Auto Warranty

“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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• Get a Price Quote for a Silverado Extended Warranty
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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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“New rules go into effect on Sunday that require fuel makers to produce a much cleaner diesel”

Automobile manufacturers are in the process of moving to more efficient engines, ahead of US legislation that will go into effect on Sunday, demanding cleaner diesel that is almost completely free of sulfur.

From an article in the Houston Chronicle:

Next January, automakers will roll out engine systems equipped with exhaust-scrubbing technologies that work in tandem with the cleaner fuel to reduce soot and smog-forming nitrogen oxide emissions.

Diesel engines are popular worldwide in commercial vehicles and among heavy-duty pickup drivers because of their power and fuel economy _ they are typically 20 to 30 percent more efficient than conventional gasoline engines. That greater efficiency also makes diesel quite attractive to ordinary drivers in Europe, where fuel taxes are much higher than in the U.S. and diesel-powered cars make up half the passenger-vehicle market.

Are car buyers ready to purchase cars that run on diesel fuel, given the public memory of the smelly, inefficient diesel-powered vehicle of yesteryear? It remains to be seen. The image of diesel clearly needs a makeover if diesel-powered engines are to go mainstream in the States.

Tips for a Successful and Useful Purchase

The savvy shopper knows that many extended warranties aren’t used. High-pressure, point of sale warranties, such as those on consumer electronics don’t give you the option of comparison shopping, and as such, are ill-advised by consumer experts.

The exception on warranties across the board is the vehicle warranty – if you do your homework.

From an article in the Houston Chronicle:

According to the Insurance Information Institute in 2004, the U.S. auto insurance industry paid out $66 in claims for every $100 in premiums.

You’ll want an extended warranty to spread the cost of maintaining or fixing your car or truck over the years. Few of us are able to come up with the large lump sum that major repairs tend to cost.

However, just because purchasing extended coverage on your car is something you’ll have to do anyway, doesn’t mean you should take the first offer that comes.

Keep the following in mind when you’re ready to buy:

• Comparion shop to see what the best rates are for your vehicle.
• When you find a good rate, get it in writing.
• Don’t just take the rate that is the cheapest, either. Find out what’s covered for that price.
• Is there different coverage for used cars?

Vehicles, by nature, are more likely to get worn down and need repair the more you use them. Having a plan for this inevitability is just common sense.

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CEO reportedly still open to alternate North American Alliance

A dispute over the terms Nissan-Renault posed to GM has lend to the end of talks between the three companies. Carlos Ghosn, chief executive of both corporations, said before the talks ended that he’d still consder working with another North American company if talks didn’t work out.

Speculative reports point at Ford Motor Company, as they have recently posed the notion to pursue talks with Nissan-Renault.

From an article in the LA Times:

"Assuming he was sincere, Ford looks like the next candidate for the job," Banc of America Securities analyst Ron Tadross wrote in a note to investors Wednesday.

Read more in the International Herald Times.

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When Two Giant Automobile Manufacturers Become One

What would the world do if GM and Ford became a single company? Probably treat it like any other American automobile manufacturing company. So what is so exciting about the potential alliance of two of the major automotive players? Quite a bit, if you’re at all involved with auto industry news. The prospect of GM and Ford putting their two experienced and highly influential automotive companies together is really more of a risky business concern than a question of “what will this do for the auto industry?”

The automobile industry would certainly feel the effect of the two giants’ merger, but no one would be more affected than if GM and Ford were to join only to have the partnership be a failure. Many large companies have embarked on the mission to unite with hopes of knocking out the market share mostly by combining solid reputation to watch the result of the merger unexpectedly crumble to below what each business had attained on their own. Reports of a possible merging of GM and Ford are highly interesting because the auto world would be waiting with held breath to see if it turns out successful or a flop. In the meantime, if it’s publicity the two corporations are looking for, they’ve succeeded at that.

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Translation: A Full-Sized Vehicle Purchase Deal

If there’s one way to battle difficult times for your automotive company, it’s to strike a sweet-sounding deal with your patrons. GM is doing just that as it announces that its 2007 line of full-sized pick-up trucks will go for no more than the 2006 line. Without getting nit-picky about pricing details and the amount of difference in this year’s line over lasts, the offer will sound nice to customers looking to purchase a truck.

While car owners and intentional buyers are getting excited about the prospect of a great buying year, GM’s offer is another example of how American auto manufacturers are being forced to compete with high fuel prices and increasingly popular foreign models. This is surely prime time to invest in your vehicle’s long-term lasting ability. When car makers offer deals and incentives to the extend that they are currently, it means the bottom line is car ownership is more expensive than ever and the public is pressured to place new vehicle buying as a lower priority. An extended warranty on your automobile can keep you from having to return to the lot sooner than your wallet expects or allows.

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