North American motorists have gotten used to paying $20-$25,000 or more for their new vehicles. Long gone are the days when sub $10,000 cars ruled the highways, with few cars available for under $15,000 these days. All of that will be changing as the pending introduction of cheap cars from China as well as imports from Mexico and other third world nations will reshape the automotive landscape. Will you buy one of these bargain brands or will you stick with one of the trusted names? Lets step forward a few years to look at a radically changed automotive market and just what it may have to offer to you, the value conscious consumer.
If you follow automotive press reports then likely you have heard talk of cheaply priced cars from China being imported to the US and Canadian markets. At prices reported to be as low as US$ 6500, these cars have created a lot of buzz and have raised concern about the entire automotive industry, domestic and foreign. One big question asked includes this: how will domestic manufacturers be able to compete price wise? Well, prices wont be quite as low as first reported once certain safety and anti-pollution measures are added in; instead the final starting price will likely be in the neighborhood of US$ 8500.
Regardless of exactly where the final starting prices are set, an economic tsunami could hit in short order.
Two of Chinas top brands, Chery and Geely, are reportedly preparing to export cars to the US in 2008. Both manufacturers produce several lines of vehicles, but current manufacturing output is limited. Expect no more than 200,000 of these vehicles for the first few years, but maybe millions more once additional capacity has been brought online.
In India, several manufacturers have been quietly expanding capacity to serve the burgeoning Indian market. One manufacturer, Tata Motors, even has pledged to build a car starting at US$ 2000. Thats no typo two thousand dollars for a new car! The last car that sold at this price in the US was the VW Beetle. Of course, you have to go back to the late 1960s to find a new Beetle at that price.
Will Tata and other Indian automakers export their cars to the U.S.? Given the current state of the Indian auto industry, likely this will not happen for some time. Capacity is expanding, but it is barely keeping up with domestic demand. Plus, each model would have to undergo extensive upgrades in order to conform to strict U.S. emissions, safety, and quality standards. Yet, the possibility of a car that will greatly undercut Chinese models in price is intriguing.
Dont think for a moment that leading world automakers will take these challenges lying down. Ford is proposing to build a sub-$10,000 vehicle in Mexico; GM is tapping its South Korean arm Daewoo for additional low cost models; and DaimlerChrysler is shopping around for a partner to help build it own super cheap people mover for around the same price.
Toyota, Honda, and several other Asian manufacturers will be sure to respond. With factories scattered across the globe, each company can pull a model from one factory and ship it to the U.S. to compete. Already, Honda and Toyota are offering cars at around $12,000 or less and each of these models could retail for much less if they are built in countries where wage levels are very low.
So, what does all of this mean for consumers? Well, you arent likely to see an across the board drop in automobile prices, but you probably will see the end to sticker shock the phenomenon that has stunned new car buyers for the past generation. What you may find is this: $60,000 Lexus and $6000 Scions being sold side by side. A huge difference in price, but something that the North American auto enthusiast may find to be commonplace.
Tags: American Motorists, Automotive Industry, Automotive Market, Buzz, Canadian Markets, Cheap Cars, Chery, Conscious Consumer, Domestic Manufacturers, First Few Years, Geely, Highways, Last Car, Low Priced Cars, New Car, New Vehicles, Pollution, Tata Motors, Third World Nations, Two Thousand DollarsRelated posts
What Do I Need To Worry About When Buying A Second Hand Car?
If you apply a little common sense when looking to purchase a second hand car, all should go well, and you could end up getting a car which will serve you well for a long time.
However, if you rush blindly into what seems like a good deal, then you could end up not even getting the car home before it breaks down.
When thinking of purchasing a car second hand there are some points which you should give consideration to and be on the look out for when giving your potential new car the once over.
Always go to view the car in good light. Never, ever go at night or view in an area which has very poor lighting. If the seller is reluctant to show you the vehicle in good lightning conditions, consider this a warning sign.
Always spend time looking for rust on the bodywork .While a few surface blisters are usually harmless, corrosion is a totally different thing. If you see a rust blemish then gently rub it with your finger and if you hear a rustling noise this could mean there is corrosion underneath the rust.
Look for any signs that the vehicle has been in a collision previously. Obvious signs are joins where the car has been welded, or creases on the bodywork.
Where possible take a qualified mechanic with you to view the vehicle before handing over any money.
Take the car for a test drive it may be uncomfortable or have a blind spot. You can also see then just how healthy it sounds.
Finally, walk away from the deal if anything such as the owner not being able to supply you with the correct documentation happens. If the vehicle registration documents do not agree with the address where you are viewing the car, be suspicious. The car could be stolen or it could be trader posing as a private seller.
Tags: Blemish, Blind Spot, Blisters, Bodywork, Buying A Second Hand Car, Common Sense, Correct Documentation, Corrosion, Creases, Mechanic, New Car, Poor Lighting, Private Seller, Purchasing A Car, Registration Documents, Rust, Second Hand Car, Test Drive, Vehicle Registration, Warning SignRelated posts
What To Do Before Buying That New Car Or Truck
Ahhhh, that new car smell…
It’s great isn’t it? But it comes at a premium. We all know that it’s cheaper to buy used instead of new, but if you still don’t think you can live without that fragrance of a new car (the real one, not the one you buy from Wal-Mart in the little spray can) – then at least think about following these steps first:
1. Research! If you absolutely have to have a new car, do yourself a favor and spend some time at Edmunds.com and research some of the cars that you are thinking about buying. If you have a specific car in mind already, be sure to research the other cars in its class as well. You might even find another one you like better and is rated higher from consumers, has higher crash test scores, better resale value, higher mpg’s, or whatever else floats your boat.
2. Once you have decided on a car, Edmunds has a great feature for pricing – it’s called True Market Value. That is basically how much other people are paying for that specific car. This can give you great leverage when negotiating the price on your new vehicle. But you also must keep in mind that it’s not a definite price level, but more of a guide for haggling with the salesman about the price.
3. Dare I say the “L” word? Loan! There I said it, whew. Once you have settled on a fair price for the vehicle you are buying, it’s time to think about how you’re going to pay for it. Since most of us don’t pay cash for new cars, most likely you’ll need to obtain a loan for your new ride. If so, then you need to pay close attention to the interest rate on the loan. This is not something that can normally be negotiated, but you still need to be aware of what your interest rate will be – even 1 percentage point lower can save you over $700 on an average priced new vehicle, over the life of the loan.
My advice on this would be to go after those low APR loan offers that the dealerships sometimes have. You know, the “buy now and receive 2.9% apr for up to 60 months” type of offers. That can save you some big bucks, lets take a closer look…
How much money can lower interest save?
Ok, lets use an interest rate comparison loan calculator and plug in some numbers, and see what we get.
Example 1 – lets say it’s for a Chevy Impala:
Loan amount: $25,000
Regular interest rate: 6.9%
Special low interest rate: 3.9%
Loan length: 5 years
Total savings with lower rate: $2,073.94
That’s right, for this example the lower interest rate would save you more than $2k over the 5 year length of the loan. That money would be much better off sitting in an interest bearing bank account, don’t you think? Just for kicks, lets do a higher priced vehicle with the same comparison criteria…
Example 2 – Let’s say you want a Tahoe instead:
Loan amount: $45,000
Regular interest rate: 6.9%
Special low interest rate: 3.9%
Loan length: 5 years
Total savings with lower rate: $3,733.08
With example 2, you would save almost $4k in interest over the life of the loan. That would be a nice down payment on your next vehicle don’t you think?
There are many different things that factor in to what vehicle you actually end up purchasing – comfort, resale value, safety, style etc. Just make sure you add “research” and “interest rate” to that list, and stay informed!
Tags: Buying Car, Consumers, Crash Test, Definite Price, Edmunds, Fragrance, Interest Rate, L Word, Leverage, Low Apr Loan, Mpg, New Car, New Cars, Percentage Point, Resale Value, T Pay, Test Scores, True Market Value, True Value, Wal MartRelated posts
Looking for the cheapest car through buying used cars is a smart practice. However, when the buyer is truly saving and is on a tight budget, buying a used car should not be immediately decided upon and should take a lot of deliberation. This is to avoid throwing away your hard-earned money.
Therefore, for people who already know something about buying used cars but wish to know when not to buy them, here are some pointers that may help people in their decision-making:
1. Buyers should be wary of buying used cars from owners that do not have complete and pertinent documents.
This could mean a lot of negative things and the buyer is the only one who will be at the losing end. Documents are crucial especially if the car is second hand. It is the only solid guarantee that a buyer can get hold of when buying used cars.
If this is the case, then, the buyer might as well not pursue the deal.
2. Buyers should consider their budget
If the reason why the buyer is opting to purchase a used car is the budget, then it should be the same reason why the buyer should be careful and meticulous in choosing a used car.
Hence, if the car needs a lot of maintenance, repairs, and other modifications, it is best not to buy that used car.
3. If the buyer is not comfortable after test-driving the car, then, it is best not to buy it.
There are instances wherein some people tend to opt for used cars because of the model of the car being sold. It is their dream car and there is no other way they can purchase them but to buy them second hand.
However, if the buyer was not comfortable with the car after test-driving it, then, it would be better not to pursue the deal, even if it means the world to the buyer to have that car.
The bottom line is that buying used cars should never be the sole alternative to people who cannot afford to buy new ones. This means that people should value the process of choosing a used car like what they would do when they buy a new car.
After all, it is their money that will be put to risk that is why it is extremely important to consider all the factors in order to have the best buy ever.
Tags: Bottom Line, Budget Car, Buy Car, Buying A Used Car, Buying Cars, Buying Used Car, Buying Used Cars, Car Buying, Car Maintenance, Deliberation, Dream Car, Guarantee, Hard Earned Money, Instances, Maintenance Repairs, New Car, Pertinent Documents, Pointers, Smart Practice, Tight BudgetRelated posts
When It Comes To Buying Car Finance Look Online First
When it comes to buying car finance your first port of call should be online. By going online with a specialist car finance website you are able to access some of the top UK car loan providers to determine which would be the cheapest option for your particular circumstances. Car finance comes in many different forms and it is imperative that you understand your options and what each option entails so when it comes to comparing you know which is better for your personal needs.
The most popular type of car finance is hire purchase, this is simply a loan which you take out after paying a deposit against the car and then pay for the remainder over a certain period of time. The monthly repayments will depend on how much you wish to borrow, how long you wish to take the loan over and the deposit you are willing to put down. Of course your credit rating will be taken into account as well and you will be putting the car up as security against the money you are borrowing in case you find you cannot afford to keep up the repayments.
An alternative method when it comes to buying car finance is to go for a popular choice called personal contract purchase. Again you will put a deposit down to reduce the amount left to borrow on the car and then take out an agreement which will last for a specified term during which very low monthly repayments are made, after this there will be a lump sum left which will mean you have choices to make. If you decide to pay off the balance left owing then the car is yours, if you want to part exchange for a new car you can or you can give the car back and you owe nothing more.
A lease or credit purchase is very similar to the personal contract purchase method of buying car finance but you do not have the option of changing cars or of giving it back, you have to find the money for the balance left owing. All finance options suit different circumstances and information and advice can be found with a specialist website regarding all options. Understanding what you are taking on is essential so you have to not only compare the rates of interest and deals but also unearth any hidden charges, these are usually found in the key facts which should come with the loan.
Buying car finance is never easy and it is not something which should be rushed into, never be tempted by what seems to be very low interest rates without first reading the small print. Hidden costs could be associated with the finance option which could boost up the cost considerably. By reading the small print you can determine how much interest will be added onto the loan, the total amount you will pay and the rate of interest, also how much would be left to pay up at the end of a personal contract purchase or lease purchase.
Tags: Buying Car, Car Finance, Car Hire, Car Loan, Cars, Choices, Circumstances, Credit Rating, Finance Options, Finance Website, Loan Providers, Lump Sum, New Car, Period Of Time, Personal Contract Purchase, Personal Needs, Port Of Call, Remainder, Repayments, Uk CarRelated posts
Buying a car needs not just investment but deep thought. The market is overflowing with choices and temptations. Buyers need to think, what kind of car and can I afford it?
Think, what do I need transportation for right now and what will I need two years from now? Do I want a car as a status symbol or as something that makes my life easier? Will the car be a commuter vehicle, or to transport children? Would a van with cargo space and high clearance be more suitable for a growing family? Should the car be a two-wheel or four-wheel drive? What kind of terrain will I be driving in most of the time? Go through auto magazines as well as consumer reports to get a clear picture of the world of cars.
1.Work on your finances and determine what you need to spend each month on transportation. A car should not cost more than 10% of your net pay per month. If it is more, then consider leasing a car instead of buying one.
2.Before you finalize anything, find out what the target price is. Four figure discounts are available with almost every make.
3.Never sign an arbitration clause or blank financial forms. Try and get finance from a separate source, a bank or financial institution.
4.Haggling will get you a good deal apart from shopping around for finance. The market is competitive be sure to check dealer fianc, high street, internet lenders, as well as other options.
5.Try and ensure a large down payment thereby reducing the loan to be paid. Work out your finances and choice of car such that the term of loan is for the shortest period.
6.Find out what buying incentives are on offer. These vary from audio systems to cash back offers, and 0% financing. Ask what extras and add ons will cost in addition to the price of the car.
7.Be sure to evaluate your old car independently if you are considering a trade in. Pay attention to cost to change, the difference between what the new car costs and what the old one is worth.
8.Find out about warranties, taxes, and insurance. These can eat into your budget.
9.Vet the contract well. Read the fine print. Make sure that paying off the loan before time will not carry any penalty.
10.Check out at least 3-4 dealers to gauge what the best offer is.
Test drive the vehicle before you finalize the deal and go through the car booklet page by page to understand all that the manufacturer needs to tell you. Be clear what is under warranty and what is not.
Never choose vehicle based on a picture or dream. It is not how you look in the car thats important but how well the car will fulfill your needs. Be practical and sensible; do not buy a model because the dealership is offering a holiday for two or a low interest scheme. Identify a vehicle that suits your needs before subjecting yourself to an onslaught of marketing.
Tags: Arbitration Clause, Auto Magazines, Car Buyer, Car Costs, Cargo Space, Commuter Vehicle, Consumer Reports, Financial Institution, Four Wheel Drive, Growing Family, Incentives, Internet Lenders, Leasing A Car, New Car, Pay Attention, Status Symbol, Street Internet, Target Price, Temptations, Warranties