Consumer Advice and Car Buying Tips

Some things never change. For the seventh year in a row auto sales and repair produced the most consumer complaints in 2022, according to an analysis by the Consumer Federation of America (CFA).

Some complaints are about the cost of repairs while others cite the quality of the work. Dwight, of Bayshore, N.Y. told us his car seems to be constantly in need of repair.

“I purchased a Ford Escape in 2017,” Dwight wrote in a ConsumerAffairs review. “For the past three years, I’ve been dealing with multiple manufacturing defects and repairs that have rendered my vehicle unusable for extended periods of time. This has had a deleterious effect on many aspects of life, as I have no alternate means of transportation and live in an area where a car is necessary for work.” 

CFA compiled the list of top consumer complaints by looking at the nearly 600,000 consumer complaints filed with various state and local consumer agencies. CFA says these agencies recovered around $743 million on behalf of these consumers.

“It is no surprise that auto sales and repair are the number one complaint category, now for the seventh year in a row,” said Erin Witte, CFA’s director of Consumer Protection. “Consumers rely on cars to get to work, school, doctor’s appointments and more, and these agencies serve a critical role to help consumers when they have suffered harm at the hands of dealers and repair shops.”

Home repair issues

Home repairs and contractors also drew a large number of complaints last year, moving that category into second place on the list. jumped to the number two category. The agencies also field a large number of reports of fraud and scams.

Here are the top 10 complaints in order: 

1. Auto Sales & Repair

2. Home Improvement Repairs and Contractors

3. Consumer Debt & Credit

4. Retail Purchase Issues

5. Landlord Tenant 

6. Frauds and Scams

7. Healthcare/Wellness

8. Home Furnishings & Appliances

9. Utilities

10. Travel & Moving

In addition to responding to consumer issues, CFA says many consumer agencies were able to provide help last year in other ways. For example, Los Angeles Department of Consumer & Business Affairs created a consumer protection education website hub for foster youth, helping them make good decisions and avoid scams. 

CFA also says the San Francisco District Attorney’s Office helped resolve a $300,000 cryptocurrency scam, and the Florida Department of Consumer & Agriculture Services resolved nearly $1 million in travel-related complaints alone. 

Most pandemic-era supply chain issues have been resolved and inventory levels have risen, but many new car dealers continue to sell cars and trucks for thousands of dollars above the manufacturer’s suggested retail price (MSRP).

A new report from iSeeCars.com found the average new car continues to be priced 8.8% above the sticker price. But that’s just the average. When iSeeCars identified the 10 models priced the most above MSRP, the gap surged to as much as 27%.

“There’s no denying it – new cars are expensive,” said Karl Brauer, executive analyst at iSeeCars. “The manufacturers keep raising their prices and then the dealers raise them again, to the point where the average new car is priced above $45,000.” 

Priciest models

If you are in the market for a new car, it may be helpful to know which models are, in some people’s minds, overpriced. According to the study, these are the cars that are priced the most above the sticker price:

1. Genesis GV70   +27.5%
2. Jeep Wrangler   +23.9%
3. Mercedes-Benz GLB   +22.9%
4. Porsche Taycan    +22.7%
5. Jeep Wrangler Unlimited  +21.9%
6. Cadillac CT4-V  +21.1%
7. Genesis GV80  +21%
8. Porsche Macan  +20.6%
9. Cadillac CT5  +20.3%
10. Lexus RH 350H  +20.3%

The news is not all bad for car shoppers. The study suggests the average sticker prices appear to have either peaked or plateaued in January, with prices dipping slightly last month.

At the same time, dealer markups above MSRP hit a high back in July and have been on the decline since. In July, sale prices were 10% above the sticker prices. Now, it’s 8.8%. So for consumers, the trend is moving in the right direction.

“The difference between dealer pricing and MSRP should continue to fall as the supply chain improves, though getting back to MSRP for most models may not happen this year," said Bauer.

Some models sell for less than MSRP

While many popular models are selling above the sticker price,  buyers are able to find new cars that are going for less than the MSRP. Brauer says the study identified at least four models where dealers are actually dealing.

“Chevrolet recently halted production of the Silverado, suggesting supply for this full-size truck is in the unique post-pandemic status of outstripping demand,” said Brauer. Other models priced right at MSRP include the Volkswagen Arteon, Cadillac Lyriq, and the Infiniti QX80.”

Brauer notes the Lyriq is a newly introduced electric SUV, so it’s surprising to see it priced right at MSRP. A popular full-size pickup, the GMC Sierra 1500, is selling just slightly above the sticker price.

A deal is a deal is a deal, right? Apparently not in the eyes of some unscrupulous auto dealers.

Gradually over the past couple of years, auto dealers have started leveraging so-called “yo-yo’ing” – a scenario where a consumer buys a car, gets it home, and then a few weeks later, gets a call from the dealership saying that their financing wasn’t approved. The kicker is that the consumer could reapply, but at a higher interest rate and monthly payment.

In a new survey conducted by NPR News, 40 consumer attorneys who work on auto cases said they've gotten calls from nearly 900 car buyers in just the past year who say they felt double-crossed by a yo-yo car sale.

And when that happens, the consumer who bought the vehicle could find themselves without the car they bought and without the vehicle they traded in. In the NPR story, a family that was reportedly yo-yo’ed by a Hyundai dealer in Orlando said the experienced left them with no car for a year and dependent on family and friends for rides to doctor’s appointments and getting to and from work.

Yo-yo? No – whoa you!

As ConsumerAffairs found out, there’s not much in the way of blanket protection for the consumer in these situations. The Federal Trade Commission (FTC) has proposed a rule to stop dealerships from employing tactics that can plague consumers throughout the car-buying experience, but that’s not a done deal yet.

In the meantime, protections are a state-to-state thing. According to research done by Lawrence Hodge at Jalopnik, an automotive industry opinion website, different states have different notification timeframe requirements for dealers.

As examples, Hodge points to Maryland where a dealer has just four days to notify a customer if they’re approved or not. In California, it’s just over two weeks.

Without federal protection, a lot of the onus falls on the consumer to make sure they’re not going to be yo-yo’ed. The Auto Fraud Legal Center points out that if someone buys a car that is financed through the dealership, the dealer can cancel the contract, but only if it notifies you within 10 days of the date on the purchase contract.

Still, before anyone puts their John Hancock on a car loan agreement, they need to look at their purchase contract to find out what things could go wrong.

“That’s the long yellow document that says ‘RETAIL INSTALLMENT SALES CONTRACT’ at the top. Turn to the back of the purchase contract, and find the box that says ‘Seller’s Right to Cancel.’ [usually at the bottom of the second column],” the Center wrote.

Fight fire with fire

The FTC suggests that consumers fight fire with fire. For one thing, they can tell the offending dealership that they will report the dealer to the attorney general if they don’t make things right. 

The Auto Fraud Legal Center adds that if the dealership cancels within 10 days, consumers can get either their down payment or trade-in back.

“The purchase contract requires the car dealer to return to you all consideration (i.e., everything) given for the purchase. This includes your trade-in vehicle. If you give a $2,000 down payment and a car as a trade-in, the car dealer must give you back both the $2,000 and the trade-in when you return the car you purchased,” the Center suggested.

And if the dealership says it’s already sold the trade-in? The Auto Fraud Legal Center says that’s another potential problem the buyer needs to ask upfront.

If the language of the purchase contract allows that, the dealership may only have to pay back the value of the trade-in as listed on the purchase contract, (2) the fair market value, or (3) what the car dealer received when it sold your trade-in.

Even though a dealership may turn out to be the bad actor in situations like these, car manufacturers don’t want any part of it. Before buying a car, it may be wise to do a web search for "retail installment sales contract plus the brand name. ConsumerAffairs found that Volkswagen and Ford both offer explanations of those contracts. It’s a safe assumption that other major automakers do, too.

If you’ve been considering the purchase a vehicle, but waiting on prices to come down, your patience is starting to pay off.

Used car prices fell 5% over the last two months bringing the average used car price down more than $1,000 in December, the first substantial drop in more than two years. Tesla’s been getting rid of its Model 3 vehicles at prices 17% lower than they were in September, too. 

“We’re still a long way from ‘normal’ but there are clear signs the elevated prices of the past two-plus years are coming to an end,” said Karl Brauer, executive analyst at iSeeCars.com. “It was easy to predict, given the macroeconomic factors we’ve seen over the past six months. With everything from inflation to interest rates hitting peak numbers, there was no way the upward pressure on car values could continue. The next big question is: how far and how fast will car prices fall?”

Who’s got the most affordable cars?

Over at Cars.com, its analysts decided to see how much the major automakers are taking the consumer’s quest for affordability to heart. What they found is that the car-buying market is chock full of cost-conscious consumers ready to buy.

Cars.com’s first-ever Affordability Report suggests that Kia, Chevy, and Ford offer the most affordable new cars for 2023, with Chevy leading the pack when it comes to trade-in value. Chevy was also recently found to be a brand that provides the best value. 

What things should consumers concern themselves with?

ConsumerAffairs spoke with Jane Ulitskaya, Cars.com's editor to find out what things consumers need to focus on when they’re on their car shopping journey. Her bottom line? Budget, current interest rates, warranty options, and whether you have a car you are trading in. 

“Take a hard look at your budget and compare how different vehicles you’re considering would impact your monthly budget, Ulitskaya said.

“Shoppers need also to consider how much money they want to put down and how long they will need to save for the down payment. According to a recent survey from Cars.com, two-thirds of new and used shoppers aim to save between three and 12 months for a vehicle and plan to save 10-\% to 25% of the final price before purchasing.”

Interest rates are a factor

Ulitskaya emphasized that consumers should spend some serious time thinking about interest rates, simply because they’ve jumped so much in the last year and the run-off of that is that a buyer could be looking at a higher monthly payment and pay more over the course of the auto loan. 

Maintenance is another factor, but one that’s a softer concern for new cars than it is for used ones. Ulitskaya said there are three automakers who have gone all-out to beat the competition in the warranty arena: Hyundai, Genesis, and Kia which all offer 10-year powertrain and 5-year or 60,000 miles bumper-to-bumper warranties, much longer than those of other brands. 

As far as trading in a car, Ulitskaya suggests shopping around with various dealers and getting offers in writing. “What most shoppers don’t think about is that you don’t have to sell to the same dealership you are buying your next car,” she said, noting that a brand dealership may be willing to pay more to keep the vehicle in the “family.”

Buying a car has proven to be difficult in the last few years, and consumers aren’t happy. 

According to the Cox Automotive 2022 Car Buyer Journey Study, last year marked the second consecutive year that consumers expressed frustration and general disappointment related to the car buying process. 

“...We think it is more important than ever to showcase the current state of vehicle buying in America,” said Isabelle Helms, vice president of research and market intelligence at Cox Automotive. “While buying a vehicle is a complicated transaction, with financing required, trade-in valuations to consider, and plenty of research required, it does not have to be frustrating for the consumer. With the right digital tools and systems in place, car buying can be a highly satisfying activity, and as efficient and streamlined as consumers want it to be.” 

What went wrong? 

Overall, consumer satisfaction with the car buying process dropped from 66% in 2021 to 61% in 2022. Both years are a significant drop from the 72% consumer satisfaction rate in 2020. However, new car sales were likely to yield greater satisfaction from consumers than used car sales. 

So, what went wrong? Experts identified three primary factors that influenced how consumers felt about the car buying process: limited inventory, the time it took to make the purchase, and high prices. 

Because cars were so hard to come by, sticking to a beloved brand or dealership wasn’t possible for many consumers. Instead, car shoppers were forced to go wherever the inventory was. Nearly 40% of all new car shoppers bought from a brand they had never used before, which was up from just over 30% in 2021. 

The time commitment necessary to buy a car also went up by nearly 20% between 2021 and 2022. That included both research time and time spent in dealerships.

From start to finish, the process took about two full hours longer this past year than in the year before, while time at the dealership went up roughly 20 minutes, and research time went up more than an hour. 

Prices of cars also created frustration for shoppers. Overall price satisfaction was under 50% in 2022, while it was over 60% in 2021. Similarly, nearly 65% of car shoppers said that they spent more on cars than they intended this year. 

Were there any bright spots? 

The survey did uncover some positives. The greatest area of satisfaction came from car shoppers who ordered their vehicles online. 

Not only did online orders of cars increase between 2021 and 2022, but the process was easier and more streamlined than those who went into dealerships. These shoppers typically got their cars faster, were able to track their orders, and were able to be more specific with the type of car they purchased. 

This trend was not only more popular this year, but those who went through the process online said that they’d likely repeat it again in the future. 

To read Cox Automotive’s full report, click here. 

New car shoppers are often swayed by flashy technology but a new survey of car owners finds some of the latest in-dash technology may not be ready for prime time.

J.D. Power’s 2022 U.S. Tech Experience Index (TXI) Study conducted a deeper dive into advanced vehicle technology and found that 46% of vehicle owners reported at least one problem with the technology in their vehicles.

The study follows similar research a year ago that found problems with the vehicle infotainment system were the major source of customer dissatisfaction with new cars and trucks. Specifically, more consumers were unhappy about how their smartphones connected -- or didn’t connect -- to their vehicle’s system.

‘Automakers should keep innovating’

J.D. Power researchers say the auto industry should address the issues identified by new car owners but should not back away from experimenting with new technology.

“Innovation is non-negotiable,” said Kathleen Rizk, senior director of user experience benchmarking and technology at J.D. Power. “The fact that the average problems per 100 vehicles (PP100) for a technology is high should not discourage automakers from innovating, as there is often a wide range of total problems experienced for a technology across the brands.”

Steve, of Beaumont, Calif., recently reported problems with the infotainment system in his Honda Civic.

“It used to go blank for some time and come back, touch screen stopped working, could not see the backup camera on the right-hand side camera,” Steve wrote in a ConsumerAffairs review.

“Did some research on the web and Youtube.com and found out that a lot of Civic owners had these issues.” 

Fingerprint reader frustrations

In the latest study, J.D. Power researchers found that the fingerprint reader was the most problematic tech issue in the study’s history. Included in the study for the first time, the fingerprint reader experienced the lowest overall satisfaction score.

Hyundai introduced the fingerprint reader in 2018. Using a fingerprint reader on a smartphone, the technology allows the driver to unlock doors and start the engine remotely.

In the 2022 study, Hyundai's Genesis ranked highest overall for customer satisfaction with in-car technology. It was also the highest among premium brands with an Innovation Index score of 643. In the premium segment, Cadillac, with a score of 584, ranked second and Mercedes-Benz ranked third with a score of 539.

Hyundai ranked highest among mass market brands with a score of 534. Kia earned a score of 495 to rank second, while Buick, GMC, and Subaru tied for third with a score of 482.

The Illinois Secretary of State has temporarily lifted Carvana’s dealer license that allows it to sell cars to consumers in the state. 

In a statement to Automotive News, Henry Haupt, an Illinois Secretary of State spokesman, said the company has been charged with failing to properly transfer titles for some of the vehicles it sold in Illinois. The Secretary of State’s Office opened an investigation in February based on nearly 90 complaints from Illinois consumers.

Carvana did not immediately respond to media requests for comment, but the issue has been reported in a number of consumer review forms, including ConsumerAffairs.

Biswadip, of Prospect Heights, Ill., said he received what was supposed to be his permanent license plate for the car he purchased from Carvana. However, he later learned that the license plate number is not the one that appears on the registration.

“I called Carvana several times to give me a temporary plate so that I can at least drive the car but did not get any resolution,” Biswadip told ConsumerAffairs. “It's already two weeks now and still I can not drive the car because of the plate. I have a little baby at home and without (a) car life is getting difficult.”

Problem not limited to Illinois

Consumers in other states have also reported registration issues after purchasing a vehicle from Carvana. Skye, of Topeka, Kan., told us that they purchased a car in January 2020.

“The registration department put the wrong odometer reading on the title paperwork as 62,000 miles when the vehicle had about 32,000 miles,” Skye wrote in a ConsumerAffairs review. “It took Carvana almost two months to make the correction and get me the paperwork back with a correction form. I submitted everything to the DMV and thought everything was handled properly.”

Apparently, everything was not resolved in the way they thought. Skye claims the company never connected the odometer correction with the VIN. This created a serious problem when Skye tried to sell the vehicle.

“While trying to trade or sell my vehicle, I am being accused of odometer rollback fraud due to their error and failure to correct it,” Skye told us. 

Similar complaints about Vroom

Carmax’s competitor Vroom has experienced similar issues. As we recently reported, Texas Attorney General Ken Paxton has sued that dealer in response to consumer complaints about lengthy delays in transferring titles.

In our reporting on that story, auto industry analyst Cliff Banks, the publisher of TheBanksReport.com, told us that Vroom and Carvana appear to be the only dealers that are producing complaints about delays in titling.

“I think it's due to them both (Vroom and Carvana) trying to grow quickly and not having the processes in place as they enter new markets to adequately provide the services required in a vehicle transaction,” Banks said.

Both companies have similar business models. Consumers choose a vehicle from online listings, and the cars are delivered to their homes. Both companies were highly popular during the first year of the pandemic.

Consumers who want to purchase a new car or truck are having to dig deeper into their pockets as an increasing number of dealers are adding thousands of dollars to the sticker price.

Auto manufacturers, notably Ford and GM, have asked dealers not to do this, fearing a consumer backlash against the brand. But dealers are independent businesses, and some told the Wall Street Journal that they are selling fewer cars and must increase profits on each sale.

In some extreme cases, buyers have discovered that the most popular vehicles on the lot are selling for as much as $40,000 above the manufacturer’s suggested retail price (MSRP). Dealers say there is no shortage of people willing to pay it. In January, 80% of new car buyers paid over the sticker price.

In one ConsumerAffairs review, Steve, of Beverly Hills, Calif., wrote that he “verbally” agreed to pay the sticker price for a 2021 Range Rover and waited nine months for the car to arrive. When the car arrived at the dealer, he said a salesman called him to tell him the price had gone up by $40,000.

“Before I even had a chance to get to the dealership to discuss the price he sold it to someone who was willing to pay the 40k over,” Steve wrote in his review. “I waited 9 months for nothing!!!” 

Buyers in revolt

According to the Journal, car buyers are in revolt. It recounted the efforts of one buyer who flew to a dealership 300 miles away to get the car he wanted at a reasonable price. Karl Brauer, executive analyst at iSeeCars.com, says making that kind of effort is increasingly necessary.

“If you can expand your search from a five or 10-mile radius around your house to a 100 or 200-mile range you can greatly expand your opportunities,” Brauer told ConsumerAffairs in a recent interview. 

Brauer points out that if you have to travel six hours round trip to save $1,200 on a car, you’re gaining around $200 an hour.

Only a couple of months ago, economists predicted that the ripple effect of a car shortage could slam consumers, and they certainly got it right. Supply chain issues have made shopping for a new car a lot less fun than it used to be. With prices continuing to rise, many people are thinking twice about how much they need a new set of wheels.

The ConsumerAffairs Research Team surveyed over 1,000 consumers and asked about the struggles they’ve faced while recently searching for a new vehicle. Our findings show that 28% of people are thinking about simply giving up on looking for a car right now.

Sadly, only 2 out of 5 people who are looking for a new car were able to identify potential options in their price range.

Settle on a vehicle and rethink travel

If you’re still in the pool of vehicle buyers who are determined to buy a new car or truck, there are several things you should expect when doing your shopping. Here are some of our researchers' recommendations to help speed up the process:

Settle for what you can find: Buying a car is a serious investment for most consumers. After going through the process several times over their lifetime, many experienced car owners know what they’re looking for before they even pull up to the lot. 

However, many people are also aware that the current shortage of available cars will limit their options. That might force a determined buyer to settle for a vehicle that meets their budget while only having some of the bells and whistles they’re looking for. 

On the subject of budget, the price ceiling for the consumers surveyed suggests that car buyers are trying to hang on to every dollar they can. The average amount that the survey respondents said they'd be comfortable spending is $21,310, which is less than half of the average price of a new vehicle in 2022 ($47,077), according to Kelley Blue Book. If new vehicle inventory levels remain tight, it’s possible that sticker prices could continue to rise.

Rethink how you travel: With growing concerns about the environment, traffic problems, and rising gas prices, consumers are starting to look at how they travel on a day-to-day basis. The average number of daily personal car trips plunged as much as 45% during the pandemic, thanks in part to people ordering more online and having their purchases delivered. Unfortunately, that's a move that the Environmental Protection Agency (EPA) says does more harm than good to the environment.

The U.S. is split about driving the same or pulling back, according to our survey. Just over half of respondents said they’re not likely to go without a car in the future, but the other half of respondents say they’re likely or moderately likely to pull back on their daily travel. ​​Drivers aged 18 to 25 were more likely to consider taking alternative transportation, while baby boomers were the least likely.

“Going carless is easier for those with reliable public transportation options. People who are able to walk, use a scooter or bike to and from their destinations may also find it easier to make the change,” the ConsumerAffairs research team advised. “Ride-sharing and carpooling are other good alternatives to car ownership when you can’t afford a car or are waiting for your dream car to become available.”

There’s more

The study covers a lot of other aspects car buyers should consider – the most desirable brands, added insights on inventory levels, and more. Consumers can learn more by reading our full list of findings here.

With 2022 just days away, consumers who are looking for a new car are probably wondering when the market will get back to normal, with an adequate selection and prices at or below the sticker price. Automotive experts say it won’t happen anytime soon.

“It’s impossible to know for sure, but just given the nature of the shortage of chips and the overall supply chain shortages that go beyond chips, it’s probably a safe bet to say that we would be lucky to get back to a satisfactory supply situation in six months, and it might take as long as 12 months,” said Karl Brauer, executive analyst at iseecars.com, in an interview with ConsumerAffairs.

The automotive experts at Edmunds concur. They say 2022 new car sales will probably fall to 15.2 million, not because of a lack of buyers but because of a lack of vehicles. Jessica Caldwell, Edmunds' executive director of insights, says every automaker is at the mercy of their suppliers, especially computer chip manufacturers.

"Sales have been depressed since the spring, but consumer appetite for new vehicles continues to run high, which will only serve to build up deferred demand next year and beyond,” Caldwell said. “In 2022 there won't be a question of how many new vehicles consumers will buy, but how many vehicles automakers can actually produce."

Expect to pay a premium price

All of this means that consumers who purchase a new car in 2022 will pay a premium price. So far, buyers haven’t balked at skyrocketing prices that average around 11% above sticker price, according to Brauer.

Edmunds data reveals that average transaction prices for new vehicles continued to hit record levels in the fourth quarter, climbing to $45,872 in November 2021, compared to $39,984 in November 2020. In many cases, consumers are paying more because they are purchasing higher trim levels with more expensive features.

Experts also predict there will be fewer leased vehicles in 2022, a trend that began this year. With low inventories, dealers won’t be encouraging leases by providing incentives.

Downside to leasing

Savvy consumers may also be less likely to consider a lease in 2022 because the residual value of the vehicle at the end of the lease will be set by today’s inflated values for used cars. It’s difficult to predict where used car prices will be 36 months from now.

"Consumers who are planning on making a vehicle purchase in 2022 must prepare for a much different market and car shopping experience compared to years past," said Ivan Drury, Edmunds' senior manager of insights. 

In short, competition for new vehicles will be fierce as inventory shortages persist. It could cause some buyers to consider an electric vehicle since automakers may be producing more of them in the coming year.

There has been a shortage of new cars since early in the COVID-19 pandemic, leading to a number of interrelated and cascading economic issues. More than a year and a half later, the economy is still trying to cope.

It all started when the U.S. economy abruptly shut down. Assembly plants closed for several weeks in April 2020, and struggled to catch up with demand when they reopened. The increase in demand was a surprise, but, in hindsight, it probably should not have been.

With mass transit shut down and fewer ridesharing options, consumers became more dependent on personal transportation. But supply chain constraints, notably the shortage of computer chips, limited auto production.

When auto plants close or reduce output, it doesn’t just mean that they need fewer workers; it also has an impact on plants that make tires, headlights, and other components. That causes municipalities where these plants are located to lose tax revenue. Some economists believe the effects could linger for years.

“It’s a very meaningful drag on growth and employment,” Ian Shepherdson, chief economist at Pantheon Macroeconomics, told DNYUZ.com.

Fewer bargains

With a limited number of vehicles to produce and sell, automakers are focusing on the most expensive trucks and SUVs that carry a higher profit margin. A consumer on a limited budget who is looking for a compact sedan is being confronted with smaller selections as well as higher prices.

Pamela, of Globe, Ariz., was able to find and purchase a 2022 Nissan Pathfinder, but they haven’t been able to drive it because of paperwork back up at the dealer.

“I took possession of a 2022 Nissan Platinum Pathfinder that I paid cash for on 8/24/21,” Pamela wrote in a ConsumerAffairs review. “To date, Nissan has not sent the MSO to my dealer so that I can get the title in my name. For nine weeks I've had to park my new car, DMV, my insurance, no one shows ownership. I've also had to get two extensions on my temporary plates from the dealer. I'm further insulted to get the Sirus notices saying my free trial is over when I haven't even been able to drive the car.”

Manufacturing economy still growing

Despite these problems, the manufacturing economy is still growing, albeit more slowly. This week, the Institute for Supply Management (ISM) reported that new orders were down 6.9% in October from the previous month. At the same time, the prices that consumers pay are rising. The ISM’s Prices Index registered 85.7%, up 4.5% from the month before.

In its latest report, Cox Automotive found a number of factors in the market that continue to work against consumers. Vehicle prices, both new and used, hit record highs in September and the middle of October. 

Meanwhile, the selection of new cars continues to shrink. New-vehicle inventory dropped below 1 million units, but used-vehicle inventory improved slightly.

Amid shortages of new cars, buyers faced even steeper challenges in September. As a result, new car sales are expected to be sharply lower when the final numbers are in.

In its preliminary estimate, Cox Automotive predicts that sales for the month will be down 8.5% from August and 26% lower than September 2020. In fact, when all the figures are tallied, Cox expects the worst month for new car sales since May 2020, when most of the economy was locked down.

By all accounts, there are plenty of people shopping for a new car or truck. But there are fewer choices as the shortage of new and used vehicles gets worse.

“After a strong spring selling season, the supply situation has worsened precipitously and is dragging sales down with it,” said Cox Automotive Senior Economist Charlie Chesbrough. “The monthly declines have been large – the sales pace has declined by more than a million units in each of the past five months. Available supply on dealer lots is now 58% lower than last September, down nearly 1.4 million units.”

Negative impact on consumers

This is having a negative impact on car buyers in a number of ways. First, there are limited vehicles to choose from. Forget color, you might not be able to find the model and trim level you want.

Buyers lucky enough to find their desired vehicle will have much less leverage negotiating a sale than they might have had before the pandemic. Manufacturers have cut back significantly on incentives because the vehicles are selling without them.

Dealers aren’t just holding to the sticker price; in some cases, they are raising it for vehicles that are popular or in short supply. That’s sending more buyers to the used car market, where prices have also risen and some late model cars and trucks are hard to find.

Still not enough computer chips

Auto industry analysts have not yet forecast an end to vehicle shortages, which are largely caused by a shortage of computer chips and other supply chain issues. That could mean very few vehicles for sale in December, a time when buyers traditionally reap savings with end-of-the-year sales.

An earlier study by Kelley Blue Book found that consumers in the market for a new vehicle are prepared to call off their search for three or more months. That, at least, could alleviate some of the demand pressures.

“With a large portion of the in-market population now saying they plan to delay their purchase given the current market conditions, it will be interesting to see how that could impact the ongoing delicate balance of supply, demand, and pricing across the industry,” said Vanessa Ton, senior industry intelligence manager for Kelley Blue Book.

In the opinion of consumers, new car quality rose at a slower pace last year. According to J.D. Power, the problem wasn’t under the hood -- it was in the dashboard.

J.D. Power’s Initial Quality Survey found that 25% of the problems consumers cited about their new cars involved the infotainment system. Specifically, more consumers were unhappy about how their smartphones connected -- or didn’t connect -- to their vehicle’s system.

“Owners are caught in the middle when vehicle and phone technologies don’t properly connect,” said Dave Sargent, vice president of automotive quality at J.D. Power. “This year there are many examples of smartphone technology not working as intended in new vehicles. With more vehicles being fitted with the wireless technology owners want, the study reveals an increase in connectivity problems between smartphones and vehicles, leaving many owners unhappy.”

M. of Larchmont, N.Y., is one of those unhappy consumers. He tells ConsumerAffairs that the infotainment system in his 2019 Honda has always given him problems.

“When turning on right blinker Apple CarPlay turns off,” he wrote in a ConsumerAffairs post. “Using steering wheel to change display doesn’t work. Constantly lost signal in middle of driving for no reason. Now nothing works on the system. So now the car I bought to have AppleCarPlay and maps does nothing.”

How quality is assessed

J.D. Power bases initial quality estimates on the number of problems experienced per 100 vehicles (PP100) during the first 90 days of ownership. The lower the number, the higher the quality. The industry average of 162 PP100 is only 4 PP100 better than in 2020, with 20 of 32 brands improving their quality from last year.

That’s good, but it would be even better if consumers were happier with the infotainment systems. The survey found that 6 of the top 10 problems across the industry are infotainment-related.

Connectivity has emerged as the major irritant. For the first time since 2011, voice recognition is not the top problem cited by new-vehicle owners. 

Android Auto and Apple CarPlay

Rather, owners increasingly cite issues with Android Auto and Apple CarPlay connectivity, which they claim has gotten significantly worse. Sargent says it’s clear that the industry has not met consumers’ expectations.

“Owners want wireless connectivity, and the industry has responded,” he said. “However, this has created a bigger technical challenge for both automakers and tech companies.

Sargent says both automakers and their technology partners are probably to blame, but consumers generally take out their frustrations on the manufacturers and their dealers. 

“Owners don’t care who’s at fault, they just want their phone and their vehicle to talk to each other,” he said.

With dwindling selections and fewer dealer incentives, consumers spent more to purchase a new car in May. Kelley Blue Book (KBB) estimates that the average transaction price (ATP) for a new car or light truck was $41,263, a $2,125 increase over May 2020.

It was also nearly $500 more than consumers paid for a new car or truck in April. Consumers purchased more trucks and cars with higher trim levels, helping to boost the ATP.

"Last month's average transaction price-performance highlights an all-time high in year-over-year growth for the month of May," said Kayla Reynolds, industry intelligence analyst at Cox Automotive. "Many manufacturers reported year-over-year gains in average transaction prices. The largest increase came from Mitsubishi, up 12% from this time last year."

Mitsubishi is known as one of the more affordable automotive brands, offering a line of compact sedans that are easy on the wallet. In May, consumers purchased more Outlander and Outlander PHEV vehicles, which are Mitsubishi's highest-priced vehicles.

Non-luxury vehicles got more expensive

The rise in automotive spending was not limited to luxury cars. KBB notes that non-luxury cars saw bigger price gains than luxury models.

Standard full-size SUVs and pickup trucks also contributed to the growth among non-luxury segments. The third and fourth highest-priced models within the segment include the GMC Yukon and Yukon XL, which carry an average ATP of $77,031 and $79,695, respectively. Both of those prices are substantially above the industry and segment average.

At the same time, consumers paid less for electric vehicles (EV) than they did a year ago. The ATP for EVs fell 10.8% from 12 months earlier but was slightly higher than April’s average cost. The minivan segment saw the largest overall price gain last month. Its ATP increased by nearly $6,000 over May 2020, and was 2.3% higher than in April 2021.

Fewer sales, higher profits

The vehicle shortage is working in car dealers’ favor. Cox Automotive reports dealer profits will likely end the second quarter at record highs.

“The price pressure index in Q2 dropped to a record low, meaning a majority of dealers are feeling little pressure to lower prices,” the company said in its latest update. “Inventory, on the other hand, continues to be a major concern.”

Cox Automotive Chief Economist Jonathon Smoke says many of May’s automotive sales trends have carried over into this month. He says June’s sales activity appears to be at pre-pandemic levels.

Consumers who have been turned off by higher prices and smaller selections of new cars and trucks are now finding the same situation on the used car lot. The shortage of computer chips that has limited new vehicle production has spurred demand for previously owned vehicles, with supplies falling and prices rising.

Industry sources show that the average price paid for a new vehicle was more than $40,000 in March, and the average paid for a used car or truck hit an all-time high of $25,463 in April. With automakers cutting production because they can’t find enough computer chips, there are fewer new cars in new car showrooms, and dealers aren’t cutting the deals they used to.

At the same time, dealers are struggling to replenish supplies of used cars and trucks. At wholesale auctions, they’re now having to compete with rental car companies that can’t buy enough new cars and are replenishing their fleets with used ones.

The COVID-19 effect

You can blame the whole issue on the coronavirus (COVID-19) pandemic. When the economy shut down a year ago, carmakers canceled their computer chip orders. Because of the long lead-time necessary to produce semiconductors, chipmakers haven’t been able to catch up.

The pandemic also caused Hertz and other rental car companies to sell off vehicles in the face of plunging demand. But now that the economy is reopening, people are traveling again.

“These rental-car companies sold off large chunks of their fleet in order to right-size for rental demand,” David Paris, senior manager at J.D. Power, told the public radio program Marketplace.

Consumers don’t appear to be balking at these higher prices. With stimulus money flowing freely, many families are feeling flush. The online automotive marketplace TrueCar reports that used car and truck sales rose to 3.4 million units in April, a 58% increase year-over-year. That added to the used car squeeze because dealers started the month with declining inventories.

How consumers might benefit

While the situation might appear to pose challenges, Kelley Blue Book (KBB) suggests that there is a way consumers might turn lemons into lemonade. Assuming they can find a new vehicle they like, their trade-in vehicle has never been worth more.

"There has never been a much better time to sell or trade in your car than right now during this strong seller's market," said Matt DeLorenzo, senior managing editor for KBB. "Dealerships are seeking more used-car inventory, and prices are reaching sky high. If you're in a position to sell, it's a great time to command top dollar for your old car.”

While there may be fewer dealer incentives attached to a new car purchase, DeLerenzo says the increased value of your used car will help take some of the sting out of a potentially higher price point. 

The economy was preparing to shut down a year ago as coronavirus (COVID-19) cases surged in the U.S. One industry bracing itself for the worst was the auto industry.

But a year later, it’s clear that the worst-case scenario never occurred, and the industry has spent the last few months trying to keep up with demand. In a report, Cox Automotive found the changes initiated by dealers last year proved highly popular with consumers and are likely here to stay.

Amid shelter-in-place orders, car dealerships were closed to the public. Sales cratered at first, but dealers quickly adapted to allow buyers to shop for a vehicle, negotiate terms, and even schedule a test drive all online.

What’s more, some national used car dealers already had that model in place. The study found what it called a sharp rise in the usage of “New Form Online Retailers,” which include used-vehicle-only sales sites like Carvana and Vroom. 

According to the study, approximately 17 percent of car buyers visited a New Form Online Retailer during their buying process, a significant increase from 11 percent in 2019 and only 7 percent in 2018. 

These retailers allow consumers to shop for a car online and then deliver it to their homes. If there is a trade-in, they take it away when they deliver the purchase. Many consumers who had never tried this before found that they liked it.

Growing role of the internet

Cox Automotives’ Car Buying Journey (CBJ) Study shows that online shopping continues to be a central activity in the car buyer’s journey. In fact, many consumers have long used the internet to research purchase options. Third-party automotive websites are still the number one destination for vehicle shoppers as they enter the process, with up to 79 percent of buyers indicating that they used a third-party site in 2020.

At the same time, the number of dealerships visited and the amount of time spent in them dropped in 2020, but sales held relatively steady. The Cox researchers attribute that to how traditional car dealers adapted to the new realities.

One of the most important steps taken in response to COVID-19 was dealers’ willingness to bring a car to the shopper’s home for a test drive. An estimated 22 percent of buyers said they did not go to a dealer to test drive the vehicle they purchased.

However, of the buyers who took a test drive, approximately 81 percent said they were satisfied with the process, the highest satisfaction rating for any step.

Efficiency led to increased satisfaction

According to the CBJ Study, consumer satisfaction with the car-buying process rose as more dealers used the internet to promote efficiency. “Heavy Digital” buyers – consumers who performed more than half the steps online – were more satisfied with the process than buyers who didn’t use the internet.

“The Cox Automotive Car Buyer Journey Study: Pandemic Edition shows that vehicle buyers in 2020 were more decisive about their purchase, spent less time on the process, and were more satisfied than ever,” said Vanessa Ton, senior manager of Industry Intelligence at Cox Automotive.  

With this level of success during a pandemic that severely limited consumer activity, the researchers say car dealers are likely to keep these new procedures in place, at least for the foreseeable future.

General Motors has committed to producing no gasoline-powered cars by 2030; Ford says it will only sell electric vehicles in Europe by 2035.

You’d think that consumers must be clamoring for electric vehicles if automakers are making such an abrupt pivot from vehicles powered by fossil fuels. But a report by The Wall Street Journal says they aren’t. In fact, the report found that car dealers are concerned that the industry’s sudden embrace of electric vehicles, pushed by government mandates, could result in a radical drop in new car sales.

Brad Sowers, a GM dealer in St. Louis, says he has yet to see any enthusiasm among his customers for electric vehicles. Last year his dealership sold 4,000 Chevrolets, but only nine were the all-electric Chevy Bolt.

“The consumer in the middle of America just isn’t there yet,” Sowers told The Journal. 

‘Concerned for automakers’

Dealers who have to sell the cars that manufacturers turn out don’t seem all that enthusiastic about electric vehicles, despite governments demanding their production.

The government mandates have caused about 180 GM dealers -- about 20 percent -- to decide to drop their Cadillac franchises rather than incurring the cost of the upgrades that GM has required to sell its planned line of electric cars.

“Frankly, we’re concerned for automakers,” said Kristin Kolodge, executive director of driver interaction & human machine interface research at JD Power.

J.D. Power’s 2020 Mobility Confidence Index Study, released in April, flashed a warning sign to the auto industry. It warned that manufacturers are plowing ahead producing cars that, so far at least, most consumers have not asked for.

While it is true that the technology is evolving quickly, the survey found that even consumers who have previously owned an electric vehicle aren’t really interested in buying another one. They cite the lack of charging infrastructure, the cars’ limited driving range per charge, and the purchase price as their main objections.

The researchers also fault the industry for its efforts to educate consumers about electric vehicles. They note that 70 percent of consumers have never ridden in an electric vehicle, and 30 percent know nothing about them.

Consumers shopping for a new or used car for the holidays are finding a slightly improved selection on dealers’ lots, but bargains have been hard to come by. 

To help stretch car payment dollars, more dealers are offering 0 percent financing. Jonathan Smoke, chief economist at Cox Automotive, says an increasing number of consumers took advantage of interest-free financing last week.

“The share of financing at 0 percent rose to 13.4 percent from 6.7 percent at the beginning of November,” Smoke said. 

Tighter supplies

One of the problems consumers have faced is having fewer cars to choose from. Even though inventories ticked up last week, the new car inventory level at the beginning of December is down 20 percent year-over-year.

The total U.S. supply of available unsold new vehicles stood at 2.87 million as December began. That’s up from 2.67 million at the start of November, but it’s well below last year’s 3.56 million vehicles. Last week, there was a 74-day supply of new vehicles on dealers’ lots, which was an improvement. For used cars, supplies are even tighter.

“Retail used supply declined to 47 days in the latest data, which is normal given the pace of sales,” Smoke said. "Wholesale supply was down to 25 days.”

The COVID-19 factor

The dangerous rise in coronavirus (COVID-19) cases dampened consumer sentiment last month, and even though the number of cases is steadily rising, Smoke says people are still purchasing new and used vehicles, just not at the pace they did before the pandemic.

“Our estimated retail sales, using a same-store methodology, shows momentum improved for both new and used sales last week,” he said. “Sales for the seven days ending Saturday were down 22 percent year-over-year for used and down 14 percent for new. December has started better than November ended.”

Smoke says it may be all about timing. He says many serious buyers may be acting before they think conditions could get worse.

With inventories tight, buyers are finding fewer incentives -- beyond 0 percent financing -- at new car dealers. Used car prices have run up since the start of the pandemic, but they dipped slightly last week.

Cox Automotive reports that model year 2017 wholesale prices declined 0.3 percent last week, and retail prices declined by 0.5 percent. However, both are now up 6.5 percent from the beginning of the year.

New car prices were higher last month when compared to November 2019, but they were lower when compared to October of this year, according to Kelley Blue Book (KBB).

In spite of the coronavirus (COVID-19) pandemic, which flourished with a wave of new cases in November, consumers spent an average of $39,259 on a new set of wheels. That was $499 more than in November 2019 but $480 less than in October.

"COVID-19 began its second surge with cases on the rise this past month and right before for the holiday season," said Kayla Reynolds, industry intelligence analyst at Cox Automotive. "Consumer confidence has been faltering and unemployment remains stubbornly high. Still, consumers in the market for new vehicles are demonstrating an ability to pay premium prices.”

The average transaction price (ATP) might have declined from October, but Reynolds says what consumers are willing to pay is still remarkably high, considering the economic uncertainty brought on by the pandemic. November’s ATP is estimated to be the third-highest month on record.

Bargains on VWs

Consumers found the biggest bargains among Volkswagen models last month. The average price was down 7.11 percent from October and was more than 16 percent lower than November 2019.

Part of that may have been because consumers purchased less expensive models last month, but dealer and manufacturer incentives may also have lowered the cost. Volkswagen launched its annual “sign and drive” promotion during the month.

Consumers also paid less last month for Toyotas, Nissans, GM models, Fords, and Hondas. The widespread decline was somewhat surprising since dealers have not felt compelled to offer much in the way of incentives to sell cars and trucks.

Inventory levels of both new and used cars are near historic lows because demand has increased and the pandemic has reduced the number of vehicles turned out at factories this year. Only a few years ago, the car industry was forecast to decline because the “sharing economy” was expected to drastically reduce demand.

Demand is still high

Not only have new cars gone up in price over the last few months, but they are selling at an increasingly brisk pace. Consumers, however, are particular about what they’re buying.

Though overall sales declined in November, Subaru reports that sales of its Crosstrek model sold 12,841 units, a 23 percent increase year-over-year and its best November in history. Outback sales increased by 3.5 percent in November compared with the same month a year ago. 

"In a sales month that was shorter than usual, our retailers rose to the challenge to deliver steady sales during this time of uncertainty," said Thomas J. Doll, President and CEO, Subaru of America, Inc.

A study of recent car buying trends suggests that dealerships’ transition to digital sales during the pandemic will become a permanent fixture in the process.

Researchers at Cars.com also say that six trends that have altered how dealers and consumers interact have changed the process for the better.

"The current climate drove dealerships across the country to quickly adapt to meet the changing needs of American car buyers," said Alex Vetter, president and CEO of Cars.com. "It has been incredible to witness an industry as large and established as automotive respond with new technology and adopt new processes to ensure a safe and frictionless car-buying experience.

Vetter is referring to the business model quickly adopted by dealers. Dealers already had new and used vehicle inventories online, so websites were modified to allow consumers to select a car and have it delivered to their home for a test drive.

Consumers seemed to like that approach, as people continue to purchase cars during the height of the economic shutdown, albeit at a slower rate than before. Dealers also like the approach since it makes their salespeople more productive, enabling them to handle several transactions simultaneously.

Ridesharing less attractive

Vetter says the pandemic also appears to have stopped another automotive trend dead in its tracks. After years of ridesharing ascendency, consumers are increasingly interested in personal transportation.

“As the pandemic continues into the second half of 2020, more people will turn to car ownership to safely get around while social distancing,” Vetter said. “And I believe we will see durable changes to car buying and selling that deliver an improved experience for all."

Digital buying is one of those durable trends. Consumers have long used the internet to shop for cars, but Cars.com predicts that the sales process will stay online long after the pandemic.

By May, car sales through Online Shopper, a digital sales platform, were up 63 percent compared to before the pandemic hit. According to Cars.com research, 71 percent of car shoppers want to complete some, if not all, of a car purchase online.

AI chatbots

The report also shows that AI chatbots were widely deployed at the beginning of the pandemic to support digital sales. That trend, the company predicts, will continue.

Thirty percent of American car shoppers want their local dealerships to offer at-home test-driving, while 31 percent want dealers to deliver their car at home after the purchase.

After years of decline, the sedan is making a comeback. Cars.com reported a 14 percent uptick in sedan search activity from April to June.

Finally, consumers appear to be focusing more on the used car market. Cars.com reports that the highest average search price fell from $39,000 to $27,000 between March and June. 

A new study conducted by researchers from the University of Washington surveyed consumers on their attitudes regarding self-driving cars. 

Though rideshare companies continue to test these vehicles, the survey revealed that consumers aren’t yet ready to let their cars do the driving, with many being more comfortable having control in the driver’s seat. 

“We believe that our respondents are telling us that if they were riding in an automated vehicle today, they would be sufficiently stressed out by the experience that it would be worse than driving themselves,” said researcher Don MacKenzie. “This is a reminder that automated vehicles will need to offer benefits to consumers before people will adopt them.” 

Understanding consumers’ mindsets

The researchers surveyed over 500 people across the U.S. to gauge how they felt about autonomous vehicles. 

The surveys were simple: participants had to choose whether they’d want to be behind the wheel or utilize a rideshare app for a 15-mile commute. However, half of the participants were told that the rideshare car would be an autonomous vehicle. 

After collecting the responses, the researchers turned participants’ answers into monetary values. According to MacKenzie, “the idea here is that ‘time is money,’ so the overall cost of driving includes both the direct financial costs and the monetary equivalent of time spent traveling.” 

Though rideshares typically won out over participants driving themselves, when the participants knew that an autonomous vehicle would be picking them up, they weren’t as thrilled with the idea. 

Based on the results, the researchers determined that participants valued rideshare rides at around $21 an hour. However, when participants were reminded that they can multitask in the rideshare car, that price dropped to $13 an hour, which showed that travelers thought the mode of transportation was more cost-effective. But despite that drop, when the participants were told about the driverless cars, that price shot up to $28 an hour; values for participants who drove their own cars came in at $25 an hour. 

The researchers hypothesize that these findings come from the variables surrounding autonomous vehicles, as many consumers are unsure of how these vehicles will operate. 

“The average person in our sample would find riding in a driverless car to be more burdensome than driving themselves,” said MacKenzie. “This highlights the risk of making forecasts based on how people say they would respond to driverless cars today.” 

The Center for Auto Safety and Consumer Watchdog have once again come together to lobby for a federal investigation into how Tesla markets its Autopilot driver-assistance system. 

Last year, the consumer groups called on the Department of Motor Vehicles (DMV) and Federal Trade Commission (FTC) to investigate the matter, calling Tesla’s marketing of its semi-autonomous driving software “deceptive and misleading.”

Since then, “another person has died, others have been injured, and many more have acted recklessly as a result of Tesla giving owners the perception that a Tesla with ‘Autopilot’ is an autonomous vehicle capable of self-driving,” the groups said in a statement. “To be clear, it is not.” 

The groups argue that Tesla’s representations of its Autopilot feature “continue to violate Section 5 of the FTC Act, as well as similar state statutes."

"It is time for regulators to step in and put a stop to Tesla's ongoing autopilot deception," said Adam Scow, Senior Advocate for Consumer Watchdog. "Tesla has irresponsibly marketed its technology as safety enhancing."

Misleading to consumers

For its part, Tesla has been clear that drivers should never take their hands off the wheel while Autopilot is engaged. However, a recent study found that many consumers still believe the feature equips the car with self-driving or autonomous capabilities. 

“The name ‘Autopilot’ was associated with the highest likelihood that drivers believed a behavior was safe while in operation, for every behavior measured, compared with other system names,” the Insurance Institute for Highway Safety (IIHS) wrote.

“Autopilot also had substantially greater proportions of people who thought it would be safe to look at scenery, read a book, talk on a cell phone or text,” IIHS noted. “Six percent thought it would be OK to take a nap while using Autopilot, compared with 3 percent for the other systems.”

A factor in crashes

In March, a Tesla owner crashed his Model 3 into a semi truck. Investigators later found that the driver had turned on Autopilot about 10 seconds before the crash. The driver’s hands weren’t on the wheel and no “evasive maneuvers” had been executed prior to the collision.

The incident was “almost identical” to a fatal crash that occured in 2016, the groups noted. “In both instances, an overreliance on features that were deceptively described as an ‘Autopilot’ directly contributed to their deaths.” 

Autopilot has also been a factor in at least two other deadly crashes. In 2018, Apple engineer Wei “Walter” Huang died in a crash while in his Model X with Autopilot activated. Huang’s hands weren’t detected on the wheel for six seconds prior to the collision. In January 2016, Gao Yaning in Handan, China was killed during a fatal collision involving a Tesla with Autopilot engaged.  

The consumer groups pushing for an investigation have accused Tesla of "making their owners believe that a Tesla with 'Autopilot' is an autonomous vehicle capable of self-driving.” 

With more consumers finding themselves utilizing electric scooters, experts are noting a strong increase in head injuries.

According to a recent study conducted by researchers from Rutgers University, lax regulations regarding adults wearing helmets while on board an electric scooter have led to a dramatic increase in head and face injuries over the last 10 years.

“Children use motorized scooters marketed as toys, but in reality, certain models can reach speeds of almost 30 miles per hour,” said researcher Amishav Bresler.

Staying safe on the roads

To track the safety of motorized scooters, the researchers examined data from the Consumer Product Safety Commission’s National Electronic Injury Surveillance system between 2008 and 2017.

Based on 100 hospitals across the country that contribute to the dataset, experts are able to create national estimates based on their findings.

In this study, nearly 1,000 people were treated for a head or face injury sustained while on a motorized scooter, which experts approximated to about 32,000 people who were similarly injured on a national scale.

Helmet use was rare among those who were injured, though older scooter riders were more likely to don the safety gear. While the youngest demographic was less than 20 percent likely to wear a helmet, nearly 70 percent of those in the oldest age group practiced safety measures by wearing a helmet.

Of those most likely to experience a head injury while riding a motorized scooter, the researchers noted that men out-injured women and adults out-injured children.

While just 33 percent of all head injuries were incurred by children aged six through 12, men between the ages of 19 and 65 were most likely to land in the emergency room after an electric scooter accident.

The researchers explained that lenient helmet-wearing regulations are most likely to blame for the recent increase in these kinds of injuries, and lawmakers should get stricter when it comes to consumers’ safety.

“The United States should standardize electric scooter laws and license requirements should be considered to decrease the risky behaviors associated with motorized scooter use,” said Bresler. “In 2000, Italy implemented a law mandating helmet use for all types of recreational scooter drivers -- legislation that reduced head trauma in scooter riders from about 27 out of 10,000 people before the law passed to about 9 out of 10,000 people afterward.”

Dangers on the road

With companies like Uber and Lyft now offering customers easy access to electric scooters, it should come as no surprise that accidents are increasing.

Experts have noticed more and more consumers landing in the hospital with injuries ranging from concussions, broken bones, and internal bleeding.

“What I think bothers a lot of us as trauma surgeons is that we’re seeing injuries that are completely against decades of injury prevention -- alcohol intoxication, no helmets, people that don’t know how to ride these vehicles in the first place," Dr. Vishal Bansal, Chief of Trauma Surgery at San Diego’s Scripps Mercy Hospital, told 10News, an ABC affiliate in San Diego.

Automobile subscriptions are quickly becoming a serious contender in the age old debate of whether to buy or lease a vehicle.

The movement isn’t at the on-every-corner level yet, but Mercedes-Benz, BMW, and Volvo are among the early believers. Rideshare company Lyft has also jumped in the game.

Now, AutoNation, with its more than 350 retail locations, is partnering with Fair, an all-in-one vehicle shopping app, to give consumers an additional option of subscribing to a used or certified pre-owned vehicle. The subscription offer will roll out later this month starting in California.

Is cheaper better?

“The cost of Fair’s subscriptions are cheaper as compared to new model cars or OEM subscriptions,” a Fair spokesperson said in comments to ConsumerAffairs.

“Two key advantages allow Fair to price cars more aggressively. First, Fair carries a virtual fleet of pre-owned vehicles that are one- to five- years old and have less depreciation than new cars,” Fair commented.

“Second, Fair also works with a network of about 3,000 dealerships and we only include the most fairly priced vehicles in our app based on analysis of prevailing market prices. Our technology is able to run VIN numbers of unique cars looking at age, mileage, condition and estimation of value, and when these things meet our standards, we will list a car in our app as a fairly-priced vehicle.”

Upsides and downsides

Inside the Fair-AutoNation subscription plan, there are two attractive pluses. One is that the consumer can keep the vehicle as long as they want and walk away without any penalty. The other being that each car subscription includes a limited warranty, routine maintenance, and roadside assistance.

If a subscriber wants to add extra insurance, bump up the mileage cap, or protect themselves against excess wear-and-tear, they can bundle those extras into their monthly payment.

However, the old “buyer beware” comes into play as it does in many car-buying experiences. In Fair’s FAQs, there’s something called a “Start Payment.”

“To keep monthly payments low without locking you in to a long-term contract, every car you get through Fair requires a Start Payment. It's an upfront fee, based on the value of each vehicle and due at signing to drive away,” the company explains.

A win-win?

The arrangement has some definite advantages for consumers, but what’s in this for the auto dealers?

It’s too early to tell if this plan will generate competing plans from large used car dealers like Carmax, but Autonation chairman and CEO Mike Jackson believes the end result will mean more upward movement for the used car industry.

“From a dealer's perspective this will help increase the velocity of the used car business while also enhancing our access to new customer groups,” the executive said.

On Wednesday, the Center of Auto Safety and Consumer Watchdog sent a letter to the Federal Trade Commission (FTC) requesting that the agency investigate how Tesla has marketed its controversial "Autopilot" assisted-driving technology.

The consumer groups called Tesla’s use of the name Autopilot “deceptive and misleading” and argued that advertising the enhanced cruise-control system under the name Autopilot could make consumers think the feature makes a Tesla vehicle self-driving.

"Tesla is the only automaker to market its Level 2 vehicles as 'self-driving,' and the name of its driver assistance suite of features, Autopilot, connotes full autonomy," the letter said.

"The burden now falls on the FTC to investigate Tesla's unfair and deceptive practices so that consumers have accurate information, understand the limitations of Autopilot, and conduct themselves appropriately and safely.”

Customers have misused Autopilot

Despite owner manual disclaimers warning drivers to keep their hands on the wheel at all times while using Autopilot, two known deaths and one injury have occurred as a result of Tesla drivers relying on Autopilot to control their vehicle.

One of the most recent crashes occurred in March. The driver told police she had Autopilot engaged and was reading her smartphone and not watching the road. In Great Britain, a driver had his driving privileges suspended for engaging Autopilot and then leaving the driver’s seat.

The consumer groups are calling on the FTC to examine Tesla's advertising practices surrounding the feature to determine whether the company should be faulted for its customers' misuses of Autopilot.

Deceptive marketing

The letter cited statements made by Tesla founder Elon Musk which seemed to suggest Autopilot is safer than it actually is.

“In an interview with CBS in April 2018, after Musk was asked what the purpose of Autopilot is if drivers still have to touch the steering wheel, he responded ‘because the probability of an accident with Autopilot is just less’,” the groups wrote.

Earlier this month, a woman in Utah crashed her Model S into a fire truck at 60 miles-per-hour while using Autopilot. Following the collision, Musk sent a tweet that said, ‘What’s actually amazing about this accident is that a Model S hit a fire truck at 60mph and the driver only broke an ankle. An impact at that speed usually results in severe injury or death.”

“Thus, Musk conflates Autopilot’s safety, or lack thereof, with the Model S’s ability to withstand a crash,” the letter concluded.

Tesla has said its Autopilot pilot feature results in 40 percent fewer crashes. The National Highway Safety Administration (NHTSA) restated this claim in a 2017 report on the first driver fatality, which occured in May. Earlier this month, the agency said regulators had not actually evaluated the effectiveness of the technology.

The automotive and technology industries continue to make progress in developing self-driving cars, but a new AAA survey shows consumers are growing increasingly skeptical, if not fearful, of autonomous vehicles.

In fact, a new survey from AAA finds consumer trust in cars that drive themselves has eroded quickly in just the space of a few months.

The survey found 73 percent of motorists would be afraid to ride in a full self-driving vehicle, a significant increase from 63 percent recorded in late 2017. Two-thirds of adults said they would actually feel less safe as a pedestrian or bicycle rider, sharing the road with self-driving cars.

AAA notes the results were likely influenced by recent accidents involving self-driving cars, being tested on public roads. In one of the most recent incidents, an Arizona pedestrian pushing her bicycle was struck and killed by a self-driving car being tested by Uber.

The preliminary investigation determined that the car's sensors saw the pedestrian but did not recognize her as an object it should avoid hitting.

High expectations for safety

“Despite their potential to make our roads safer in the long run, consumers have high expectations for safety,” said Greg Brannon, AAA’s director of Automotive Engineering and Industry Relations. “Our results show that any incident involving an autonomous vehicle is likely to shake consumer trust, which is a critical component to the widespread acceptance of autonomous vehicles.”

Broken down by age groups, the results aren't what you might expect. Millennials, the generation that is considered the most tech-savvy, has lost faith in autonomous vehicles the fastest. In 2017, only 49 percent of millennials expressed misgivings about riding in a self-driving car. Today, it's 64 percent.

“While autonomous vehicles are being tested, there’s always a chance that they will fail or encounter a situation that challenges even the most advanced system,” said Megan Foster, AAA’s director of Federal Affairs. “To ease fears, there must be safeguards in place to protect vehicle occupants and the motorists, bicyclists, and pedestrians with whom they share the road.”

Consumer groups want to hit the brakes

A number of consumer and safety groups agree. That's why they have been vocal in their criticism of the government's fast-tracking of autonomous vehicle testing on public streets. The Center for Auto Safety is among the groups worried that there isn't enough regulatory oversight, as an increasing number of self-driving cars interact with humans.

After the Arizona accident, the group said pushing these vehicles out onto the road without proper testing and regulations is a mistake. It notes that government safety guidelines put into place in 2017 are voluntary and "designed to put manufacturers directly into the driver’s seat."

While companies like Uber and Google continue to move forward with autonomous vehicle technology, a new study suggests consumers’ trust in self-driving cars is low.

Almost 60 percent of drivers who currently own a connected car -- defined as a vehicle with certain “smart” technology features -- said they wouldn’t buy a self-driving car even if money wasn’t an issue, according to a survey conducted by Solace.

Many connected car drivers admitted they don’t always feel comfortable handing over the driving controls to their vehicle. While 62 percent of connected car drivers believe their vehicles help them drive safer, 40 percent of respondents said they wouldn’t trust their car to brake for them; a mere 9 percent said they “always trust their connected car.”

Millennials have the least trust

The study -- which drew its findings from the responses of 1,500 connected car drivers weighted against U.S. Census Bureau data -- found that young millennials are more likely to want full control of their vehicle compared to baby boomers.

Younger consumers are generally thought of as being open to new technology, but the survey found that almost half (46 percent) of respondents aged 18-25 said they would not trust their car to automatically react to driving conditions. Only a third of drivers 65 or older felt the same.

“The automotive industry is focused on bringing self-driving cars to the mass market, but our survey showed that connected car drivers of all ages just aren't ready to hand over the wheel," said Shawn McAllister, CTO of Solace.

"While advancements in autonomous vehicle technologies are incredibly exciting, it's important to keep an understanding of the consumer front and center. We hope our survey will help in this regard."

Connected car features

Those surveyed owned a car with connected device features such as Bluetooth connectivity, safety sensors, GPS navigation, remote door locks, WiFi, or voice assistance.

While most consumers said they’re becoming more comfortable with connected car features -- and are especially happy to receive safety and navigation assistance -- many drivers didn’t know what information their connected cars can store.

Nearly half (48 percent) of respondents weren’t aware that their connected vehicle could store personal information such as their home address, birthday, and social security number.

Overall, the findings suggested consumers are receptive to features that improve the driving experience -- but most aren’t eager to allow technology to completely take control.

New car sales dipped by an estimated one percent in November, according to Kelley Blue Book, which may explain why car companies are hoping more consumers will "subscribe" to a car.

Volvo recently launched Care by Volvo, a car subscription service where consumers pay a flat monthly fee for the use of a car when they need it.

If that sounds a lot like leasing, Scot Hall, CEO of Swapalease, admits there are a lot of similarities. In an interview with ConsumerAffairs, Hall said the concept is part of the sharing economy that is aimed at millennials who have been slow to purchase new cars.

"Most subscription-based set-ups don't require a lot of money upfront, there's usually a standard flat monthly rate that could go up or down, depending on usage," Hall said. "That's going to be an attractive feature from a budgeting standpoint."

What's the appeal?

The monthly fees aren't exactly cheap, but if you purchase a car, finance it, and pay for insurance and maintenance, you could come out close to even on a subscription. You avoid the hassles of owning a car and can have access to more than one vehicle, depending on the program.

"If you needed a car to drive to work, a small sedan or SUV would be a good choice," Hall said. "But perhaps you're taking a vacation and would like to use a larger, more comfortable vehicle for the trip. Maybe you have to move some furniture, so you would reserve a pickup or van."

Under the Volvo subscription, the company retains ownership of the vehicle and pays for the insurance and maintenance. Some subscription levels include being picked up at your doorstep and a concierge service.

In 2016, Ford purchased Canvas, a car subscription company serving San Francisco. This year the company expanded to Los Angeles. Porsche and Cadillac also launched luxury subscription services in 2017.

Links to ridesharing

Canvas acknowledges a link to ridesharing and other transportation services, saying it is trying to adapt car ownership to the changing needs of the modern consumer. Hall expects consumers who are frequent users of ridesharing apps like Uber and Lyft to be early adopters of subscription cars.

"My educated guess is the consumers who will be most interested in this service are the younger generation and millennials, whose members seem to be less interested in owning things," Hall said. "Also, I think it might depend on what area of the country these consumers are in. People in urban areas may be more receptive than consumers in small towns."

IHS Markit, a data analytics firm, predicts "mobility as a service," which includes ridesharing, will gain momentum as a trend and represent 10 million vehicles by 2040.

Part of that growth may be fueled by more companies getting into the car subscription business. Automotive News reports some dealers, auto lenders, and even startup companies are beginning to offer subscriptions as an alternative to owning a car.

Following two destructive hurricanes in two weeks, there are a lot more flood-damaged cars in the U.S. than there were a month ago.

All too often, these vehicles make their way onto used car lots, or are offered in the classifieds in private party sales. A new report from Carfax, an automotive data company, suggests consumers are currently driving around in 325,000 cars and trucks that have been underwater.

That's a 20% increase over last year and doesn't take into account the impact from the recent hurricanes.

In most cases, when a car is submerged in water, the insurance company will declare it a total loss, and write the owner a check for a replacement. But that doesn't always happen.

What to do if your car is flooded

State Farm Insurance advises consumers whose cars have suffered flood damage to carefully inspect the vehicle, but not to start it. If water has gotten into the engine, starting it can cause even worse damage.

The company offers a step by step guide here.

As you might expect, it all depends on how high the water got. If it covered the floorboards but didn't make it to the seats, there might be extensive damage but the insurance company might decide it can be repaired.

The experts at Popular Mechanics suggest wasting no time cleaning out your flooded car, since mold, mildew, and even corrosion can set in almost immediately. They say you need to get started before the insurance adjuster arrives, because there is no guarantee he or she can get there right away, especially if there has been widespread flooding.

If the water has made it all the way to the dashboard, the vehicle needs to be totaled. That's especially true if the flooding was caused by salt water. Maybe the interior can be cleaned and the mechanical systems repaired, but Popular Mechanics says the complex and intricate electrical systems in today's vehicles are probably beyond repair if they were submerged.

What buyers should watch out for

So consumers shopping for a used car have to be aware of two types of flooded cars; those that have been repaired but may still have flood-related issues, and those that should have been junked but somehow have made it back onto the market.

There are classic signs that a car has been underwater. When you open the door, you are likely to be greeted by a musty odor, no matter how much detergent and disinfectant was used to clean the interior.

This will be especially true if you open the trunk. The trunk compartment is not ventilated and it is almost impossible to cover up that musty smell.

You might also be able to see signs of water damage. If the car was underwater for any period of time, there may be a watermark on the seats that is difficult, if not impossible, to remove. It might be even more visible in the trunk.

Look for signs of rust on metal fixtures, especially seat belts, and look at the rear of the car for the dealer decal. If the dealer is in a market -- like Houston -- that recently suffered flooding, the integrity of the vehicle needs further investigating, especially if it is on a used car lot in Illinois.

The reason consumers should avoid flooded cars goes far beyond cosmetics. A flood-damaged vehicle is probably going to be an unreliable vehicle. One thing after another may go wrong because the vehicle may be rusting from the inside.

'Salvage' title

If an insurance company declares a flooded car a total loss, there is nothing to prevent you from purchasing it from the insurance company and trying to repair it. But if you do, that vehicle, by law, must carry a "salvage" title. That lets any potential buyer know that the vehicle has been repaired from a defect serious enough to deem it a total loss.

"Our data shows there's still much work to be done in helping consumers avoid buying flood damaged cars," said Dick Raines, president of Carfax. "They can, and do, show up all over the country, whether it be a few miles or hundreds of miles from where the flooding occurred."

Raines worries about what Hurricanes Harvey and Irma will mean for unsuspecting consumers shopping for a used car. He estimates the two storms could result in several hundred thousand more flooded cars ending up on used car lots and in the classifieds.

"Buyer beware" has never been more important than now when you go used car shopping.

August is usually the month new car dealers offer incentives to make way for the new model year. But the numbers so far show consumers paid about 1% more for a new set of wheels.

Kelley Blue Book (KBB) estimates consumers paid an average of $34,648 for a new car or truck during August, up $243 from August 2016. It suggests consumers chose slightly more expensive vehicles during the month, or vehicles with a more expensive option package.

Most of the year-over-year increase came courtesy of just one company -- Chrysler Fiat. The amount consumers spent on the brand last month increased 6.6% over August 2016, helped in large part by spending on RAM trucks and Jeep SUVs.

General Motors led the increase from July to August on strong sales of its luxury brand Cadillac and GMC trucks. The average transaction price (ATP) was up 1.1% month-over-month.

Mixed average transaction prices

"August revealed mixed average transaction prices across the major manufacturers, although the industry average still managed to rise nearly 1% year-over-year," said Tim Fleming, analyst for Kelley Blue Book. "However, we should note that this is far lower than the 2 to 3 percent gains in the first half of the year.

Fleming notes that consumers spent less on full-size trucks and mid-size cars. He concludes that there are signs of pressure on new car prices that will likely lead to the first down sales year since the recession.

But there were a few automotive categories where consumers were willing to spend more last month. The ATP for minivans rose 2.6%, consumers spent 1.9% more on entry-level luxury cars, and 1.5% more on small SUVs and crossovers.

Uncertain future

While sales and spending numbers might suggest a drop off in new car sales for the year, Hurricane Harvey may prove to be the wild card. As we noted this week, an estimated 500,000 vehicles in the Houston area have been flooded, meaning most will be replaced with insurance checks.

With sagging sales before Harvey, the prospects for consumers negotiating a more attractive deal were improving. With a sudden demand for new and used cars, consumers may find they have less bargaining power power on both the new and used car lot.

After months of record new car sales, consumers have taken a breather. Sales are off their highs, meaning buyers have a little more bargaining power.

At the same time, the huge number of cars coming off leases has inundated the used-car market, pushing prices lower. It seems there has never been a better time recently to buy a new or used car.

At least, that was the situation a week ago.

But now Hurricane Harvey has dumped more than 50 inches of rain on the Houston metro area, and that has resulted -- among other things -- in the flooding of an estimated 500,000 cars and trucks. Presumably, the owners of those totaled vehicles will soon be getting checks from their insurance companies and will be buying either new or used replacement vehicles. When that happens, there will be a surge in automotive demand and good deals will be harder to come by.

Turning on a dime

Industry experts say the market dynamic may turn on a dime. Before last weekend, the assumption was that the glut of used cars would depress the prices of both used and new cars. After the damage caused by Harvey, all bets are off.

In an interview with CNBC, Steven Wolf, chairman of the Houston Automobile Dealers Association, predicted a surge in demand for replacement vehicles in the next 30 days. Wolf said used-car prices are likely to quickly rise, though he thinks new cars will not see the same kind of upward pressure.

Labor Day weekend is usually a big promotional time for both new and used car dealers. Consumers outside of the Texas flood zone, who are in need of a new set of wheels, might be wise to take advantage of the sales.

Act before the price increase

While prices are already rising for used cars, you might be able to get a better deal now than you could a month from now. New car promotions are usually set up weeks in advance, so new-car Labor Day weekend promotions should not be affected.

The estimated half million cars and trucks flooded by Harvey's downpour should be headed for the scrap heap. As in almost every flood situation, a few will illegally make their way to the used car market.

Consumers don't have to worry about it when shopping this weekend, but in the weeks ahead used-car shoppers need to be wary of cars from Texas on the used car lot, especially if they smell musty and are beginning to show signs of rust.

As a result of the catastrophic flooding along the Texas Gulf Coast, perhaps millions of cars and trucks have been submerged and will have to be replaced.

That may turn out to be a huge lift to the flagging auto industry, which has seen sales slide in recent months, but a new survey suggests consumers are going to be a lot more discerning about what they choose as replacement vehicles.

In fact, as new car prices have continued to hit new highs, consumers appear to be less impressed. The American Customer Satisfaction Index (ACSI) shows satisfaction with new cars is down 1.2%, mainly on a big drop by U.S. manufacturers.

GM managed to hold its own with consumers, but satisfaction with Ford and Fiat Chrysler took a tumble. Foreign manufacturers seemed to do best with U.S. consumers and have widened the gap between vehicles made by U.S. companies and those carrying an international brand.

'Seen this movie before'

"Chances are that we have seen this movie before," said Claes Fornell, ACSI Chairman and founder. "There was a surge in demand and increasing customer satisfaction with foreign cars in the 1980s, mostly because the domestic auto industry had difficulty keeping up. While U.S. cars have improved much over the years, they have not been as consistent in quality and customer satisfaction compared with their international counterparts."

Fornell says U.S.-based car companies can improve their brands only by renewing focus on their products and their customers. Toyota, meanwhile, is apparently doing something right as it scored highest in both the mass market and luxury segment. Ford's Lincoln, which led the luxury segment only a year ago, fell 5%.

In the mass market segment, five of the top six are from international manufacturers and all five improved their customer satisfaction standing over last year. Subaru is in second place, followed by GMC -- the only domestic nameplate -- Hyundai, Kia, and Mazda.

Buick and Jeep prove to be exceptions

Even after a number of safety recalls, Honda managed to tie Chevrolet. Among domestic brands, Buick and Jeep were among the few showing improvement.

Even Volkswagen is showing signs of bouncing back from its emissions cheating scandal, with satisfaction with the brand going up 1%.

Declining satisfaction has coincided with declining new car sales in recent months, though the two may be unrelated. Kelley Blue Book (KBB) predicts new car sales bounced back this month, posting a 1.5% year-over-year gain when the final accounting is done. It expects strong gains by GM and Toyota, with sharp declines by Ford and Chrysler.

Memo to the automotive and technology industries: you might be in a rush to get self-driving cars on the road but consumers aren't in a hurry to ride in one.

A survey by J.D. Power finds, with the exception of Millennials, all other generations are becoming more skeptical of self-driving cars, not less.

“In most cases, as technology concepts get closer to becoming reality, consumer curiosity and acceptance increase,” said Kristin Kolodge, executive director of driver interaction and HMI research at J.D. Power. “With autonomous vehicles, we see a pattern where trust drives interest in the technology and right now, the level of trust is declining.”

Using last year as a benchmark, the survey found 11% more Generation Z and 9% more "pre-Boomers" say they “definitely would not” trust automated technology to get them where they want to go. But that doesn't mean they're against automotive technology.

Safety features are popular

Consumers of all ages say they are interested in learning more about technology-related safety features, such as emergency braking and steering, lane-change assist, and cameras that illuminate blind spots. They're just not ready to take their hands off the wheel, and Kolodge says that attitude is hardening.

“Forty percent of Boomers do not see any benefits to self-driving vehicles," she said. "Automated driving is a new and complex concept for many consumers; they’ll have to experience it firsthand to fully understand it."

Perhaps, but the question remains just exactly how they will experience it. It is highly unlikely that the average consumer will be able to afford a self-driving car, at least not one of the early models.

Expensive cars

Price is something neither the automotive not technology industries are talking much about. Technology publisher Quartz Media recently noted the reticence of experts to discuss price, but said it found one who ballparked the cost of a fully autonomous vehicle at $250,000.

So far, however, the consumers who are open to autonomous vehicles aren't too worried about price. For all five of the technologies with the largest purchase intent gap, Gen Y/Gen Z has a stronger intent to buy than Boomers. These consumers say they are definitely or probably interested before they even know the price.

Price alone, however, is probably not the only hesitation on the part of skeptical consumers. They may share some of the same concerns as safety advocates, who have urged both industry and government policymakers to tap on the brakes as the move to put self-driving cars on the road.

Even though there has been little documented consumer sentiment asking for them, automakers are moving quickly to develop autonomous cars.

Testing has already begun on public roads in California, New York, and Michigan. Now, Consumer Watchdog, a consumer advocacy group, is urging everyone to tap the brakes.

Speaking at the Automated Vehicles Symposium 2017 in San Francisco, Consumer Watchdog Privacy Policy Director John Simpson said there currently are no federal and few state regulations covering self-driving vehicles. He worries how self-driving cars are going to mix with vehicles driven by people.

"No federal or state standards would leave us at the mercy of manufacturers as they rush to use our public highways as their private laboratories however they wish with no safety protections at all," Simpson said.

Praise for California

He praised California's initial autonomous vehicle testing regulations, saying they are working. He notes that 36 companies have permits to test robot cars on public roads and will be required to file crash and disengagement reports, so the public knows what's happening.

The consumer group is calling on the National Highway Traffic Safety Administration (NHTSA) to adopt enforceable federal safety standards covering self-driving cars. If the feds don't do it, the group warned, the states will have to.

But Congress might not let the states act. Simpson said the House Energy and Commerce Subcommittee on Digital Commerce and Consumer Protection held a hearing recently on a bill to prevent states from adopting autonomous vehicle safety standards.

Last year, the Obama Administration issued an automated vehicle policy that relied on voluntary measures. The Trump Administration is said to be reviewing that policy and may issue guidelines of its own.

Big stake for consumers

Simpson says consumers have a big stake in how this all plays out. The concern is what the cost to both consumers and taxpayers will be in the future, when human drivers will share the road with what are essentially "robot cars."

There are also legal questions to be determined. For example, who will be at fault in a crash between a car driven by a human and one piloted by a robot?

Simpson says Congress should not limit or restrict state consumer protection laws in this area, and should not give manufacturers a pass by allowing arbitration clauses, "hold harmless" provisions or other waivers in their contracts.

Consumer concern over the rush toward automotive automation is not new. A years ago Consumer Reports called on Tesla to disengage its auto pilot feature in the Model S until the carmaker makes it necessary for the driver's hands to remain on the wheel at all times.

At the same time, a coalition of consumer groups called on the government to establish clear rules before turning self-driving cars loose on the nation's highways.

Incentives and special financing deals often make new cars attractive, but you can't get away from the fact that new cars cost a lot.

Kelley Blue Book (KBB) reports the average transaction price (ATP) consumers paid for cars and light trucks in May was an estimated $33,261, up 2.6% from May 2016. But that doesn't mean the sticker price was more.

"Transaction prices continue to climb at a steady rate, driven by the weakening sales mix of cars which is estimated at 38% in May, down from 41% one year ago," said Tim Fleming, analyst for Kelley Blue Book.

Compact SUV's were big sellers last month. With sales increasing 2% over the previous May, dealers were sell willing to negotiate, resulting in a slightly higher ATP. But Fleming says that may be changing.

Signs of discounts

"There are signs of discounts in SUV segments that are growing quickly, including subcompact and luxury SUVs, which are likely helping to fuel those segments' double-digit sales growth this year," he said.

Fiat Chrysler vehicles saw the biggest ATP increase, rising nearly 6%. Ford was close behind at 5%. Hyundai-Kia's May ATP was unchanged from the year before.

New car sales have slowed down this year, creating more incentives. But consumers who want to save money are also taking a look at late model used cars.

Because of the growing popularity of leasing new cars, used car lots are packed with three year-old vehicles that have just come off a lease. Because there are so many, dealers were able to pay less for them at auction and are in a position to sell them for a little less.

Difficult to get rid of them

Since the lightly used cars are entering a market that favors trucks and SUVs, the prices will fall, Jim Lentz, Toyota North America CEO told USA Today. "It's more difficult to get rid of them," he says. "You're going to have very attractive certified used passenger car payments relative to new passenger cars."

For example, a 2013 Honda Accord LX sedan with 29,000 miles is listed at Carmax for $15,999. A new 2017 Honda Accord LX has a TrueCar price of $24,130.

Carfax reported that used car dealers were offering incentives in May, usually reserved for new cars, on a wide selection of late model used cars.

Automotive publisher Edmunds.com has called the current used car market "one of the strongest buyer's markets in recent memory." However, the glut of used cars is mostly confined to recent models.

If the car you're driving is more than six years old, Edmunds says it might be worth more than you think, because there's a shortage of used cars in the lower price range.

The Memorial Day weekend auto dealer ads will be chocked full of deals on new cars. And as we noted this week, some nice cars will probably go at steep discounts.

While they might not get the promotion of new car deals, bargains on late model used cars will be just as real, and might be a better fit for your budget. A new car might go for much less than its sticker price, but it will still be several thousand dollars more than a comparable three year-old model.

When it comes to late model used cars, automotive publisher Edmunds calls it "one of the strongest buyer's markets in recent memory." It reports a huge number of vehicles are coming off their three-year lease this spring, meaning there is a large selection of 2013 and 2014 models to choose from.

That suggests used car dealers are in the same boat as new car dealers -- too much supply and not enough demand. That normally results in lower prices and more incentives.

At the same time, your old car may be worth more than your think. The Edmunds editors report dealers have a shortage of vehicles that are six years-old or older, and could be eager to take your trade-in.

Tied to the new car market

One reason for the attractive used car market is the record sales recorded by new car dealers over the last few years. At the same time, a wider swath of those sales have been three-year leases.

"The leasing surge we've seen over the past few years is taking hold and changing the face of the used-car market," said Edmunds senior analyst Ivan Drury. "With new-vehicle sales already beginning to stagnate, swollen inventories of off-lease used vehicles hitting the market and priced to move may cannibalize new-car sales and further strain residual values."

That may be a problem for new car dealers going forward, but it creates opportunities for consumers now. According to Edmunds, three year-old cars aren't holding their value as much as in years past. It says the average three year-old vehicle today is selling for $1,200 less than what dealers figured its residual value would be when it was leased new three years ago.

Used car prices are falling

That's already showing up in used car sale prices. Used car specialists at J.D. Power found used car wholesale prices -- what the dealers pay for them -- fell 1.5% in April. And just like Edmunds, J.D. Power says it's all connected to problems in the new car market.

"While April's losses were consistent with historic norms, the used market continues to experience negative pressure from a struggling new market," said David Paris, senior market intelligence analyst at J.D. Power Valuation Services.

And Paris expects prices to keep falling. He projects used cars that are 2009 or later will go down another 1% this month. In fact, you might want to wait until next month to buy a used car, since Paris expect used car prices will fall 2% in June.

New car prices have continued to rise, with the average transaction price now $35,000 or more.

That puts the average vehicle -- remember, $35,000 is just the average -- out of reach for a lot of consumers. Sure, you can lease it or finance it for the rest of your life, but that's not really a good way to buy a car.

Fortunately, there are a lot of new cars that sell for well below the average price. For example, the Kia Soul sells for around $18,000. The Toyota Corolla goes for just over $20,000. The Honda Fit sells for around $17,000.

Granted, these economically-priced new cars are pretty small, and might not be as practical for a family. So Kelley Blue Book (KBB) has offered up some alternatives -- larger, more comfortable rides that are still well below the average transaction price.

Chevrolet Impala

Number one on KBB's list is the 2017 Chevrolet Impala, starting at around $27,000. KBB says the Impala offers an impressive combination of spaciousness, comfort and value for families and individuals seeking a full-size sedan.

Another Chevrolet, the Malibu, also packs a lot of room and comfort for a below-average price. The Malibu got a make-over in 2016, winning praise from critics and consumers alike. Besides the expected car comforts, the Malibu also offers available 4G LTE Wi-Fi, Apple CarPlay and wireless phone charging. It sells for just under $22,000.

Now in its 35th model year, the 2017 Toyota Camry delivers a wide range of attributes, including roominess, features, and an affordable sticker price. In most cases, you can drive away in one for around $22,000.

Honda Accord

The 2017 Honda Accord is a top seller year after year. Its high quality, smooth ride and popular features make it a top seller year after year. It sells for around $22,000.

Despite its growing popularity, the Subaru Outback is still priced under $30,000. KBB says the Outback is not just rugged, but also offers a cushy interior and soft ride. It sells for around $26,000.

Of course, if you load any of these cars down with options you can probably get the price over $35,000. But if it's a smooth ride and affordable payment you're seeking, you've got plenty of choices here.

From all accounts, the automotive industry is enthralled with the idea of self-driving cars.

Every automaker, it seems, is working on the technology that removes the driver from the equation. We are told that autonomous vehicles hold the promise of ushering in a utopian travel experience, where every occupant of every vehicle may sit back, enjoy the ride, and stay glued to his or her smartphone.

But are consumers -- the people the automotive industry needs to make this a reality -- really buying it? The evidence suggests not all of us are completely on board.

The latest research from J.D. Power on the subject suggests growing consumer skepticism, which runs counter to the way things usually play out.

"In most cases, as technology concepts get closer to becoming reality, consumer curiosity and acceptance increase," said Kristin Kolodge, executive director of driver interaction and HMI research at J.D. Power. "With autonomous vehicles, we see a pattern where trust drives interest in the technology and right now, the level of trust is declining."

Younger consumers more accepting

The research, however, shows that the younger you are, the more open you are to a computer driving your car. Older consumers, however, are increasingly skeptical.

The insurance industry, after initially expressing enthusiasm, has also begun to raise some questions. The objective of autonomous technology is to remove human error, meaning fewer accidents. But Lockton, an insurance broker, suggests these vehicles are not without risk.

A Lockton white paper, Autonomous Vehicles: Risk Management Issues and Concerns, delves into some of those risks, including shifts in liability exposure, cybersecurity, and the impact it will have on underwriting commercial auto policies.

The company says most cars on the road today have little or no automation. If they do, however, cybersecurity may be a concern. The report notes that today's hackers have the ability to break into some models of vehicles through the entertainment system and take control.

How much does it cost?

But a bigger concern for consumers may be sharing the road with autonomous vehicles and the cost of buying one. Currently, Uber is operating a handful of driverless vehicles in Pittsburgh and Arizona with few problems. An Arizona accident involving a driverless car was found to be the fault of the driver in the other vehicle.

But it also raises the issue of cars driven by humans sharing the road with vehicles piloted by computers. Because for the foreseeable future, most cars are going to have a human behind the wheel.

That's because driverless cars are likely to be extremely expensive, at least for the first few years they come onto the market. Try pricing some of today's technology features on a new car, such as lane change warning, and you'll find it dramatically increases the price of a new car. It would stand to reason that a car that drives itself is going to have a huge price tag, perhaps well beyond the affordability range of the typical consumer.

J.D. Power says 40% of Baby Boomers don't see any benefit to driverless cars. The firm predicts they'll change their minds as they get more comfortable with the technology.

Auto service businesses, whether a dealer, franchise, or independent garage, appear to be doing a better job of serving their customers these days.

The latest J.D. Power U.S. Customer Service Index (CSI) study shows "significant improvement" in the quality of automotive service. This includes things ranging from an oil change to a complete engine overhaul.

J.D. Power measures service on a 1,000 point scale. In this year's survey, auto service businesses logged a score of 805, up from 779 the previous year. Customer service rose from 800 to 813.

The study limited its scope to customers driving vehicle one to five years-old.

Doing it right the first time

"The quality of work—doing the job right the first time—can noticeably affect customer satisfaction and loyalty, but it shouldn't be viewed in a vacuum," said Chris Sutton, vice president, U.S. automotive retail practice at J.D. Power. "Proactive communication with the customer, especially while the car is being serviced, is one element that has a direct influence on loyalty."

That may be an area where auto service businesses have increased their focus in recent years. Of those consumers in the survey, 55% said they will "definitely" return when their vehicle needs service. Customers who received text message updates and reminders from the business were significantly more loyal.

Helpful technology

Sutton said the research found that consumers of all ages prefer texts as a way of communication, yet only 3% said they get them on a regular basis. Sutton says auto service businesses that want to improve customer service and consumer loyalty should consider adopting text updates.

In fact, the study suggests the adoption of technology by service providers may be the key to rising levels of customer satisfaction. It found the use of tablets by service advisors and online scheduling tend to boost customer satisfaction. The use of tablets rose from 17% in 2015 to 24% last year.

One area where dealers fall short is servicing the increasingly sophisticated infotainment systems. Only 80% of consumers in the study said a dealer was able to repair problems with vehicle radios the first time.

Economists who say there isn't much inflation in the U.S. economy probably haven't shopped for a car lately.

The average transaction cost on a new car is now north of $35,000 and used car prices keep going up as well.

The latest State of the Automotive Finance Market report from Experian shows the amounts consumers are financing on new and used car purchases has hit a record high. As a result, buyers are extending the loan payback times to reduce monthly payments.

In the last quarter of last year, the average loan amount for a new vehicle rose to a record high of $30,621. For used vehicles, the average amount financed was $19,329, up from $18,850 in the same period of 2015.

73 to 84 month loans

To keep monthly payments within their budgets, nearly a third of new car buyers opted for loans of 73 to 84 months. In the used car segment, more than 19% of buyers went for loans that long.

"With the average loan amount for new and used vehicles hitting all-time highs, we are seeing the need for affordability drive consumer purchasing behavior," said Melinda Zabritski, Experian's senior director of automotive finance. "Our latest research shows an $11,000 gap between the average loan amount on a new and used vehicle — the widest we have ever seen. This upward trend is causing many consumers to find alternative methods like extending loan terms, getting a short-term lease or opting for a used vehicle to get what they want while staying within their monthly budget."

All of this is being done to make the monthly payments fit into a buyer's budget, but personal finance experts might point out that fitting the payment into monthly cash flow doesn't necessarily make the car "affordable." In fact, if it takes seven years to pay off a new car, it might be argued the car is not affordable.

20/4/10 rule

Here's a simple test called the 20/4/10 rule, which determines whether the vehicle you are considering is really affordable.

The 20 part is the down payment. The price should be low enough that you can afford to make a 20% down payment.

Next, you should be able to afford the monthly payment by financing it for no more than four years -- not six or seven.

Finally, the monthly payment and insurance should not exceed 10% of your monthly income.

Applying that formula to a new car costing $35,000, a consumer should be prepared to put $7,000 down, leaving a balance of $28,000. At 2.5% interest, the monthly payment for four years is $614.

How does that fit into your monthly budget?

In the past, the annual Consumer Electronics Show (CES) in Las Vegas was simply a showcase for the latest consumer gadgets.

Visitors could see things like personal digital assistants (PDA), the latest developments in VCRs, and even the newest solar-powered calculators. These shows were a launching pad for products that never made it off the pad, as well as those that became part of everyday life.

In recent years, CES has almost seemed like an auto show. Carmakers have showed up to display the increasing integration of technology into their vehicles.

Honda says it will showcase its vision of a redefined mobility experience, with an emphasis on artificial intelligence and robotics. Cars, after all, are beginning to drive themselves, so the technology has less to do with the infotainment system and more to do with the base operating system.

Honda promises to reveal how its technology could ultimately reduce traffic congestion.

Hyundai teaming with Google

Hyundai, meanwhile, is partnering with Google on its Blue Link Agent, which works with Google Assistant. Using voice commands, consumers will be able to start their Blue Link-equipped Hyundai and set the temperature control before leaving the house.

Karl Brauer, executive analyst for Kelley Blue Book, says CES has begun to rival major auto shows as a venue for the latest automotive developments.

“With the race for the autonomous car in full sprint, everyone expects CES to unveil the latest developments in self-driving capabilities,” Brauer said. “We’ll also hear plenty on that subject from traditional automakers and tech companies, both of which are jockeying for bragging rights at leading the race.”

Rolling computers on wheels

As cars become rolling computers on four wheels, Airbiquity promises to reveal its latest innovation in over-the-air (OTA) software and data management, which keeps connected vehicles up to date, much as PCs must constantly be updated to make sure they run properly.

“As more and more connected vehicles are enabled to receive OTA software updates—as well as export operational and driving behavior data—automakers will need a way to efficiently manage the increasing complexity of doing OTA for millions of vehicles with a multitude of electronic components, systems, and software files from numerous suppliers,” the company said in a statement.

Also expect to see the latest developments in self-driving technology, as nearly every automaker has embraced the idea that humans will eventually become passengers only, and not drivers. Michael Harley, senior analyst for Autotrader, says CES is marking the passing of eras, as old fashioned cars become automated digital devices.

“It’s no surprise that CES, the world’s largest consumer technology show, will be the global stage to premier tomorrow’s automotive wizardry,” he said.

Harley says he expects to see advancements this week that will bring “the automotive industry one-step closer to the eventual removal of the steering wheel.”

CES runs from January 5-9 in Las Vegas.

For many consumers, the worst part of buying a new car is dealing with the dealer. There have been scattered attempts to move the whole process online, but they have been only modestly successful so far.

A start-up in California called Roadster thinks it has worked out the kinks and is rolling out something it calls Express Storefront, which takes humans almost completely out of the equation.

Roadster says it enables consumers to shop for a car from their home or office, apply for credit, have their trade-in appraised, and make decisions about down payments, insurance, and so forth.

Once that's done, the dealer delivers the car to the buyer's home or office, the paperwork is signed, and everyone lives happily ever after.

That's the theory anyway and, so far, reports say it's working out pretty well. 

"This is how consumers want to do business. In every other marketplace, consumers are buying things online, not just researching them," said Mike Christian, general manager of Toyota Marin, according to a report by Automotive News.

Roadster has been around for a few years. It initially billed itself as a consumer concierge, helping to close car deals. The initial process required humans on the dealer end to shepherd the deal along, whereas Storefront Express is almost entirely hands-off, the company says. (Concierge service is still available for consumers looking for exotic cars or who want more hand-holding).

An essential element is transparent pricing. There's no haggling and all charges are spelled out on the site.  

Linked from dealer

Consumers can go directly to the Roadster site, but the company expects most customers will come from dealer websites that link out to Roadster using "buy online" buttons.

Roadster and dealers who are on board so far say many consumers prefer the more methodical approach online buying brings to the car acquisition game. Instead of feeling pressure by salespeople and finance managers, consumers can take their time and, at least in theory, put together the deal that's best for them without fixating on price.

"Generally speaking, shoppers spend a disproportionate amount of effort on the up-front price of the car, while not spending enough time and energy on the other aspects of their deal that can be even more impactful to their bottom line. Things like finance or lease rates, trade-in values, or settling for a car that has more features than they really need or want," Roadster's Rudi Thun says on the company's blog. 

For now, the service is only available in California, but if it works, it's expected to spread rapidly.

In a recent story, we reported that Toyota is rolling out a program to lease more used cars. As a postscript, we added the advice we normally include in stories about car leasing:

While leases may appear to offer more car for the money, consumers don't have anything to show for their monthly payments at the end of the lease and often find themselves facing lots of unexpected costs, including excess mileage, charges for minor damage, and the ubiquitous "end of lease fee," which is just what it sounds like, a fee for nothing. 

This generated some rather heated responses from car salesmen, like Richard, a Toyota salesman who said our warning about lease-end fees was "completely false" and recommended we do more research.

So we did and found a recent ConsumerAffairs review by Susan of Madera, Calif., who said she had leased a Toyota Prius in 2013 and purchased a Sienna in 2014. She also talked her father into buying a Tundra.

But then: "Two months ago I returned my lease, and the way Toyota repaid us for being great customers was to charge me $350 at the end of my lease for not buying through Toyota Financial again. Even though we bought a new Sienna after the Prius, and even after my dad bought the Tundra."

$350 + tax

It doesn't happen only in California. George of Manahawkin, N.J., recently turned in his 2012 Rav4 at the end of the lease. "Two months after I returned the car I received $350 fee + tax. I have owned/leased five Toyotas since 1990. There was no disposition fee assessed to the contract for any of these vehicles. They never disclosed this fee to me or I would have never leased the vehicle in the first place," George said.

Justin of Howell, N.J., is also fuming about the end-of-lease fee. Justin paid off his lease early and asked Toyota Financial if it would waive the $350 "disposition fee" at the end of the lease term. 

"I was told that this Loyalty Waiver is reserved for 'qualified customers that MUST lease or finance a Toyota through a participating dealer...' My argument was that the word 'Loyalty' insinuates that this waiver would be applicable to 'Loyal Customers' and since I have purchased one car and leased two from Toyota that I should be considered a 'Loyal Customer.'

"I suggested that they change the wording to 'Continued Customer Waiver' to represent a more accurate description of what the waiver really represents. In addition, I suggested that they change their contracts to fully disclose the disposition fee in bold and put a line for customers to initial next to it so that they have an opportunity to negotiate the waiver prior to signing the contract. No dealership should be allowed to use the word Loyalty in this waiver as it is deceptive and misleading," Justin said.

These and many other consumer reviews in our database would seem to contradict the claims made by Richard the Toyota salesman, who said flatly: "Toyota, in my close to twenty years with them, has never charged a 'lease end fee.' Completely false."

Dents & dings

Richard also objected to our mentioning charges for damage and excessive wear, saying that Toyota is "very liberal" in overlooking minor dings and dents. 

But Dennis of Oil City, Pa., says he found Toyota to be very liberal in assessing damages.

"I leased a 2010 Rav 4, had the pre-inspection, and there was nothing the matter. I turned the vehicle in and get a bill for $429.46 for excessive wear and use. I had 28,000 miles on it. They say there was a 12-inch scratch on it, it wasn't there when I turned it in. It sat in a parking lot for approximately 3 weeks before they picked it up. Who knows what happened in that time frame!" he said.

John of Olathe, Kansas, sent us a photo of his Prius (above) to illustrate his dismay with Toyota's end-of-lease inspection.

"I cannot believe we have babied our Toyota Prius on a lease through Toyota. I had the inspection yesterday and they said that I need to have the bumper, hood, and roof reconditioned (look at the picture). This is probably the best lease return Toyota will get," John said. "I take complete care of all of my vehicles and have never experienced something so unjust. My experience leasing from other companies is completely different."

Nothing to show

Toyota salesman Richard took special umbrage at our statement that consumers should consider that after making payments for three or more years, at the end of the lease they are basically left with nothing.

Not true, said Richard: "I think the most untrue statement is that 'consumers don't have anything to show for their monthly payments. As some one [sic] who leased thousands of Toyota's [sic] to people, I vehemently disagree. A wise consumer leasing a Toyota can typically re-lease right around 30 months of a 36 month lease. Using their equity that they accumulated they can choose to lower the payment on their next lease, or purchase another vehicle. Additionally, they can just re-lease and take a check for the equity. All those options are more than you let on in your article."

Could be, but while some consumers may have the experience Richard describes, others wind up like Ronald of Torrington, Conn.

"Terminated my lease early (3 months). Turned the vehicle into a Toyota dealer for another lease. Received a letter from Toyota Financial Services demanding that I pay the remaining three months left on the lease. I paid the amount they requested," he said. "Six months later, I received a letter from a debt collection company hired by Toyota Financial services demanding $1249.76."

Then there's Yvonne of Rialto, Calif.: "I was leasing my vehicle through Toyota, then purchased it. The finance department tacked on the residual. I am paying $58,000 by the time I finished paying for this vehicle in 2016, after already paying for four years of payments."

"My payments are $540 a month, which is extremely hard for nine consecutive years."

Leasing isn't buying

Yvonne, like many consumers, has failed to fully understand the nature of a lease. For the three or four years that she was leasing the car, she was merely paying for using it, not making any payment towards the residual, which is what the buyer and the manufacturer agree the car will be worth at the end of the lease.

If a consumer turns the car in at the end of the lease, the car is gone and so is the money. If they buy it, as Yvonne did, it is a separate transaction in which the consumer pays the residual. So, yes, Yvonne could very well pay $58,000 over nine years, depending on the length of the lease, her down payment, the residual value, and so forth. 

Consumers often buy cars at the end of the lease term, thinking they have -- as Richard suggests and as Yvonne perhaps believed -- built up equity in the car. In fact, they have merely paid for using it and have not taken even a chip out of the residual in most cases.

Oftentimes, consumers would be better off turning in their leased car and shopping for a used car of similar vintage if they don't want to lease a new one. They would at least have some bargaining position as a prospective buyer, whereas at the end of a lease, the consumer is in a poor bargaining position since she has already agreed to pay the residual price if she decides to purchase.

What to do

If you're thinking of leasing a car, it's important to decide up front what's important to you. A lease may be at least partly tax deductible in some cases -- sales and property taxes are generally less and the monthly payment is generally lower. 

If having a new car every few years is important to you, there's nothing wrong with leasing, but it means you'll never get to the day when you make your last payment and own your car free and clear. 

Automotive site Edmunds.com has a set of online calculators that can help you run the numbers and decide what's best for you.

Oh, one other thing to keep in mind: leasing a car is not like renting one from Hertz or Avis. The lease lasts for as long as the contract says it does -- 24, 36, or 48 months usually. Many consumers think they can end the lease early if their situation changes, which is not usually the case.

There are, however, cases when a lease might end early whether anyone wants it to or not. We heard recently from Laurie of Los Angeles, whose husband of 47 years died last August after leasing cars from Jim Falk Lexus for more than 12 years.

"I didn't want the car out front as a reminder so I called Jim Falk Lexus. They were unsympathetic and said I was responsible for the lease," she said. "I called Lexus Financial and they told me they would come get the car and auction it off and we would figure out something. At the same time they sent a collection agency to go after me."

"It has not even been a month as a widow and you are sending dogs to bother me in my grief! This is outrageous. I am horrified that after being such good customers you are this heartless and cruel," she said in a ConsumerAffairs review.

In fact, if her name is not on the lease, Laurie is not personally responsible and does not have to pay another cent, said an attorney we asked about this case. Her husband's estate may, of course, be liable for the unpaid portion of the lease. That's something for the estate's executor to work out.  

In Lexus' defense, turning the case over to a collection agency may sound heartless but it may well be the company's standard procedure for any case in which the consumer is unable or unwilling to continue to make payments. Auctioning the car and using the proceeds to pay off as much of the remaining term as possible is a reasonable way to proceed, the attorney said, even though it may sound heartless.

Despite an ever-increasing number of choices, there is a large segment of American consumers who find a brand they like and stick with it. It's always been the case for cars and trucks.

Consumers who bought Fords one year tended to buy another when it was time for a trade-in. While that isn't true for all brands today, it is definitely true for some.

Experian Automotive keeps track of consumer loyalties and reports that Subaru has the most loyal following, with 67.7% of Subaru owners going back to the dealership to buy another. Among companies that sell cars under more than one nameplate, Ford is close behind, with 67.5% of consumers who own a Ford remaining loyal to the Ford family when purchasing a new vehicle.

"It's exciting to see that manufacturers' efforts to improve owner loyalty are working," said Brad Smith, director of automotive statistics and consulting at Experian. "Over the last few years, loyalty rates have increased, and these improvements are key to the industry.”

Data help carmakers improve

Smith says studying consumer loyalty among vehicle brands, makes, and models helps the industry make better business decisions, such as a dealer selecting inventory and targeting advertising or a manufacturer making adjustments to a vehicle's design and creating more competitive promotional strategies.

In the Experian analysis of sales data, Subaru, Ford, Toyota, and GM hold the top four spots for loyalty, with only 0.5 percentage points separating them. Why does loyalty matter? For a consumer considering a new car purchase, it can point to vehicles that tend to make their owners happy.

Top 10

Here is Experian Automotive's top 10 in terms of customer loyalty:

1. Subaru
2. Ford
3. Toyota
4. GM
5. Fiat Chrysler
6. Daimler
7. Kia
8. Honda
9. Hyundai
10. Nissan

Buyers continue to pay more

When buying these and other cars, consumers continue to pay more and more for them. The average transaction price hit yet another record high in December, according to Kelley Blue Book (KBB). The average price paid for a new car last month rose to $34,428 – up nearly $300 from a year ago.

"Prices continue to climb, reaching record levels, with more new product on the market than ever before, and new product iterations tend to bring higher transaction prices, particularly among luxury models," said Akshay Anand, analyst for Kelley Blue Book.

Among the possible reasons for higher spending levels is, with lower gasoline prices, consumers are buying more SUVs and trucks, which carry higher sticker prices. But Anand also notes consumers are opting for more luxury models, which last month made up 15% of total sales.

Among luxury nameplates, Lexus and Lincoln both rose 1% month-over-month and from this time last year. KBB says new products have helped each brand achieve average transaction pricing in the $40,000 range.

Cars are getting better and consumers tend to hold onto them longer. For one thing, it may take 5 or 6 years to finish paying for them.

Not surprisingly, consumers now keep their new cars an average of 6 years before trading them in or selling them. But not all cars.

The automotive website iSeeCars.com has completed a review of 5 million 2014 model cars sold in the U.S. between September 2013 and March 2014. Then, it checked a year later to see where those cars were.

Most were still with the consumers who bought or leased them but 2.7% – or about 1 out of every 40 – had been sold or traded in. The next question – did any particular models show up on this list significantly more than others?

Well, yes, and the Buick Regal was at the top of the list. Jacob of Sanford, Maine, told of his experience in a recent ConsumerAffairs review:

"My 2014 Buick Regal exploded at 5000 miles on the highway. And I got injured and had to stay at the hospital for 1 week for burns and MRSA caused by the explosion in the Buick Regal. I am never buying a car made by GM ever again," John said.

Least likely to be kept

Here are the 7 models that topped the list, turning over anywhere from 2.6 to 4 times faster than the average:

1. Buick Regal – 10.7% of owners sell after 1 year
2. Chevrolet Sonic – 8.9% of owners sell after 1 year
3. BMW X1 – 7.8% of owners sell after 1 year
4. Dodge Charger – 7.7% of owners sell after 1 year
5. Mercedes-Benz C-Class – 7.4% of owners sell after 1 year
6. Chevrolet Cruz – 7.2% of owners sell after 1 year
7. Nissan Frontier – 6.9% of owners sell after 1 year

Should this give you pause if you, as a consumer, are considering purchasing or leasing one of these 7 models? Maybe. At least the people conducting the study seem to think so.

“iSeeCars.com analysts think the fact that consumers are giving more of these cars up than the average is directly linked to quality or perceived quality of the cars," said Phong Ly, CEO of iSeeCars.com.

Ly says all 7 cars were ranked as average – 3 stars -- or worse in the J.D. Power 2014 U.S. Initial Quality Study, which surveys consumers after 90 days of ownership.

"Because purchasing a new car is expensive and something most people tend to spend a lot of time on, it stands to reason they would make a change shortly afterward if they felt the quality was lacking,” Ly said.

Not necessarily a lemon

It's not that the cars on the list are lemons. It could simply be a case where the bar has been set exceptionally high by competitors. For example, the most frequently-flipped car, the Buick Regal, is in a highly competitive category and might not always live up to buyer expectations.

"Competitors such as the Lexus IS250 and the BMW320i are known for their top-notch interiors and seat comfort, whereas the 2014 Buick Regal has been criticized by some as lacking in these areas," said Ly. "These are two key areas that tend to be of high importance to owners, though it may not be apparent in the test drive whether their expectations can be met in the long term."

The fact that new car buyers tend to flip these cars could actually provide an opportunity for the bargain-conscious used car buyer. Because there tends to be a lot of these models on the market after 1 year they can be purchased at a significant discount.

For example, iseecars.com says a 2014 Buick Regal with 10,000 to 15,000 miles is currently valued at 32.2% less than its new car price. 2014 models with average miles of the Dodge Charger and the Mercedes-Benz C-Class averaged 31.0% and 28.4% less than their new prices, respectively.

"This means that car shoppers have a much greater likelihood of finding their ideal car in terms of color combinations, trim level, options and mileage, if they’re shopping for one of the models on the list," said Ly. "With a savings of at least 17.9% over new for all of the cars except one, they can save some serious cash."

A Queens, New York, man and his Israeli brother were charged in indictments unsealed today with offenses related to a long-running odometer tampering and money laundering scheme, the U.S. Attorney’s Office for the Eastern District of New York announced.

Chaim Gali and John Triculy, 40, of Queens Village, New York, and Shmuel Gali, 42, of Israel, are charged in a 15-count indictment in the Eastern District of Pennsylvania (EDPA) with conspiracy, securities fraud and false odometer statements.  The Galis are also charged in a related two-count indictment in the Eastern District of New York (EDNY) with mail and wire fraud conspiracy, and money laundering conspiracy. 

“Mileage is one of the most important factors in a consumer’s decision to purchase a used car,” said Acting Assistant Attorney General Joyce R. Branda for the Justice Department’s Civil Division.  “Misrepresenting the mileage on a used car fraudulently induces a consumer to pay more money for less value, and it hides necessary information that will affect how a consumer maintains and repairs that vehicle.” 

The indictments allege that the Galis devised a scheme to defraud buyers of used cars by misrepresenting the mileage of approximately 690 vehicles they sold beginning as early as 2006 and through at least 2011. 

The indictments charge that the Galis used fictitious dealer names to purchase high-mileage, used motor vehicles from a national vehicle leasing company.  The defendants are charged with conspiring to alter the odometers in these vehicles, which they purchased in Florida, Maryland, Missouri and elsewhere, to reflect false lower mileages. 

The indictments allege that the Galis then fraudulently altered the motor vehicle titles to reflect the false lower mileages and as a result, the commonwealth of Pennsylvania issued motor vehicle titles reflecting the altered mileages. 

The defendants subsequently sold the vehicles at wholesale automobile auctions in Pennsylvania and New Jersey using various dealerships, including Chase Auto Center and Conestoga City Autos. 

At the auctions, the Galis provided the buyers with Pennsylvania titles bearing the false lower mileages.  The EDPA indictment alleges that in some instances, the title indicated mileage more than 100,000 miles less than the true mileage of the vehicle.

“The defendants created an elaborate odometer tampering and money laundering scheme to con would-be buyers into purchasing used cars at inflated prices,” said U.S. Attorney Loretta E. Lynch for the EDNY.  “They then used the proceeds of their crimes to continue their fraud against additional unsuspecting consumers."

Chaim Gali was arrested today in New York.  Shmuel Gali is in Israel and the government will seek his extradition.

NHTSA has established a special hotline to handle odometer fraud complaints.  Individuals who have information relating to odometer tampering should call (800) 424-9393 or (202) 366-4761. 

In the 1980s GM tried to appeal to young Baby Boomer car buyers with the marketing catch phrase, “it's not your father's Oldsmobile.” Actually, it pretty much was.

Now, there's a new emerging generation of car buyers and manufacturers are finding that not only are tastes diverging, so is the car-buying process. At least that's what the research shows. For example, among Millennials, there is very little actual tire-kicking going on.

A study commissioned by AutoTrader.com interviewed thousands of Millennials, Gen Xers and Baby Boomers and concluded that Millennials are much like earlier generations in their general automotive preferences. They're image conscious and aspirational – they want a nice car now, rather than when they've achieved more in their careers.

Rick Wainschel, AutoTrader.com's vice president of automotive insights, notes luxury brands have anticipated this desire by developing more entry-level models.

"Lower-price-point vehicles such as the Mercedes CLA, BMW 1-series and Audi A3 are making luxury cars more attainable for Millennials earlier in life, which could help these brands establish long-term consideration and loyalty," Wainschel said.

Keeping an open mind

If Millennials are similar to their older peers in wanting the trappings of success in their ride, the way they go about about shopping for just the right deal is a departure. An analysis by Annalect, a business analytics firm, finds they tend to go into the buying process with no firm convictions.

While previous generations tend to be influenced by TV commercials and actively scan newspaper ads for price information, it seems many Millennials start the car shopping process with no idea what they want to buy.

How, then, do they decide? For 95%, online research drives the decision. And here, Millennials do their homework.

Taking more time

The study shows they spend more than 17.6 hours shopping for a car online – usually with their smartphone – vs. 15.5 hours for other buyers. Shopping time includes consulting research, reading reviews by experts and consumers, and other online activities.

That means when they arrive at a car dealer, they pretty much know what they want and aren't likely to change their minds.

“Since the majority of Millennials are decided on which vehicle they want to purchase by the time they get to the dealership, the opportunity for dealers and OEMs to influence their purchase decisions is online — where Millennials spend the majority of their shopping time,” said Isabelle Helms, vice president of research and market intelligence at AutoTrader.com. “With that, it’s incredibly important for automotive advertisers to understand how Millennials are shopping online and across mobile devices so they can effectively reach this generation of car buyers.”

No stigma to a lesser-known brand

Millennials also appear more open than their older peers to buying a a less well-known brand if they perceive quality and value. Young buyers are more likely to drive away in a Kia or Mazda because they believe in the quality of imports.

While Boomers and Gen Xers both include both Chevrolet and Ford among the brands that best fit their personalities younger Millennials don't include either one, preferring only German and Japanese brands.

Auto manufacturers are digesting this research to devise different ways to sell cars to different generations, and some marketing efforts are breaking new ground. If you've seen the new “in the moment” Lincoln MKC ads featuring Matthew McConaughey, you'll notice an almost zen-like appeal to contemplative Baby Boomers.

Millennials, on the other hand, are more likely to be swayed by research as they narrow down their choices. A Baby Boomer consumer is most likely to learn about their next new car at the dealership, but a Millennial values research and first-hand recommendations from a family member or a friend and knows about the car before they arrive.

For that reason, automotive advertising is likely to target fewer Millennials and more Boomers and Gen-Xers.

Eight New Jersey car dealerships will be paying $1.8 million to settle charges that they deceived customers through such tactics as failing to disclose existing mechanical defects or past damage to used cars; charging for supplemental warranties and other costly “after-sale items” without customers’ consent; and failing to honor the negotiated or advertised prices for vehicles.

“This settlement is a tremendous success for the consumers who were affected by the alleged deceptive sales tactics,” Acting Attorney General John J. Hoffman said. “The consequences, including a civil penalty of $1.8 million, are particularly appropriate in light of the fact that the owners of these dealerships allegedly violated an earlier settlement in which they had promised not to engage in such practices.”

The earlier settlement, reached in 1999, covered similar consumer grievances.

The dealerships are all owned by Carmelo Giuffre, of Brooklyn, N.Y., and Ignazio Guiffre, of Colts Neck, N.J.

The settlement includes Route 22 Auto Sales Inc., d/b/a “Route 22 Toyota,” Route 22 Automobiles Inc, d/b/a “Route 22 Honda,” Route 22 Nissan Inc. d/b/a “Route 22 Nissan,” and Hillside Automotive Inc. d/b/a “Route 22 Kia”, all located in Hillside; Hackettstown Auto Sales, Inc d/b/a “Hackettstown Honda”; Hudson Auto Sales Inc. d/b/a Hudson Honda, in West New York; and Freehold Automotive LTD, Inc. d/b/a “Freehold Hyundai” and Freehold Chrysler Jeep, Inc d/b/a “Freehold Chrysler Jeep.” All eight dealerships are owned by Carmelo and Ignazio Giuffre.

“Buying a new or used vehicle can be an intimidating process, especially for consumers who lack the ability to independently learn about a used car’s condition or history before making a decision,” Division of Consumer Affairs Acting Director Steve Lee said. “Our state laws protect all consumers by ensuring they have access to all relevant information when buying a motor vehicle. This settlement is intended to ensure that these dealerships will not again violate our laws or deceive potential customers.”

A spokesman for the dealerships, Rich Tauberman, said programs have already been implemented to inspire greater consumer confidence. 

“This Consent Order reflects a desire by Route 22 Auto Sales, Inc. and its affiliated dealerships to avoid costly and prolonged litigation, focus on its business and build on the transition to 'One Price,' an innovative, transparent and negotiation-free sales process,” Tauberman said.

There are many ways to buy a used car. You can go to a dealer, browse through the newspaper classifieds or look on Craigslist.

A few brave souls, in hopes of getting a sweet deal, go to public auctions. They may, in fact, find a car at a bargain price but there's also a good chance it's going to need a lot of work.

According to Popular Mechanics, a public auto action is something the public should avoid. The magazine says the only consumers who should try to purchase a vehicle at a public auction are exceptional mechanics.

Pitfalls

What kinds of pitfalls await the innocent car buyer? Cars in too sorry shape to be traded in. Cars with so many miles the odometers have stopped working. Oh yes, a few flood cars thrown in for good measure.

However, you may also find some repossessed vehicles, older rentals and cars seized by tow trucks and never claimed. RepoKar Auto Auction, a company that runs public auctions, says many of the sellers at these auctions are financial firms who want to sell the off-lease vehicles returned at the end of the lease period.

But the nicer off-lease vehicles tend to show up at dealer wholesale auctions, which are rarely open to the public. That's where dealers compete for mostly late-model cars that can be detailed and put on the lot to be sold for a profit.

There are also government auctions, which are usually open to the public. There, you will find government vehicles that have outlived their usefulness. Law enforcement agencies also sell confiscated cars and trucks at government auctions.

Tips from an auctioneer

Former auto auctioneer Steve Lang, writing on the automotive website Edmunds.com, says the world of auto auctions is a world the average buyer “enters at their own peril.” He warns that almost nothing is as it first appears to be.

Since you usually aren't allowed to test drive the vehicles – or even start them – before bidding, a car in mint condition could have a blown head gasket or other issues under the hood.

Lang says knowing who is selling the vehicles at an auction is critically important. If the cars have come from a bank or a new car dealer, there's a chance you might find a worthy vehicle.

But if the cars have come from a used car dealer, expect to see a lemon parade. If a used car dealer can't sell a car on his lot, it's going to wind up at a public auction.

Donated vehicles

Public auctions may also be places where vehicles donated to charitable organizations are sold. A donated vehicle might be a good buy, but often it isn't. Often someone donates a car after they've driven the life out of it and can't get enough to make it worthwhile trying to sell it.

If you are determined to give auctions a try, it's best to attend a few without bidding. That's because, like many auctions, the action unfolds at a fast pace. It's easy to get overwhelmed.

Fast lane

“Auctions are the fastest of fast tracks—you are betting you know what you want, that you can recognize a car’s strengths and faults, that you know what it’s worth, and that you have the cool head to stop bidding at that point,” cautions Car and Driver magazine. “The attraction of auctions is that there are rare cars to be had that are not found anywhere else. Auctions also let you avoid dealer markups or overly ambitious owners.”

However, in the age of eBay, when people routinely bid on cars without seeing them, an auto auction isn't as intimidating as perhaps it should be. Automotive site Autos.com says it is true you can get a car for a very low price, but you should be concerned if it's too low.

An amazing deal just may be too good to be true.

A vehicle is a major purchase – for most consumers the second biggest they'll make. So getting it right is important. Buying a car you'll enjoy driving is always a plus, but meeting three other criteria may be even more important.

Safety is consideration No. 1. Both you and your passengers need to feel safe in all types of driving conditions. The good news is cars now are a lot safer than they used to be. Still, some are safer than others.

More to choose from

The Insurance Institute for Highway Safety (IIHS) recently singled out 39 models as meeting its standards for a Top Safety Pick for 2014. The category requires good performance in the Institute's moderate overlap front, side, roof strength and head restraint tests and, for the first time, good or acceptable performance in the small overlap front test introduced in 2012.

Winning top honors in the small car group is the Honda Civic 4-door. Among mid-size cars, the Ford Fusion and Infiniti Q50 share the honors. In the minivan category, the Honda Odyssey took top honors.

"Consumers who want both crash prevention technology and the latest in occupant protection have a fair number of vehicles to choose from," said IIHS President Adrian Lund, announcing the list back in December. "We hope manufacturers will continue to incorporate front crash prevention, developing more robust systems and adding them to more trim levels or, better yet, making them standard equipment."

MPG

Aside from being affordable to purchase, consumers generally need a car that is economical to operate. With fuel the major expense, getting a vehicle with good fuel economy is important. Once again, newer cars tend to offer that quality. These days the average mid-size sedan tends to get better than 30 miles per gallon (MPG), far better than a decade ago.

Generally, however, the smaller and lighter the car the better the mileage, and of course hybrid and electric motors help. Comparing the fuel economy in a sub compact to the mileage in an SUV is a bit like comparing apples to oranges.

So Kelley Blue Book (KBB) recently compiled a list of the elite mileage vehicles – those getting 40 MPG or better. Twenty-five cars made the list, which was dominated – not surprisingly – by hybrids and electrics. In fact, no gasoline/diesel-only models made the cut.

Topping the list was the Scion IQ EV, getting 121 MPG. Number two was the Honda Fit Electric Drive, at 118 MPG and the Mitsubishi I, getting 112 MPG.

Residual value

Finally, choosing a car that will hold its value preserves some of the money you're spending on the vehicle. It's a well-worn cliché that a car loses value the minute you drive it out of the showroom. Choosing wisely will limit how much that value falls that day – and the days that follow.

A lot of things go into residual value, including supply and demand. If you have a vehicle that a lot of people want to purchase as a used car, it will be worth more at trade-in time. Not spending a lot up front, it turns out, gets you the best return on the back end.

According to the latest edition of the National Automobile Dealers Association (NADA) Used Car Guide, three-year old subcompacts have the highest residual value, retaining 54.4% of the Manufacturer Suggested Retail Price (MSRP) for a typically equipped model. The electric vehicle (EV) segment ranked the lowest at 39.9%, perhaps because the demand just isn't there yet.

"Depreciation is often the No. 1 expense of owning a car, and understanding how a vehicle will retain its value over time should be considered," said Jonathan Banks, executive automotive analyst of the NADA Used Car Guide.

The top three performers in the subcompact segment are the Honda Fit, Scion xB and Kia Soul. The Subaru Impreza, a compact, scored as the top value-retaining vehicle among all classes and segments at 63.5%. Among luxury cars , the nod went to the Lexus IS and the Lexus CT for hybrids and EVs. The Subaru Legacy also topped the midsize car segment with a value retention rate of 60.9%.

Car dealers have been wheeling and dealing so far in 2013, driving sales to record highs. While each month provides some tantalizing offers, August just might be the best month to visit a new car showroom.

Here's why – a study by TrueCar.com, an automotive website,shows the average price for buying a vehicle in August is more than $150 lower than any other month. On average, that's $500 less than the the other 11 months.

What may be more surprising is that it's $1,000 less than December. Even though conventional wisdom suggests December is one of the best months of the year in which to buy a new car, the data suggests it's actually one of the most expensive.

Why August?

So, what makes August such an opportune time to upgrade your wheels?

“August is the best month to buy a car or truck because dealers are cleaning out older inventory as the new models roll in,” said Scott Painter, founder and CEO of TrueCar. “This change-over means late-model vehicles are priced to be quickly sold off the lot. August is definitely the time to buy if you’re looking to save money.”

Let's just take that notion for a test drive. Here's what Honda, one of the best-selling nameplates in America, is offering in August.

• 2013 Honda Civic: $18,109 - $24,716; 0.9% APR financing for 24-60 months.
• 2013 Honda Accord: $21,219 - $32,418; 0.9% APR financing for 24-36 months or 1.9% for 37 – 60 months.
• 2013 Honda Fit: $16,030 - $20,347; 0.9% APR financing for 61 – 72 months.

Ford is also offering some pretty compelling August deals, depending on the region of the country where you live. The 2013 Ford Escape is priced at $22,617 - $31,558. It's offering $1,500 cash back to customers in the northeast and southeast and $2,000 cash back to customers in the west, northwest and southwest. Some buyers in the west may qualify for additional 0% financing.

At the low end, the Ford Fiesta goes for $13,766 - $18,778. Buyers may qualify for $1,250 cash back or my opt for $1,000 cash and 0% financing up to 48 months.

The Ford Taurus, meanwhile, is offering among the biggest cash incentives this month. The Taurus, which sells for $26,394 - $34,259, is paying up to $4,250 to qualified purchasers. Another option is $1,750 cash back and 0% financing up to 60 months.

$28,950 transaction price

How much are you likely to spend? According to the TrueCar data, the average August transaction price over the previous four years is $28,950. February, with its Presidents Day sales, is second, at $29,109.

While you might find good deals on new cars in August, there may also be some good buys on used cars, especially three year-old models turned on on leases. The automotive site Edmunds.com reports the average price of a used car at franchise dealerships is down $118 in the first half of 2013 to $15,986.

You might have trouble getting the best deal on a used Honda. Hondas sold faster at franchise dealerships than all other brands. Lincolns, on the other hand, might yield the biggest bargains since they sold at the slowest rate.

If you're looking for a used hybrid, you may be in luck. Because hybrid leases jumped in 2010, Edmunds expects a significant increase in used hybrid inventories in the third quarter.

BMW's Mini Cooper has hit the sweet spot with American drivers, with sales approaching 300,000 in recent years.

But the shine wears off the little cars all too quickly in some cases, with timing belt failures causing catastrophic engine damage in some models, according to a class action lawsuit and numerous complaints posted to ConsumerAffairs and elsewhere on the Internet.

Elizabeth of Deer Park, Texas, bought a used 2007 Mini with the money she got from her insurance company after her Honda was wrecked. Soon her finances were wrecked too.

"I got it home and two months later, the oil light came on," she said. The head gasket had failed, causing $2,000 worth of damage. A few months later, the timing belt failed. All told, Elizabeth said she spent $5,000 on repairs in less than a year. 

Things didn't turn out much better for Peter of Riverside, Calif. 

"My 2007 clutch had to be replaced on February 2012. I had to replace the valve cover, gasket, and hose at 37,500 miles. It cost $718.00. Then in March at 40,000 miles, I have to replace the timing chain at $2200.00 and a thermostat at $675.00. I have to pay out of my pocket for all the repairs since February 2012," Peter said. "I think that Mini does not build a car to last past 35,000 miles before you have serious problems."

What did BMW know?

Joshua Skeen and Laurie Freeman had similar problems. They're now the named plaintiffs in a class action lawsuit that argues BMW has known of the defect since 2008 but hasn't warned purchasers, offered a recall or made any attempt to reimburse vehicle owners for the repairs costs.

The models specified in the suit filed in U.S. District Court in New Jersey are the 2007-09 Mini Cooper R56 and the 2008-09 Mini Cooper R55.

A BMW spokeswoman told ConsumerAffairs the company could not comment on pending litigation.

The lawsuit claims there is a defect in the Mini's timing chain tensioner, which maintains an appropriate tension of the engine's timing chain. The timing chain controls the timing of the engine's valves, but when the chain doesn't have proper tension or synchronization, the engine's pistons and valves collide with great force and the engine components suffer so much damage that the engine seizes and must be rebuilt. 

Rob of Stamford, Conn., has reached a similar conclusion. He took his 2007 Mini Cooper S in for service after the engine started making rattling sounds during cold starts.

The timing chain guide (plastic) had cracked in pieces and scattered though the engine and oil pan," Rob told ConsumerAffairs. "The dealer replaced timing chain, timing chain tensioner (broke too!), and guide. It's been less than 6 months, and the same sounds are coming back!" Rob said in December 2011.

"There is obviously a timing chain mechanism design flaw. Mini should correct this on all affected vehicles. MINI is responsibile for their design mistake regarding a substandard timing chain box," he said.

The named plaintiffs, Skeen and Freeman, both bought new Mini Cooper S models in 2007 and allege that while the timing chains used in the Mini Cooper are meant to last about 10 years or 120,000 miles, they encountered problems with their engines far sooner than expected.

Skeen said he had to spend $3,288 in January to replace his car's engine, which had about 74,000 miles on it. Freeman said her timing chain tensioner was replaced twice -- under warranty in July 2009 and again in February 2013, 14,000 miles later, at a cost of $1,381.

"Maintenance-free"

The lawsuit says that BMW falsely claims the Mini timing chains are maintenance-free. It cites complaints to the National Highway Traffic Safety Administration (NHTSA) from consumers who say their Mini Coopers unexpectedly stopped dead on highways and, in one case, on the on-ramp to a busy freeway.

Perhaps one of the most extreme complaints comes from Julie of Snoqualmie, Wash., who told ConsumerAffairs of her experiences with her 2008 Mini Cooper Clubman, which she bought new and babied with frequent doses of synthetic oil and other recommended maintenance.

Then, one day, the engine light came on. The diagnosis: blown turbo. The cost to repair: $3,400. 

"This was a hard pill to swallow ... but it was the best option considering I owe $17K on the car and it's only worth $17K with a good turbo. So I said okay on the repair," Julie said. But Julie's troubles weren't over.

"The shop called me on the day it was supposed to be done and said they had bad news. When they went to get the car started, the timing belt busted when it turned over and the engine is toast and needs to be replaced."

The lawsuit alleges breach of express and implied warranty claims and New Jersey Consumer Fraud Act and Georgia and Illinois law violations. William J. Pinilis of PinilisHalpern LLP, Morristown, N.J., is representing the plaintiffs. 

When you think about it, 100 percent of the time you spend in a car is spent sitting down. So the fact that automakers would be putting more effort into making seats more comfortable should come as no surprise.

A study by J.D. Power and Associates find that vehicle owners have noticed the improvement. Satisfaction with seats is increasing, even among owners of compacts and subcompacts, which have been known in the past to skimp a bit on seating amenities. Seat satisfaction among compact and subcompact vehicle owners averages 7.5 points on a 10-point scale, which is significantly higher than the 2008 study, as are ratings for seat material conveying an impression of quality and seat styling.

Great expectations

"Owners have high expectations for their vehicle, and purchasing a smaller vehicle doesn't mean they want to forego amenities, especially regarding seats," said Mike VanNieuwkuyk, executive director of global automotive at J.D. Power and Associates. "A vehicle's interior has been growing in importance to vehicle owners, and seats are paramount to driver and passenger comfort."

The study finds that consumers now rank interior comfort as the second most important reason for selecting a particular car.

"Automakers are doing a good job of recognizing the importance of seat comfort and quality, identifying suppliers to provide the best seats available and integrating them into the vehicle," said VanNieuwkuyk. "That's evident by the steady increase in seat satisfaction since 2008."

That may be one reason -- that and the rising cost of gasoline -- why consumers are increasingly buying smaller vehicles. Market share for compact and subcompact models has grown to 35.4 percent in the first seven months of 2012 from 32.0 percent during the same period in 2008. At the same time, 27 percent of new-vehicle owners replaced their vehicle with a smaller 2012 model.

What consumers want

Just what makes for a comfortable automobile seat? Believe it or not, headrests and armrests figure prominently, according to J.D. Power. Simple and easy to understand controls are highly valued and have a significant impact on owner loyalty and satisfaction.

Other highly-prized qualities are memory seats, seats that are heated, cooled or ventilated, and adjustable sliding rear seats or adjustable reclining seats. Only 30 percent of current owners say their cars possess those features for 90 percent say they would like to have them.

In addition, the majority of owners who have fold-down rear seats, heated seats, power lumbar support or height-adjustable seat belts in their current vehicle indicate they would want these features again in their next vehicle.

So while engine performance, ride, color and styling all remain important features of a car, it appears consumers are growing more pragmatic about what really matters most.

"Seats are a constant touch point for vehicle owners, and is central to providing a comfortable experience," said VanNieuwkuyk. "Owners clearly are looking for more features and comfort from their vehicle seats, and it is evident there is an opportunity to raise the bar."

If you watched last night's Super Bowl, you saw some pretty clever car commercials. But before you rush off to a dealership, understand that even the slickest, funniest most appealing car advertisements can be misleading.

It's not that the commercials give you information that is not true -- but rather, it's the information they don't give you.

"Advertisers have every right to create excitement for their product, but to be a smart shopper you need to understand and interpret the language of hype," said Philip Reed, senior consumer advice editor at automotive site Edmunds.com. "Once you've translated an ad into 'consumerspeak,' you'll know if the vehicle featured is a good deal for you."

According to Reed, the five most common marketing ruses found in automotive ads are:

1. Showing the top trim, but advertising the base price. In TV ads it's common to see a fully loaded, top-trim model of a vehicle on the screen while the price of a base model is being displayed. You might assume that you could buy the car pictured at the price presented. Wrong. The small print should clarify this, if you can manage to read it.
   
2. Preposterous MPG. A hot-looking sport coupe is tearing up the landscape when the text flies across the TV screen: "40 mpg!" Granted, this car is capable of getting 40 mpg on the highway, provided you drive like a fuel-efficiency-focused hypermiler. But you won't get anywhere near that mileage if you're driving full-throttle like the guy in the ad.
   
3. Lease Payments Too Good to Be True. You're innocently checking the box scores in the newspaper when you see a luxury car ad promoting lease payments for only $199 a month. If you left for the dealership right away, you might not notice the small print saying that $4,999 is required to start this lease.
   
4. The Phantom Special. A local newspaper ad features the phrase "One at this price," which is a tip-off to what insiders call an "ad car." It's usually the purple one with crank windows and no A/C — cheap, but not necessarily in a good way. If you go to the dealership and ask to test drive the one-only car, it's likely A) "Already been sold," B) "Out on a test-drive" or C) "In the back of the lot, and I'd have to move 50 cars to get to it." The "good" news, of course, is that they have lots of other cars for sale. The bad news is that those cars are a lot more expensive.
   
5. Rebates for Everyone — But Not You. You see an ad for the car of your dreams, listed at a price that barely squeaks into your budget. So you run down to the dealership only to find out that to get to the reduced price the dealership factored in a military rebate, college-graduate rebate, brand "loyalty bonus" or other discounts and rebates that are not available to folks like you.

Then, there are those fabulous financing deals.

"Zero percent financing is only for qualified buyers," Reed said. "If you don't have excellent credit, those advertising messages don't apply to you."

Edmunds.com analysts estimate that only about one in four car buyers qualify for the lowest interest rate offered.

Car shoppers usually arrive at the car lot determined to negotiate the best price on a new or used car. But no matter what price they finally arrive at, African-American car buyers usually end up paying more in interest charges when they sign the loan papers.

An analysis of the Federal Reserve Board Survey of Consumer Finances data, conducted for the Consumer Federation of America, finds African-Americans typically pay a higher interest rate on car loans that white consumers, and that this rate gap is increasing.

On 2004 loans for new car purchases, blacks paid a typical (median) rate of 7.0 percent compared to a typical rate of 5.0 percent for all borrowers. On used car loans, African-Americans paid a typical rate of 9.5 percent compared to a typical rate of 7.5 percent for all borrowers.

This rate gap of two percentage points is much higher than the rate gaps of 1.3 and 1.2 percentage points for 2001 new and used car loans respectively reported by the Fed.

A far higher percentage of African-Americans were likely to pay auto loan rates of at least 15 percent, the study found.

For new car loans, in 2004 6 percent of African-American borrowers paid this much, compared to only 2 percent of all Americans. For used car loans, 27 percent of black borrowers paid this much, compared to only 13 percent of all borrowers.

The percentages of black households and all other households with at least one auto loan differed little -- 32% of all African-American households and 35% of all households.

It's hard to believe that any differences in credit-worthiness explain all of these rate gaps, said Stephen Brobeck, CFA's Executive Director. African- Americans can take steps to lower their auto loan costs. Most importantly, they should call their bank or credit union for an auto loan rate quote before talking about financing with a car dealer or finance company.

Calling one's bank or credit union for a rate quote will minimize the chances of a car dealer marking up the loan rate above the risk-related "buy rate."

Detailed research by academics, earlier this decade, of data on millions of auto loans revealed that minorities were far more likely to have their auto loan rates marked up than non-minorities. As a result, courts ordered most major car finance companies to cap rates, usually at 2-3 percentage points above the buy rates, and provide funds for minority-related consumer education.

CFA utilized the services of Professor Catherine Montalto, a professor at The Ohio State University to analyze the latest Survey of Consumer Finances data, which was collected in 2004 and released last year. These data are for a representative sample of about 3,000 American households.

Buying a car has never been easier, or perhaps more fraught with danger for the consumer. As individuals and dealers turn to the Internet to market vehicles to customers, complaints about online deals gone bad mount.

"I looked on Auto Trader for a car and saw a Honda Accord for $7,000," Chris, of Virginia Beach, Virginia told ConsumerAffairs.com in 2005. "I notified the buyer, who told me he had to relocate due to his job and that was why he was selling the car. He told me to put the money in an Auto Trader escrow account and he wouldn't get it unless I liked the car."

Chris said he sent in the escrow form, along with the money, and never heard from the seller again. The address he was given was the seller's, not the escrow account's. When he looked at the Web site, the phantom car was listed again, with a new price and in a new city.

Michelle Gomez, president of Recoveries Unlimited, isn't surprised by such stories. Even when the sale isn't an outright scam, as it was in Chris' case, she says an online purchase can be a recipe for disappointment.

"If people buy a vehicle on the Internet, 99.9 percent of the time it's not going to be what they expected," she told ConsumerAffairs.com.

Gomez has seen the problems inherent in online vehicle sales firsthand.

Her company is involved in moving vehicles between dealerships and to consumers. She has been in the repossession business and continues to work as a "skip tracer," tracking down people who've taken the money and run.

One of the problems with online vehicle sales is the consumer never really knows who they are dealing with. It's easy for an individual to sell a car they don't own, and even easier to set up their own "virtual" dealership, with photos of a huge inventory and modern showroom.

"There are a lot of dealerships that have called me to move cars for them, and it turns out to be one guy, operating out of his living room, selling a vehicle on eBay," Gomez said.

Rating systems are unreliable too, she adds. In many cases the posts from "happy customers" are nothing but plants.

"The seller is going to write down the five stars. They're going to write what they want you to read, that they are credible, that they are reliable, that they are good," she said.

In addition to AutoTrader.com, dealers and individuals sell vehicles on eBay, which made a name for itself selling small, inexpensive items, and where any losses from fraud tended to be small. That's all changed with the addition of more and more big ticket items like automobiles, but the trend in the industry appears to be movement toward online sales, despite the dangers to consumers.

Recently, online retailer Overstock.com expanded its presence in the car business, reaching agreement with the automotive sales division of Enterprise Rent-A-Car to sell a portion of the company's out-of-service fleet. The company also works with auto dealers nationwide to list new and used vehicles.

"Overstock.com's Cars Program allows car buyers to search for quality vehicles and connect quickly with the dealers offering them," Overstock.com CEO Patrick Byrne said in a statement.

Whether consumers are dealing with a nationally known company or an individual, Gomez says it's wise to be very careful when entering into an online transaction for a car or truck. She's delivered a lot of these vehicles to customers who were not at all happy with what rolled off the truck.

"Some of these cars get pieced up from a chop shop, or they could be flood cars," she said. "I've delivered cars to celebrities who were very upset, and I'm in the middle of handling that transaction and getting that car back to the dealership."

While the Internet provides a fast and convenient way to buy a car, Gomez advises consumers to treat an online purchase they same way they would if they were buying the car from a stranger across town. Get information -- lots of information.

"I would recommend getting the seller's full name, a copy of their driver's license and five to ten references," Gomez said. If everything checks out, then go see the vehicle, take a road test, and have a mechanic look at it. Ask whether the car is road ready and can pass a safety inspection."

That's right. Even if the car is several states away, don't commit to buy it, she says, until you've seen it with your own eyes, looked under the hood, and taken it for a test drive.

While the Internet may be the 21st Century way to buy a car, some things haven't changed -- like never buying a car without kicking the tires first.

This year's Consumer Reportstop tenlist of vehicles named only Japanese automakers, leaving Detroit out in the cold for the first time since 1997 when the list began.

Detroit auto executives were a little hot -- if not burning -- and have fired back at the consumer magazine.

Lori Queen, who is a General Motors executive involved in small car production told the Automotive News in an e-mail that the editors and reporters who put together the Consumer Reports auto issue are "the most unprofessional group of people I have ever worked with."

"They are totally nonobjective and go to great extremes to paint a picture for their paid subscription readers, who primarily buy Japanese cars. They don't consider price or price differences, they don't consider model mix or consumer preferences, they buy the cheapest car they can find and then base all their opinions on a limited sample," Queen told the automotive magazine.

For the record, the Consumer Reports top ten included the Honda Civic, Honda Accord, Acura TL, Infiniti M35, Subaru Forester, Toyota Highlander Hybrid, Honda Ridgeline, Honda Odyssey, Toyota Prius and Subaru Impreza WRX/STi.

No wonder Detroit was fuming. But Consumer Reports promises the vehicles were selected because of performance, versatility, reliability, safety and interior fit and finish.

No politics here, the organization insists.

"Our findings are driven first, foremost and exclusively by a commitment to providing consumers with expert, independent, test-based and survey-based information," said Jim Guest president of Consumers Union, the nonprofit publisher of Consumer Reports.

--30--

There's been talk in automotive circles that General Motors may be on the road to bankruptcy court. But GM executives may do a U-turn after reading the results of a new study that finds car buyers wary of buying a car from a bankrupt company.

The survey by Directions Research, Inc., found that only 26 percent of respondents said they would buy or lease a car manufactured by a company that was in bankruptcy.

The last major auto manufacturer to declare bankruptcy was Daewoo. The Korean company was unable to find a way out of bankruptcy court and it was eventually liquidated, leaving its customers stuck with "orphan" cars. That meant parts were difficult, sometimes impossible, to find. The U.S. dealer network collapsed and there was no one to honor the warranty.

"I can't find parts for my car -- it is not running and I owe money on it," Anthony of West Babylon, NY, complained to ConsumerAffairs.com in January 2003. "What can I do?" he asked.

The answer for Anthony, unfortunately, was to avoid buying from a financially shaky manufacturer next time around -- advice that apparently resonates with many of today's consumers.

Daewood's physical assets -- its plants, machinery and spare parts -- were auctioned off but the company and the brand name disappeared. The company that bought the lion's share of Daewoo's assets and began building cars in Daewoo plants under its own name? That's right, General Motors.

While no one expects GM to collapse, the fact is that a bankruptcy filing could result in temporary disruptions and changes in its dealer network.

GM lost nearly $5 billion from its North American operations during the first three quarters of 2005 and, although management denies any such plans, there is mounting speculation it may have to seek bankruptcy protection.

GM recently announced it would close 12 plants in North America and cut thousands of jobs.

Many major airlines, including United, Delta and Northwest are currently operating under bankruptcy protection, without any noticeable effect on passenger bookings. But as the Directions Research study shows, consumers don't view an automobile purchase in the same way they do an airline ticket.

The Cincinnati firm polled 1,063 adults during the three weeks ending December 14. The polling company said the study was not paid for by any special interest group and was not requested by any of its clients.

While the survey did not delve into car buyers' reasons for not buying from a bankrupt manufacturer, it did find that more affluent consumers were more likely to make such a purchase. It said that while just 20 percent of those earning under $25,000 a year would consider such a purchase, 32 percent of those earning more than $100,000 would do so.

U.S. consumer interest in SUVs dropped sharply in April as people turned to more fuel-efficient vehicles. Truck-based SUVs have become a traditional profit center for U.S. automakers while fuel savers have long been a strength of Japanese automakers, such as Toyota Motor Corp. and Nissan Motor Co.

Large gains at Toyota, Nissan North America and American Honda fueled an increase in April sales, while General Motors and Ford Motor Co. posted declines.

Toyota, Nissan and Honda said sales in April were their best ever for the month and in Toyota's case, the best month ever in its history in the United States.

Sales of Toyota's Prius, the most popular gas-electric hybrid car on the market, nearly tripled compared with April of last year, to 11,345.

General Motors Corp. and Ford Motor Co. sales were down slightly, while DaimlerChrysler AG showed a nearly 9-percent gain. Leading Japanese and Korean automakers, however, posted big double-digit increases.

Industrywide, passenger car sales were up 11 percent in April, while light truck sales rose only 1.3 percent. SUVs, particularly large ones like the Ford Expedition and GMC Yukon, seemed to be hardest hit. With a 28-gallon tank, it can cost $60 or more to fill up an Expedition.

Toyota and Nissan also won customers by offering significantly larger discounts last month. Rebates, low-interest loans and other come-ons rose by 76 percent at Nissan to $1,800 and by 107 percent at Toyota to $1,100.

Both continue to trail the traditional Detroit brands, which average $3,400 in incentives.

Be warned: Just because you put down cash and roll away from the dealership with a new vehicle doesn't mean you'll get to keep driving it. In fact, as the complaints to ConsumerAffairs.com vividly illustrate, leaving a dealership with the car - and keeping it - can sometimes be far more complex than you've bargained for.

Increasingly, buyers are signing purchase papers and driving happily away in their new cars, only to find out that the financing they agreed on didn't fall into place. At that point, they're usually told that they must either return the car or sign up for sub-par financing at extremely high rates, sometimes approaching 20 percent per year.

Often, the people squeezed by these spot delivery schemes are the most vulnerable, those with tarnished credit or low income who don't have a lot of alternatives. At other times, they're victims of dealer fraud or other bad faith dealings. Regardless, it's an ugly situation for the consumer.

Consider the experience of Michelle of San Jose, who put down $3K on a used Ford Explorer, signed a finance contract and took the car. The next day, she was told that the financing fell through, and that she had to get a co-signer or return the vehicle.

Michelle wasn't having it. "I told them that if my application didn't qualify with only my information, then I wasn't interested in keeping the car," she says. Despite her resolve, Michelle didn't get her money back, though she did get to keep the car.

Michelle was one of the luckier spot delivery customers. More typical is Brandon of Tarpon Springs, FL. He was aghast when his mother-in-law was pressured to get newer, much higher-rate financing and threatened with repossession when she balked.

According to Brandon, it all began when his mother-in-law decided to buy a Ford truck. She put down $3K and traded in a Dodge truck, then took her new truck home from the dealership, which, she believed, had approved her for financing. Instead, within a couple of days she was contacted by a lender, who asked for W-2s, tax returns and other financial documentation.

When that lender refused to finance her, she gave the dealership $12,000 more in cash, leaving a $13,000 balance, so far still unfinanced. The dealer continues to threaten, and the family still doesn't know if the mother-in-law will get her trade or cash back.

"The dealer has told her that the repossession department is already looking for her truck, and that she must sign new papers immediately," Brandon says.

A Rare Problem?

Dealer industry reps say that spot delivery problems are rare, and that the issues that do come up usually could have been avoided if consumers took the message of the conditional sales rider to heart.

"Unfortunately, some consumers pay more attention to the check they get for dinner than they do to the second-highest priced deal they're going to do in their lives," notes Alex Kurkin, a partner with the Miami law firm of Pathman Lewis LLP.

While there are few statistics available, Kurkin argues that spot delivery returns and refinancing conflicts couldn't be happening very often. After all, he says, a dealership doesn't benefit from letting consumers drive cars when the dealer hasn't been paid.

"A dealer can't afford to have that car out there for a month and a half and not get paid," says Kurkin, who represents the Florida Automotive Dealers Association. "They won't have enough to buy new inventory. The banks that finance them might even call in the inventory loan."

But Kurkin may be understating the problem. In fact, given the unclear legal status of conditional sales riders, it's not surprising that the issue will crop up from time to time. According to consumer attorneys and consultants familiar with spot delivery issues, state law is still unclear as to whether conditional sale riders will stick, leaving buyers in limbo.

In fact, observers say the law hasn't caught up to the intricacies of spot deliveries. For example, state law in New Hampshire is unclear on something as simple as whether you should put temporary tags on a vehicle that's been spot delivered but not financed, notes attorney Peter Wright, professor at Franklin Pierce Law Center in Concord, NH.

Even in transactions that flow smoothly, the papers get back-dated to the date of sale, rather than to the date the financing finally comes through. During those prior weeks, should the car have had temporary tags on it or not? According to Wright, no one's really sure.

Consumer Misery

How can car dealers get away with this? The answer, Wright says, is that many consumers end up signing their rights away. Spot buyers are typically asked to sign a contract addendum, known as a conditional sale rider, stating that the car sale doesn't close until the dealer gets financing approval from the bank.

Too often, many consumers don't understand what they're signing - or what it means for them if financing falls through.

Though the dealer may describe financing as a done deal, the finance contract is actually based on an educated guess as to what the banks the dealer works with will accept. In reality, banks usually take a few days or weeks to make their lending decision.

If the preferred bank bounces the contract, the dealer will attempt to place the loan with a different bank -- usually a "subprime" lender who charges extremely high interest -- and if the consumer balks, the dealership may attempt to yank back the car.

As if that wasn't painful enough, some consumers find that the rider they've signed forces them to accept whatever loan arrangements the dealer makes. Not surprisingly, the financing the consumer gets in that situation is seldom attractive.

Boosted by the dealer's finance commission, which usually piles a few points of interest on top of the bank's charges, a buyer's monthly payments can climb dramatically.

"We've seen evidence that when somebody is called back to sign new financing papers, the new rate is higher than what that financing company would have done [if the dealer wasn't involved,]" says Wright, who runs the consumer law clinic at Franklin Pierce. "Basically, people have to sign any deal that the dealer digs up."

That was certainly the case when Melissa of Wheaton, MD attempted to buy a Nissan Altima.

When Melissa first signed her contract, she agreed to pay $388 a month for the Altima. Accepting that, she took the car home. Three weeks later, the dealer called back -- and told her that she'd have to pay $477 a month if she couldn't get a co-signer. "I feel that I have been misled and I should not have to do [either one]," she says. "I would like to keep the car and pay what was the original agreement."

Fighting Back

Are these contract riders legal? At the moment, the courts are still sorting that out. While many dealers manage to push through these provisions and make them stick -- sometimes with the backing of state retail sales laws -- federal courts have raised some questions as to whether these conditional sales riders are fair or enforceable.

In at least one recent case, a federal court found that the deal is complete when a dealer signs the sales contract, rather than when the banks come through with a loan. "The court realized that the dealer has recourse," notes Duane Overholt, president of consumer advocacy firm Stop Auto Fraud. "For example, they have the ability to consummate the deal as agreed by simply signing the deal with the bank and accepting responsibility for the loan."

Bolstered by rulings like these, consumers like Julie and Carl are fighting back. When the Bullhead City, AZ couple bought their used car, they put $300 down and agreed to a 31-month repayment term. About two weeks after they drove the car off the lot, the dealer asked them to bring back the car or sign up for payments nearly double what they'd expected.

They didn't do either. Instead, they two contacted Overholt, who put them in touch with a lawyer.

Since then, the dealership's offer has gone from cutting the loan term in half and requiring an additional $1,000 down, to asking for $300 more down and cutting only one year off the financing period. Under the new terms, payments would actually drop slightly.

Still, Julie isn't satisfied. She plans to fight until the dealer abides by the deal she and Carl agreed to in the first place. "The dealer did this on a Monday afternoon, and they had time to communicate with the bank before we took the car," she says. "The way I see it, it's their problem now."

We're starting to think that car dealers employ staff linguists to come up with new euphemisms for "used." One of the latest is "certified." In and of itself, this means absolutely nothing. What is the rust bucket certified to be? Used? We already knew that.

Bottom line is: "certified" means nothing. The only thing that means anything is the sales contract you sign, complete with all the add-ons the nice finance lady tries to shove under your pen.

A smart consumer will scoop up all this material and take it home for a thorough read. Every line means exactly what it says and you will be held to the agreement you sign, so read it carefully.

Oh, and about that shiny "certified" car: Let it sit there while you review the paperwork. As soon as you drive it off the lot, you lose your three-day right to get out of the deal in most states.

Syed of Katy TX writes (6/19/03):
After searching for several months on the Internet for the best deal on new/used car, my wife and I finally purchased a certified used car (2002 Toyota Camry LE) from Don McGill Toyota (11800 Old Katy Rd, Houston, Tx-77079) in Dec. 2002 for $14,995 (the internet-advertised price including 6-yr/100,000 miles limited powertrain warranty certification). As an option, we added leather for an additional $1,000. Including TTL & Fees, total cost came to $17626.51. We financed the car with Mary Li (Finance Manager) of Toyota Financial Services at Don McGill Toyota.

We decided to make a downpayment such that our monthly payment would be $300 (for 5-yr financing at the APR offered). Accordingly, the Finance Manager calculated the downpayment amount with $300 as monthly payments. She then told us that for about $305 per month (i.e. only about $5 and few cents more per month) we could get Lo-jack and 10-yr bumper-to-bumper warranty (to include electronics, electricals, etc.) in addition to the already included 6-yr/100,000 miles certified powertrain warranty. When asked about the total cost for these extra items/service, she said it would be about $600. It seemed to be a good deal so we agreed to purchase this extra option/service at $600.

We requested Mary Li to calculate the downpayment once again so that our monthly payment would still be $300 with the optional service added to the amount financed. She re-calculated the downpayment, which was $6,279.71. We paid $6,279.71 as downpayment. So the amount financed was $17626.51+$600-$6,279.71 = $11,946.80. Finally, Mary Li lead us hastily sign and initial several papers. Having trusted her, we quickly glanced through the papers and signed and intialled all the papers without objecting to her failing to make us aware of the exact/actual charges put on the contract papers. Moreover, she did not hand over copies of these papers to us at that time. She said the contract papers would be mailed.

We waited for about one month for the contract papers to arrive but they did not. However, the monthly payment bill arrived right on time. The bill did not show the balance due or the amount financed. So we decided to check our account online. We were surprised and shocked at what we saw - the financed amount shown was unbelievable - $14,795.77 (not $11,946.80 as expected). We contacted Mary Li at once to request for the contract papers in order to check what might have happened. She said the contract papers could not be mailed because of backlog and would be mailed soon. But the contract papers did not arrive during another one month.

We called her several times again, left messages and sent certified letters indicating the incorrect financed amount. Finally, after about two months, the contract papers arrived. On the contract paper we noticed two (2) mysteriously added false charges: First, supplemental warranty charges were $1,750 - the amount that we never discussed or were told of. Second, this number ($1,750) had been added twice - as supplemental charges (mentioned above) and in the sale price of car as well. Even the Dealer fees ($227.04) were added twice - in the sale price of car and again separately as dealer fees.

It was obvious that in an attempt to show profit on her part, the Finance Manager (Mary Li), had played around with the numbers and had cheated us of about $2,850. By misleading overcharges on optional items/services, she had tactfully added about 20% to the initial car price.

We called her, left messages, and sent certified letters explaining the issue. She never responded for about a month or so. Finally we managed to set up an appointment with her. On the appointment day, she kept us waiting for about three hours pretending she was quite busy. Actually, she simply seemed unwilling to discuss the matter with us. Finally, after three hours of waiting, she was rude enough to tell us that she couldn't help us since our papers were not with her and were with Robert Tabak (her Financial Director; now a Production Manager at DonMcGill Toyota). We had to give up all hopes of resolving the problem with her at that time and, unfortunately, we returned home without any resolution.

Then we contacted her supervisor Robert Tabak at Don McGill Toyota. Unlike Mary Li, he dealt with us in a very professional manner. During the discussion, Robert Tabak explained to us that the $1,750 charge was for the additional supplemental comprehensive warranty in addition to the 6-yr/100,000 mile powertrain warranty and that we had signed for it. Of course we had signed! But we were told it was for the 10-yr bumper-to-bumper warranty with Lo-jack and for about $600. We did not recall seeing the charge of $1,750 when we signed the paper. Regarding another charge of $1,750 (that was included in price of the car), he said the charge of about $1,500 was for the Lo-jack and was unable to explain about the rest. The Lo-jack price document seemed to be forged. Charges were written by hand which we never saw during signing. We had never agreed to this high Lo-jack charge with Mary Li.

The Production Manager agreed those were high charges and said there could be a mistake by Mary Li. Therefore, he offered to settle the issue right there by giving us a credit of $1,000 only the supplemental warranty charges if we agreed not to pursue the matter further. However, the credit of $1,000 offered was not acceptable to us. And, unfortunately, once again the matter remained unresolved. And still is.

Michael of Tampa writes (5/13/03):
Bought a certified pre-owned BMW from Fields BMW in Winter Park, FL and it has broken down 5 times in one year. Three times now the #3 cylinder coil has gone out and has been replaced. The service advisor stated BMW has had problems with the coils and are having supply problems with the new and improved coils so they are only replacing each one as they go out.

However, with the same coil going out three times now, I feel there is another problem causing it to fail. In typical arrogant BMW fashion, they blew me off as usual. I contacted the BMW executive line and was promised the world and that they would call me back with a solution. Of course they never called.

Now I know that BMW stands for big money wasted.

Ann of Sherman Oaks CA (5/19/03):
I just purchased my first financed car, a 2001 Toyota Echo from Keyes Toyota in Van Nuys. The car is a Toyota "certified" car, meaning it has undergone a rigorous point-check and comes with an additional warranty. I asked no fewer than 5 times if the warranty was included in the sticker price and the answer I received from my salesman, the manager, and the finance guy was "Yes". As I was signing the forms, the finance guy -- Wolfgang -- quickly pointed to all the places I was to sign and I did.

I noticed that the contract read that I was paying for a warranty-so I said, "Wait, this says I'm paying for the warranty" and Wolfgang replied "no, no, the warranty is included in the purchase price, you are financing more because of the taxes and license fees etc." I had already been reassured that this great warranty was included in the asking price and did not question it further. This is the very first time I have financed a car and I was very nervous. I got home and upon closer inspection of the contract (which, of course I should have done at the dealership) it sure enough says I've agreed to "purchase" a $1500 warranty.

As things stand, they are holding my $2500 down payment check until May 30. I would like to go back and cancel the entire deal. I feel I was deliberately deceived, and I'm very upset.

Michael of Sportsylvania VA (4/10/03):
I traded a perfectly good truck for a bigger truck. I purchased a 1999 Chevy C/K1500 four-wheel-drive two-door Ex with 48,000 thousand miles from Ultimate Pontiac Buick GMC Isuzu. I purchased this vehicle Feb 1, 2003. On Feb. 2, 2003 I heard a knocking in the engine. I took the truck to the service department for them to hear, they proceeded to tell me nothing was wrong with the truck. Since I purchased a power train extended warranty and the dealership also had a 3,000-mile warranty so I figured something like this would be covered.

I decided to take it to a Chevy dealership and let them listen to the engine. The mechanic there said the engine was knocking and the truck needed a new one. Since the dealership where I bought the truck and warranty was just three miles away, I took the truck back to Ultimate for repairs. A mechanic from Ultimate heard the noise right after he got in the truck, he said to turn the truck around and take it back. He proceeded to tell the shop manager that the engine was knocking and the truck needed a new engine.

After the dealership had the truck for three weeks they called to say the extended warranty was not covering the engine because they said it was a preexisting condition. Robin told me as a favor they were going to put a junk-yard engine in the truck, and I would have to pay the $100 extended warranty deductible. I questioned this because the extended warranty was not covering the engine. I also reminded him that the dealership had a 3,000-mile, 30-day warranty on the truck being the truck was GM certified. He then proceeded to tell me that since he was doing me a favor by putting a used engine in my truck I could at least pay the $100. He then threatened to make me pay for the rental car since the extended warranty did not even if I had only had the truck for twenty four hours.

I picked my truck back up on a Friday and on that Saturday I noticed the check engine light was back on and antifreeze was leaking along with transmission fluid. I returned the truck on that Monday only for them to tell me the engine was bad and they could not give me another rental car and they would have to get another junk yard motor. They told me it was okay to drive the truck until they found another engine. They called a few days later with another engine. When I asked how many miles was on this one they were unable to tell me. They also said the mechanic working on my truck would not be able to put the engine in for a week.

They called back a couple of days later to tell me that the motor had 80,000 miles on it and they were glad I had asked because they would have put that motor in my truck. Instead they returned that motor and after many calls to GM and Better Business Bureau they put a new GM certified engine in my truck.

Bharat of Baldwin NY writes (4/15/03):
I purchased a certified 2000 Honda Civic from Memet Nissan of Queens. The initial cost of the car was $9000. It was the last day of May and they rushed me through the sale so they can tend to other customers. I told the finance person that I did not want any extra on the car except for the extended warranty. Not knowing that he slipped a paper in the contract for an replacement program which enrolls me into a VIP program that will allow certain maintenance done on the car at discount prices and in case the car gets stolen they will give me $7500 to put towards a new car purchase.

After leaving the dealer I realized that the salesperson did not give me my receipts for my car so I called and asked that I come back and get my paperwork. They told not to worry about anything that I can come back in the morning and pick it up. When I went back in the morning I was told that the salesman was not in and that I should come back tomorrow. I finally got the paperwork after three days. After sitting down and reading through the paperwork I realized that I was charged for the replacement program. I immediately called the dealer and told the finance person that I was not interested in that program which is going to cost me another $3600 and that he take it off of my contract, he then told me that it was too late for him to do anything about it.

They intentionally kept my paperwork away from me so that the three days that I had to change or reverse the deal passes by. Now a car that I originally purchased for $9000 is going to cast me $19,800 and they refused to take off the extra charges for things that I did not want in the first place.

Anika of Trenton NJ (3/27/03):
I purchased a 2000 Ford Contour from Capital City Ford in March of 2001. I purchased it as a certified car. I asked was the car ever in an accident and I was told no. A certified car as I was told is as good as a new car.

The trunk of the car has a bad leak. The first time I took the car back, I had it for about a week. I let them know what the problem was. I got the car back and they said it was fixed. It wasn't. Two weeks after the first time I returned it for repairs I had to take it back for the same problem, the trunk. I asked again was the car in an accident because my trunk shouldn't leak like that. The bottom line is, March 11, 2003 was my 4th time sending the car back for the trunk and the 3rd time for my fuel pump. I was told by an appraiser from my insurance company that my car was in a rear end collision and he could tell. He showed me where the trunk was attached back.

I tried contacting the dealership and the sales manager at the time was very rude to me. I did contact Ford and I spoke to a customer service manager named Eric and someone was supposed to get back to me and they haven't. That was March 12, 2003. I purchased the car in good faith believing a certified car will not give me any problems besides the normal problems cars have. I feel that a leaking trunk is a lifetime of problems as long as I have the car and Capital City knew that I was sold a car that should not have been certified.

Ron of Saddle Brook NJ (3/16/03):
On 1/04/2003 I purchased a vehicle from Rockland Toyota, Nyack, NY. The sales person was very quick to close the deal and was not the best at explaining the contracts to me or even what he was doing. I was told I would have to purchase a warranty in order to make my car certified. The warranty cost me about $1300.00.

I was able to take the car home that day but was missing some things (extra keys, all owners manuals and warranty books, floor mats), that I was told I would have to come back for them the following week. While driving home I realized that something was odd about the car, the airbag light would not go off. I returned on the next Monday to get the rest of the things that were promised to me and they did not have them. I told them about the airbag light and the sales guy seemed unconcerned about it. He told me to come back in a day or so to pick up the keys and such.

When I returned they did have everything and once again I complained about the airbag light. I was told I would have to make an appointment to have it looked at. That night I read the owners manual and discovered that the airbag light staying on all the time meant a possible malfunction in the airbag. I went to the dealer again to stress my concerns and asked how a 128-point inspected, certified car got sold to me with a faulty airbag.

Almost a week later the car was in the shop getting remote keyless entry installed and having the airbag light fixed. When I got the car back I was told that they were unable to repair the airbag due to not having the parts. It would be almost a month before I would have that problem fixed 1/30/03. In the meantime I started to have other concerns about the car. The brakes and air vents were both acting up and I would be in the dealer at least 4 more times having the car looked at all though they checked them and said they checked out fine. I am still continuing to have problems with them today.

When I had the work done on the airbag the service department failed to set my steering wheel correctly. When I drove the car home the steering wheel was set to the left and the car was driving straight. When I straighten the wheel out the car took of to the right. Once again I was back at the dealer having the car repaired. After taking the car home the next day I discovered that two pieces of the dashboard were messed up. One piece was cracked and the other, a plastic pillar between the window and door, was loose and falling off. It would take another 3 times in the shop before this problem was fixed. I made sure to get the paperwork on all the work that was done to my car but on one occasion the service guy told me paperwork is too complicated and he would have to mail it out to me.

Other problems I have come a cross have not been on the service end but on the sales side of things. On the sales contract it states my car was new and sold at new price when in fact it was a used car. It says that I traded in my old car for $85.00 when in fact it was $7000.00. There was problem with the payoff amount for my old car. The dealer sent my bank a check that did not cover the whole payoff and I had to cover the difference. I never received any certification papers or Carfax report, all of which I should have gotten upon purchase. When I did get a Carfax report from the dealer it was incomplete and it took them 3 times to get the full report.

Afterwards I printed out my own Carfax report off their website and there were differences between the one I got from the dealer and the one I got on my own. The major one being that mine lists my car as a fleet vehicle when theirs does not.

Jeannine of Garden City NY (2/14/03):
I purchased a certified pre-owned BMW 323ci from Endurance Motor Cars of Mt. Kisco, NY, on 6/26/02 with 49,000 miles on it. I have owned the car for seven months and I was informed by Hassel BMW in Freeport, New York on 2/12/02 that I needed a new front suspension which will cost $900.00 and the repair is not covered under the warranty. I contacted the salesman, Peter Whilte, that sold me the car at Endurance Motors and he passed me off to Winston Hylton, the service manager who ignored me. I also spoke with customer relations of BMW North America and told me they couldn't do anything and to call the dealer I bought the car from.

Frank of Old Tappan NJ (2/18/03):
I am writing due to problems I have in getting my daughter's car repaired. She has a 1999 Volkswagen Passat, which is a certified Pre-Owned vehicle. I would like to file a complaint against: East Coast Auto Mall 340 Sylvan Avenue Englewood Cliffs, New Jersey 07632. My car has (2) major problems that have not been corrected.

First the transmission seems to slip, happening mostly on cold mornings. When the car is shifted into drive and I am accelerating, the engine revs, but it is not moving. After rolling a couple hundred feet the gears seem to engage and the car finally will move. The second major problem pertains to the braking system, specifically the distance the brake pedal travels in order to stop the car. In stop and go traffic the pedal goes to the same spot in order to stop the car. The problem is evident on highway driving. Traveling on a highway after driving a minimum of 5 or 6 miles and then having to apply the brakes, the brake pedal sinks much farther than normal, to the point of almost reaching the floorboard. Believe me, traveling at highway speeds this is a very nerve wracking experience.

More importantly, are the brakes eventually going to fail, causing a serious accident with injuries or possibly a fatality?

East Coast Auto Mall had my car a total of 4 weeks on three different occasions. In December it was there a week and a half. January they had it for two weeks, and in February they had it for another three days. As I write this letter they have not fixed my car and both problems remain. Back in December they charged me $169.00 to reset codes on my transmission. I paid this, but I feel this should be covered under my warranty. Fred Gates, the service manager refuses to reimburse me, stating that whenever they reset codes this is not covered by the warranty. If my transmission was fixed I would not have complained about this charge, but the problem still persists.

Another time they replaced a brake light switch which they claim was a possible problem with the transmission. Each time they called me and said the car is ready. Obviously it is not!

Back in December 2002 they said they didn't notice a problem with the distance the brake pedal traveled, and told me to pick up the car after having it 1 1/2 weeks. Still not happy with the brake pedal, I brought the car back to them in mid January and asked them to please re-check the car. After the car was there for a week a service advisor called me and said they still can't find any problems. At that point I got furious and asked to speak with their service manager. I spoke to Fred Gates and he agreed to drive my car. He determined there was air in the brake line and decided to change the brake fluid. A few days later when I picked up my car upon driving home I noticed the car was not repaired. I called Fred as soon as I got home that night and asked him a second time to take a ride with me so he knows what I am talking about. Again he refused to go with me and claims he knows what I am talking about. He commented to me that solving this problem is "like finding a needle in a haystack."

I took the car back for a third time on February 3rd. I was told that they replaced the master cylinder, and that three different people drove it, and they all believe that would solve the problem. When I drove the car home that evening and the next day, the brake pedal did seem fine. Thinking the problem was corrected, I drove the car to Boston on Saturday February 8th. Prior to reaching the N.Y. Thurway I was driving a short distance and applying the brake, and the pedal distance was good. I drove across the Tappan Zee Bridge and nearing the toll plaza I applied the brake and to my dismay (and near panic) the brake pedal didn't stop at the higher point, but rather sank down to again almost reaching the floorboard. I drove to Boston and back with this condition, always worrying that the brakes will fail.

Anat of Beverly Hills CA (2/10/03):
The salesperson at South Bay Volvo in Orange, CA, misrepresented that the warranty on the certified pre-owned vehicle is the same as that on new Volvos, when in fact it is much more limited.

Kelli of Garden Grove CA (1/12/03):
We purchased a 1999 323I in Feb. of 2002. After 3 days of negotiations and 9500.00 down, we bought the car. I originally wanted a black one with a bit less features, but they told me this one had more features, was "mint" and all Certified BMW's are like new! My payments are 547.00 per month. I have problems with the window rattle, total computer went out on me ... had to be towed, etc. Nothing compared to what I soon found out!

This last Nov. I took my daughter to buy a Dodge through some friends that I have worked with. I asked the used car manager to " appraise" my car as well. He proceeded to ask me if I had been in an accident? When I said no, he showed me where the car had been repainted about 3/4 of the way. He showed me where there were "bondo" bubbles in one of the fenders. The car is silver and it is hard to match. He showed me where there was "over-spray" ... and told me my car was worth about $13,000, then take $2,000 away for smog and safety and then however much to paint the whole car, making my car worth about $8-10,000.

I paid almost $30,000, and still owe 26,000. I called the dealership immediately and went there by myself to meet with the manager in sales. After I got there, I was met by "Sam Chaalan, Service Director" who led me into his office after checking the car. He said he understood how upset I was, please wait til Monday and come back and he will "get me out of the car". I asked for this in writing and he refused so, I refused to leave with the car, so he called the sales manager. He basically told me, he could do nothing but sell me a NEW car.

I then asked to speak with the General Manager and was met with Mr. Chip Irwin. He and Mr. Chaalan left the office to once again look at the car. They came back to the office I was in and Mr. Irwin shrugged his shoulders and said it was "not that bad".

Aimee of Richmond VA (1/16/03):
I own a certified used '99 Volkswagen Passat that I bought from West Broad VW/Audi in Richmond. Two months ago, my oil pump failed. My family (husband, 2 young children) and I were stuck on the side of the highway. The car was towed into our neighborhood mechanic who said he was probably not the person to fix the problem. The car was then towed to West Broad Volkswagen & Audi where the engine was replaced at a cost of approximately $5400. Since then my car has gone back to them 3 times.

The first time I was driving home from work and the driver side air bag came on and the brake light came on and made continual beeping noises. I pulled over, stopped the car and called my husband. The car would not start again. He came, jumped the car and we drove it back to the dealership. They told us the 6-month-old battery was bad. We went back to the battery vendor and they replaced the battery that was still under warranty. A few days later, the same thing happened on my drive from work. Rather than pulling over, I drove it home, which wasn't far. The car would not start again once it had been stopped.

We jumped the car and drove it to West Broad Volkswagen again. The car was scheduled to go in anyway because of an oil leak. The mechanic replaced a seal or tightened something for the oil leak and charged the battery. When we returned to the dealership once more we could tell by the way the car was cranking that the problem had not been solved. There was a slight delay starting. Later that afternoon they said that their "diagnostic" indicated that it was a bad alternator (cost $700). We retrieved the car, purchased an alternator from a salvage yard over an hour away for a '99 Passat. This alternator was taken from a car with 22,000 miles on it. And was checked by the Salvage Yard prior to purchase. This cost $65.

It turned out though, that our car required a '98 alternator. We drove back to the salvage yard. We took the car to a local VW mechanic (not a dealer) where he charged us $61 to charge the battery and put in the alternator. The car started up. We drove across town home. The next day, I drove the car in to work. I drove the car home from work and noticed that it seemed a little weak. My husband tried to drive the car that evening to the grocery store. It would not start.

That evening I contacted Volkswagen via some 1800 number and placed a complaint. They assured me that they would be contacting the dealership to make sure that they are doing what they can to resolve this issue. Today I took the afternoon off to met with the general manager, the service manager and the mechanic to make sure that we are taking the proper route. I initiated this meeting. I had an extremely difficult time getting anyone on the phone. They were "at lunch" for over 2 hours. Finally, I spoke with the general manager and I told him I would be in this afternoon along with a brief synopsis of the past two months. I asked for a meeting to address my concerns.

The receptionist was extremely rude. After waiting a while I asked if the general manager was in the building since he didn't seem to be answering her page on the intercom. She said he was. I asked her to ask him how long he would be. Her response was "You haven't been waiting over an hour have you?" I told her that my time was valuable too and sat down to wait. During the meeting, the general manager, Mark Parham, was also extremely rude. He made comments regarding the "grimace" on my face and my "body language". After a very heated discussion, we came to the conclusion that they would do another diagnostic of the car and we would proceed.

Later this afternoon, the mechanic called with the results of this "new" diagnosis - the alternator was bad. My husband went around with him for a explaining over and over that we had come to the agreement that they would assume that the alternator was good and that they should look elsewhere - fuses, circuitry etc. The service manager called back with the claim that they could not proceed further in the diagnostic until the alternator was fixed ($700 remember?). We did agree that my husband would take the alternator back to the salvage yard (over an hour) and get another one from them. West Broad Volkswagen will put this alternator in for $110.

During the past few months, we made the decision to get rid of this car. This was not an easy decision. We owe over $10,000 on this car. CarMax offered us $5300 for trade in. The car hasn't been in working condition long enough to have another conversation with another dealership regarding trade-in.

Dolores of Hawk Run PA (1/17/03):
On June 10, 2002, I purchased from Rider Auto in State College, PA, a certified pre-owned 2000 Pontiac Sunfire for my daughter as a college graduation gift. At the time it had 36,176 miles on it. Barely 4000 miles later, on Dec. 21, 2002 my daughter and I broke down along Interstate 80.

The car was towed to a local garage. The cause was thought to be water in the cause or a failing fuel pump. One week later, my daughter again broke down. However, the car finally started. On January 6, 2003, the car once again broke down. The PA State Police had the car towed from the side of the road. I called Riders the following day and asked that they pick up the car and fix it. I only had a 90-day or 3000-mile warranty. However, I do not feel that a car barely three years old should need to have a fuel pump replaced. I had the car for 6 months and barely put 4000 miles on it, so obviously the car did not receive a lot of wear and tear from me.

I also bought the car as a certified pre-owned vehicle. During Riders' "110-Point" used car inspection I feel that this should have been detected as a potential problem. I made several calls to the dealership and received the runaround and at one point was told by some saleman "screw it". Finally, my car was towed there, on Jan. 7,2003. Around 5 o'clock the following afternoon, Riders called me to tell me my car still was not examined. The next day, Jan 9, again near closing time, I was called and told it was finally examined and the fuel pump needed replaced.

The part finally arrived on Monday, January 13 and my car was ready for pickup along with a bill close to $600. Unfortuately, I still have yet to pick up the car because I cannot afford this large of a repair bill and towing charges, so the car is at the dealership until I can pay for it, hopefully sometime next week. I believe my car should have been repaired free of charge because the fuel pump should not have gone this quickly.

• Read your lease thoroughly before you sign it. Do not let salesmen rush you and challenge any assertion that a quoted price is good for one day only.
• Pay special attention to end-of-lease charges. Make certain you know how these will be calculated and how much you should expect to pay when the lease is up.
• Also pay special attention to early termination charges. Be certain you know whether or not you can terminate the lease early and, if you do, what the charges will be.
• If at all possible, don't lease. Auto and truck leasing is almost always a bad deal for consumers. It makes sense for businesses and some self-employed persons who can deduct lease charges on their taxes. In almost all other cases, consumers are better off buying.