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Keith's Used Cars Blog

By Keith Griffin, About.com Guide to Used Cars

Honda Airbag Recall Expanded on Used Civics, Accords

Saturday November 7, 2009

Honda CivicIt's not my intent to report every recall associated with used cars (because of the volume), but recalls about airbags are important. That's why I wanted to share information from an Automotive News article about the National Highway Transportation Safety Administration investigating Honda's handling of a recall for airbag problems in 2001 model year Accords and Civics.

According to Automotive News (subscription required), "The automaker's first recall, in November 2008, involved 3,940 Accords and Civics from the 2001 model year. The second recall, in June, involved more vehicles of the same models and year. Honda expanded the second recall in July to include certain 2002 Accords and Acuras. In all, the second recall totaled 440,000 vehicles. Honda has said the airbag inflator can rupture from too much internal air pressure, sending metal fragments through the airbag and hitting vehicle occupants. The company has acknowledged one death and multiple injuries from the defect."

I'm not here to task Honda for its handling of the recall. Rather, I want to remind folks buying a used Accord, Acura or Civic from 2001 to 2002 to make sure the car they're buying is not part of this recall. More information on recalls is available by going to the NHTSA recalls website. Make sure you do your homework before buying a used Honda from 2001 or 2002.

Have you ever bought a used car only to find out later it was subject to recall at the time of purchase?


Used Car Prices Have Risen – But Appear To Be Leveling Off

Tuesday November 3, 2009

piggy banksAt first glance, it appears alarming that used car prices have risen. According to Edmunds.com, three-year-old used cars currently sell for about 16 percent more than they did this time last year. Typically, used car prices rise 4.6 percent from year to year.

Seems like a big jump until you factor in that prices slumped a bit last year because of higher fuel prices. Some spike could be expected this year. However, this increase is still out of the ordinary. As Edmunds analyst Joe Spina explained in a news release: "The remarkable price increase is easily attributed to basic economic principles: used car supply is down, and demand is up. Why is supply down? In recent years, automakers largely withdrew from leasing and now the effects are starting to kick in, so off-lease inventory is starting to dry up. Also, thanks to relative softness in the new car market, there aren't as many used cars being traded in. Meanwhile, demand is up because many traditional new car shoppers are now considering used due to the economy."

There is some good news, though, if you have waited to purchase a used car. Prices should be stable. As Spina told AutoObserver.Com, "Barring any other atypical market forces or dramatic changes in gas prices, we expect that used car prices will be stable over the next few years - which is good news for consumers who plan to trade in soon."

Here is the breakdown by segment with the price increase in percent from Oct. 2008 to Oct. 2009:

  • Standard Compact:13.5%
  • Premium Compact: 1.3%
  • Midsize: -1.6%
  • Standard Sport: 4.7%
  • Premium Sport: 19.5%
  • Fullsize: 12.7%
  • Standard Luxury: 15.9%
  • Premium Luxury: 22.9%
  • Compact Pickup: 7.3%
  • Fullsize Pickup: 26.2%
  • Mini SUV: 7.8%
  • Midsize SUV: 25.4%
  • Fullsize SUV: 7.8%
  • Luxury SUV: 14.4%
  • Mini Van: 27.1%
  • Fullsize Van: 3.0%


White House v. Edmunds: Your Cash 4 Clunkers Analysis Is Wrong!

Thursday October 29, 2009

Yesterday, Edmunds.Com reported that Cash for Clunkers wasn't the big deal everybody thought it was. So, the White House responded today: "Dear Edmunds, Your Cash for Clunkers analysis is wrong! Love, The White House." OK, maybe it wasn't quite that language but that's the gist.

Edmunds.Com reported that "Cash for Clunkers cost taxpayers $24,000 per vehicle sold. Nearly 690,000 vehicles were sold during the Cash for Clunkers program, officially known as CARS, but Edmunds.com analysts calculated that only 125,000 of the sales were incremental. The rest of the sales would have happened anyway, regardless of the existence of the program."

Well, that upset the White House. It responded on its blog: "Busy Covering Car Sales on Mars, Edmunds.com Gets It Wrong (Again) on Cash for Clunkers." The White House says, "This analysis ignores not only the price impacts that a program like Cash for Clunkers has on the rest of the vehicle market, but the reports from across the country that people were drawn into dealerships by the Cash for Clunkers program and ended up buying cars even though their old car was not eligible for the program."

Of course Edmunds fired back, but let me say this: both sides are right but Edmunds is probably a little more right, truth be told. I've found their analyses over the years to be right on mark.

Tell me what you think below. Who is right in this argument?


Domestic Used Cars Don't Generate Excitement

Monday October 26, 2009

Ford F150Interesting little tidbit from AutoRemarketing.com, the used car industry's trade publication: A study from Virginia Commonwealth University suggests that the domestic automakers' slumping market share since 1996 has been caused primarily by a lack of new-product launches.

It all makes sense when you think about it. I've been covering the new car industry steadily since 2002 and the used car industry for about two years. People want to buy the hot thing - even if it's a used car three or four years old. As long as the car was hot when it first came out (and stayed so for at least a year), its used car sales are going to be strong.

Think back over the last five years. I'd say you could count on two hands the number of new cars and trucks introduced - and I mean really new and not refreshed - from the domestic manufacturers that have generated true excitement. Heck, I think I'm being generous at 10 - and the F150 pictured above is one of the 10.

Let me know what you think by commenting. Has the domestic market lost share over the last 13 years because it's not coming up with sufficiently exciting product?

Demand for Used Cars High, But Buyers Are Fickle

Wednesday October 21, 2009

Car buyersHere's an interesting trend in used car sales uncovered by CNW Research in its monthly report on car buying: consumers are no longer buying just for the sake of buying. They're becoming more fickle in their purchasing habits, not because they can't afford the used cars, but because they're holding out for the right used cars.

The October report says, "Demand for used cars remains high, however. The number of consumers looking for a used vehicle has actually grown in the past year to 1.9 million (October '09) vs. 1.6 million (October '08). But finding a car or truck that consumers are willing to acquire is getting tougher precisely because inventories are thin. Among those looking for a one to five-year model, fewer than 28% have located a vehicle meeting their criteria (regardless of price segment) during the third quarter of this year. That compared to over 51% in the first quarter and 41% in the second quarter."

CW Research blames it on tight inventories, but it's more than that. Buyers have the money but they're not willing to settle as they may have in the past. Buying habits like that are going to drive more competition in pricing. Consumers should have the upper hand in the coming months even if inventories are tight.

Photo © Getty Images

Don't Be Scared - You're Not Going To Buy a Clunker

Friday October 16, 2009

Cash for Clunkers carsIt's not really a scam, but people are going to try to make money by scaring you about clunkers from the Cash for Clunkers program floating around on the used car market. I'm not say it can't happen, but the odds have to be miniscule. Don't get suckered into spending money on any report besides a basic CarFax report that you should get before purchasing a used car. You're not going to buy a clunker - at least not one traded in for the official Cash for Clunkers program.

AutoWeek.com reported on Oct. 15 that, much like the flooded cars from Hurricane Katrina ravaged Mississippi and Louisiana, "Clunker junkers could also find their way back onto the used-car market through similar surreptitious means."

Trust me, it's a scare tactic. Go to the government website for more information on the National Motor Vehicle Title Information System. It's going to have all the information you need to avoid buying a clunker.



Shop Used Car Dealers with the Right Values

Thursday October 15, 2009

AutoRemarketing.com ran a story this week that is a primer on what you should look for in a used car dealer. The article told about David Baldwin, of Best Deal Auto Sales in Fort Wayne, Ind., winning the 2009 Joe Krier Quality Dealer of the Year award winner. Normally, that's not news you would read on this blog, but Baldwin won the award for:

  • being consumer oriented;
  • having a record of good business decisions based on honesty and integrity; and,
  • being a civic leader within the community.

The article goes on to state how successful this philosophy has been for Baldwin. "The dealership celebrated its 10-year anniversary this year. The store has grown from one lot with seven cars, to four locations offering more than 300 vehicles in the Indiana cities of Auburn, Warsaw and Fort Wayne, including a service garage that opened in January 2008."

What's the lesson to take away from this? Work only with used car dealers that are consumer oriented, give back to the community, and run an honest lot. Ask your friends and associates who they would recommend. The local dealer you hear mentioned most may never win a dealer of the year award, but they will probably deserve your business.

Hyundai Certified Pre-Owned Adds Carfax Buyback Guarantee

Friday October 9, 2009

As of Oct. 1, all Hyundai dealers selling certified pre-owned vehicles will be required to run a Carfax Vehicle History Report as part of the certification process. I have complete details about Hyundai Certified Pre-Owned, as well as other programs.

Eligible vehicles have less than 60,000 miles and are no more than 5 years old. All Hyundai certified pre-owned (CPO) cars pass a 150-point inspection and are backed by an industry first 10-year, 100,000 mile powertrain warranty. In addition, these cars come with another industry first, the Carfax Buyback Guarantee. Go to the website for complete details, but CarFax will basically buy back any car that has a problem with its title if CarFax gave it a clean bill of health to begin with.

"Hyundai's CPO sales were up 68.4 percent in the first seven months in an industry down 8.4 percent, evidence that our CPO program is attracting consumers to our brand," said Tracy Bowes, manager of assurance products, Hyundai Motor America, in a news release. "Having America's Best Warranty and the security of a Carfax Vehicle History Report on our certified pre-owned vehicles is just another example of how Hyundai stands behind our quality, allowing us to grow in an extremely competitive market."

Toyota Used Car Shopping iPhone App

Wednesday October 7, 2009

Toyota iPhone appThe Toyota used car shopping experience now has an iPhone app. iCrossing, a global digital marketing company, today announced that on-the-go users will be able to search Toyota Motor Sales USA, Inc.'s Certified Used Vehicle inventory for the best deals on previously owned Toyotas. The recently added certified used vehicle content can be accessed via Toyota Motor Sales mobile site.

What this means is you can be out shopping for a certified used Toyota and have all the info available to you at your fingertips. It's a nice feature if you're having a bad experience at one Toyota dealership and want to head to another one. Just tap some info into your iPhone or other smart phone and voila, you're shopping experience continues.

The certified used vehicle search functionality on the Toyota mobile site offers a unique rich media experience. It has been optimized for numerous devices that have Web browsing capabilities, including the iPhone. Consumers can use the mobile search functionality to find new and certified used vehicles, pricing, dealer information and photos of vehicles on the lot.

Photo courtesy Getty Images

Used Car Prices Should Drop in November & December

Friday October 2, 2009

Everywhere you turn, the Wall Street Journal, the Mannheim Report, everybody is touting the fact that used car prices are increasing, which is true, but the underlying implication seems to be they are going to keep increasing. One report I read recently suggests otherwise. I think used car prices should drop in November and December.

The RVI Group out of Stamford, CT, in its 3rd Quarter 2009 newsletter on trends in the new and used car markets, reports that the used vehicle supply is up 25.3% from last year. That's going to contribute to prices staying soft for the remainder of the year (my words - not RVI's).

Sure, prices are rising against 2008 numbers, but that was a year with high gas prices and tight, tight, tight, tight consumer lending policies. Lending has eased up a bit and gas prices are down about 35% since 2008's peaks.

Right now you're going to find values in the small car market, as well as full-size vans. You're going to experience some sticker shock in the full-size pick and SUV markets. However, based on the tea leaves I'm reading, prices should drop in November and December when folks stop buying cars and focus on holiday spending.

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