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Tag: automobiles

Auto Industry Has Best Year Since 2007

With credit more available and the economy slowly recovering, the U.S. auto industry sales rose 9 percent led by individuals and businesses who may have stayed out of the market for a couple years and now need to replace aging vehicles.

While this article focuses a lot on GM and Ford, the first paragraph of the article (and another paragraph near the end) mentions that this growth is led by foreign manufacturers, like Honda.

Of course growth in the automobile industry is welcomed by every automobile company, foreign or domestic, and the level of growth last year is definitely encouraging. However, we thought the most interesting part of this article was the discussion of how national politics and tax increases on midde-income families could affect the automobile industry.

Many industries, including the auto industry, were and are paying close attention to the debt ceiling talks and the fiscal cliff that was “largely averted” Jan. 1 of this year. The article points out that there was a payroll tax increase that took effect at the beginning of the year and the hostile national politics affecting the economy may keep people off the dealership lots.

The 2 percent tax increase will take about $1,000 from the average household budget, the article said, which is about the same as a down payment on a vehicle.

“It would have been nice if all the open questions had been resolved in the ‘fiscal cliff’ discussion over the holiday, but clearly they weren’t, and that does extend this period of uncertainty from a consumer point of view,” Jonathan Browning, head of Volkswagen AG’s American unit.

The auto industry is hoping that more available financing and an economy that’s recovering as a whole will be enough to compensate for uncertainty and higher taxes.

“The cheap financing and improved income will make up for that, but that’s something we’re going to have a keep an eye on,” Jesse Toprak of TrueCar.com said.

What do you think? Will $1,000 less out of your family’s budget and uncertainty about the economy (and the politics involved) affect your car buying this year?

 

Before You Buy a Car for a Holiday Gift…

We all see the beautiful commercials of new cars topped with giant bows parked in the snowy driveways. Buying someone (or yourself) seems like the perfect gift, but before you take the plunge, there are probably a few things you want to consider.

1)      If you are buying this car for your significant other, be sure it’s a car that they want…and not one that you want. Just like when you were younger and you wanted to buy your sibling a toy for your birthday that you really wanted so you could play with it. I suspect that buying someone a car just so you can drive it will go over about as well. Or not.

2)      Even if you are buying a car for yourself, be sure it fits your family situation. I recently talked to a sales person at a local dealership who said the used sports car we just passed only had 20,000 miles on it because his wife made him bring it back because it didn’t have seats in the back for their kids. If you have children (or pets), it may be important to have enough room for them.

3)      There are many great deals out there right now to buy a new car, but make sure you are realistic with what you can afford. While it might sound dreamy to give your significant other a car for zero down, don’t forget there will be hundreds of dollar payments from months/years after that. I’m not trying to suck out your holiday cheer, I’m just trying to preserve your relationship.

4)      While a surprise might sound romantic, unless you are the “Gift Whisperer” and/or have really done your homework, it’s probably best to include the person you are buying the car for…lest you get the wrong color or trim or entirely wrong car. L

5)      We have a saying in our house: go big or go home. How can you incorporate this into your auto-gift buying experience without buying more than you can really afford? Buy one trim above what they would probably expect. You can never go wrong with heated seats or that navigation system.

If you have any questions that you don’t want to ask the person you are buying the car for (because you’re afraid of ruining the surprise, etc.), feel free to talk your friendly and knowledgeable sales person at Sims Honda, Northwest Honda or Apple Valley Honda dealerships!

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