If you've ever bought a car (and hopefully if you're reading my site, you have) you'll have always come that point in your decision as to whether to buy new or used. New is nice - you get a shiny new toy, unsullied by any other driver. You take it in the pants on depreciation though - the second the ink dries on the contract of sale, you lose 30% of the value. Used means you don't have the depreciation problem but you have the uncertainty of the car's history. So what are the pitfalls and benefits of both? This week I'll deal with new cars. Next week we'll look at used.
The biggest pitfall of a new car is that the dealer will see money signs floating all around you and will attempt to get you to buy an extended warranty and pay top dollar for the car. The extended warranty is a complete no-no unless it's a manufacturer extension AND you're planning to keep the car for 5 years or more. But what about the price? A new car is expensive, right? Yes, but don't ever pay what the dealer is asking or you're a fool, and you know the saying about a fool and their money. So how do you get a good deal on the price? Research is the answer. Here in the US, there are companies like Consumer Reports and FightingChance that offer new car pricing reports. It's been a while since I lived in the UK so I don't know if there are places there that do the same thing, but these are well worth the money you'll spend on them - typically less than $20. But you need to buy them very close to when you're ready to commit to the sale because they contain information that is normally only relevant for a couple of weeks. They'll contain info on what the various deals are in place for dealers around the country (special financing rates, cashback deals etc), as well as the holdback amount. Holdback is what the dealer is paid by the manufacturer for every sale, and it's why when you buy "below invoice" the dealer still makes money. Most importantly, these reports will tell you what the true invoice price is - how much the dealer paid for the car you're about to buy from them. Knowing this, and knowing the holdback amount, you can normally beat a dealer down in price. For example when I bought a Honda Element in 2009, the sticker price was $24,070. The pricing report I bought showed that the Honda invoice to my dealer was $22,398, that the dealer would get a $1,200 holdback and that for another 13 days, there was a dealer incentive to sell Elements that resulted in Honda corporate giving them an additional $900 per vehicle sold. Finally it also showed that the dealers could go as low as 1.1% on finance rates (whereas they would only advertise 2.9%). What does all that mean? If I'd walked on to the dealer lot and paid $24,070 and taken out a 2.9% loan, they'd have known I was a total idiot. (Only idiots go and buy a new car "on impulse"). Between the documentation fees, the markup, the holdback and the manufacturer incentive, the dealer would have made $4,022 profit which is insane in this day and age. Over the life of the loan I would have paid $1200 in interest. Because I knew how much they were getting back from Honda, and because I knew the loan rates they could do, I actually walked out the door having paid $20,500 with a loan that only cost me $357 in interest. Honda corporate made $200 off me, and the dealer made zero off me but ultimately received $2,100 in profit from Honda.
See how it works? Research is absolutely the key, and if you get a stubborn dealer who thinks it's still the nineties and tries to bully you into paying stupid money with high pressure sales tactics, just walk out. There are plenty of other dealers who will work with you on a decent price and very often you'll find a dealer who appreciates that you've done your homework because it means a quick sale to you with very little messing about and they can then get on an roll another punter once you've left.
Of course the downside of that story is that the instant I turned the key in the ignition, the car depreciated to $14,350 but that's why next week's post is about used cars.
Monday, April 2, 2012
Monday, March 26, 2012
Driver education
Following on from last week's post about self-driving cars, it occurs to me that the true solution to the driving "problem" isn't increasing the number of interfering driving "aids" that are put in cars. We don't need ABS, adaptive cruise control, lane departure warning systems, blind spot cameras and all the other nonsense. What we need is proper driver education and regular re-testing, enforced with steep fines. The education would cost, as would the re-testing, and the fines would be steep enough to cover some costs whilst at the same time being a disincentive for people to re-offend. Look at other more enlightened countries - especially those in Scandinavia where it takes a year or more to do the driving education course and drivers are required to know how to handle their cars in terrible road conditions (snow, ice, rain), at night, in towns and on freeways, at many different speeds. Compare that to the joke of a driving education and testing system in America where driving licences are handed out like candy and you can be legally blind and still have a licence. The statistics bear out the education argument too. Sweden has one sixth the casualty and accident rate of the US per capita. Germany has one third. Most European countries have at least half the rate the US does if not more. (Countries by traffic-related deaths)
The problem is the culture of inclusion, where a car is treated as a right instead of a privilege. Society today is afraid to tell people that they've failed at something so instead we try to ensure that everyone gets a driving licence and then we deal with the consequences of this flawed policy by loading cars up with all manner of gadgets in an attempt to keep people safe. Now don't get me wrong - seatbelts, airbags, crumple zones and side impact bars I believe should be (and for the most part already are) mandatory in every car sold today. These are all mechanisms to help you out as a Hail Mary. But to put all the other things into vehicles that we see nowadays is irresponsible of the manufacturers because it lulls drivers into a false sense of security. People aren't trained but instead are led to believe by the manufacturers that their car will effectively save them from their own stupidity. Look: when you're driving 2 tons of steel, it needs to be treated with respect and attention, and education is the only way to get people to understand that. All you need is to see one good snowy day to realise how much drivers have been misled into believing they're safe in their vehicles. Look at the video below - not one of the cars is steering the right direction, trying to counteract the skids, or has even a single wheel rotating. I can tell you what's going on in every one of these cars; the driver has both hands on the wheel, pulling it towards them with as much force as possible whilst standing on the brake pedal with both feet (probably with their eyes closed). The results are predictable, and ultimately the end product of a system where we've elevated the value of driver "aids" at the exclusion of actual driver eduction. In this case the worst decision these drivers made was attempting to drive on a street that was patently undrivable in the first place. Believing their driver aids would save them coupled with a badly misplaced understanding of their own skill is what you see here.
Enjoy the video. It was taken not 10 miles from where I live, in a state where we deal with snow for three months every year.
The problem is the culture of inclusion, where a car is treated as a right instead of a privilege. Society today is afraid to tell people that they've failed at something so instead we try to ensure that everyone gets a driving licence and then we deal with the consequences of this flawed policy by loading cars up with all manner of gadgets in an attempt to keep people safe. Now don't get me wrong - seatbelts, airbags, crumple zones and side impact bars I believe should be (and for the most part already are) mandatory in every car sold today. These are all mechanisms to help you out as a Hail Mary. But to put all the other things into vehicles that we see nowadays is irresponsible of the manufacturers because it lulls drivers into a false sense of security. People aren't trained but instead are led to believe by the manufacturers that their car will effectively save them from their own stupidity. Look: when you're driving 2 tons of steel, it needs to be treated with respect and attention, and education is the only way to get people to understand that. All you need is to see one good snowy day to realise how much drivers have been misled into believing they're safe in their vehicles. Look at the video below - not one of the cars is steering the right direction, trying to counteract the skids, or has even a single wheel rotating. I can tell you what's going on in every one of these cars; the driver has both hands on the wheel, pulling it towards them with as much force as possible whilst standing on the brake pedal with both feet (probably with their eyes closed). The results are predictable, and ultimately the end product of a system where we've elevated the value of driver "aids" at the exclusion of actual driver eduction. In this case the worst decision these drivers made was attempting to drive on a street that was patently undrivable in the first place. Believing their driver aids would save them coupled with a badly misplaced understanding of their own skill is what you see here.
Enjoy the video. It was taken not 10 miles from where I live, in a state where we deal with snow for three months every year.
Monday, March 19, 2012
Self-driving cars again.
I know I vented about this a couple of months ago but now BMW and a handful of other manufacturers are touting their latest self-driving cars, it's time for another perspective. Google have already had one of their vehicles crash, back in August last year causing a 5-car accident. That raises the spectre of who is ultimately responsible for such an accident. Google said it was the driver in their case and there's the crux of the problem right away. If you weren't in control of the vehicle at the time, how can you be responsible for its actions? How about the vehicle manufacturer? Certainly they're partly to blame but they will offset the blame to the software authors and the sensor manufacturers. Did the car crash because of a bug in the software or because one of the sensors it relies on failed? How do you prove what caused the failure? What happens when someone in a regular car causes the accident? The manufacturers are going to great lengths to point out that their self-driving cars can adapt to and compensate for any eventuality. That's a rose-tinted view of the world - I guarantee any one of us could cause an automatic car to hit ours with the minimum of effort because just like human drivers, a computerised system laced up to sensors with hundreds of thousands of lines of code cannot compensate for human stupidity.
Now think about this: any vehicle with an outside connection (like OnStar) is insecure. OnStar in particular is so deeply integrated with the onboard computers that it opens the door to remote vehicle hacking. University researchers proved in 2010 how easy it is to hack into the CANBUS (OBD II) of any modern car. (Original report (PDF)). Yes they had physical access to the CANBUS but their followon paper published in 2011 (Second report (PDF)) performed the same attack via the vehicle telematics instead.
Given that precedent (and how ridiculously easy it is to steal any OnStar-equipped car via social engineering) do you really want a self-driving vehicle that is open to software attacks like this?
Going back to the crash scenario - how do you now prove that it wasn't a malicious software attack?
The lawyers will have a field day with self-driving cars if they ever become mainstream. Look at the furore over the Toyota floormats sticking the brake pedals down - that was a simple physical design problem and it nearly took Toyota down.
I truly hope they don't become mainstream. I can't imagine a bleaker future for drivers than cars that drive themselves. Not to mention the morally bankrupt idea that people want to admonish all personal responsibility when driving. That alone I think is reason enough to question the entire development effort behind these vehicles. If people are really so desperate to have the "drudgery" of driving removed from their lives, perhaps they should reconsider public transport and taxis. Or give up their "horrible" cars altogether and just stay inside.
Now think about this: any vehicle with an outside connection (like OnStar) is insecure. OnStar in particular is so deeply integrated with the onboard computers that it opens the door to remote vehicle hacking. University researchers proved in 2010 how easy it is to hack into the CANBUS (OBD II) of any modern car. (Original report (PDF)). Yes they had physical access to the CANBUS but their followon paper published in 2011 (Second report (PDF)) performed the same attack via the vehicle telematics instead.
Given that precedent (and how ridiculously easy it is to steal any OnStar-equipped car via social engineering) do you really want a self-driving vehicle that is open to software attacks like this?
Going back to the crash scenario - how do you now prove that it wasn't a malicious software attack?
The lawyers will have a field day with self-driving cars if they ever become mainstream. Look at the furore over the Toyota floormats sticking the brake pedals down - that was a simple physical design problem and it nearly took Toyota down.
I truly hope they don't become mainstream. I can't imagine a bleaker future for drivers than cars that drive themselves. Not to mention the morally bankrupt idea that people want to admonish all personal responsibility when driving. That alone I think is reason enough to question the entire development effort behind these vehicles. If people are really so desperate to have the "drudgery" of driving removed from their lives, perhaps they should reconsider public transport and taxis. Or give up their "horrible" cars altogether and just stay inside.
Monday, March 12, 2012
The joy of paying off a car loan
The average middle-class person has three big debts in their life. Their house, their car and a credit card or two. The house is always difficult to get out from under, and carrying credit card debt of more than a couple of hundred dollars or pounds is just idiotic. But a car loan is one of those financial drains tied to a luxury item, and cars are a luxury item. In the world that a lot of my readers live in, I wouldn't be surprised if the household had two cars, but there are obviously places in the world - here at home too - where people just can't afford a car. So it's a luxury item, and taking out a loan on one is something you should only do if you have a chance of paying it off. Two years ago I picked up a new car and took out a car loan on about 50% of the value of it (my trade-in paid for the other half). For two years I've been putting most of my spare money into the loan as additional principal payments, and a few weeks ago I achieved motoring nirvana - a lien release from the credit company, giving me a clean title. ie. I paid off the loan and now I own my car. I can't tell you what a weight that is to be lifted off my shoulders, especially as I'm staring down the barrel of unemployment (a long and torrid story of a company so full of managers and process that we've forgotten how to actually produce anything). I try not to carry much debt on my credit card (singular) but I still have a mortgage. Not having a car payment every month is really nice though. But here's my problem. I'm a car guy and shiny new Precious's always catch my eye. If I'm still employed by this time next year, I just know I'm going to be in the market for a car change, which inevitably will mean a new loan.
So if you're in the percentage of the world's population that owns a car, and you have a loan on it, do everything you can to get out from under that loan. It's a lovely feeling.
So if you're in the percentage of the world's population that owns a car, and you have a loan on it, do everything you can to get out from under that loan. It's a lovely feeling.
Monday, March 5, 2012
The HANS device
With the start of the Formula 1 season just around the corner, I thought it might be informative to explain what the HANS device is. HANS means Head And Neck Support and it's a device that is used in most motorsports now. The name is actually a bit of a misnomer because it doesn't really support anything - it's designed to stop the hyperextension of the neck in a crash.
In a crash it's the speed of the stop that causes most injuries and the HANS device stops the head from snapping forwards or sideways in a severe stop. In the good old days, the large lateral force in a crash would cause the driver's head to be slammed from side to side or forwards and backwards. This was made worse by the added weight of the helmet, making the head behave like a pendulum. Spinal injuries resulted as the neck was over-extended - a severe version of whiplash.
The HANS device is a yoke that sits over the driver's shoulders, and around the back of the neck with a pair of straps up the back that attach to the helmet. When the driver is sitting in the car, where the seatbelt straps pass over the top of the driver's shoulders, they sandwich the HANS device between the straps and the shoulders. As the straps are tightened down, the device becomes held down. In normal use, the straps are long enough to allow the driver to look down and from side to side, but they're short enough that in the even of a crash, as the head moves forward it's held from going too far by the straps.
The entire function of the HANS device relies on the seatbelts - as soon as the seatbelts are undone, the yoke basically just sits over the driver's shoulders which is why it's so easy to put on and take off - you'll see them do it in the pits sometimes.
There are also HANS devices for motorcycle riders and racers but they're a little different. Obviously there's no seatbelt on a motorbike so instead of relying on a belt to clamp the device to the rider's shoulders, this type rely on straps under the rider's armpits to hold the yoke down. From that point on it works exactly the same as the car version, preventing hyperextension of the neck in a crash.
So look for it next time you watch your favourite motorsports and see a driver being strapped into his ride. Most motorsports use them now.
As an ironic footnote, it's worth noting that legendary NASCAR racer Dale Earnhardt refused to wear one, arguing that they were uncomfortable and ineffective. He was subsequently killed in a crash that would have been survivable had he been wearing one, and his death forced the HANS device to become mandatory in NASCAR.
In a crash it's the speed of the stop that causes most injuries and the HANS device stops the head from snapping forwards or sideways in a severe stop. In the good old days, the large lateral force in a crash would cause the driver's head to be slammed from side to side or forwards and backwards. This was made worse by the added weight of the helmet, making the head behave like a pendulum. Spinal injuries resulted as the neck was over-extended - a severe version of whiplash.
The HANS device is a yoke that sits over the driver's shoulders, and around the back of the neck with a pair of straps up the back that attach to the helmet. When the driver is sitting in the car, where the seatbelt straps pass over the top of the driver's shoulders, they sandwich the HANS device between the straps and the shoulders. As the straps are tightened down, the device becomes held down. In normal use, the straps are long enough to allow the driver to look down and from side to side, but they're short enough that in the even of a crash, as the head moves forward it's held from going too far by the straps.
The entire function of the HANS device relies on the seatbelts - as soon as the seatbelts are undone, the yoke basically just sits over the driver's shoulders which is why it's so easy to put on and take off - you'll see them do it in the pits sometimes.
There are also HANS devices for motorcycle riders and racers but they're a little different. Obviously there's no seatbelt on a motorbike so instead of relying on a belt to clamp the device to the rider's shoulders, this type rely on straps under the rider's armpits to hold the yoke down. From that point on it works exactly the same as the car version, preventing hyperextension of the neck in a crash.
So look for it next time you watch your favourite motorsports and see a driver being strapped into his ride. Most motorsports use them now.
As an ironic footnote, it's worth noting that legendary NASCAR racer Dale Earnhardt refused to wear one, arguing that they were uncomfortable and ineffective. He was subsequently killed in a crash that would have been survivable had he been wearing one, and his death forced the HANS device to become mandatory in NASCAR.
Monday, February 27, 2012
What's a new car buyer to do?
A couple of weeks ago one of the comments left on my blog was that most of my posts are to do with things I dislike, and why didn't I write something positive? Well - out here in the real world of motoring, there's not a lot of happy things to write about. Roads are choked. Politicians are legislating cars out of existence. Abominable car designs continue to pour on to the roads. Cars have more and more distractions to stop the driver from concentrating on the job at hand, and the police - by and large - are more interested in stopping people for doing 5mph over the limit than they are in stopping people who are committing properly dangerous offences like lane-hogging, crossing the gore, shooting red lights, jumping railroad crossings and such.
However there are some bright spots. In my opinion, Ford is one of them right now. I've always been anti-Ford and anti-GM. I thought they were both purveyors of awful cars. In GM's case that's still true - there's not a single vehicle that company produces that is even slightly appealing. I've always been a VW/Audi fan, or in some cases the odd Honda or Toyota. Ford however have had a turnaround. Over the last few years their European vehicles have become properly decent - they look OK, drive well and have some appeal. With the latest generation now making their way over the pond, if I were in the market for a new car, I'd be seriously looking at Ford right now. I love the Fiesta - it's a pokey little rollerskate that is fun to drive. The new Focus I think looks really good, drives well, handles way above average and has a semi-decent interior. I love the look of the 2013 Fusion - looks super-classy, like an everyman's Aston Martin. And the Kuga (to be called the Escape over here) I think is destined for success based on drives I've taken in the old generation ones in the UK. I think that Ford are also benefiting massively because they didn't take any government handouts. It's not all sunshine and roses though. The Expedition, Explorer and Edge I think come from the old-school Ford where ungainly ugly designs filled with cheap plastic and thirsty engines abound. But as a buyer I wouldn't be in the market for a road-tamed Panzer. I'd be looking for a car - a crossover or compact SUV at the most. Between the Hyundai Veloster, the VW Tiguan, the Fiat 500 and all the new Ford vehicles, I'd be spoiled for choice. Now if only Citroën would bring the DS3 Sport to the US, we'd have some proper competition.
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