J.D. Power Releases 2009 APEAL Study

The reasoning behind J.D. Power and Associates’ Automotive Performance, Execution, and Layout study is to find out “how gratifying a new vehicle is to own and drive” for each customer.

The overall winner in the 2009 APEAL study was Porsche, which maintained its dominance in the top spot for the fifth straight year. Rounding out the top five were several other luxury brands: Jaguar, Cadillac, Audi and BMW.

Individual categories included one decent upset: In the Midsize Premium Car category, the Hyundai Genesis beat out both the BMW 5 Series and the Jaguar XF. Other winners of interest included the Dodge Challenger, Volkswagen CC, Ford Flex and Nissan Maxima — all relatively new models.

Family Vehicles Selling Again

When the economy and car sales started tanking last summer, I pointed out that a major economic indicator was that family-friendly vehicles were seeing their sales flatline. In June, despite still-negative numbers from all manufacturers, crossovers both large and small — and even some SUVs — saw sales start to pick back up.

Higher-Mileage Trims on the Rise

Call them super-saver cars. More than ever, automakers are offering specially branded, fuel-efficient trim levels, but buyers should beware: Those models may compromise performance, have fewer features or require spending a little more to get those mpg savings. In addition, they may be harder to find than their best-selling siblings.

Take, for example, the 2010 Ford Fusion. Its impressive 23/34 mpg city/highway EPA rating only applies to the automatic base model, the Fusion S. The midlevel SE and better-equipped SEL are rated at a lower 22/31 mpg with the same four-cylinder engine and automatic transmissions.

Why the difference in mileage? Ford spokesman Alan Hall said the Fusion S saves gas by using lower-resistance tires and specific transmission calibrations, and by being lighter because there’s less equipment in that trim.

Buick LaCrosse to Get 30 MPG Highway

GM announced today that its all-new LaCrosse will get 30 mpg on the highway thanks to the direct-injection four-cylinder from the Chevy Equinox and GMC Terrain. Via webcast, GMC-Buick vice president Susan Docherty said that makes it the “most efficient premium sedan” in its segment — including cars like the Acura TL, Lexus ES 350, Lincoln MKZ and Toyota Avalon, she later added.

The four-cylinder, which makes 182 hp, will come only on the base LaCrosse CX, with the midlevel CXL and top-dog CXS getting 255-hp or 280-hp V-6s. All three engines have six-speed automatics. GM estimates EPA certification of about 20/30 mpg city/highway for the four-cylinder, chief engineer Chris Meagher said. Once the four-cylinders hit dealership lots, it could be responsible for 25% of all LaCrosse sales, GM says.

Pricing for the four-cylinder model hasn't been announced, but the 2010 LaCrosse CX with the V-6 starts at $27,085; given the $1,500 cost difference between the same two engines on the Chevy Equinox, we’d estimate the four-cylinder will start in the $25,000 range. All three recommend regular unleaded gasoline, vehicle line director Jeanne Merchant said; several would-be competitors sip premium. Here’s how the trims stack up:

Lexus Takes Over Top Spot in Initial Quality Study

Lexus has regained its top spot from Porsche in this year’s Initial Quality Study conducted by J.D. Power and Associates, with Cadillac, Hyundai and Honda rounding out the top five.

Two very important studies that come from J.D. Power every year include one dealing with the first three years of ownership, which offers a glimpse at how well a car will hold up over that time period, and another being the Initial Quality Study, which asks questions about the first three months of ownership.

There’s always vigorous debate — especially in our comments — about the IQS study and its real value to car shoppers. We’ll just weigh in with the fact that the more information with which you can arm yourself, the better. Plus, many newer models won’t be listed on the three-year dependability study.  

For the full list, click below. For J.D. Power's full report, go here.

Cash For Clunkers Bill Passes Senate

Late yesterday, the U.S. Senate passed a bill including “Cash for Clunkers” legislation that offers up to $4,500 in cash vouchers to qualifying new-car buyers.

Similar bills have passed in Europe and spurred car sales soon after passing. This U.S. version has been watered down to include only $1 billion in funding instead of the original $4 billion. That means after the bill goes into effect — likely in August — the funding will only last until Oct. 1.

We will have much more on the bill later today, but a brief synopsis is below.

Consumer Reports Identifies Top Cash for Clunkers Candidates

It’s obvious that if you want to take advantage of the new Cash for Clunkers law working its way through Congress, your junker vehicle’s trade-in value needs to be less than the minimum $3,500 voucher ($4,500 if the new car you’re eyeing gets 10 mpg better than the trade-in) for it to be worth your while.

Consumer Reports has identified some prime candidates to pile onto the scrap heap. Cars that make the most sense to junk include vehicles like Cadillac’s DeVille, Eldorado and Seville. Lincoln also has several scrap-worthy cars in the Continental, LS V8 and Town Car. Trucks make up most of the list, however — especially those from the 1990s.

It’s important to keep in mind that buying a new car has more benefits than just better fuel economy. If you’re still tooling around in a 1999 Nissan Quest, for instance, you’re missing out on a decade of major safety improvements. Today’s vehicles are built to cushion occupants during crashes far more effectively, while things like side-impact and side curtain airbags and electronic stability control make for a much safer driving experience.

Also, with a new car you’ll get a warranty that will cover major repairs, as well as a few years (hopefully) of no-repair driving. If you’re still hanging onto that 1994 Dodge Ram, you have to factor in those repair costs.

The Cash for Clunkers bill passed in the House of Representatives yesterday and will move to the Senate for a vote. Then the bill heads to the President before becoming law.

Cash for Clunkers: The Best Gas Guzzlers to Junk (Consumer Reports)

Are Domestic Automakers Making the Cars Americans Want to Buy?

A common criticism lobbed at domestic automakers recently is that they don’t build the cars Americans want to drive. This seemingly unanimous opinion was routinely raised during the GM and Chrysler bankruptcy filings by every pundit shoved in front of a television camera.

Presumably, this means Chrysler, Ford and GM focus too much on building “gas-guzzling” SUVs and full-size pickups and too little on the well-made, fuel-efficient subcompacts (e.g. Mini Cooper and Honda Fit) and hybrids (Prius) that Americans now want in their driveways.

There’s one little problem: Those small, fuel-efficient cars aren’t what Americans want. At least, they’re not what Americans buy when gas prices are below $3.

Tax Deduction on New-Car Purchase Available in All States

The Treasury Department announced additional tax deductions for the purchase of new vehicles, this time for states that have no sales tax.

The announcement comes as part of the American Recovery and Reinvestment Act of 2009, which said car buyers could deduct state or local sales or excise taxes incurred when purchasing a new vehicle. Now states without a sales tax — we’re looking at you Alaska, Delaware, Hawaii, Montana, New Hampshire and Oregon — will also qualify.

The additional deductions cover other, non-sales fees or taxes imposed by state or local governments that affect a vehicle’s ultimate purchase price. To qualify, cars have to be purchased between Feb. 16, 2009, and Jan. 1, 2010, and the deduction will only be available on customers’ 2009 tax returns. It’s also limited to taxes paid on the first $49,500 of the purchase price of a new car, light truck, motor home or motorcycle, and is available whether or not the taxpayer itemizes deductions.

Treasury Announces Further Tax Deductions for 2009 Car Buyers (Jalopnik.com)

Survey Finds Surging Gas Prices Will Spur Small-Car Sales

This may be another summer of rising small-car sales. Nine out of 10 new-car shoppers foresee a spike in gas prices in the coming months, and two-thirds say it will influence the car they buy, according to Kelley Blue Book’s recent Market Intelligence Study.

KBB polled 753 prospective car buyers in the second half of May, and 87% predicted steep increases in gas prices, up from 66% in April. Coupled with the new Cash for Clunkers legislation, which should soon become law, sales of fuel-efficient vehicles and smaller engine options will likely see a boost.

Last summer, when gas prices shot up to more than $4 a gallon, car sales accounted for 57% of the market, but things fell back to the traditional 50-50 split with thirstier trucks and SUVs when fuel costs dropped, according to IHS Global Insight. Right now, cars account for 52.7% of the market, up from 51.9% in March.

Even if prices don’t hit summer ’08 levels (and let’s hope they don’t for the economy’s sake), three-fourths of those surveyed said that gas prices would lead them to change their spending habits. About 60% admitted that higher gas prices have either changed their minds about a purchase or led them to look at vehicles they never would have considered before.

Right now, the national average for a gallon of gas is hovering just below $2.67, up from $2.30 a month ago, according to AAA.

Survey: Sharply Rising Gas Prices May Accelerate Sales of Smaller Vehicles (Detroit News)