How Leasing A Car Has Changed

Should I lease my next car? That's always been a question for car buyers, but now there’s another one to ask: Will I be able to lease my next car?

Domestic automakers’ financial subsidiaries have cut back their leasing programs, thanks in large part to lower used-vehicle values, especially for big pickups and SUVs that gulp gas.

Based on poor earnings reports, Chrysler is getting out of leasing altogether, while General Motors and Ford are making it difficult to arrange a lease through their financing subsidiaries.

All automakers have reduced their reliance on leasing because it hurts an already bleak profit picture.

"This trend is continuing due to the relative high costs and risks [of leasing] compared to traditional cash and APR [discount financing] business," GM vice president of vehicle sales and marketing Mark LaNeve said in a memo to dealers. 

The difference between predicted and actual SUV residual values this year alone led to a $4.8 billion loss for domestic automakers.

So what can consumers do?

Small Pickups More Popular, Less Safe

As gas prices top $4 a gallon, some consumers have turned to compact and midsize pickups rather than full-size models that devour gas.

"Unfortunately, they won't find any that afford state-of-the-art crash protection," Adrian Lund, president of the Insurance Institute for Highway Safety, said in releasing results of the agency’s first side-impact crash tests on small trucks.

Side impacts are the second most common type of fatal crash, killing almost 9,000 people in 2006. Small trucks usually don't get the latest safety systems standard because most are long in the tooth and aging in terms of underlying technology, as attention is instead focused on next-generation full-size models that account for the most profit for automakers. Ford, for example, may only offer the Ranger for a couple more years. That model hasn't been significantly altered in more than a decade.

"Until they improve, most small pickups aren't good choices for people looking for safe transportation," Lund said.

New Gift Idea: Car of the Month

If you can send a different jar of jelly, box of fruit, or six-pack of beer to a friend or relative each month for a year, why not a car?

Automotive journalist Bob Kocher formed the Toy Car Club to do just that. Of course, your driveway and garage would bulge if a new Impala, Camry or Fusion arrived each month, so Kocher came up with an idea to send a scale model, die-cast collectible car each month.

Toy Car Club will mail a new die-cast car each month for 12 months, along with a collector card featuring a photo and historical explanation of each vehicle, to a child, grandchild, friend or collector. Cost: $34.99 for all 12 cars, which includes shipping and handling.

Toy Car Club's initial collector set is called the Classic Car Group and includes a 1957 Chevrolet Corvette, 1964 Ford Mustang, 1955 Ford Thunderbird, 1949 Ford Woody Wagon, 1962 Volkswagen Bus and 1967 Volkswagen Classic Beetle. 

ToyCarClub.com

GM Shrinks Volt's Gas Tank

General Motors has downsized plans to equip the Chevy Volt plug-in electric car with a 12-gallon fuel tank. The original idea was to give the vehicle an extra 600-mile driving range once the lithium-ion battery pack ran out of its initial charge.

The tank has been shrunk to hold fewer than 12 gallons. GM won't say exactly how many gallons it will now hold, other than a source saying, "We're working on that."

GM's goal is to begin selling the Volt by the end of 2010.

The original target with the Volt concept was for it to run in battery mode only, without burning a drop of gas, for up to 40 miles — about the distance most folks travel each day — before the lithium-ion battery pack needed to be recharged. 

That goal hasn’t changed. Initially, though, it was intended to be able to travel up to 600 miles more after that using a small on-board gas engine/generator to create more electricity to power the car. It would then need a one- to two-hour recharge, or the gas tank would need to be refilled.

The target now is to travel 360 miles after the initial charge wears off rather than 600.

GM says because most cars travel 40 miles or less each day, there was really no need to have a 12-gallon fuel tank — and the added weight — to extend the range by 600 miles.

"Most cars today have a range of more than 300 miles and less than 400 miles before refueling,” said Jim Hossack, vice president of AutoPacific, an automotive research and consulting firm. “GM didn't need a longer range because most bladders can't go 600 miles.

"By going with a smaller tank it means GM can take weight and price out and make Volt a little lighter and a little cheaper, and that's what you call making an improvement.”

States Paying to Get Clunkers Off the Road

How can you get folks to scrap their low-mileage, high-polluting clunkers and buy more fuel-efficient machines?

Easy: Pass strict emissions testing legislation that in effect bans older, lower-mileage, higher-emission vehicles from the roads. Or, because owners of those vehicles are still voters, instead offer to buy up their old cars so they have the money to put down on a replacement vehicle.

The Detroit News reports that Texas launched a $45 million annual program in January called "Drive a Clean Machine," offering consumers in Austin, Houston and Dallas-Fort Worth up to $3,500 for their old car, to go toward the purchase of a new or less-than-3-year-old used vehicle priced at no more than $25,000. The offer, however, is only to low-income families of four with a combined income of less than $63,000 whose cars are drivable but fail the state emissions test. The program has taken more than 11,000 vehicles 10 years or older off the road so far this year. 

Americans junked an estimated 13 million vehicles in 2007, or 5.2 percent of the total on the road; that’s up from 5 percent in 2006. Estimates are that, starting with the clunkers, if you replaced 5 percent of all cars each year it would take 20 years for all vehicles on the road today to be replaced with more fuel-efficient hybrid, diesel, electric, or hydrogen fuel-cell vehicles.

Consumer Expectations Rise With Gas Prices

Thanks to fuel prices that topped $4 a gallon this year, 79% of consumers are interested in buying a more fuel-efficient vehicle, like a hybrid or diesel, next time they’re in the market for new wheels, versus 47% a year ago. That’s according to Consumer Reports’ annual Auto Pulse survey, which it released Thursday.

The 79% figure is nearly the same as the 78% of consumers recently surveyed by J.D. Power and Associates who said they are interested in a higher-mileage vehicle.

At the same time, though, 69% of respondents told Consumer Reports they want their new vehicle to be the same size or larger than the one they now drive. More than half — 54% — said they are willing to pay a higher price for a vehicle that delivers better mileage, such as the premium a diesel or hybrid carries over regular models.

Consumer Reports’ findings again echo J.D. Power's results, which found that 46% of consumers are willing to purchase an eco-friendly hybrid even it sets them back an average of $5,000 more than a similarly sized conventional car.

Hyundai Elantra Tops Reliability Report

The Hyundai Elantra has earned Consumer Reports' "excellent" rating in predicted reliability among small, high-mileage cars road-tested by the magazine.

It beat out the Honda Civic EX for the top spot, also finishing ahead of the Toyota Prius, Mazda3, Subaru Impreza, Toyota Corolla and Ford Focus, all of which achieved "very good" ratings in a report on the potential reliability of small gas-saving sedans.

All but the Corolla earned "recommended" ratings. CR said it didn't have enough reliability feedback on the new '09 Corolla to give it a "recommended" rating yet.

"The Elantra's top rating in the small-sedans class shows how far Hyundai has come in the last decade," CR said of the findings in its July issue, which goes on sale Wednesday. "Its cars used to be unreliable and unrefined, with low scores in tests. Now, some compete with the best in their classes."

CR called the Elantra SE "a well-rounded package with a quiet, roomy cabin, comfortable ride, nice fit, excellent braking and very secure emergency handling aided by the standard electronic stability control."

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More Hyundai Elantra News

2008 Lexus LX 570 Not Easy to Find

The full-size, $74,700 2008 Lexus LX 570 SUV has the worst fuel economy rating of any Lexus, at a paltry 12/18 mpg city/highway.

There's no hybrid version, no derivative that burns E85 ethanol, and no higher-mileage diesel alternative. You can't even get one with four cylinders that shut off when cruising to conserve gas at a time when it’s topped $4 a gallon.

Yet if you want to order one today, you may have to wait up to 90 days to get one in the color you want with the options you want.

"There's only a four-days supply of LX 570s in dealer inventory nationwide," Lexus spokesman Greg Tomei said. A 60-day supply is considered normal. “We don't give the number out, but from the time it reaches the lot until it leaves the lot, the LX 570 has the quickest turn rate of any vehicle in our lineup."

Holiday BBQs Still Sell Cars

Hot dogs, apple pie and lots of unsold Chevrolets are on the Memorial Day menu at Bill Stasek Chevrolet in Wheeling, Ill., while Raymond Chevrolet in Antioch, Ill., is planning barbecues.

We're not sure if food soothes the savage beast, but it apparently helps sell cars over the holidays. As they've done for years, dealers are planning cookouts to get folks into their showrooms over the holiday weekend.

"Whether it's furniture or cars, consumers are conditioned to sales and lots of hoopla over holiday weekends," said Mark Scarpelli, owner of Raymond Chevy in Antioch.

Brad Tuftin, general sales manager at Stasek Chevrolet, agrees.

"The Memorial Day holiday brings in people who simply were driving by who decide to stop in and take a look," he said.

So a hotdog on a bun and a slice of apple pie on a plate can actually attract customers?

Now's Not the Time to Trade in Your SUV

Now that it costs $100 and change to fill its tank, ready to dump that big gas-guzzling SUV for a 30-mpg two-seat Smart minicar or a 45-mpg Toyota Prius sedan? 

Good luck.

A study by CNW Marketing Research says dealers will welcome you with open arms when you come to buy that new car, but they’ll treat your trade-in as if it has the plague because it's going to sit on that used-car lot for an eternity — if not longer.

CNW says that, thanks to high gas prices, dealers have a 130-day supply of unsold SUVs on their used lots that were taken in trade — more than double the 57-day supply they had a year ago. A 60-day supply is considered normal.

As a result, if you bring a full-size SUV in to trade, you'll find that it's worth about $3,000 less now that gas is $4 a gallon than it was a year ago when fuel was at $3 a gallon, CNW says.

So, how difficult is it to get rid of a 12-13 mpg used SUV now?