"Chevrolets & Fords Getting Better Gas Mileage Than Hondas & Toyotas"
October 6, 2009 There's been a renewed interest in gas mileage of late. Due to the gas price spike last year, many consumers are more concious of MPG numbers, and advertising campaigns are taking full advantage of the new mindset.
Both Chevrolet and Ford, for example, are currently airing commercials bragging that some of their offerings achieve higher MPG ratings than competing Honda and Toyota models. While this is true, and the domestic manufacturers are certainly to be commended for besting the imports in a category the imports once ruled, gas mileage alone is not reason enough to buy any particular brand or model, foreign or domestic.
Yes, the higher the miles-per-gallon the better, especially given the volatility of the oil market and the widely held belief that gas prices will one day rise to uncomfortably high levels, and likely stay there. In reality, however, gas mileage alone ~ and any cost savings that might come with it ~ is not the only expense ~ nor is it the most significant expense ~ associated with a new vehicle.
While filling the tank can be a frequent reminder of driving costs, the long-term impact of repairs and depreciation are driving costs often overlooked by most buyers, at least not truly felt until they get that dreadful "wake-up call" in the form of an (expensive) unexpected repair or having a vehicle worth far less than expected, or needed, when it comes time to trade.
In terms of quality and reliability, Chevrolet and Ford, along with other domestic manufacturers, have introduced many promising new models in recent years, and every indication is that these newer models approach, match, or even exceed the "bullet-proof" reliability and resale values long enjoyed by Honda and Toyota. But, these promising new domestics have not yet been on the road long enough for this to be proven.
In terms of maintaining resale value, the domestics ~ historically bested by many imports ~ have an even longer road to "salvation." While we may soon begin to see that domestic quality and reliability are up to par with some of the long-standing imports, it will take even longer for that reputation to have a similarly positive impact on depreciate losses and resale value.
My point? The cost of gas is relatively insignificant compared to other expenses and losses associated with a new car or truck. Saving a few dollars here and there on a vehicle that gets better gas mileage is very unlikely to come even remotely close to covering repairs (and repair-related time-robbing inconvenience) and depreciation if that higher mileage vehicle doesn't "hold up" as it should. In short, gas mileage alone isn’t reason enough to choose one vehicle over another.
For more information, read "Hidden" Ownership Costs on my Advice page.
"Who Has The Best Service In Town?"
September 21, 2009 There's a local commercial that starts with something to the effect of, "Who has the best service department in town? It's not Lexus, Mercedes, Honda or Toyota..." then announces proudly that a nearby GM dealership (which sells at least four domestic brands) was voted "best" by some group or another.
While the service at that dealership may very well be exceptional, the ad makes it sound like it's better than the dealers selling the other brands named. But that's not necessarily true.
1. Honda, Lexus and Toyota products are historically the most reliable available. Therefore, they require far fewer -- if any -- trips to the service department.
2. And, since these three brands' service departments experience such lower volume, there would naturally be fewer votes cast, if any votes were cast at all.
The dealership holding the "best" service department award is surely a good one, probably better overall than others. Just be sure not to miss the fact that, though it clearly does a lot of business and satisfies its customers, it -- and the brands it sells -- may not necessarily be your best choices.
Instead of going for service at the "best" department in the area, wouldn't you really rather skip the trip altogether?
Kia Spectra & Subaru Dealer Commercials
June 7, 2009 Two recent television commercials have caught my attention as being somewhat misleading, while sounding fairly impressive:
Kia is running an ad comparing its $14,200 Spectra to a (nonexistent) $14,200 Toyota Corolla, implying that you get more car for less money in the Kia Spectra. The Truth: You'll get less car for less money with the Kia Spectra. Kia is a relatively new brand, and its track record doesn't even remotely compare to Toyota's. And, while Toyota historically ranks at or near the top of almost all rankings, Kia's short record ranks roughly mid-pack, at best. In A Nutshell: The extra money you'd spend for a "comparable," more expensive Toyota Corolla would be an investment that sticks with you for the duration: reliability and resale value would be higher at the end, and you'll surely spend less time (and money) on repairs.
Another ad points to Subaru's gradual sales increase as a reflection of its quality, reliability and resale value, implying that you might want to join the ever-growing group of happy, satisfied owners. The Truth: While Subaru has enjoyed modest, steady sales increases recently, it's more of an oddity or a fluke than anything else, and certainly isn't due to any remarkable quality, reliability or resale value factors. Not one respected automotive journalist or consumer group has ever marveled over these traits in a Subaru, and I've run across many a client who experienced aggravating problems with their cars. In A Nutshell: Buy a Subaru if that's what you want, if some (or many) aspects of the car appeal to you. But don't expect to enjoy stellar quality, reliability or resale values: they're not likely to happen, at least not based on the current track record. There are many better choices out there.
Listen Closely, Think Carefully & Look Out For “Puffing”
April 3, 2009 There’s a fine line between fact and fiction in almost all advertising, or maybe you’d call it a gray area. In most cases it’s called “puffing,” which is the art of “exaggerated commendations…for promotional purposes,” a perfectly legal, but sometimes misleading, practice. 
Simple examples of puffing would be, “We have the best pizza in town!” or “This is the easiest mop you’ll ever own!” It may or may not be true, but it sounds good, and it’s not necessarily untrue, therefore it’s not illegal. Whether or not a product needs puffing – only a rare few brands and products have the long-term, bulletproof reputations that don’t require puffing – if a competitor is puffing there’s a good chance the rest of the competition will have to do some puffing of their own, or their presentation (in advertising form) could fall flat.
Advertising in the automotive world often uses impressive-sounding “puffs,” like “fastest-selling” or “most-awarded,” statements that really don’t mean much (if anything), but they sound good (and just might get you into the showroom). Just what does “fastest-selling” mean anyway? It’s clearly not “best” selling – or they’d say so – but it sounds good, doesn’t it? More than likely, they had a small, obscure but exceptional sales period – probably for a week or so – where they sold more than their competition (and/or have manipulated the data to sound more impressive than it really is). And what does “most-awarded” really mean? Awarded by whom? Do we really care, for example, that magazines like Good Housekeeping or GQ awarded some accolade to an automobile? We don’t think so.
Two of the “Detroit Three” are running commercials that have caught our attention in recent weeks:
One of them makes the claim that its quality is “unsurpassed by Honda or Toyota.” We’re not sure exactly what they mean – there must be some key in the use of the word “unsurpassed,” possibly linked to an obscure study of some sort. We’re not sure we believe the claim, at least not as it sounds. Yes, there is every indication that this particular manufacturer’s quality is greatly, even vastly improved – and it may very well be the best of the “Detroit Three” – but we find it hard to believe they’re already on par with the practically unbeatable duo from Japan. We’re hopeful and optimistic, but it will take at least a few more years of consistent, solid proof before we can be certain. If you’re planning to buy American, however, this manufacturer is a good choice.
Another makes the statement that their “quality and reliability are the best in company history.” While it certainly sounds good, it really doesn’t mean a thing. We respect that they’re not making potentially false comparisons to others, but the statement means absolutely nothing. It had better be true – we certainly hope that its quality and reliability haven’t gotten worse – but it’s still meaningless. The truth of the matter is that this manufacturer has a long history of poor quality and reliability, and all indications are that it remains the worst of the “Detroit Three,” no matter how much better it might be today.
There are few locally-grown commercials making statements that sound appealing as well, but they’re not really saying much, and it could be argued that some are a little misleading:
“Sales tax is free” sounds like you can skip South Carolina’s sales tax (which is capped at $300), but that’s not the case. Yes, as part of the government’s stimulus efforts, sales tax on cars purchased between February 16 and December 31, 2009 is deductable on your 2009 income taxes, but it’s not actually “free.” You’ll pay it this year, and get a deduction next year. Also of note, this part of the stimulus is more valuable to those buying cars – and paying higher taxes – in states where the sales tax isn’t capped (at our relatively low rate). In short, it’s no big deal here in South Carolina.
“We’ll pay off your trade, no matter what you owe” sounds like someone is going to rescue you from being “upside down” (owing more than your car is worth) by making your payoff, regardless of your car’s actual value. That’s not going to happen. One way or another, unless you come up with the cash out-of-pocket, the difference between your payoff and your trade-in’s value is going to be rolled into your new car. You may or may not be aware of this at the time, as the “upside down” difference is usually taken out of the mark-up on the new car, but you can rest assured that no one is giving you that difference out of the kindness of their heart. Also be aware of the dangerous possibility of “snow-balling” your “upside down” factor. If your new car’s value drops a lot before you trade again, you may then find yourself twice as “upside down” the next time you’re in the market for a new ride. Lean toward vehicles with reputations for traditionally high resale values.
“Guaranteed financing” sounds like you’ll get financed no matter what your income or credit history. You will, if they’ve made that claim, but there are a couple of “catches” that may surprise you when you hear the details: the down payment required could be enormous – perhaps even close to the actual value of the car – and/or the interest rate could be uncomfortably – even ridiculously – high. If your credit rating and/or income level aren’t great, deals like these may be your only option, but you need to be very careful that you’re not shooting yourself in the foot. Pay a reasonable price for a proven, historically reliable vehicle.
Our message is a simple one. Before being persuaded by great sounding advertising claims, listen closely to exactly what they’re saying and think carefully about what, if anything, they really mean. Do the research. Check the facts. Do the math.
 puffing. Dictionary.com. Merriam-Webster's Dictionary of Law. Merriam-Webster, Inc. http://dictionary.reference.com/browse/puffing (accessed: April 03, 2009).