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Report: More car buyers favoring longer term loans, up to 10 years [w/poll]

Filed under: Car Buying, Earnings/Financials

Couple shopping for new cars

The length of car loans in the US keeps on growing as more and more consumers look for ways to save money every month to pay off obligations and necessities. Extremely low interest rates and more durable automobiles have become key factors in driving these new longer-term car loans, which can last anywhere from six to 10 years.

Auto loans used to last four or five years on average, but, in today’s cash-strapped era, automakers are more interested in selling cars than profiting from financing, which has resulted in the low interest rates and longer loan terms consumers are seeing today. While some might be concerned that this is the same sort of subprime lending that led to the housing crash in 2008, James Lentz, chief executive of Toyota North America, tells The Detroit News that there’s little risk added with these longer loans because defaults typically happen within six months. He also told the newspaper that the longer term options can be the difference between a customer buying a Corolla or a more expensive Camry.

And consider Bradley Gallant’s case. The Detroit News reported that he financed a new Honda Accord with a six-year loan at 1.89 percent to divert money to other investments. Compared to a four-year loan on the same car, he saves $130 on his monthly bill and only ends up paying $370 more in interest by the end of the loan. We commend Mr. Gallant on negotiating such loan terms, but it also drives home the point that interest rates must remain low for such loans to be good deals.

In December, we reported that the fastest-growing category in automotive borrowing was the seven-year loan and noted that automakers were reluctant to offer them because it kept customers off the market for too long. Well, apparently, the times they are a-changin’ – and they’re getting longer.

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More car buyers favoring longer term loans, up to 10 years [w/poll] originally appeared on Autoblog on Thu, 25 Jul 2013 19:00:00 EST. Please see our terms for use of feeds.

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Report: GM will no longer release monthly production figures

Filed under: Plants/Manufacturing, GM

General Motors has announced that it will no longer disclose monthly production figures to automotive data providers. Automotive News reports that GM notified research and data providers IHS Automotive, Automotive News Data Center and Autodata Corp. about the change, saying that the company will now provide numbers for wholesale deliveries. Up until now GM, along with many other car companies, provided monthly North American production figures, broken out by individual models.

The automaker says that the new policy is due to a change in the way it records financials for vehicles. In the first part of this year, GM started assigning profit and loss to the country in which a vehicle is sold, rather than to the facility at which it was manufactured. This, says GM, makes the production numbers less critical to keep track of.

Concerns about the change in reporting are multitudinous. Many automotive suppliers use production forecasts that are based on real production data to plan their own manufacturing schedules for coming months. What’s more, Automotive News tells us that the GM numbers have been used in many other standard indicators of economic health in the US, including those published by the Federal Reserve. While models exist for estimating the production data, nobody is exactly sure how accurate they’ll be, or what the longer term fallout in the industry will look like.

GM will no longer release monthly production figures originally appeared on Autoblog on Tue, 18 Jun 2013 10:58:00 EST. Please see our terms for use of feeds.

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Opinion: Chrysler no longer left for dead, biggest test still coming

Filed under: Chrysler, Dodge, Jeep, Fiat

Some years ago, sitting in my office with the windows open on a warm spring day, I heard a deep rumble – not unlike the sound of a freight train passing by… but closer, more menacing, and immediately followed by a violent shudder as a rare Midwest earthquakes rolled out from under Lake Erie.

This wasn’t supposed to be a particularly good year for the smallest of the Detroit makers.

I’m starting to hear a similar sound, not quite so loud, but this time emerging from Auburn Hills, Michigan, where Chrysler is headquartered. Call it a hum, maybe a rumble, though definitely not yet the sort of buzz that would follow a similarly seismic event – in this case the turnaround of a company most folks had long written off for dead.

This wasn’t supposed to be a particularly good year for the smallest of the Detroit makers. Its product pipeline, went the conventional wisdom, was all but empty, other than the completely-remade Jeep Grand Cherokee and redesigned Chrysler 300, due later in the model-year. But I think most of us in the media were delivered a pleasant surprise a few months back when we got a first good look at the rest of the maker’s 2011 lineup.

Paul A. Eisenstein is Publisher of TheDetroitBureau.com, and a 30-year veteran of the automotive beat. His editorials bring his unique perspective and deep understanding of the auto world to Autoblog readers on a regular basis.

Continue reading Opinion: Chrysler no longer left for dead, biggest test still coming

Opinion: Chrysler no longer left for dead, biggest test still coming originally appeared on Autoblog on Fri, 04 Feb 2011 16:31:00 EST. Please see our terms for use of feeds.

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Toyota Sienna score in Consumer Reports plunges, no longer top-rated

Filed under: Minivan/Van, Crossover, Ford, Honda, Mazda, Toyota

2011 Toyota Sienna – Click above for high-res image gallery

It’s generally accepted that every new iteration of any vehicle is somehow better than its predecessor. And that’s true of the 2011 Toyota Sienna minivan, which is festooned with more goodies (like a 16.4-inch widescreen monitor for rear-seat passengers) and a sportier flair (complete with a sporty SE trim) than the previous generation Sienna. The only question that remains, then, is this: Do those improvements automatically equal a better vehicle?

According to Consumer Reports, the answer is no. And surprisingly, it’s not even close, with the new Sienna’s overall test score of 80 paling in comparison to the 2010’s overall score of 94. The main culprits cited by CR for the plummeting score are poor fit and finish and excessive interior noise – bad enough that CR claims it’s not possible to have a proper conversation between front and rear passengers.

So, if not the Toyota Sienna – which held the honor for three straight years – what is CR’s top-rated minivan? The six-year-old Honda Odyssey. For what it’s worth, there’s a new Odyssey coming out next year, but as we’ve seen from the Sienna, a new model doesn’t necessarily equal one that tests better at the influential magazine. It’s also worth noting that the new Sienna’s overall score is roughly on par with that of the Kia Sedona, which has been available in its current configuration since 2006.

Consumer Reports also tested other people movers, such as the micro-minivan Mazda5 and the large box-on-wheels crossover Ford Flex. Both vehicles got rather positive reviews, and testers found that they may be looked at as realistic replacements for the tried-and-true minivan paradigm of the Toyota Sienna. Check out the official press release after the break.

Gallery: 2011 Toyota Sienna

[Source: Consumer Reports]

Continue reading Toyota Sienna score in Consumer Reports plunges, no longer top-rated

Toyota Sienna score in Consumer Reports plunges, no longer top-rated originally appeared on Autoblog on Tue, 03 Aug 2010 16:28:00 EST. Please see our terms for use of feeds.

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