Saturday, December 27, 2008

Use the Toyota Prius as a life saving generator

In a recent snowstorm in the Northeast, one Toyota Prius owner used his hybrid to run his refrigerator, TV, freezer and heater during the power outage. For 5 days, his trusty Prius was able to power his home and keep things running.

The Toyota Prius brings new meaning to the word 'utility'. Maybe it should be a called a HUV or hybrid utility vehicle.

Sphere: Related Content

Friday, December 12, 2008

C.O.D - Cash On Delivery for Chrysler

In the latest news from AutoBlog, part suppliers are asking Chrysler for COD terms ontheir merchandise. Cash On Delivery - no more credit.

As suppliers become more and more weary of the Big 3's ability to come out of this mess, they are going to trust the credit of the Big 3 less and less. Stay tuned.

Sphere: Related Content

Thursday, December 11, 2008

Why Auto Insurance Continues to Rise?

When gas prices soared earlier this year, people started to drive less. And with less driving, that should mean fewer accidents which should translate into lower auto insurance for consumers.

There are a couple of other supporting factor which in theory should drive down auto insurance rates. The battered economy and looming recession has brought car prices down, especially used cars in the luxury or gas guzzlers variety. As a result of lower car values, auto insurance rates should decrease because insurance payouts for totaled, stolen, or salvage cars should be lower. Also, modern cars are superior with advance technology in safety to reduce injuries in the event of an accident. For the 2009 models, it's not uncommon for a car to have 6, 8 or more airbags.

Despite all this, why is it that auto insurance continues to rise?

Sphere: Related Content

Monday, November 24, 2008

Facebook Valuation is like a Zillow Zestimate

The latest word on the street is that Facebook initiated discussions with Twitter for the purposes of buying the micro-blogging service. However, according to TechCrunch, the talks broke down partially because Facebook wanted to make the purchase with mostly stock (at a $15B valuation). The sticking point was that Twitter executives and investors didn't think that Facebook was actually worth $15B and decided against a deal. Even if Microsoft did just invest $240M into the company at that stratospheric valuation, other people were apparently not believers.

This same phenomenon is happening with Zillow Zestimates, at least here in the SF Bay Area. Zillow uses a proprietary algorithm along with historical home sales, local trends and lots of other 'black box' stuff to come up with a Zestimate (what your house is worth today) for your home. The problem is that this Zestimate is often times $50K-$200K higher than what you can actually sell it for (at least in the areas that I've looked). It obviously depends on each house, but most Zestimate values need to be discounted by a healthy percentage to get to a home's true value today.

While these two examples do not seemingly have any tie to actual car prices, they do underscore the need that all consumers have to know the actual price paid for something that has an opaque value (a house, a stock, or a car). In fact, the best way to know what something is truly worth is to know what someone else is willing to pay for it. With Facebook, Microsoft may have overvalued the company just for the opportunity to participate. With Zillow, since each house is different, each person's value will be different. With cars, which are commodities for the most part (with mileage, condition & location as the biggest variables), value can be derived directly from what other people paid for the same car.

With over 17,000 actual sales price data points for new & used cars, we're hoping that the actual values you see in our data will represent the true value of the car, not an inflated value that you don't completely trust.

Sphere: Related Content

Sunday, November 23, 2008

Mitt Romney on the Auto Bailout

The big news of the week has been the proposed big 3 US automaker bailout by the government. Should the government save GM, Ford and Chrysler from bankruptcy? Should they let the companies suffer the consequences of decades of poor decision making and mis-management?

Here is a great editorial on the situation from Mitt Romney - a former Republican presidential candidate from this year's election. Romney has a unique perspective on the situation since his dad used to run American Motors (produces of the wonderful AMC Pacer and Gremlin).

Romney's position on the matter is pretty obvious, given the title of his op-ed: Let Detroit Go Bankrupt in the NY Times.

A few facts about the US auto industry compared to foreign companies who have manufacturing plants here in the US:

- US autoworker: $71 per hour (including benefits)
- Foreign autoworker (at a US plant): $47 per hour (including benefits)
- $2000 - the additional cost per car that US automakers must shoulder due to the massive union contracts and benefits they must pay out. With margins already so slim on new cars, it's pretty easy to see why the big 3 are having problems making money.

Sphere: Related Content

Tuesday, November 11, 2008

A must "see" for all of you Rubber Neckers!

Why is it that every time there is a car accident on the freeway, people insist on slowing down to rubberneck? When there are wrecked cars blocking the roadway, I can understand. Otherwise, I think people just can't help themselves to see how bad the wreckage is.

For all of you rubberneckers out there (myself included), I came across this site that you'll love. WreckedExotics.com is site that has pictures of expensive, wrecked cars. Since the Porsche 911 is one of the more popular cars on PriceHub, I'll use this as an example:

The site has tons of pictures that chronicle the destruction of European and American aluminum, steel and glass. There is enough carnage here to satisfy even the most curious rubbernecker.

Don't miss these wrecked police cars either.

Sphere: Related Content

Friday, October 31, 2008

GM or Ford to buy Chrysler?

The big 3 U.S. automakers are in trouble, especially GM and Ford.  Word on the street is that both are looking to acquire Chrysler to consolidate operations, cut costs, and take the #1 position as the global auto sales leader from Toyota.  However, such an acquisition would require a large amount of cash that neither company has.  GM is burning more than $1 billion in cash each month, and Ford is burning more than $2 billion a month.  Therefore, to pursue Chrysler, GM or Ford would have to raise cash, which is going to be near impossible with the current financial markets.  And at the current burn rates, there's a possibility that GM or Ford might even run out of cash in late '09 or '10.  Will the U.S. government have to step in and bail out the U.S. auto industry like they did with the financial industry?
 

Sphere: Related Content

Tuesday, September 30, 2008

Is the economy driving car prices lower?

The recent financial crisis and economic turmoil appears to have an effect on car prices. This is not surprising given that people generally become more conservative in poor economic climates and hold off on making big purchases.

In the automotive marketplace, new car dealers are going to see fewer buyers which will pull actual selling prices down. But for used car transactions, whether it's at a retail used dealer or private party transactions, we could see either stable/slightly increasing prices OR falling prices. Which way the prices will head towards will be determined by the vehicle make/model.

For example, the used market for luxury, SUV, and other gas guzzling vehicles are likely to deteriorate while the used market for hybrids, compact/economy, and gas efficient cars will thrive. With the economy headed for an apparent recession and gas prices still near record highs, people are dumping luxury cars, SUVS, and gas guzzler vehicles. The Ford Expedition or the BMW 530i that used to sell for $30k just a couple of years ago has no takers unless the prices drop below $10k.

In a quick scan of the online classifieds, dealers and private individuals are still using KBB or Edmunds to list their luxury, SUV, and gas guzzler vehicles at above market prices. However, after the negotiations are over and when the car or SUV is sold, the real selling price is often much lower than the listing price and the published KBB or Edmunds price.

Let's take a look at the KBB private party transaction value for a 2003 Ford Excursion V8 4WD:

KBB Good Condition: $10,255

However, a quick scan of the PriceHub database shows just one of three 2003 Ford Excursions as having sold for more than $10,000 in the last 3 months.

http://www.pricehub.com/price/Ford/Excursion

For the hybrids, compact/economy, and fuel efficient cars, the real selling price will likely be closer to the listing price if derived from published KBB or Edmunds price.

What does this all mean? This means that the changing economy is affecting real market pricing for cars & SUVs, and the best way to get a good sense of the real selling price is to look at actual transaction data instead of the so-called published KBB or Edmunds price.

Sphere: Related Content

Friday, September 12, 2008

Buy a 1999 car at 2004 price, or vice versa

Most auto manufacturers produce a particular vehicle for 4-6 years before overhauling it and releasing a newer generation (new styling, new chassis, new engine, etc). Sometimes, car dealers will take advantage of the similar looks of a vehicle throughout a particular vehicle generation. For example, a '99 Porsche 911 looks very similar to a '04 Porsche 911.


'99 Porsche 911 (top) vs '04 Porsche 911 (bottom)

Both are from the same generation (by Porsche's internal identification, the "996"), but the more recent model usually command a higher price than the older model. You'll see ads for a '99 vehicle that read "Looks like a '04 model", and you can bet that some dealers will price that '99 vehicle at the '04 price range to take advantage of unsuspecting buyers.

Knowing this information, smart buyers can also take advantage by buying a vehicle that's produced earlier in that generation for less money than a vehicle that was produced later that generation. This of course, assumes that factors like mileage, options, engine upgrades, etc. are similar and not too different. So, if you are looking at a '03 BMW 5-series, you may also want to consider a '00 model because both are from the same BMW 5-series generation (the "E39" generation) and both look the same, but the '00 model has a lower value than the '03 model, and the '00 model could represent a bargain for the savvy buyer.

Sphere: Related Content

Friday, September 5, 2008

Land Rover - Buy 1 and Get 1 Free

We're hearing that Land Rover of Ahaheim Hills, CA is offering current Land Rover owners a crazy promotion - Buy 1, Get 1 Free. That's right, buy or lease a 2008 Land Rover and get a 2006 Land Rover LR3 for "free". Technically, it's just a free 2-year lease on the LR3, but still I don't know of anyone that would balk at getting a fairly new Land Rover to drive around for free for a couple of years.

The reason for this promotion is likely the continued weakness in the luxury vehicle market & the economy, along with people continuing to opt for fuel efficient vehicles instead of gas guzzling SUVs. Sales of large trucks and SUVs have plummeted and it's not surprising that this particular Land Rover dealer is trying to be creative in getting people to buy.

The interesting scenario is that most large trucks & SUVs have experienced accelerated depreciation in the last 6-12 months due to high gas prices, and many of the current Land Rover owners are upside down if they financed their Land Rover purchases. So, it's hard for current Land Rover owners to take advantage of this offer without suffering a financial loss. The gentleman that forwarded us the promotion details stated "I still owe $34k on the 2003 Range Rover that I bought, and the trade-in value has now dropped to $20k. As much as I would like to upgrade to a 2008 Range Rover and get a free LR3 for my wife, it just doesn't make sense for me to cough up another $14k for the priviledge of getting another large SUV that is going to depreciate rapidly."

As you can see by the pricing charts on PriceHub, the Land Rovers are historically notorious for high depreciation rates (even before factoring in the effects from recent high gas prices). For prospective buyers that are thinking about the "Buy 1 Get 1 Free" offer, it might be good to take a look at the Land Rover charts on PriceHub to help you in your decision making process.



Sphere: Related Content

Tuesday, August 26, 2008

HOA from hell - The Lincoln Mark LT vs. the Ford F150

A HOA (home owners association) in Texas recently told one of its residents that he wasn't allowed to park his new Ford F-150 pickup truck in his driveway. Apparently, the HOA doesn't allow pickup trucks to be parked in owners' driveways. However, Escalades, Ridgelines and even Hummers have been exceptions to the rule. When the owner asked why a Lincoln Mark LT was allowed under the HOA rules and his Ford F150 was not, this was the response from the HOA:

"It's our belief that Lincoln markets to a different class of people."

This story has been well documented AutoBlog.

I wanted to quickly compare the actual sales prices for the Lincoln Mark LT and the Ford F150. While we don't have a huge amount of data for the Lincoln Mark LT, a 2007 model with 11K miles sold for about $34K. The average actual selling price for a Ford F150 was about $22.5K.
I guess $11K and a Lincoln badge are all you need to live like 'the other half'...

Sphere: Related Content

Wednesday, August 6, 2008

Resale value: Jeep Grand Cherokee vs. Porsche 911

With all of the data the PriceHub community has been contributing to the site, I wanted to use this data to showcase some of the differences between the resale values of a notoriously bad resale car (Jeep Grand Cherokee) and a historically good resale car (Porsche 911).

Instead of putting numbers and calculations here, I have pasted graphs of the average, actual sales prices for each car for the past several years. Here is the graph for the Jeep Grand Cherokee - note the steep decline from 2008. The average selling price drops quite significantly as the car gets older. According to the graph, if you buy a Jeep Grand Cherokee and sell it after a year or two, you can expect to recoup a fraction of what you paid for it.












Now take a look at the average, actual sale prices for the Porsche 911. While the average selling price does drop initially, you can see that the 911 has a floor price somewhere around $22K, regardless of year. For the Grand Cherokee, the actual values continue to drop with no end in sight.












While my analysis isn't scientific by any stretch, it is interesting to compare the average actual price charts for different cars. I'll admit that it may not be completely fair for me to compare an iconic sports car to a poorly made American SUV.

I doubt that this data will stop you from buying a poor resale car - but it may help to set your expectations properly when you goto sell your car in the future.

Sphere: Related Content

Thursday, June 26, 2008

What Happens After a Car is Traded-In?

Have you ever wondered what happens after a car is traded in? Let's say you buy a new 2008 Honda Accord and trade in your 2003 Toyota Camry. What happens to your old Camry after you drive off the lot with that new Accord?

In most cases, the dealer is going to extract the monetary value out of that trade-in as soon as possible. If the trade-in is a low mileage, good condition example of a popular make/model, the dealer may put it on its used lot and hope for a quick sale. If the car has minor issues that can be fixed relatively quickly & cheap (i.e., bald tires, interior carpet stains), the dealer may fix it up quickly and try to get a quick sale. However, there's no guarantee that the dealer will put the car on its used lot just because the car is low mileage, in good condition, and popular. If you trade-in a Honda Civic at a Porsche dealership, chances are the dealer will not put a used Civic next to its fleet of used BMWs, Porsches, and Mercedes. Dealers typically attract a certain profile of customers for their particular make, and they try to carry inventory, new & used, that is consistent with their customers' profile.

If the dealer thinks the trade-in doesn't fit with his used inventory, the dealer will just wholesale the car and send it to an auction. If that Camry or Civic trade-in is in good condition, chances are it'll get snapped up at the auction by another used dealer who will then put it on its lot forsale. The lot could be affiliated with a new dealership or one that just focuses on used cars.

If the trade-in has high mileage, is in need of repairs, or is an unpopular make/model (i.e., Pontiac Aztec), the car will fetch a much lower price at auction and the used dealer that purchases the car will spend as little money as possible to get the car up to pass-able condition for sale. This is why many auction cars are considered "undesirable".

Sphere: Related Content

Monday, June 23, 2008

What's Better Than a Hybrid or Electric Car?


How about a useable solar powered car? Check out this Mazda Miata that a few scientists in Japan converted into a 100% solar powered car. It has a range of about 18 miles and a top speed of 60 miles per hour. The conversion cost $21k USD but the fuel cost is a big fat zero.

Sphere: Related Content

Tuesday, June 10, 2008

Gas prices across the US and hybrid sales

An informative (and shocking) website called GasBuddy has published a heat map that shows the gas prices across the country. While the entire country is experiencing super high gas prices, California seems to be hit especially hard. According to GasBuddy, California has the highest gas prices at $4.36 per gallon or greater. Parts of Wyoming, Oklahoma and Missouri appear to have some of the lowest gas prices at $3.70-$3.79 per gallon.















It's no wonder that California leads the US in new hybrid registrations, with 26.1% of all new hybrids purchased (according to MSNBC). Here are the runner-up 'green' states:

1. California, 26.1 percent
2. Florida, 5.5
3. New York, 5.0
4. Texas, 4.9
5. Washington, 3.7
6. Illinois, 3.7
7. Virginia, 3.4
8. Pennsylvania, 3.2
9. Massachusetts, 2.8
10. New Jersey, 2.8

NewYork, coming in as the third 'greenest' state, seems to also have higher gas prices than the rest of the nation (though not as extreme as those of California).

Of course, the leading hybrid is still the Toyota Prius.

Sphere: Related Content

Sunday, June 8, 2008

Hybrid Selection

With all of the auto manufacturers focusing on hybrid technology, the selection of hybrid cars, trucks and SUVs has really expanded over the last couple of years. Here's a list of current available and soon-to-be available hybrid vehicles:

Will the list double by the end of the year?

Sphere: Related Content

Monday, June 2, 2008

Tornado Fuel Saver Does Not Work

If you've like me and have ever seen the Tornado Fuel Saver advertised on TV, you may have always wondered whether this $40 device really works or not. Intuitively, this device seems like it could work - it first right inside the cold air intake hose of your engine, and claims to boost the amount of air your engine receives in order to boost both your engine's power and fuel efficiency. The device almost looks like a little jet engine placed inside your engine.

However, Consumer Reports has done its own testing and claims that this device does not provide any additional power or fuel efficiency. They recommend against buying this. The EPA has actually done its own test on the this device and many other devices and has come to similar conclusions. See the EPA results for yourself.

Buyer beware - don't be fooled by the late night 'As Seen on TV' ads.

Sphere: Related Content

Saturday, May 31, 2008

Best Fuel Efficient Cars

With gas prices at $4+ per gallon, there is a renewed focus on cars that have the best fuel efficiency. Hybrids get the most attention, but there are actually a few other cars that provide the most bang for your buck, according to Consumer Reports. Each of these cars is ranked by the cost of the car divided by its observed MPG.

Model (MPG) - Price per MPG

1) Honda Fit Sport manual (34 mpg) - $464
2) Honda Fit base (32 mpg) - $476
3) Toyota Prius base (44 mpg) - $540
4) Mazda3 manual (30 mpg) - $576
5) Toyota Prius Touring (42 mpg) - $591
6) Nissa Versa 1.8 SL (28 mpg) - $596
7) Honda Civic Hybrid (37 mpg) - $605
8) Honda Civic EX manual (31 mpg) - $607
9) Hyundai Elantra GLS (27 mpg) - $650
10) Scion tC base (26 mpg) - $658

A couple of interesting observations:

- 7 of the top 10 most fuel efficient cars are NOT hybrids
- The Honda Civic Hybrid barely outperforms the Honda Civic EX in Price/MPG
- The Prius Touring edition (bigger wheels, tighter suspension) gets 2 less MPG than the normal Prius according to CR

Sphere: Related Content

Monday, May 19, 2008

Prius & Gallardo Using the Same Designer?

The new Toyota Prius and the current Lamborghini Gallardo look very similar from the front and all the way to the A-pillar. Did Toyota hire Lamborghini's designer? You be the judge!

Sphere: Related Content

Saturday, May 17, 2008

Tata Nano - the first $2500 car in the US?

Tata, an Indian automaker, is building a $2500 car. The Tata Nano is 10 feet long and is powered by a 2 cylinder engine. It gets an estimated 51 MPG. While there are no immediate plans to sell this car in the US yet, I'm sure that we'll start seeing these driving around shortly. One of the challenges with bringing these micro cars to the US is that the vehicles don't yet meet US safety and emission standards. By the time these cars are modified for the US, you can bet that the price will rise.

Personally, I think the car looks like a deformed Prius that has been pushed together from the front and back. It doesn't look like there are any crumple zones in the car either. I believe the engine is mounted in the back to conserve space. My biggest fear for this car is its safety - you could very well end up with one a tire in your lap in a minor accident.

With oil hitting $126 per barrel, you can bet that cheap, gas-efficient cars will be in high demand, even if the cars look like deformed Priuii.


Sphere: Related Content

Wednesday, May 14, 2008

Used car prices on the rise?

Now that the US Dollar is getting pummeled in the global markets (1 EURO = 1.55 USD at today's exchange rate), prices for European cars are on the rise. On a recent trip to a San Mateo, CA BMW dealer, we saw a brand new M3 coupe list for $72k and a new M3 convertible list for $82k! The devaluation of the dollar brings back memories of the 90's, when the Japanese Yen was crushing the US Dollar and prices of Japanese imports were going through the roof. Remember when the 1995 Toyota Supra had a staggering MSRP at $44k?

With the dollar declining, there are reports that Europeans and some Asians are scooping up used BMWs, Mercedes, and Porsches in the U.S. and shipping them back to Europe and Asia. Some of the cars that are being shipped back to Europe including models like the BMW Z8, Mercedes SL600, SL63, and Porsche 911. We're seeing that prices for used Porsche 911's are holding up very well, with some models even appreciating slightly. Perhaps this is good news for those that already own European cars, but bad news for those that are looking to buy new or used European cars.

Sphere: Related Content

Thursday, May 8, 2008

Are Hybrids Really Worth It - Part 2

Last month, I wrote about the perceived vs real cost effectiveness of hybrid vehicles. My conclusion was that hybrid owners would have to keep the car for 7-8 years and/or gas prices would have to hit $7-9 per gallon to offset the higher purchase price of the vehicle.
We're starting see spy photos of the new 3rd generation Toyota Prius and the details that are being leaked are leading me to believe that cost gap is shrinking.

For example, the new Prius engine will be larger and more powerful (going from 1.5 liters to 1.8 liters), but the hybrid system will be even more efficient so both performance and fuel economy will improve as well. The new electric motor will play a bigger part in the power delivery, and what this means is a short trip to the local post office might not require any fossil fuel at all!

Toyota has hinted that the new Prius will be priced at the same MSRP as the current Prius, possibly even lower for the base level Prius. Just imagine 6 months from now, when a new Prius can be had for $21,000 sticker with noticeably improved fuel economy and gas prices hovering above $4 per gallon. Perhaps the new Prius hybrids are really cost effective to own after all, with other tangibles like better performance and more interior room representing icing on the cake!

Sphere: Related Content

Monday, May 5, 2008

SMART Car pricing premiums revisited

A few months ago, I wrote about the Smart Car price premiums people were paying in order to be the first on their block to own a new Smart ForTwo. In February, gas prices were high, but they weren't as high as they are now ($4+ here in SF). I was curious to see if these high gas prices had any effect on the demand for Smart Cars. Since my Smart Car MSRP premium post, PriceHub has had 9 real sold prices for Smart Cars entered. They all seem to have sold for significantly more than the MSRP price - following the same pattern that I saw back in February:

SMART Pure: +38% over MSRP
SMART Passion: +39% above MSRP
SMART Passion Cabriolet: +33% above MSRP

Here are some of the more recent sold price entries:

Passion Cabriolet - $22,500 (Idaho)
Passion Cabriolet - $22,500 (Florida)
Passion Coupe - $19,450 (Pennsylvania)
Passion Cabriolet - $23,000 (Wisconsin)

See all SMART ForTwo Sold Prices.

Sphere: Related Content

Wednesday, April 16, 2008

The Toyota Venza is gaining popularity

The Toyota Venza seems to be gaining in popularity, based on the increased number of people who are searching PriceHub for actual sold prices on this 2009 crossover vehicle.

While the Venza hasn't officially been rolled out to the general public, some car experts have the MSRP of the Venza pegged at somewhere between the MSRPs of the Camry and Highlander , $18K and $27K respectively. So far, we don't have any actual sold prices for the Venza, so any of you lucky early adopters, please post your price!

According to a recent Consumer Reports 'Sneak Peek', the Toyota Venza is going to satisfy those people who were sad to see the Toyota Camry Wagon discontinued. Consumer Reports says the Venza is an interesting mix of a Camry, Avalon and Highlander.

Sphere: Related Content

Are Hybrids Really Worth It?

With gas prices continuing to soar, more and more people are looking at hybrid cars, SUVSs, and trucks. However, in taking a closer look at hybrid performance, it seems that they are not as cost effective as we think they are. For example, most hybrid owners report that their vehicles don't achieve anywhere near the published miles-per-gallon fuel efficiency. Most owners are getting 15-20 mpg less than their EPA published ratings (Toyota Prius getting 35-40 mpg instead of the EPA rating of 60 mpg, Honda Civic Hybrid getting 25-35 mpg instead of the EPA rating of 48 mpg, and Ford Escape Hybrid getting 22-25 mpg instead of the EPA rating of 33 mpg). In addition, new hybrids MSRP's are typically 20-30% more expensive than the conventional gas-powered equivalent. So, for a hybrid owner to breakeven with his/her gas-powered counterpart (for example, a Honda Civic Hybrid vs a Regular Honda Civic), the hybrid owner would have to keep the car for 7-8 years and/or gas prices have to hit $7-9 per gallon. How's that for hybrid economics?

Sphere: Related Content

Monday, March 31, 2008

Porsche Panamera

It all started with the Porsche Cayenne, the SUV from Porsche. Now, Porsche is working on a 4-door sedan named Panamera. The car enthusiast forums are abuzz with active discussion and opinions on the car. To some, Porsche has the envious position in that it has a strong brand that's long been associated with high performance sports cars. As Porsche tries to extend their brand and launch new vehicles like a high performance SUVs and sedans, can they successfully make the transition while maintaining their leadership in the sports car market?














A quick look at Pricehub's data reveals that the last generation of the air cooled Porsche 911's (1995-1998) tend to fetch higher prices than the first generation of the water cooled 911's (1999-2002), even though the water cooled 911's are newer, has better technology, and is more likely to have lower mileage. Could this pricing trend be an indicator of the marketplace making a statement regarding Porsche's latest desirability and their recent vehicle developments?

Sphere: Related Content

Sunday, March 2, 2008

Best and Worst Cars of 2008




Consumer Reports just published their best & worst list for 2008 cars. 4 of the 5 top cars are Japanese. The bottom 5 cars are all American.

The top 5 Consumer Reports tested cars for 2008:

1) Lexus LX460L
2) Infiniti M35 X
3) Infiniti M35 (RWD)
4) Porsche 911 Carrera S
5) Toyota Sienna XLE

The bottom 5 Consumer Reports tested cars for 2008:

1) Jeep Wrangler Unlimited Sahara
2) Hummer H3
3) Jeep Liberty Sport
4) Chevrolet AVEO LS (manual)
5) Chevrolet AVEO LS (automatic)

Using the Consumer Reports ratings along with PriceHub data, I took a very quick and unscientific look at how the best rated and worst rated cars held their value over time. The thing that jumped out at me was how quickly both Jeep vehicles drop in value. Both the Wrangler and the Liberty PriceHub price graphs show a very sharp decline in prices as the car gets older. On the other hand, the 911 and the Sienna PriceHub price graphs are relatively flatter and don't exhibit the steep declines seen by the Jeeps.

Consumer Reports must be onto something.

Sphere: Related Content

Wednesday, February 27, 2008

$19,995 "OBO"

Quite often, you'll see a forsale ad with the price listed as $xx,xxx obo. Have you ever wondered what that "obo" really means? Is the seller willing to take the best offer below his asking price or is the seller looking for the best offer over his listing price? A quick scan on Yahoo Answers revealed that "obo" means different things to different people and there's plenty of confusion. Either way, what should you offer when you come across an "obo" price ad?

With PriceHub, we take the guesswork out of these "obo" listings. By fully disclosing actual sale prices of cars & trucks, we help buyers make fully informed decisions about their offer prices for cars & trucks. The next time you come across an "obo" listing, hop over to PriceHub and check the actual sale prices of the car or truck you are interested in. Armed with these real transaction data points, you'll be able to make a bonafide offer that is reflective of true, fair market value.

Sphere: Related Content

Wednesday, February 20, 2008

SMART Car Price Premiums over MSRP

During one of my recent trips to Europe, I was struck by the large number of super small cars driving around their cities. From Paris to Prague to Rome - the streets were littered with these tiny little cars. For the overly congested European cities where space is at a premium, these tiny cars make alot of sense. Just about every automaker had a small version car - the Mercedes A Class, the variations of Fiats and Renaults - the list goes on. However, the one car that stood out was the Smart. The Smart was the most popular of these cars and it was arguably the best looking. Whenever I saw a Smart parked, I couldn't help but peer inside to see what it was like. I always thought that it would be cool if they started selling Smarts in the US, but I always thought that these little things would never pass our strict safety regulations. That all changed late last year when Smart began taking $99 reservations for these USA versions. Certified to be street legal here, Smarts were finally coming to our shores.

Initially, the Smart Fortwo is offered in 3 versions: the Pure, the Passion and the Passion Cabriolet, with MSRPs of $11,590, $13,590 and $16,590 respectively. These MSRPs were a bit higher than I expected, since they are about 1/2 the size of a Honda Civic but at around the same cost.

With new car model offerings (which have a cult-like following), I wasn't surprised to see the first 2008 Smart Fortwos selling for well above the MSRP. According to the actual Smart Car prices on PriceHub, Smarts have been selling for quite a bit higher above MSRP:

SMART Pure: +38% over MSRP
SMART Passion: +39% above MSRP
SMART Passion Cabriolet: +33% above MSRP

While my back of the envelope calculations are not scientific by any stretch, they do illustrate the popularity of the Smart so far. I wouldn't be surprised to see these huge premiums over MSRP last for quite some time. After all, it took a few years for Toyota Prius prices to come back to Earth.

Sphere: Related Content

Sunday, February 17, 2008

Sunday, February 3, 2008

Superbowl Car Ads Review

Like millions of people, I watched the Superbowl today and took in all the spectacle, including the Superbowl TV ads. You can always count on the beer companies to spend millions during the Superbowl, but the car manufacturers are also typically aggressive in their ad spend. This year, Toyota and Hyundai went big with 2 placements each. For fun, I thought I would review and rate all of the car-related ads in the 2008 Superbowl.

Audi was the first car manufacturer with an ad in the 1st quarter. I was surprised that they took out a 60-second spot that featured their new R8, an exotic car. The messaging was "old luxury just got put on notice, Audi and the R8 are here". I thought this was a bit of a mixed messaging -- was Audi trying to tout the R8 (currently selling for ~$165k according to Pricehub.com) as a luxury car, or was the R8 a halo car to emphasize the engineering and performance for the rest of the Audi luxury lineup? Grade: C+

Toyota was next with a Corolla ad, which emphasized features like good sound proofing in a cost efficient car. The ad was pretty mainstream and something that you would expect from Toyota. Grade: B

Next was a Lexus ad featuring the GS in all sorts of drifts and power slides. The ad was very well done and typical in the Lexus style. Grade: A-

In the 2nd quarter, GMC also had an ad for the GMC Yukon Hybrid. The ad was very progressive and showed GMC as an environmentally conscious company. Grade: B+

In the 3rd quarter, Hyundai went aggressively after the luxury makes BMW & Mercedes with their ad featuring the Hyundai Genesis. The pitch was "as spacious as a Mercedes S-class but at the same price as a C-class". This was a very bold statement and we'll have to see if consumers will buy into the Genesis. To get an idea of how much a Mercedes C-class actually cost, check out the various C230 prices at Pricehub.com. Grade: B+

Also in the 3rd quarter, Toyota showed an ad for their Sequoia SUV. Again, this was a fairly safe ad that was similar to what you would expect from Toyota. No surprises here. Grade: B+

In the 4th quarter, Hyundai came back again with another ad for their new Genesis. This time, in addition to BMW and Mercedes, Hyundai also called out Lexus. The pitch was similar as the first Genesis ad, but this time targeted at BMW with a "more spacious than a BMW 7-series, but priced like a 3-series" messaging. For a sample of what the BMW 3-series might actually cost, check out Pricehub.com. Again, very bold and we'll have to see if consumers will buy into it. Grade: B

In addition to the car manufacturers, Bridgestone Tires, Cars.com, and Garmin also had prominent ad spots.

The Bridgestone ads were well done, clear in the messaging, and were my favorite ads during the Superbowl. Grade: A

On the other hand, the Cars.com ad was a bit goofy but still somewhat entertaining. Grade: B-

The Garmin ad was similar to the Cars.com ad, a bit goofy but still entertaining. Grade: B

Sphere: Related Content

Sunday, January 20, 2008

How One Car Seller is Using PriceHub on Craigslist

This weekend, a PriceHub user brought a particular car ad on Craigslist to my attention. While this ad for a Lexus RX300 was similar to the 100 or so other ads for the same car, it was different in one way. In the vehicle description, the seller mentioned that his asking price was fair, based on the actual prices he had seen on PriceHub. He then linked his ad to the PriceHub actual sale prices for the Lexus RX300. Because these actual sales prices were submitted by real people, the seller felt his asking price was more than fair since it was based on real data, not a best guess calculated from a pre-determined formula.

In my experience, this is the first time that I've seen a seller use actual car sale prices to justify their asking price. Sellers commonly use KBB or Edmunds.com to provide price justification, but I personally discount these estimates since they are so broad. Depending on which price the seller decides to use from KBB or Edmunds (trade-in, private party, or dealer retail), the range of prices for a given make/model of a car can really vary. For example, if a seller says that they are pricing their car "way below blue book", I automatically assume that they are using the 'dealer retail' price as their basis, which is always the highest price quoted.

It is our hope that PriceHub can bring a new level of transparency to the car buying and selling process. This RX300 ad from Craigslist is a good indication that this new level of transparency is starting to gain some momentum.

Sphere: Related Content

Friday, January 11, 2008

Thanks to eHub and Emily Chang!

I just wanted to quickly thank Emily Chang's eHub for mentioning us yesterday. Her positive influence and authoritative voice in the web community are clearly evident by the large amount of people who have visited our site. As a result, we've gotten some great user feedback on how we can improve PriceHub to help make the car shopping process easier and more transparent.

Thanks Emily!

Sphere: Related Content

Saturday, January 5, 2008

Top 15 Family Sedans from Consumer Reports - Feb 2008

In the latest issue of Consumer Reports magazine (2/2008), the top affordable family sedans were revealed. The biggest revelation was the fact that the almighty Honda Accord lost its top spot the Nissan Altima. The price range (new) for this category ranged from $20,415 (Mercury Milan) to $23,900 (Kia Optima). Here are the latest rankings:

1) Nissan Altima
2) Honda Accord
3) Kia Optima (4 cylinder)
4) Toyota Camry
5) Hyundai Sonata SE
6) Kia Optima (V6)
7) Hyundai Sonata GLS
8) Mazda6 i
9) Ford Fusion
10) Mercury Milan
11) Subaru Legacy
12) Saturn Aura XE
13) Mitsubishi Galant
14) Pontiac G6
15) Chrysler Sebring

Besides the Accords slip to the number 2 spot, I was also surprised to see 4 Korean cars in the top 7 spots. I guess I still remember when the Hyundai Excel (~$4000 new) was considered a disposable car, much like the Yugo.

With new car ratings, the pricing is pretty narrow. As you start looking at used versions of these cars, the number of factors to consider multiples (mileage, location (snow vs. sun), condition, Carfax history, etc...). Be sure to check PriceHub's actual sale prices for all 15 of these models and all other cars and trucks.

Sphere: Related Content