IRVINE, Calif. — New research from the Kelley Blue Book Market Intelligence Group revealed today that more vehicle buyers are apparently turning to used units, as well as tending to pay in cash rather than financing their purchases.

The study findings showed some startling vehicle buyer sentiment about potential purchasing and financing plans.

Stemming from what analysts believe to be unsteady economic conditions, the survey determined most in-market shoppers are planning to spend a relatively small amount of money on their next vehicle purchase. Additionally, KBB found these same consumers are more likely to buy a used vehicle versus a new unit.

Furthermore and most relevant to auto finance companies, more than one-third of in-market vehicle shoppers involved in the survey say they plan to pay the entire cost of their next vehicle purchase in cash, and they are not influenced by incentive offers.

KBB indicated 74 percent of the individuals surveyed plan to purchase a vehicle within the next six months. Of that cluster, more consumers emphasized they are in the market for a used vehicle (67 percent) rather than a new one (33 percent).

Again, returning to what could pique the interest of finance companies, KBB found that 42 percent of used-vehicle shoppers and 20 percent of new-vehicle shoppers said they plan to pay the entire cost of their next vehicle in cash.   …Read More

The National Bankruptcy Research Center reports that 150,000 consumers filed for bankruptcy in March 2010.  This is the highest monthly consumer-filing total since the Bankruptcy Code was revised in 2005 and represents a 34 percent increase from the February 2010 filings and a 23 percent increase compared with March 2009.

Keith:  All the press around the Toyota recalls got me thinking about a car I sold with a crack in the windshield. My shop assures me that it is safe but someone in the customer’s family is telling her that I broke the law by selling the car that way. I want do the right thing, but a new windshield is very expensive and as long as I am not breaking the law I would like to avoid replacing it. Am I in trouble?

Answer:  It is against the law to sell a vehicle when a safety item, such as a windshield, is not in working order. While your shop says the windshield is safe (and I am not doubting they are right, although you used the word “crack” as opposed to chip to describe the defect in the windshield, which may suggest otherwise) the customer (or members of her family) believes you are doing something wrong. That often times will wind up leading to other problems with that customer down the road. I would offer to replace the windshield and, perhaps, split the cost with her, thus avoiding the likely problem with this customer in the future. If it is a recent sale, you could also unwind the deal if it comes to that. In any case, if you pay for all or part of the windshield repair remember to use a Goodwill Repair Form and if you unwind the deal to get a Release of Claims signed (an example of one can be found here on Auttr). Unfortunately, in our business you can do everything right and still wind up with an unhappy customer, often the result of them being misinformed.

While there are many aspects to a motor vehicle sale, one area that presents a number of significant legal compliance issues for dealerships is the proper way to offer a warranty.  While at fist glance the subject appears relatively straightforward, it becomes complicated because of the various federal and state regulations that often have an overlapping effect on the subject matter.

Generally speaking, a warranty is a promise by a manufacturer or seller, or a third party on their behalf, to stand behind its product. There are two types of warranties that businesses give consumers with the sale of a product, implied warranties and express warranties.  Implied warranties are a creation of state law and are based upon the common law principle of “fair value for money spent.”  There are two types of implied warranties for consumer goods such as motor vehicles, the implied warranty of merchantability and the implied warranty of fitness for a particular purpose. Read the rest of this entry →