Monday, December 14, 2009

Hyundai's Decade Long Comeback

It wasn't long ago when Hyundai cars were the butt of many car jokes.  In 1986, Hyundai entered the U.S. car market and began selling the Hyundai Excel for less than $10k.  The Excel, while cheap, had many problems including engine and transmission problems.  Many cars did not even make it to 100k miles.
Fast forward a decade, and Hyundai now has a decent fleet of sedans, coupes, SUVs, minivans, and even luxury cars.  Hyundai's lineup now includes the Accent, Elantra, Sonata, Santa Fe, Genesis, Azera, Tucson, Veracruz, and Entourage.  Long gone are the unreliable cars of the past, and we now see Hyundai ranked in the top 10 in quality and customer satisfaction polls like J.D. Powers.  Hyundai is planning to challenge BMW and Lexus in the luxury car market, as well as tackle the sports compact market.  Additionally, Hyundai is also working on hybrid technology.  With that said, we think Hyundai be the Honda or Toyota of the '90s.


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Thursday, September 24, 2009

PriceHub's Prediction of the Top 3 Electric Cars

Almost every auto manufacturer is working on electric car technology and here's our prediction of the top 3 electric cars in the market by 2011.

1. Nissan Leaf - It's coming to the US in 2010 with seating for 5 adults and a 100 mile range. Nissan seems to have skipped the hybrid technology development and concentrated on making the 100% electric Leaf a real world vehicle. Target price for the Leaf is around $30,000.

2. BYD e6 - Headed for the US in 2011 with seating for 5 adults and a 250 mile range. Never heard of BYD? Well, Warren Buffet invested $230 million in BYD and is making a bet that they will become the global leader in electric car production. Target price for the e6 is about $40,000.

3. Chevy Volt - Slated to launch in the US in 2010 with a range of 40 miles on the electric motor and another 260 miles on the 4-cylinder gas engine. Despite GM's bankruptcy, development on the Volt has continued and the car is still scheduled for a fall 2010 launch. Target price for the Volt is around $40,000.

What about electric cars from Toyota, Tesla, and or even Honda? While Toyota is the king of hybrid cars via the Prius, the 100% electric version of the Prius has not been able to get more than a 10-20 mile range. Honda will follow its trend of waiting and observing first, then come out with its version a few years later that will be the best in the industry. Tesla, on the other hand, will target the high-end luxury market with the Model S. While Tesla will have success in its high-end niche market, it won't sell enough cars to make our top 3 list.

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Monday, August 24, 2009

The Real Impact of Cash for Clunkers

The Cash for Clunkers program is ending today. Most news reports are stating that the program was wildly popular and very successful in stimulating auto sales. In fact, Transportation Secretary Ray LaHood stated "It's been a thrill to be a part of the economic news story in America."

However, here at PriceHub, we think the Cash for Clunkers program has had an overall negative impact on our economy. Let us explain why.

1. The increase in auto sales is a short-term, one-time spike and will not continue after the refund program ends. The economy is still struggling and consumers will not continue to buy new cars at the current rate. Demand for new cars will fall (perhaps even more so now that so many people have already purchased new cars under this program) and the car manufacturers will struggle again for the remainder of the year and likely through next year.

2. As of last week, around 450,000 new cars were purchased which means approximately 400,000 new car loans were initiated. The Cash for Clunkers program has saddled 400,000 consumers with more debt, and assuming that the average car loan is $18,000, that means consumer debt has just increased by $7.2 billion.

3. Business at independent repair shops is down since people are trading in their old cars for new cars, and they no longer need repair services. Since most independent repair shops are "mom & pop" owned, this service sector is struggling and taking a major hit. Potential consequences may include shops closing and/or higher service cost for consumers as a result of reduced competition (shops that stay open may need to charge higher rates to stay afloat.)

4. Owners of cars that fall under the Cash for Clunkers classification but don't qualify for the program (ie, car was not owned for at least a year, car was in the process of being restored and was not insured, etc) could find fewer replacement parts as legislation requires the engine, transmission, and other drivetrain components be destroyed.

All in all, our summary of the Cash for Clunkers program is that it helped stimulate a one-time spike in sales, but sales will return to sluggish levels once the program ends. Other than this one-time benefit for car manufacturers and their dealers, we believe the economy is worse off due to other groups that are negatively affected by this program.

Send us your feedback - what's your take on the Cash for Clunkers program?

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Monday, August 17, 2009

Get a great deal a car lately?

Have you gotten a great deal on a car lately? Let us know! With the economy the way it is, we'd love for people to share what they really paid for cars, both new and used.


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Monday, August 10, 2009

GM sells new cars on eBay?

GM announced today that it will test a trial pilot to sell new cars on eBay. Most of the GM dealers in California have signed up for the trial, which will result in approximately 20,000 new listings of GM cars for sale on eBay. The idea is that individual dealers will independently set the "buy-it-now" price, which is suppose to reduce the burden and stress of negotiating at the dealership. While this is a good concept, the key here will be whether the "buy-it-now" price is competitive in the marketplace and/or whether buyers will feel like they can get a better deal by going into a dealership and negotiating. Some people will complete the eBay purchase via "buy-it-now", but my guess is there will be a lot of people that will search for the lowest "buy-it-now" price for a particular GM model, then print that page and walk into a dealership to haggle for additional discounts. Just like most used car transactions on eBay, where the listing serves as a marketing tool and most transactions are negotiated further after the listing has expired, the new GM/eBay program will serve as a good marketing tool for GM's new cars but the end result will be a similar outcome in that further negotiations will likely take place well after the auction has ended.

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Sunday, July 26, 2009

$99 Lease Deals

With the bad economy, car manufacturers and dealers are looking for creative ways to move cars off their lots, including putting together great lease deals. The interesting thing about some of these lease deals is that the payments are set to be low because the car manufacturers are counting on the residual value of these popular cars to stay high. As long as they can get a high resale value on these cars at the end of the lease terms, they can afford to set the monthly payments low. Only time will tell, in 3 or 4 or 5 years, whether these cars will hold its value to justify the low lease payments for the car manufacturers.

The PriceHub team did a quick survey of the current lease landscape, and we've compiled our top 5 lease deals for this month:

1. 2009 Volkswagen Jetta California Edition. $189/month - 36 month lease - 10k miles/year. $0 total drive off. $0 security deposit.

2. 2010 Mazda3. $229/month - 42 month lease - 12k miles/year. $0 total drive off. $0 security deposit.

3. 2009 Honda Civic LX. $99/month - 24 month lease - 12k miles/year. $2399 total drive off. $0 security deposit.

4. 2009 Honda Accord LX. $159/month - 36 month lease - 12k miles/year. $2399 total drive off. $0 security deposit.

5. 2010 Honda Insight. $229/month - 36 month lease - 12k miles/year. $2799 total drive off. $0 security deposit.

It's no surprise that Honda's got some great lease deals since Hondas tend to hold its value well. What's surprising on this list is the Volkswagen Jetta at $0 down and only $189/month. What that tells us is that Volkswagen expects its Jetta to depreciate by only $6800 after 3 years. Will the new Jetta hold up and retain its value? Only time will tell...

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Saturday, June 27, 2009

Happy Birthday PriceHub!

Two years ago, we started PriceHub to bring price transparency of vehicles to the mass consumer.  Our goal was to provide a place where people can find the actual selling price of cars and trucks.  Two years have passed, and we now have a robust database of selling prices for just about every car, from the everyday Honda Accord to the exotic Ferrari 360.  Many users now visit our site before they complete a vehicle purchase or sale transaction.  There are also many people who visit the site just to track vehicle prices and to follow market trends.  Our goal for this next year is to continue to provide valuable information on pricing for people who want to see actual vehicle prices.  We have a few site upgrades in mind, and we'll reveal new features as they are rolled out.  Please continue to send us feedback because we like hearing and getting people's opinions about our site.  And oh, by the way, Happy Birthday PriceHub! 


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Wednesday, June 3, 2009

Carfax reports - a great start, but don't trust them completely

In the latest print version of Consumer Reports, there is an article that details why it isn't prudent to completely trust Carfax and other used vehicle history reports (AutoCheck & VINCheck included).

While these reports are great at documenting the official history of a car - when it was bought, when it was sold, what the mileage was when it was sold and whether the car was totaled, Consumer Reports found that cars that are involved in serious accidents but are NOT totaled don't necessarily get an entry in its Carfax record. These types of cars can have clean Carfax records even with serious repair and body work. In fact these cars that have clean titles fetch more money at auto auctions since the clean title will allow shady dealers to sell the repaired car as having a clean Carfax record.

As a part of the due diligence of buying a used car, just keep in mind that a clean Carfax or other type vehicle history report shouldn't be the only factor you look at when purchasing a used car. Make sure you inspect the car for any visibly repaired body damage (to name a few):

- misaligned fenders with the body
- different shades of paint on the car
- different textures of paint on the car
- over spray of paint onto surfaces that should have paint on them (like the wheel wells)

All of these things can tell you if a car has been repaired or not. For more minor damage, there is a good chance there is no entry for the incident on these reports either. If you need to, bring along a friend who knows cars or have the car inspected by a professional mechanic.

I personally think Carfax and the other report services are great - these reports provide access to car history information that once was near impossible to get. Just don't forget to use these reports as one of the many factors you should evaluate before buying a used car.

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Saturday, April 18, 2009

The $40,000 Electric Volt

General Motors, despite its financial turmoil, is still moving forward with plans to launch the Chevy Volt in the fall of 2010. However, those plans may be derailed if General Motors doesn't get a government bail-out and falls into bankruptcy. General Motors is hoping to launch the Volt with a price tag of about $40,000. However, the company also estimates that it needs another $750 million to complete the development of the Volt. After it's all said & done, that price tag will probably rise to $50,000 and if the Volt makes it to market, it may have a hard time competing with the Toyota Prius and Honda Insight at $25,000 to $30,000.

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Sunday, March 22, 2009

Flying Car

Just read about this flying car on the China Daily News. This vehicle will allow you to drive or fly to the grocery store. The flying car was built by a company named Terrafugia, a spinoff from MIT. While this is a novel idea, I'd hate to see what the insurance is on this.

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Friday, March 13, 2009

Certified Pre-Owned hybrids from Toyota

Toyota just announced that they are going to certify pre-owned hybrid vehicles. Obviously, these certified hybrids will command a premium over their non-certified counterparts.

However, you are getting this additional warranty:

  • 3-month/3,000-mile comprehensive warranty
  • 7-year/100,000-mile limited powertrain warranty1
  • 7-year/100,000-mile roadside assistance1
  • 174-point quality assurance inspection
  • CARFAX® Vehicle History Report™
  • 8-year/100,000-mile factory hybrid battery warranty1
  • Standard new-car financing rates available
For potential used-Prius owners, the 8 yr battery warranty could help alleviate some anxiety. It will be interesting to see how this affects used Prius prices.

Here is the announcement from Toyota.

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Tuesday, February 24, 2009

Thursday, February 19, 2009

New feature: Comment on Prices

We just added the ability to comment on the prices for each make and model on our site. We felt that by letting our users comment directly on the prices for a car or truck, we could help consumers get an even better sense of new & used car prices.

Try it out!

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Friday, January 30, 2009

Bye Bye Fun Cars

Due to the slow economy and poor market conditions, car manufacturers are downsizing their product lines and cancelling the production of cars that they consider to be slow sellers, non-practical and/or gas guzzlers. We've got word that cars like the Honda S2000, Dodge Viper, Hummer H3, Lexus SC, Saturn Sky, and Chrysler PT Cruiser are all cancelled for production in 2009 and beyond. This is unfortunate, as many of these are fun, iconic cars that also serve as a technology showcase and halo model for that manufacturer.

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Monday, January 19, 2009

Auto Marketing 101 - The Starting Price of a Vehicle

We've noticed that marketers at car companies have started to change their marketing tactics. They no longer tout performance features like 400 horsepower or luxury features like navigation systems. Nowadays, many of the ads just jump right to the point and highlight the thing that matters the most -- the price, which is usually presented in a "starting at $xx,xxx" format. Here are a few examples from a random sampling of this week's ads:

Of course in reality the "starting price" is just the teaser and no one really gets to buy a car at the starting price. I wonder, does the slogan "truth in advertising" apply to the auto industry?

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Tuesday, January 6, 2009

President Obama's Limo

Here is a spyshot of President-elect Obama's limousine - it's a Cadillac that has 8 inch thick doors. While it doesn't quite resemble any one model, it does have the hand stitched seats and familar Cadillac logo. It hasn't been painted black yet, but it will by 1/20.

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