying connection with another venue for conspicuous consumption: real estate.

Overall car sales had been on a downturn, but premium vehicles have been insulated from this trend until now. The possible link to the housing market has largely been based on the parallel decline of luxury car purchases and the housing market observed in California.

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What if the warranty on the used car you bought does not transfer?

When you’ve purchased a previously owned vehicle, you may find out that the warranty that was on the new car has expired. Or you may find that the warranty transfers some benefits, but not all of them. Is there anything you can do to have warranty coverage when you assume ownership?

Yes. You can actually purchase your warranty separately, and get coverage via an extended warranty that will make up the difference or overlap slightly.

When you shop, don’t just pick up the cheapest warranty you can find. Compare pricing, but also compare what coverage you’re getting for your money. Weigh this against how reliable your car will be overall or the likelihood of an unexpected major repair expense.

Lack of warranty coverage doesn’t have to be a deal breaker.

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“IRS Increases Vehicle Reimbursement Rate”

The IRS has increased the vehicle reimbursement rate.

The Internal Revenue Service today issued a 2007 allowable vehicle reimbursement rate of 48.5 cents per mile, despite a moderation in gas prices compared with the volatile post-Hurricane Katrina prices of a year ago.

The 2007 rate is an increase from the 2006 rate of 44.5 cents per mile.

Many businesses use this rate as a guideline for their compensation of business travelers who use private vehicles to do company business.

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“Government wants to keep confidential some vehicle safety data” – Detroit Free Press

According to a recent article in the Detroit Free Press, the National Highway Traffic Safety Administration wants to keep certain vehicle safety data private.

From the article:

The proposal, similar to past versions, came in response to a ruling by a federal judge earlier this year that the agency had failed to provide enough notice to comment on an early warning system plan. In the March ruling, District Judge Richard J. Leon sent the proposal back to the agency.

The early warning system was part of legislation approved by Congress following the massive recall of Firestone tires in 2000. It required automakers and other manufacturers to submit data on deaths, injuries, consumer complaints, property damage and warranty claims.

NHTSA said its proposal would consider certain early warning information as confidential, including production numbers not involving light vehicles, consumer complaints, paid warranty claims and field reports.

Apparently the requested disclosures violate a public records law that prohibits sharing information that could result in privacy intrusion.

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Green vehicle guide available for download from their site.

The Environmental Protection Agency posts a guide online called the Green Vehicle Guide that gives data on the environmental impact of vehicles.

They have recently updated their website with information on the 2007 models of popular cars. You can also go to their site to look up specific vehicles, or find the "greener" ones in their database.

The updated version with the cars listed alphabetically or by air pollution score is available in text, Adobe Acrobat or Excel format for downloading by consumers.

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“10 best and worst cars for depreciation”

From the article printed on the Consumer Reports site:

…affordably priced models–such as the Toyota Prius hybrid, Mini Cooper, and youth-oriented Scion models–hold their value better than higher-priced sports and luxury models.

And while all of the top 10 models have either Japanese or European nameplates, nine of the bottom 10 are domestic models. Contributing to their high depreciation is the fact that many are older models, commonly used by fleets and rental companies, and often heavily discounted.

Of particular note is that the number one car on the best list is the Toyota Prius Hybrid, while there are several domestic SUVs and minivans on the worst list.

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“To win customers, many automakers are looking to improve their warranty offerings “

According to an article in Businessweek, the gap between quality and safety from one automobile company to another is closing, and is resulting in a search for new methods of product differentiation. A popular way for the car companies to distinguish themselves from each other is the warranty that comes with the vehicle.

From the Businessweek article:

To demonstrate confidence in the quality of their vehicles and lure customers away from competitors, many automakers are looking towards ramped up warranty offerings – the window of time and/or distance for which the vehicle is covered in the event major maintenance issues arise.

General Motors Co. recently made headlines when it announced that it was increasing its limited powertrain warranty on all 2007 model vehicles to 5 years or 100,000 miles, including roadside assistance up 100,000 or 5 years and courtesy transportation. The warranty is fully transferable and has no deductible.

The article goes on to mention how Hyundai and Kia each “increased flexed warranty offerings in order to strengthen its quality reputation and gain a foothold on the competition” – and the plan worked, if the recent recognition and sales for either of the companies is any indication.

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Ad agency CEO Ludwig defends against mixed consumer reviews: “The biggest risk you can take is to play it safe.”

In a recent article called Striking a Nerve, Autoweek lets us peek into the creation of the latest Silverado pick-up truck commercial. The television ad, which aligns historical images of major events that have affected Americans over the last half-century or so, has started to bring strong reactions from consumers and critics alike. Some view the controversial commercial as exploitive of emotional images to make money, proponents state that it is "tasteful and inspirational and plays well among truck buyers".

The article delves a bit deeper into the intent of Cheverlot and the ad agency who developed the commercial, Campbell-Ewald, when creating the ad, which in the end, may be the primary concern of consumers.

Ludwig says he anticipated that the Silverado spot would generate complaints. The commercial is about America "and the knocks we have taken and pulling ourselves up by the bootstraps," he says. "Anytime you are provocative, you are going to elicit some provocative responses"…

On Saturday, Oct. 21, two new 30-second spots for the Silverado will debut during the World Series. A separate spot targeting Hispanic Americans also will premiere that day. That spot will use historic images such as Hispanic workers helping to build Hoover Dam.

It’s too early to assess the commercial’s impact. But John Wommack, general manager of Brown Chevrolet in Devine, Texas, says he thinks it will appeal to his store’s truck customers. "They are very patriotic and proud of their country," he says. "The message will give them a good feeling."

GM won’t get a scientific study of consumer response to the first commercial for several weeks. So far, Kosak says, anecdotal reaction has been "strikingly positive."

Whether the upcoming scientific survey of consumer reaction results in an overall positive review or not is almost besides the point when an ad goes beyond simple relaying of information about a product. The commercial has even passed news into discussions about its artistic value and is being discussed both as a public relations issue within the industry, and on an emotional level between both the target audience, truck buyers, and the parallel market of those who purchase other types of vehicles. That kind of coverage in the press is considered money well spent. Emotional messages from companies also tend to create strong kinships with consumers, who feel like the corporation, and thus their product, represents them.

Want to see what all the fuss is about? You won’t have to wait until October 21. Preview the upcoming commercial at Autoweek in Windows Media Format.

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Could we see the first electric cars by 2008?

According to an article in the San Jose-Mercury news, the first fully electric car to run on American roadways is now in the planning stages.

No major automaker currently sells a purely electric-powered car that can be used on public roadways in the United States.

Mitsubishi displayed an all-wheel-drive gasoline-electric hybrid car at the Detroit Auto Show in January, but the company does not currently sell a hybrid car.

In the early 90s, there was speculation that the first fully electric car available nationwide was expected to come from GM, as they had a clear advantage at one point as far as research and development.

Though there is some speculation that GM had ulterior motives for abandoning the project in 2002, their official reason, stated as insufficient demand, held water at the time from a profitability standpoint – gas prices were half what they are now. Now that more consumers believe that the has come for the electric car, and are stating that they would purchase one, it looks as if Missubishi will be the frontrunner in the entire industry.

Electric cars are not necessarily the savior of the energy question, according to a documentary that explores the issues behind converting to alternative energy sources, "Addicted to Oil". Early blogosphere reports show that consumer response to the news so far is positive.

The issue of electric cars raises many important questions. Will maintenance costs for cars run on electricity decline, or are ther other issues that could make the costs go up? Could maintenance frequency go down? What kinds of changes would have to be made on warranty coverage?

Some of these questions can be estimated from studies on hybrids, or the electric car community in California. Others we won’t know about until the sample of electric cars is large enough. For those, we’ll have to wait and see.

The drop in self-serve gas prices in LA county and surrounding areas sets records

Though the price of crude oil remains steady, the average self-serve price of gas at the pump in LA and Orange County has dropped dramatically since this past August. From an article in the Daily Breeze:

The average price of a gallon of self-serve regular gasoline fell 64 cents in the Los Angeles-Long Beach area since Aug. 18 and 67 cents in Orange County, according to the Auto Club.

“With price downturns averaging a penny a day or more in the last 60 days, this is a record rate of decline.”

This drop in price include an 8 cent average drop this past week. Wire reports are picking up this story in California primarily, however, some many pricing trends that start in California in various industries later spread eastward to the rest of the country. Motorists across the United States certainly hope that it does.

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