The Subcompact Market Isn’t As Cheap As You Think

Who would have ever thought that we’d see a day when a Toyota Yaris and Mitsubishi Mirage cost $16,000 – $17,000? That’s just a base price. The top trim Yaris could cost you as much as $19,000, and all you’re getting for it is 106 hp, 32 combined mpg, a touch screen and bluetooth. There isn’t much cargo room, very little shoulder and leg room, and at the end of the day, you’d be better off buying a Honda Fit. When does the cost for sub compacts become unreasonable, especially since we’re talking about a market that attracts consumers who want overall practicality?

The problem with the price is what the subcompact car is offering. Yes, to add features like a touch screen and bluetooth is great, but what is the overall goal with this market? To be practical in every sense of the word. For starters, the price isn’t practical. Not when it comes to the other options on the market. In a matter of 8 years, the Yaris’ price has spiked $3,000, and while MSRP says the base price is around $16,000 for the 2015 model, Toyota dealers are selling some of them close to $19,000+.

Without even looking to other brands, the Yaris’ top trim price is invading the Toyota Corolla’s territory. One could argue that the Honda Fit does the same to the Civic, but at least the Fit has cargo room and offers more value to the consumer. With President’s Day sales extended into March due to the snowstorms we’ve gotten in the Northeast, there are better options consumers could go with, and while fuel economy might be lacking, some of the cars are not too far off from the Yaris’ 32 combined mpg.

Some of the other options in the $17,000 – $19,000 price range are –

Toyota Corolla L/LE/S

Honda Civic LX

Honda Fit LX/EX

Ford Focus SE

Ford Fiesta SE

Those five vehicles are better options in terms of cargo space, shoulder and leg room, and fuel economy isn’t too bad. The list could be extended even further, but I think you get the picture as to what you could get at this price if you decided to buy new.

Due to sales events going on currently, the Hyundai Elantra SE/Sport and the Elantra GT are within the $18,000 to $19,500 range. The Subaru Impreza sedan and hatchback are also available within this price range, along with the Volkswagen Jetta S /w Technology Package, and even the Chrysler 200 limited which is one of the biggest surprises so far to have such a sale.

After seeing the prices, the subcompact market doesn’t seem so reasonable or practical anymore. If owning a small car is a must and you’re not concerned about cargo space, then by all means go with the Yaris or Mirage. But always remember that there are some great offers out there, and better cars to choose from than going the subcompact route.

If you prefer a small hatchback, the Fiesta, Fit, VW Golf, Elantra GT, and Kia Rio are other options on the table. In the sedan market, some dealers even have Ford Fusion’s, Toyota Camry’s, and Hyundai Sonata’s on sale for $3,000 to $4,000 below MSRP. Right now is the time to buy and take advantage of some of the deals. On a $16,000 – $19,500 budget, you could find a quality car that not only looks better, but is better built and worth the price.

Acura Is Going Automatic, Leaving One Model Left With Manual In 2016

The consumer markets have spoken and one auto manufacturer has listened. Acura will soon be offering only automatics in their lineup, and in 2016 only the ILX will have a manual transmission. A new era in the automotive market is upon us, and while I can hear the groans from the car enthusiasts who swear by the manual transmission, paddle shifters is that kid on the block who’s taken over and everyone now follows.

The original story posted on Car and Driver goes through Acura’s transition thoroughly. The company that brought us the Integra is realizing that consumers don’t want the manual transmission, and there are a few theories as to why this is happening. For one, automatics are getting great gas mileage, a stronghold and persuasive buying point manuals once had.

Some people are blaming the non-car enthusiasts for this change, but let’s think about the sports cars and exotics that now offer paddle shifters. Ford Mustangs offer automatics, and for a while now, Ferrari has put paddle shifters in their cars. Most notably, the LaFerrari doesn’t even come with a traditional manual. Every car in-between Ford and Ferrari that attracted hardcore car enthusiasts and were for people who could drive manuals are now available in automatics or auto shift. This is the direction car manufacturers have gone, and with manuals only making up 6% of the market, demand is dwindling for a clutch.

With touch screens, navigation systems, iPhones, and other devices that distract drivers, the last thing most consumers want is to worry about shifting. Yes, the purists out there will say that manual is the only way to thoroughly enjoy a car, but an overwhelming majority of drivers, including car enthusiasts, are finding auto shift and automatics to be just as much fun. Let’s also remember the demographics here as well. With most people moving back into the city, having to upshift and downshift at every intersection and being in traffic on the highways is a chore most people don’t want to add when commuting.

Is there a place for manuals? Absolutely. For Acura however, most of their car buyers use their Acura’s as daily drivers, and with the Honda-owned company not offering much in the sports car market, most of the manual transmission lovers will have to look to older models to get their fill. Otherwise they’ll have to change brands, but even Lexus and Infiniti are beginning to change along with consumer demand.

At the end of the day, the goal for any company that sells products is to increase sales. As mentioned earlier, manuals only make up 6% of the market, which means 94% of consumers want an automatic or paddle shifters. Cars with manual transmissions really are a dying breed, and maybe some automakers will still offer traditional manuals on models they know have a cult following of loyal consumers.

The entire auto industry is in the midst of a revolution, and with electric cars gaining traction, who knows what other components will be different in cars in 5-10 years.

Acura is seeing the change and they’re going to listen to consumers. Other car manufacturers will follow suit, and are already moving away from the manual transmission but still offering it on some of their models. It’s truly amazing what consumer buying power can do, and with the advances we’re seeing in the auto industry, this change to going automatic and auto shift was bound to happen.

Debunking the “Leasing is a Bad Option” Opinion

Go on any online forum, Facebook page or group, Twitter, or Reddit and you’ll find an overwhelming majority of commenters and members of groups discouraging many people from leasing when they ask the question. Everyone is entitled to their opinion. Some people prefer buying outright, some would rather buy certified pre-owned or used, and a growing percentage of consumers are looking at leasing rather than buying. Every consumer has their motivation as to how, what, and why they buy the cars they do, but why is leasing always ripped when someone asks the question?

One of drawbacks of leasing is the annual mileage limit that typically ranges between 10,000 – 12,000 miles, depending on the car brand. You’re also looking at a higher down payment on a lease. But there are other factors (I’ll get to that in a moment) where the $2,000 – $3,000 down payment doesn’t look so bad in the long run. You will also not have the option to trade in the car after your lease is up, but you can buy the car or look at leasing again. Lastly, any extra miles that go above the annual limit, or scratches and dents, will cost you at the end of the lease, so you must be more careful than if you bought new or used.

Now that we’ve got the negatives out of the way, let’s take a look at why leasing is actually better.

As a used car buyer, I’ve experienced dealing with maintenance due to owning an aging car. I have monthly car payments, and I had to put a $2,000 down payment on the car. Right there we’re looking at close to $4,000+ (not including the monthly payments) with the down payment and maintenance. I’m paying $200+ a month on car payments, and to put that into perspective, the payments are more than if I leased a new Mazda 3 sedan or hatchback, Toyota RAV4, or a Honda CR-V.

The payments are a concern for people inquiring about the costs of leasing, and the advice givers always go back to the payments as a strongpoint to oppose the idea of leasing. However, if you’re in the position where you can’t buy a used car outright and put a down payment on it, you’re still dealing with monthly payments. Unlike with leasing, you could be locked in for 48 – 60 months depending on how much you want to pay per month, as opposed to being committed for 24 – 36 months with a lease. So right there you’re putting in an extra year or two on an older car that could be subject to mechanical failure due to high mileage or age.

Some dealerships are now offering free maintenance with a lease. That’s huge, especially if you’re thinking longterm. There are dealerships out there that also offer competitive prices when it comes to oil changes and wheel alignment. Also with a lease, you’re less likely to have to deal with major maintenance bills with the car being so new. There are no previous owners, so the entire time you have the car you know it’s history from your first drive to the last time you’ll ever see the car.

The last positive is that dealership’s leasing offers are always changing, especially during holidays. Herb Chambers BMW of Sudbury had an offer for the BMW 328ix that you couldn’t refuse. It was $275 a month with a $3,000+ down payment (usually you’d be paying close to $300+ a month). I know the down payment would scare anyone away, but if you have the money, you can’t tell me you’d rather buy a $3,000 early 2000’s Honda Civic with 180,000 miles that’s been owned by 3 different people, than a new 3 series. Now again, it’s all about where you are financially, but whether you’re a parent or college graduate, you would prefer something new or newer than having to deal with the headaches and hassles of owning an older car.

It doesn’t have to be a BMW, but a new Mazda 3, Honda Civic, Toyota Corolla and RAV4, or Subaru would be a better option than buying used and dealing with the unknowns.

Yes, leasing has it’s downsides, but so does buying used. It really depends on what you’re specifically looking for. As someone who owns a nine year old car, driving a new car with a lower monthly payment sounds great. Also, the peace of mind of owning a new car with no mechanical issues or aging equipment would make me sleep more soundly at night.

Winter In New England: Never Buy A Front Wheel Drive Car

Have you had enough of winter yet? We sure have. Between shoveling out the driveway, getting stuck on unplowed roads, fishtailing down city streets, and not feeling invincible like the car ads show, makes us extremely tired of snow this year. But guess what? We still have another month or so of winter left, and with a front wheel drive car, patience has run out. Unless you’re a young kid who likes snow drifting in parking lots, RWD will get you nowhere in this weather, and at times FWD is no better. That leaves us with one choice. AWD crossovers, SUV’s, and sedans. Are we complaining? No.

The biggest issue with front wheel drive is that you have no traction in the back. You may make it around the corner, but the back end always gets loose, even with stability and traction control on. Older vehicles are more prone to these problems due to loss of power, and this is very noticeable when going uphill. The prime remedy is to always winterize your car, put on snow tires, and go the whole 9 yards, but weather chooses no favorites and it will stop you dead in your tracks.

When it comes to RWD, you might as well attach a RV trailer on the back of the car because it will expend all your energy and concentration to make it home in a timely manner. Because all the power comes from the back, you have to stabilize the weight ratio as the engine is in the front which causes a nightmare if you get stuck in a rut. Personally, we never understood why RWD was ever considered to be a great idea for driving in the northern reaches of the country, but that decision is up to the buyer.

After surviving six feet of snow in less than three weeks, we’ve decided that AWD and four wheel drive is the only answer to making it through unplowed surfaces. Go on Youtube and Instagram and you’ll find Subarus going through snow as if it was cotton candy, and a BMW dealership in Massachusetts showed the power of BMW’s AWD system as it made it out of a snowbank surrounding the car.

If you still want a RWD or front wheel drive vehicle after winter of 2015, all power to you. We’re done with fishtailing and watching drivers with AWD facing no adversity while we’re trying to correct the wheel because the rear tires feel like they’re on banana peels.

Some people would say all the fun cars are RWD, but we beg to differ. You can’t tell us that cutting through snow in a Subaru and feeling unstoppable for a season is better than snow drifting. Having to put a shovel in the trunk and constantly debating whether you can make it through that snow pile or up that unplowed street has changed our perceptions of winter driving. Yes, for the first storm it seems fun, but when you’re actually trying to get from point A to point B in one piece, AWD seems like the best alternative.

This winter will be over in a few months, at least that’s what we’re hoping. By then maybe FWD and RWD cars will seem more appealing, but for the time being, AWD systems, whether that be Quattro or X-drive, Subarus or Volvos, SUV’s or crossovers, are the only vehicles we want to be behind the wheel of until late April.

Making A Case For The Kia Forte Hatchback

Two weeks ago, I had the pleasure of getting a good long look at the redesigned Kia Forte5 SX. Needless to say, it left a lasting impression. The hatchback market is extremely competitive with the Volkswagen Golf and GTI leading the way, Ford bringing their Focus RS over to the United States, the Fiesta’s dominance in the compact hatchback market, the fresh design of the Mazda3 which is turning heads, and Hyundai’s Elantra GT. Where does Kia’s Forte fit in, and can it hold it’s own against the competitors?

The Forte hatchback comes with two trims: The EX and SX. For performance, you would most definitely want to go with the SX, which is turbocharged, packing 201 HP. Unfortunately to get all the bells and whistles, which includes front and rear heated seats, you’re looking at spending $28,000, but it’s worth it. A sporty interior that will grasp the attentions of young millennials and will certainly get them noticed. A spacious interior that has more cargo volume than the Golf and GTI will make it easy for college students to move in and out of dorms, while also making room for passengers when it’s a late night on the town.

The EX on the other hand is more practical, getting much better gas mileage (25 MPG in the city, 33 MPG on the highway), but not lacking in power. With a 2.0L engine, you’ll still get 173 hp, 0-60 in 7.5 seconds (only two tenths of a second slower than the GTI). With a base price of $19,960, it’s much more reasonable, but if you’re looking for leather interior and other comforts, the price could hover around $25,000.

The Kia Forte is definitely a car worth looking at getting if you don’t want a Golf or GTI. While you’re not getting the fastest hatchback with the SX, you’re still getting a turbocharged engine, cargo space, a sporty interior, and a car that will turn heads. It’s the kind of car you want to get if you want to be different and not buy a car your friend owns.

If you’re a fan of Top Gear UK, you’ve probably already seen the Forte make it through a grueling challenge of rugby. The car is no doubt durable, and even for Top Gear, was an eye opener. The Forte is by far one of the most impressive cars I’ve seen in the hatchback market. I wasn’t expecting to see premium features such as backup assist, heated seats, navigation system, leather seats, and sunroof from a car that’s been flying under the radar for so long.

As someone who goes against the trend and leans more towards something different, the Kia Forte5 would certainly be in the top 5 cars under $25,000 I’d choose as a daily driver.

3 Cars That Surprise, But Don’t Attract An Audience

Every young person’s dream is to own a car that gets looks, notoriety, and a crowd that will fawn over the driver and car. But to get that, you’ll most likely have to buy a $50,000 car that has a powerful engine and nice luxurious interior. However, there can be negatives to all this. Not only is there the possibility your car could get stolen, but there might be a group of envious people who seek to harm your car because they can’t own something that gets the attention of everyone. Maybe you are the type that wants luxury and performance, but without the gathering crowd and just enjoy driving a car that you know is just as good as the Audi or BMW parked in the spot next to you.

Well, you’ve come to the right place. Here are three cars that will surely surprise you, but are probably not the first options on your list of luxury and performance vehicles.

1) Volvo S60/V60 T5

volvo-s60-v60-polestar-side-v2-1500x1000

Any Volvo could be considered non conspicuous, but with a turbocharged five cylinder engine that supplies 250 hp on the AWD model, the S60/V60 tops the competition in it’s category. Other than a selected few cars, not many can boast that they have a more powerful engine than an Audi A4 or the lower trims of the Mercedes Benz C300. The Volvo seats make this car extremely comfortable, adding to the luxury aspect of the car. There is no lag in acceleration when you press the gas, and there is nothing more pleasing than hearing that turbocharged engine roar.

2) Subaru Legacy 3.6R Limited

2015-Subaru-Legacy-011

Besides the WRX/STi, Subaru’s have the same image as Volvo. They’re seen as safe vehicles for the middle-aged adult, can get through snow thanks to it’s AWD system, and are not considered as a luxury vehicle. That’s where the Subaru Legacy 3.6R Limited comes into play. The Legacy has a 256 hp H-6 engine that has just a bit more power than the S60. This car comes fully equipped with leather seats and a navigation system. The only knock on the Subaru would be it’s subpar fuel economy getting 20-29 miles per gallon. However, this car comes with the performance and luxury qualities that make this car fly under the radar.

3) Toyota Avalon

2014-toyota-avalon-xle-photo-537109-s-1280x782

Toyota wasn’t joking when they said this was their best creation ever. The Avalon comes with a V-6 engine that supplies 268 hp, and the best part is, this is standard. When it comes to luxury from Toyota, we tend to look at Lexus, but the Avalon has what it takes to hold it’s own against the competition. This car not only looks executive, but it has an engine that would certainly surprise someone if they had no prior knowledge of the car beforehand.

There are plenty of options out there if you don’t want to buy an Audi, Mercedes Benz, BMW, or Lexus, or want all the hype and drama that comes with the people who are drawn in by what you have. The S60/V60 T5, Subaru Legacy 3.6R Limited, and the Toyota Avalon can fulfill all your wants and must haves when looking at a car to buy. These three cars constantly fly under the radar, but you can have fun with them at the same time.

More Car Buyers Are Leasing and That’s Good For You

The percentage of Americans leasing cars has boomed to 20% over the past few years. Rough economic times, better leasing offers, and car manufacturers creating better vehicles has helped spur the growing number of consumers leasing instead of buying new. Some car dealers may prefer that most consumers would much rather buy, and that leaves the opportunity for those who buy certified pre-owned vehicles with an endless array of quality cars at reasonable prices. As with most trends in the economy, there is always an opportunity for someone to walk away with a great deal, and right now it’s time to take advantage of the leasing craze that is growing across the country.

Tesla just unveiled a leasing program for their Model S, which will now make monthly payments cheaper for the consumer.

From the Wall Street Journal

With sales of its electric sedan declining in its home market, Tesla Motors Inc. this week launched U.S. incentives that cut its monthly lease price and aim to convince potential customers that buying the car is a safe financial bet.

Tesla Chief Executive Elon Musk said the Silicon Valley car maker is joining with U.S. Bank to cut monthly lease payments by as much as 25%. In a blog post on Saturday, he credited the bank’s lower cost of capital for the lease-rate cut. He also unveiled a “happiness guarantee,” promising to take back cars within the first 90 days of ownership “if you don’t like your car for any reason.” The return policy doesn’t allow a buyer to swap for another vehicle.

While some would say this is because of declining sales, this is happening across the board for most auto manufacturers. Leasing is becoming the new normal, especially with the uncertainty of the long term health of the economy. You might ask, “So where are the opportunities?”. Here are three cars that are under $25,000 and are from luxury brands that can be found on dealership lots. Best of all, they’re certified pre-owned and the mileage is below 31,000.

1) Volkswagen GTI/Wolfsburg Edition

8785047257_a64186dbf7_b

It’s not too uncommon to find Volkswagen Golfs, but to find multiple GTIs spanning from the years of 2011-2013 is very surprising. Even better for the consumer, there are a few Wolfsburg edition GTIs on the market that are under $25,000, one of which has only 5,000 miles on it. These are gems, and with the turbocharged engine that supplies 200 hp, you get performance and cargo room which is always a plus.

2) 2011 Lexus IS 250

2011_Lexus-IS-350_Sedan-Image-01-1024

To see these under $25,000 with close to 20,000 miles is certainly an eye opener. A local Lexus dealer outside of Boston has a few of these, and even though they are the base models, they’re still fully equipped and in great condition. Navigation system and backup assist make you feel like you’re getting away with more than what you paid for, but these are the types of deals that are out there. Seeing a Lexus IS on the market in great condition and not overly driven, it makes you question why there are certified pre-owned Toyota Camry’s and Chevrolet Malibu’s in the same price range.

3) 2011 BMW 3 Series

bmw_328i_01_small

Just as the Lexus IS, the model year may be the only reason why these luxury cars have depreciated in value. There are BMW 328i X-drives that only have 25,000 – 30,000 miles on them and priced under or at $25,000. Once again, this is a luxury sedan that will make your mouth water because to see a BMW in unbelievable condition at that price was unheard of a few years ago.

When seeing offers and deals like this, it really makes you consider going the certified pre-owned route. The automotive market is evolving, and unlike 10-15 years ago, going used isn’t a bad thing, especially when you have three solid vehicles at reasonable prices. This is only the beginning though. Seeing that there is no reason to believe the leasing trend is going to slow down, there will be more opportunities down the road. Who knows what will be on the market a year or two from now, and maybe there will be better offers than there are right now.

Latest GM Recalls (List Of Models) 10/22/14

Here we go again with another round of recalls, this time involving 162,240 GM cars. This recall is extremely important as the Takata airbags are being blamed for some gruesome injuries. Without any further delay, here is the list of GM models that are part of the latest recall. If you own one of these, don’t hesitate to bring the car back to the dealer.

Cadillac

• Deville

Chevrolet

• 2013-2014 Cruze
• Trailblazer
• Impala
• Monte Carlo
• Venture

GMC

• Envoy and Envoy XL

Oldsmobile

• Aurora
• Bravada
• Silhouette

Pontiac

• 2003-2005 Vive
• Bonneville
• Montana

Saab

• 2005 9-2X

Acura Going AWD To Compete With Subaru and Audi?

CIAS 2013 - 2014 Acura RLX
MSVG / Foter / CC BY

According to a report by Automotive News, Acura is looking to make AWD standard on all their models and go the route of Subaru and Audi. But is it too late for the Honda-owned luxury car manufacturer?

While going AWD creates benefits for the consumer, Acura has to distinguish themselves from Subaru and Audi first. What is the Acura brand? Who are they marketing to, and are they a luxury car company, or more similar to Subaru who market to consumers that need AWD to deal with snow and difficult terrain?
Subaru has already built up a strong tradition of manufacturing durable and long lasting AWD sedans and station wagons, and their Impreza and Legacy are in a league of their own that’s very difficult to break through and compete.

Audi on the other hand is pure luxury that offers AWD as standard, but their cars are predicated on luxury more than off-road capability. Their sedans and smaller crossovers are competing against BMW and Mercedes Benz, and it would be a mistake for Acura to jump into the fray and compete against the best the automotive world has to offer.

Acura needs to change their image, or promote the brand that displays a definte direction so consumers know exactly what they’re buying. Introducing a crossover SUV wouldn’t be a bad place to start, and then figure out where their sedans compete in the automotive market. 

AWD is the right answer, but to the wrong question. Consumers don’t know where Acura fits in the luxury market, and they have no idea whether it’s a luxury brand or not, especially with the changes they’ve made to their lineup by getting rid of the TL and TSX. Acura has a lot of questions to answer and evaluate where their brand stands among its competitors, but when it comes to standardizing AWD on all their models, they’re on the right track.

Chevrolet: From “Like A Rock” to “The Dollar Menu”

2014 Chevrolet Silverado LTZ
AlBargan / Foter / CC BY-ND

Chevrolet has been launching campaigns to attract an assortment of consumers for years by offering cheap prices for those who have poor credit or can’t afford buying a new car due to their financial situation. While that is a noble cause, one that has probably been successful, there are major implications the auto manufacturer faces by making such offers. After the launching of their latest marketing campaign, “Chevrolet’s Dollar Menu”, they’ve unofficially solidified their fate as being the McDonald’s of the automotive world.

The deal is one dollar down payment in a lease offer for the Chevy Cruze and Chevy Silvarado, making them the cheapest lease offers on the market today. Forgetting about the incentives, limited mileage because of a lease, and the deal itself, let’s take a step back for a minute and let this sink in. A dollar menu for an auto brand, not a fast food restaurant, but an American auto manufacturer.

With all the recalls Chevy has had to endure, and now offering some of their lineup for a dollar, they’ve now opened themselves up to the perception of being the car equivalent of McDonald’s. When it comes to the food McDonald’s offers, you could say, “It’s cheap, but in the long wrong could cause obesity”. Chevys are now cheap, but could break down 2,000 miles later. This is not the best approach for a struggling auto maker and completely makes the brand look bad by subliminally saying, “Our cars are lemons and no longer of good quality”.

Chevrolet was once a proud American auto maker, the Camaro and Corvette were highly coveted by young adults, the Silverado was a very popular and durable pickup truck, and the Impala and Malibu were decent four door sedans that could hold their own against their American counterparts. Even the commercials sent better messages by going with the slogan “Like a rock”. In a matter of 15 years, Chevrolet has gone from being a respected manufacturer, to being the prime example of not buying American when it comes to cars.

Instead of the dollar menu approach and sounding like a fast food restaurant, Chevy should try a strategy similar to Honda. The Honda Fit is being marketed as an affordable, yet fun and efficient compact hatchback that fills every need for young adults, as they’ve been the target of this recent advertising effort. Chevy has the Spark, Sonic, and Cruze, all with starting prices under $20,000, and this should be the basis of a marketing campaign. Honda isn’t playing the Chevy game by being a Burger King or Wendy’s, and instead has a sound marketing strategy to a specific audience who are in the market for the hatchback.

The Sonic is a fun, hot, little hatchback for Chevy, and they should roll with it as being the backbone of affordable cars in their lineup. In all honestly, if a Cruze is only $1 down, I don’t think I’d be willing to pay the $169 a month as it doesn’t seem worth it, and would then think that the Sonic or Spark should be offered for $.50 or $.75 down on a lease offer.

When it comes to the automotive world, there should never be a dollar menu. ‘Like a rock” was a better slogan as it promoted a durable and quality vehicle lineup by an American automaker. Chevy has a lot of work to do when it comes to brand image after the countless number of recalls, but if they really want to be respected again, they need to drop the dollar menu immediately.