Is It A Good Deal ?

If you’ve ever had a bad experience with Carmax, we’d like to know. The more we share your stories, the more people are informed regarding Carmax’s business practices.

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This poor family bought a car they found on Craigslist.com, they did what most people do and ran a Carfax vehicle history report and found a clean report. They then purchased the car and four months later the police were at their door to impound the car. So remember, just because you get a clean Carfax or Autocheck report it doesn’t mean the car isn’t stolen.

Complete Story

Because of the rising strength in the Canadian Dollar and the decline of the U.S. Dollar many Canadians are coming across the border to buy cars or many U.S. cars are getting shipped and sold in Canada. One major problem arises from all that though and that is some of the cars being taken to Canada are deemed lemon cars in the U.S. but not in Canada. To help identify vehicles bought back by auto manufacturers, used car shoppers can check for lemon brands using the free Carfax Lemon Check at www.carfax.com.

One very important point that the media never brings up regarding gas prices is one of the most core reasons why the prices keep rising. The US pays for all its crude oil in US Dollars, against all major currencies the US Dollar is falling fast… therefore the more the dollar keeps falling the more dollars we have to shell out to get the same crude oil. As the dollar continues to fall expect the gas prices(oil) prices to rise… they’ll blame it on the OPEC countries and production, but the truth is the US Dollar is the reason prices are rising.

About to buy a car? Using the Free Advice link above send us an e-mail about the details of the car you’re looking to purchase and we’ll send you back expert advice about the purchase.

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Free car advice never got easier than this!

Three top investors in the automotive industry painted a grim picture on Sunday for the sector in 2008, with one executive predicting a possible slump in U.S. sales to levels not seen in 15 years.

The weakest forecast is for a possible 9.4 percent decline. But all three — Jerry York, an adviser to billionaire investor Kirk Kerkorian; financier Wilbur Ross; and Thomas Stallkamp, a former Chrysler president — were more pessimistic than many in the battered industry.

“While I am very negative on the autos sector over the next 12 to 18 months, I’m just not sure how bad it could be,” York, a former board member of General Motors Corp and chief financial officer of Chrysler, said at the Reuters Autos Summit in Detroit. “We all know housing is a debacle.”

U.S. light auto sales could slip to 15.5 million or less next year, York said. That would be down from near 16 million this year, a drop of 3 percent to mark the second consecutive annual decline and the lowest tally since 1998.

Stallkamp, a partner at private equity firm Ripplewood Holdings, which owns several auto parts makers, said the market could slump to 14.5 million, the lowest level since 1993.

“I’d say it’s somewhere between 14.5 (million) and 15 (million), somewhere in there and it’s hard to tell,” he said. “Today, I’m a little more towards 14.5 (million).”

Such a decline would be felt throughout the sector, CSM Worldwide auto analyst Michael Robinet said.

“That would certainly be one of the worst years on record given the gravity of the industry,” he said.

U.S. auto sales fell almost 11 percent in 1991, when the economy was in recession.

Ross, an investor who specializes in restructuring troubled businesses and has assembled an auto parts empire through acquisitions, said the U.S. consumer was “pretty well tapped out” as he predicted auto sales would slip a few hundred thousand units from this year.

Most automakers have predicted U.S. auto sales next year in the range of just under 16 million to 15.5 million, with Japan’s Nissan Motor Co Ltd at the low end.

However, the crumbling U.S. housing market is spooking consumers, the investors said.

“I hope I’m wrong on 14.5 (million) to 15 (million),” Stallkamp said. “But I think the mortgage issue is going to freak people out and that will hit pretty hard in ‘08.”

Ross called it “a sort of poverty effect from house prices going down.”

The U.S. automakers’ market shares will suffer more than foreign rivals in such a weak market, Stallkamp said.

“You’re going to see some continued retrenchment in construction and the building trades that will hit the Big Three particularly,” he said.

The investors see the Big Three U.S. automakers cutting factory production instead of returning to overly generous discount deals such as GM’s zero-percent financing offers, first rolled out after the September 11, 2001, attacks.

“I think you’re going to see less discounting in general,” Ross said. “Now that they have a little better control of the factories and now that the factories are a little more right sized.”

None of the three predicted a recession for the U.S. economy in 2008, but York said “it feels like it’s on the way.”

Stallkamp, on the other hand, sees global credit markets stabilizing in the first half of 2008, with the holiday shopping season a key indicator. He sees U.S. auto sales coming back in 2009.

The U.S. automakers, already slashing jobs and factory production, will “have to get smaller faster” and push for more sales overseas in a weaker market, Stallkamp said.

“Maybe I’m too pessimistic on how low it’s going to go,” he said of the U.S. market. “Maybe I live in Michigan. This is a pretty crummy place to be right now.”

(Additional reporting by Poornima Gupta, James B. Kelleher and Kevin Krolicki; Editing by Braden Reddall)

Source: Yahoo Financial

Great article over at HowStuffWorks.Com about “How Car Financing Works”. Goes through types of financing available, financing sources, why you should shop for your own loan and much, much more!

Remember if you need any help with financing or have any questions feel free to ask us at the Free Advice Here link above.

How Car Financing Works Article

1. First and foremost know your total car cost! Even if you don’t understand a single thing about a lease, do yourself a quick check and multiply the payments by the term, add any incentives or rebates, add any down payment, and add the cost of the car at the end of the lease (residual value).

Payments *(term) + Incentives + Rebates + Down payment + Amount due at end of lease (Residual value) = Total cost of car.

Why is this important? Simple, you can compare this to doing traditional financing. In most cases, the lease of the car should cost close to financing the car. Lease factors and interest rates vary slightly, but it is still a good gauge. If they feed you lines that lease rates are not good because banks are only offering special interest rates, then maybe you should not lease. This is almost always not true, if the banks are running good interest rates they probably have good lease rates.

2. Come prepared with traditional financing costs! This is important for step 1. Calculate the cost of the car using interest rates from 1-6% and 36-60 months. If you don’t know how to do this search our site for loan amortization or download our free loan tool for MS excel. Simply calculate the payment for 1%,2%,3%,4%,5%,and 6% and in any incentives and rebates, and down payment.

Now you have something to compare. If the total cost of the lease in step 1 is close to the total cost of the car is step two at 5%, then you know your car if purchased at the end of the lease would be similar to buying the car at 5% interest. If the buy financing offered by the dealer is 0% for this loan period then you know you have work to do as the lease is a lot more expensive.

3. OK, so you compared total cost and they equal the appropriate interest rate, am I getting a good deal? This is where leases become confusing for the average consumer. The answer is probably not if you plan on turning in the car at the end of the period. Why? Leasing in other words is financing the depreciation of the car. We have all heard the expression “the car loses value the minute you drive it off the lot”. This is true, usually in the neighborhood of 20%, this loss in value is what you are paying for in a lease. So, if you pay more than the expected loss of the car of the term you choose you are not getting a good deal.

4. Don’t put a lot of money down! This is the single easiest way to set your wallet on fire. Remember in tip #3 that you are financing the estimated depreciation. If you put money down, the dealer can put the money towards the residual value of the car and give you a low payment. If you trade you car in at the end of the lease you just lost your down payment.

5. Ok what is the proper amount to put down? In my opinion nothing. It is a lease, however, we can’t always qualify for that so do a simple check. Calculate the following: payments*term + down payment + rebates and incentives. Look at that number and then ask yourself is this how much the car is going to loss value in over the term I am looking at? For example, if you do this math on a 30K car that you want to lease for 36 months and the value equals 20K, then something is wrong. Either you payment is to high, you down payment is to high, or they did not give you the rebates. Warning, when doing this compare keep in mind that you pay interest in the lease based on the lease factor so your numbers may be off a little depending on the lease factor they gave you. If you did step one and two, then you know you approximate equivalent interest rate and you should be able to determine a reasonable amount to factor in.

6. Leasing is financing the depreciation of the car! I know this has been said before, but it is so important to understand this. There is no need to have a residual value at the end of the lease that is below what you think the value of the car is going to be at the end of the term. Your payment should be the lowest you can get while keeping the residual value high or above the estimated value of the car at the end of the lease. This seems the opposite of what you would thing, right? Well, if your residual value is higher than the car is worth at the end of the lease, then you are in effect renting the car for less while you are driving it which is the object of a lease (very important: remember all you checks in step 1 and 2, it is you check that they have applied all amounts).

7. In most cars, 36-month leases are optimal. Why? It has to do with depreciation. Any longer and your paying for a steeper rate of decline and it does not make sense to do that.

8. Never do off - term loans (i.e. 39-months, 52-months, etc)! These are designed to build in better profit margins while looking better to the consumer. I have never seen one in that is better then a traditional term loan. They might be out there, but if you go down that path be sure you know how to fully calculate everything on the loan because if you don’t you are probably better off pulling all your cash out of your wallet, handing it to the dealer, and then leaving.

Before you lease always know at least how to do the tips above and please do more homework. Leases are very easy for dealers to make incentives and down payments disappear. I firmly believe, that with out leasing the car dealers would be in far worse condition profit wise today.

Be wise, do you homework and happy leasing! Send questions out to the public in the comments!

Scammed! That’s what happened to several Web surfers who applied for an auto loan at the Allstate Auto Lending Web site, police say. I spoke with four of the people who are claiming that they were ripped off by this site, and they say they lost between $650 and $1500 each. They maintain that the operator of the Web site took their money–and their hopes for a new car–and vanished.

“I play it pretty safe online, and really never thought I would end up being the person that this would happen to,” says Karen Maxwell, a human resources manager from the Bronx, in New York City. Like each of the people I spoke to, Maxwell says she found Allstate Auto Lending listed as an advertiser in the sponsored links section of Yahoo’s search results. She applied for a loan on the site and was approved. She was instructed to wire $941 to “Bill Wallace”–the person listed as the operator of the Allstate Auto Lending Web site, which claims to be based in Santa Cruz, California. That $941 is long gone.

Maxwell is one of several people who told me that Allstate Auto Lending lured them into handing over their money by offering low interest rates and easy credit approvals for an auto loan.

“This is without question a scam that deceived and took advantage of high-risk borrowers,” says Zach Friend, a spokesperson for the Santa Cruz Police Department. Friend says his department has received 6 complaints against the site, which is no longer operational. Those complaints have been forwarded to the Texas State Attorney General’s office, where the operator of the Web site is believed to be based, he says. The Santa Cruz Better Business Bureau, too, has received 12 complaints over the last four months alleging that Allstate Auto Lending took money from consumers and disappeared.
AWOL Auto Loan Firm

All of the alleged victims I talked to say they were approved for a car loan through a credit application they filled out at Allstate’s site. When their application was approved, they were told to put about 5 percent of the loan amount in escrow as an insurance policy, should they default on the loan. Each of them handed over their Social Security number, their bank account information, and a copy of their driver’s license. They were then told to use a money-wiring service called Moneygrams to send their escrow payment to Palm Bank in Bradenton, Florida.

The problem? There is no Palm Bank in Bradenton, Florida. The money reportedly went instead to a prepaid Visa credit card account. Friend suspects no one will ever get their money back.
Even the Web Savvy Are Fooled

Geoffrey Kogler, a New Jersey-based air traffic controller for the U.S. Air Force, says the day he went down to pick up a black Chevy S-10 pickup truck at the dealer was the day he realized he’d been ripped off for $750.

“I felt stupid,” Kogler says. He says that Allstate Auto Lending told him that it would transfer the money needed to buy the car he wanted directly to the dealership selling it. All Kogler would have to do was pay the $750 escrow payment to Allstate Auto Lending, and then he could pick up the car the next day.

“Not only am I out the money, but this guy has everything he needs to steal my identity,” Kogler says.

As naïve a mistake as these folks may have made, don’t write them off as Internet rubes who deserve what they got. After interviewing them, I found that they had been online for years and considered themselves Web savvy. Most were comfortable paying bills and banking online. And most didn’t fit the profile I conjure up as the type of person who falls for what is known as an advance-fee loan scam.

My point is this: Even if you consider yourself an experienced Internet user, you need to keep your guard up. The good news is that for any Net surfer, no matter how experienced or inexperienced, there are tools to help and a checklist of pitfalls to watch out for online.
Learn From Their Mistakes

Lakewood, New York, resident Dawn Hammond, like the other people I interviewed, found Allstate Auto Lending listed in Yahoo’s search results. Hammond says she was scammed to the tune of $847. Like the others, she says the fact that Allstate Auto Lending was advertising on Yahoo led her to trust the site.

That was their first mistake: It’s important to scrutinize online advertisers as closely as you would any site you find using a search engine. A study coauthored by McAfee and antispyware activist Ben Edelman found that 9 percent of sponsored results from top search engines, including Yahoo, lead to Web sites that contain spyware and scams, and could be operated by people who send spam.

McAfee offers a free Internet Explorer and Firefox browser add on called SiteAdvisor that puts little green, yellow, and red caution icons next to search results’ sites and sponsored links when it thinks you should be wary of them. Such a tool could have prevented Hammond and others from doing business with a disreputable or unknown company.
Fake Logos or Lack Thereof

Another reason that the people I spoke with said they trusted Allstate Auto Lending’s Web site was because it had the Better Business Bureau’s BBBOnLine Reliability logo on it.

The logo suggested that the site had been endorsed by the BBB as reliable, says Andrea, an Arizona resident who says she lost $1493 to Allstate Auto Lending. (I agreed to honor Andrea’s request not to identify her hometown or use her last name.)

The BBB does have a BBBOnLine Reliability seal program, but Allstate Auto Lending is not part of that program–despite the fact that it displayed the logo, says Zach Vander Meeden, a BBB spokesperson. In fact, the only affiliation the site has with the BBB is 12 complaints filed against it to the Santa Cruz Better Business Bureau, he says. Those complaints claim the site never delivered on loans after customers wired the firm money.

You should always click on the BBB logo presented at a site. Any company worth its salt should link you directly to its BBBOnLine report for your review. If the BBB logo doesn’t link directly to a report, visit the BBB’s Web site and look up the company yourself.

Another visual clue to look for is a browser icon that looks like a padlock in the bottom corner of your browser. If the padlock is locked, that means the site uses an encryption system called Secure Sockets Layer (SSL) to protect customer information that is typed online and transmitted across the Internet. Allstate Auto Lending didn’t utilize this security measure–another cause for concern given the sensitive information the online application asked for.

You also shouldn’t be fooled by official-looking paperwork. Hammond said she downloaded Allstate Auto Lending’s paperwork and took it to both her bank and the car dealership. “I wanted to get their opinion as to whether the company looked legitimate,” Hammond says. She says her bank and the dealership said the paperwork looked fine, and both suggested going with Allstate Auto Lending because neither of the potential lenders could offer a better deal.
Been There, Done That

Kogler–the New Jersey-based air traffic controller–says securing loans over the Internet was old hat for him. He was hoping that this would be the third successful loan he applied for and received through an Internet-based financial institution.

The lesson here: Always be vigilant when doing anything over the Internet when it concerns your personal and financial information. Unsavory opportunists prey on consumers, hoping to scam you into thinking they are someone you can trust.

Typically, scammers try to weasel their way to your money by pretending to be one of your financial institutions–sending you an e-mail prompting you to take some sort of action with your account. This, they hope, will lure you to a fake site (also known as a “phishing” site) that masquerades as the official site, where your account information is requested and then stolen.

A good antiphishing toolbar can go a long way toward preventing you from making a costly mistake. You can also update your Firefox browser to the most recent version, which includes built-in antiphishing technology to warn you of dangerous sites. Internet Explorer 7 also includes built-in antiphishing safeguards.
Take Your Time Shopping

My last tip: Don’t rush into anything online. Kogler says he was hoping to get his loan from Allstate Auto Lending so he could buy a new car to take home for an upcoming vacation. In retrospect, if he hadn’t been in such a rush to buy a car, he says, he might have had more time to scrutinize who he was about to hand over his money to.

“I thought I would be driving to upstate New York in a new Chevy pickup,” says Kogler. “Instead I got ripped off and had to drive my motorcycle in the rain.”

Each of the other people I interviewed was also in a hurry to buy a car. I can’t help but think that their rush to take advantage of what they thought was a good deal caused them to let their guard down just enough to allow a company to take advantage of them.

Avoid getting stuck in the rain yourself the next time you buy online, and be prepared and do your homework. If you end up a victim of a scam, you can file complaints to numerous consumer watchdog and law enforcement agencies.

The Texas Attorney General’s office declined to comment on any investigation into Allstate Auto Lending. However, the office urges anyone who has a problem with the company to file a complaint online.

You can also file a complaint about a suspected online scam with the Internet Crime Complaint Center, which is a joint venture of the FBI and the National White Collar Crime Center. In addition, you can register a complaint with the BBB, which not only will keep your complaint on file, but will also try to resolve the complaint.

In cases like Allstate Auto Lending, unfortunately, you may have little hope of recovering your money. But your complaint will alert authorities to take action against the firm–which just may prevent others from getting ripped off.

Tom Spring - PCWorld.Com

Honda Motor Co.’s luxury Acura division topped a consumer satisfaction survey intended to measure how well U.S. car shoppers felt they were treated in dealer showrooms whether or not they bought a vehicle on the spot.
The study, released on Monday by Pacific Grove, California-based sales consultancy Pied Piper, showed Acura in first place, followed by Ford Motor Co (NYSE:F - GM - news) Saturn.

Automakers such as Toyota Motor Corp have made an effort to improve the quality of dealer service intended to address long-standing complaints that dealers can be pushy, neglectful or less than transparent when explaining vehicle features and financing options.

“The dealerships that scored well all give customers a reason to be interested other than the deal,” said Fran O’Hagan, study author and president of Pied Piper. “Acura dealers were very consistent in all categories.”

European import and luxury brands dominated the study, which was based on a combination of results from a survey of random shoppers leaving 1,592 auto dealerships and results from paid researchers posing as car shoppers.

The brands rounding out the top 10 were VW (VOWG.DE), Nissan, GM’s Saab, Audi (NSUG.DE) and BMW (BMWG.DE), according to Pied Piper.

Hagan said research showed up to 30 percent of U.S. vehicle shoppers do not buy on the same day they visit a showroom, making satisfaction with the shopping experience key for automakers struggling to find sales in a declining U.S. market.

The study ranked 12 brands below the industry average, including all three mass-market offerings from the Detroit-based automakers: Chevrolet, Ford and Chrysler.

Toyota, Hyundai Motor Co. Ltd. and Honda Motor Co. were ranked at the industry average in the first-of-its kind study.