Cash For Clunkers Leaseholders Already Looking For A Way Out?
Last year the federal government's CARS program—better known as Cash for Clunkers—sparked a frenzy of shopping for smaller, more fuel-efficient cars, retired older guzzlers, and boosted an ailing industry.
Now, a year later, it sounds like a significant portion of those people are having regrets. The lease-trading marketplace LeaseTrader.com reports that less than 20 percent of Cash for Clunkers transactions were for leases, but an unexpectedly high portion of these lessees are now looking for a way out.
Since May, especially, LeaseTrader has noted an uptick in those who are looking to have their leases assumed—especially among those who are leasing affordable, popular vehicles like the Toyota Camry, Honda Accord, and Ford Escape.
According to CNW Marketing Research, which tracks the leasing industry through periodic surveys, in 2009 one out of five leases was terminated early, and last year roughly one in four who had to break a lease cited a change in job status as the main reason.
Getting out of a lease isn't as easy as it sounds. About the only way of doing so without destroying your credit score is—if the leasing company allows—is by finding someone willing to assume the remainder of the lease terms. Companies like LeaseTrader.com, and also Swapalease.com help those looking to dump their lease with those looking for a shorter-term vehicle.
In order to have the federal CARS $3,500 or $4,500 rebate included in a lease, customers needed to commit to a five-year term, so especially for lower-cost vehicles people are often saddled with more interest and a longer payment scenario than they'd intended.
Many, apparently, are finding out that their bet on the economics of Cash for Clunkers—replacing a less efficient, paid-off one with a more efficient one on lease or loan—isn't going to pay off. Fuel prices haven't risen significantly over the past year. They've surely fluctuated; last August 1, a gallon of regular unleaded averaged $2.24, according to the U.S. Energy Information Administration, but by September 5 it had climbed to $3.03. For the past week, it's averaged $2.74.
This story originally appeared at The Car Connection
VW’S New Mid-Size Sedan To Replace Passat In U.S.
TheCarConnection reported it first, earlier this month. Now, other outlets are confirming our report that Volkswagen will likely replace the Passat in the U.S. with its upcoming "NMS" mid-size sedan due in 2011.
The latest information comes again from VW's U.S. chief Stefan Jacoby, who told Automotive News that the company is still "looking at" whether to replace the Passat with the new mid-size sedan or sell the two side by side.
Jacoby told TheCarConnection that the NMS would replace the Passat in the U.S. in an exclusive interview in Germany.
The problem with selling the Passat alongside the new Tennessee-built sedan is that the U.S.-built mid-sizer will be larger than the Passat, and cheaper. The current 2010 Passat starts at $27,695 and measures in at 188.2 inches in length. Expect the new mid-size sedan to be priced around the $20,000 mark, making it a perfect competitor for cars like the Nissan Altima, Toyota Camry and Honda Accord.
The reason for the major price differential between the Passat and the new mid-size is the exchange rate. While the Passat has to be imported from Europe, the new mid-size sedan will be built at a factory in Chattanooga, Tennessee.
Capacity at the place will be more than 150,000 vehicles but VW expects sales to only reach 100,000 annually. By comparison, sales of the Passat sedan and wagon peaked at 96,142 in 2002 but fell to 30,034 last year.
Incidentally, the recently launched Passat CC sedan will remain on sale, and the new "NMS" and the CC will likely be paired as are the Nissan Altima and Maxima, close in size but distinct in mission.
VW also confirmed to TheCarConnection that the new NMS sedan will share much of its running gear with a new Chinese-market sedan, and will be sold around the world in markets like India and Russia--turning the project from a U.S.-only vehicle to a more profitable global mission.
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This story originally appeared at The Car Connection
Lexus Celebrates 20 Years
Toyota proudly notes that its wildly successful Lexus division debuted exactly 20 years ago at 1989's Detroit Auto Show. The cars that started the brand were the LS 400, a Benz S-Class fighter, and the ES 250, a Camry-based sedan with a V-6, frameless windows, and stellar fit and finish.
Despite a chorus of doubters, Lexus quickly established itself as a formidable contender, sending both engineers and marketing managers at rival German luxury car makers back to the drawing board in attempts to produce cars as reliable, efficient, and affordable as the Japanese upstart. Consistency has been Lexus hallmark - to this day, it is nearly impossible to find a Lexus product that doesn't offer remarkable quiet, finesse, and serene operation in every imaginable driving scenario.
Then again, critics have aimed squarely at Lexus' inoffensive nature, lobbing insults like "bland" and "vanilla" at the automaker. True, perhaps, but Lexus' sales numbers tell a very impressive story regardless. And accolades through the years from all the major automotive journals like Automobile and Car and Driver suggest that the brand has succeeded in its relentless pursuit of perfection.
To be sure, Lexus has built some slow-sellers, vehicles that haven't resonated so well with U.S. tastes. Replacing its fantastic SC 300/SC 400 line, for example, with the uncomfortably tight and expensive SC 430 folding hardtop was a true head-scratcher. On the other hand, Lexus has led the luxury car world in the gas/electric hybrid realm, producing the likes of the RX 400h and the LS 600h L. True, those models focus more on performance than they do efficiency, but they paved the way in the minds of the Lexus faithful for a hybrid vehicle fitting into the company fold, and the brand new HS 250h, just shown in Detroit and going on sale this fall, finally turns fully toward uber efficient operation by using the proven powertrain from the Toyota Camry hybrid.
Concludes John F. Thompson, editor of Toyota's Open Road blog, "this use of technology that didn't even exist 20 years ago is a pretty good way, we think, to begin our second 20 years in the pursuit of excellence."
Happy birthday, Lexus, and congratulations on a remarkable first 20 years.
This story originally appeared at The Car Connection
