Fewer Than 200 Have Returned GM's Guaranteed Cars

GM’s 60-Day Satisfaction Guarantee program has proven to be a confidence booster for the company. Today, GM announced that fewer than 200 buyers out of 222,000 who purchased a new GM car have returned them unsatisfied. However, that’s out of 658 who took the guarantee offer over $500 in cash back. That’s a 33% return rate.

These returns don’t cost the buyer the full price of the car, but they are out taxes, fees and two car payments. This means those who returned cars were very unsatisfied and skeptical to begin with. GM says it is being proactive about the returns; they're following up with each customer and conducting high-level interviews with engineering staff to find out what the customers didn’t like. A few of the purchasers returned the cars for other models or trim levels, but many just didn’t like the cars or trucks.

Chrysler Could Lose Another 145 Dealers

As part of its bankruptcy filings, Chrysler terminated 789 dealers, leaving roughly 2,400 shops in the U.S. Now, a credit issue may cause another 145 dealers to close their doors.

Chrysler Financial once backed loans to dealers so they could stock inventory. The company, which is owned by Cerberus Capital Management (Chrysler's former owner), is in the process of terminating all loans to dealers while maintaining its loan business to car buyers. It’s transferring this dealer business to GMAC now; the government is planning to wind down all of Chrysler Financial's business in liquidation by the end of 2011.

To back these new dealer customers, GMAC is asking for more collateral, which is often in the hands of Chrysler Financial in terms of mortgages and other debts the dealers have leveraged.

Sounds like a blast to be a dealer, doesn’t it? The financial wrangling has already led to 85 dealers not getting GMAC financing; another 50-60 dealers are still in negotiations.

Chrysler May Lose 145 Dealers on Lack of Financing (Bloomberg)

New and Used Car Prices Spiked in October

Prices for new cars rose 1.6% in October, the largest month-to-month increase since May 1981, and used-car prices rose 3.4%, which is that market’s largest monthly increase since September 1980, according to the U.S. Labor Department.

The consumer price gains for cars are a result of the Cash for Clunkers program, which largely cleared dealerships of ’09 models and reduced overall inventories. As 2010 models arrived, dealers became less likely to offer incentives for models that can sell for a higher price.

Analysts say that car prices will remain high through this year because automakers cut production to match a struggling economy. Those cuts, which were made earlier this year, will continue to keep inventories depleted and incentives low.

Still, if you’re willing to buy a 2009 model, you might be able to secure a good deal. Don’t forget that Black Friday — the best day of the year to buy a car — is on the way.

New, Used Car Prices Rise in October (Detroit News)

Best Car Discounts Fall on Black Friday

The most feverish shopping day of the year known as “Black Friday” may also be the best day to buy a car, according to data from Truecar.com.

Truecar.com found the average discount for a car on Black Friday is 7.5% due to a combination of dealership discounts and manufacturers’ year-end incentives. Because the deals are individually negotiated it’s hard to say exactly what a consumer will pay, but the trend toward lower sales prices is clear.

This year, the average new-car discount on Nov. 27 is projected to be 7.5% — up from a projected 6% the day before, and who’s shopping on Thanksgiving anyway? On average, a consumer will pay about 4.7% less than sticker price for any given day of the year. Theoretically, this data makes sense. Traditionally, Black Friday sends swarms of people to shop for anything but cars, which could leave dealers a bit desperate to make a deal.

Deals to look for this year as identified by Truecar.com include 28% off a 2009 Suzuki SX4, 26% off both the 2009 Nissan Titan and 2009 Ford F-150 pickup trucks and 20% off the sticker price of a 2009 Hyundai Sonata.

You can check a list of incentives in your area here.

Black Friday Is the Best Day to Buy a Car (CNN)

Ford Bullish on Small Cars

Ford kick-started the SUV revolution with the introduction of the Explorer SUV in the '90s, but the next big opportunity it sees is in small cars. That's according to Ford sales analyst George Pipas, who spoke to a gathering of Chicago-area media recently. Who are the buyers that will drive growth in this segment? Pipas says it’s Millennials, a demographic that wasn't even driving when the Explorer debuted.

It's easy to see why Ford is focused on Millennial buyers, which it counts as those born from 1980-95. Every day about 11,000 Millennials become old enough to drive in the U.S., according to Ford. With 50 percent of first-time buyers choosing small cars, there are sales to be had, Pipas said.

For Millennials, though, small doesn't necessarily mean basic. "[Millennials] want more than an econobox in a small car," he said. "They will give up something else to get what they want on the car."

Movers and Losers: October 2009

This month’s list of the fastest- and slowest-selling models reflects how the 2010 model year turnover can skew things. However, a majority of the vehicles in the top 10 are extremely popular models. Obviously, all of them meet our sales threshold to make the list.

Losers don’t have to make any threshold and their ranks are filled with nearly all luxury nameplates. It might be a good time to scour our listings for some 2009s that are still around. The lists and rules are below.

Used-Car Prices Dipping Back Down

The Cash for Clunkers program definitely led to higher used-car prices over the past few months. In fact, wholesale prices for used cars hit an all-time high in September; this past December, used-car prices were at a record low.

Last month, overall prices dropped 0.9% after factoring in a seasonal adjustment. This is a welcome correction, analysts say. While wholesale prices don’t instantly correlate to prices on lots, they should have an impact relatively soon.

It seems that alarmists once again sounded warnings because of the September spike after Cash for Clunkers, and one month later we’re seeing a move closer to the norm.

Wholesale used-car prices show first decline since December (USA Today)

GM to Offer Free Oil Changes to Pontiac, Saturn Owners

You read that right. General Motors wants to make sure current Pontiac and Saturn owners consider a new GM vehicle for their next car purchase by offering free oil changes at a Chevy, Buick or GMC dealer. That way the freebie takers will peruse new GM products from brands the company didn’t kill off in bankruptcy while they’re waiting for their car’s oil to be changed.

Final details on the offer will be released next week, including if it’s just a single oil change per customer or more. It sounds like a good idea to us, and most people we talk to like free things. What do you think?

GM Eager to Retain Pontiac-Saturn Customer Base (WardsAuto.com)

Colorado Gives Massive Tax Credit on Hybrids

A new tax break in Colorado will give state residents a credit on their 2009 income taxes for up to 85% of the difference between the cost of an alternative fuel or hybrid vehicle and a comparable one that runs on regular fuel, according to Fox News.

How does that translate into actual savings? It means that you could buy the north-of-$100,000 Tesla Roadster electric sports car for almost 40% off — potentially a $42,083 discount. That’s almost reasonable. Buy a 2009 Lexus LS 600h and you’ll catch a $20,000 break (starting MSRP: $106,035). The credit can also be used on lower-priced vehicles such as the Honda Insight and Toyota Prius.

The deal lasts through Dec. 31, which means green-car fans will have to figure out how to move to Colorado quickly.

Whoa! Colorado Residents Get $42G Refund on Tesla Roadster (New York Daily News)

Consumer Reports' Most and Least Reliable Cars

Earlier we wrote about automakers’ overall rankings in Consumer Reports’ annual survey. Now, we’re tackling which models ranked highest and lowest among the 1.4 million vehicles surveyed. The big winner is Ford, and it’s not because they had the most vehicles with above average reliability. Consumer Reports says the company has a “world-class” lineup in terms of reliability, with 46 out of 51 Ford, Lincoln and Mercury vehicles scoring average or above-average reliability ratings.

In comparison, GM’s now four brands — Buick, Cadillac, Chevy and GMC — had 20 out of 48 models with average scores and just one, the Malibu V6, with above average scores.

Last year, Chrysler had no vehicles breaking the “average” barrier, but this year the new Dodge Ram 1500 pickup truck earned a place among the middle of the pack. However, a third of the company’s lineup scored much worse than average, the lowest rating given.

You can look up the full list of ratings if you’re a CR subscriber here. We list the most and least reliable models by category below.