New-car leasing grows in better economy with improved access to credit

Dreaming of a new car, SUV or truck but worried about the cost? Leasing could be your ticket to ride. With the economy in recovery, dealers and the captive, and aftermarket lenders they access, are offering some very good deals. And, leasing isn’t just for tax advantages or for luxury cars anymore. “Leasing has moved to include the full spectrum of models,” according to Director of Business Development Richard Van Hassel of Volkswagen Credit and Audi Financial Services.

The trend toward leasing is picking up, according to Ally Financial’s Director of Consumer Products, Greg Skurkovich. “Leasing volume has been increasing steadily for the past couple of years…we plan to continue that momentum in 2012.” Ally provides lease financing for General Motors, Chrysler, Suzuki, Saab and Maserati customers. In fact, leasing is back to its highest rate since 2005, according to several sources.

Behind the leasing upsurge, which for some brands accounts for up to 30 percent of their business, are several factors. The improved economy has resulted in more credit availability and the job market is stabilizing (unemployment in Colorado is now below eight percent). “We’re seeing a broader credit range of customers,” said Ally’s Skurkovich, who also lists stronger consumer confidence and the highest-ever average age of vehicles as contributing factors.

Why lease instead of own? “Leasing is just a very affordable way to drive more vehicle for less of a monthly payment and little or no money down,” according to American Honda Finance’s Dealer Relations Manager, Don Hull. Monthly lease payments generally will run 30 to 60 percent lower than loan payments, even with zero-percent loans.

Good leasing candidates are drivers who want a new vehicle every three or four years, want the latest technology and safety features, want the comfort of a warranty, can reasonably predict how many miles they will drive in a year, take good care of their vehicles and don’t like to negotiate over trade-ins.

According to Ron Emery of Toyota Financial, “Someone with a three-year lease can have three brand-new cars in the same time as someone who finances one 72-month retail contract.” These days, three years can bring some substantial technological, safety and fuel economy improvements.

The hassle factor is also a major leasing motivator, according to Emery. “When customers bring back a leased vehicle there is no negative equity and they aren’t subject to the volatile used car market. They just hand back the keys and walk into a brand new car. And if there is equity (the car’s resale value is worth more than the dealer originally estimated at the end of the lease) a customer gets to take advantage of that.”

“A lot of people will finance a car for six or sometimes seven years but they don’t keep the car for more than three or four years,” said VW’s Van Hassel. “They’re financing the whole car but never really paying it off, so they’re paying interest on part of the car they’re never going to use.” The difference with leasing, and the main reason monthly payments are lower, is that monthly payments mostly pay for the depreciation cost of the vehicle during the term of the lease. Depreciation is the cost of the car minus the estimated resale value of the car at the end of the lease period. In short, when you lease, you’re paying only for the use of the car for the lease period, not the full cost of the car.

Leasing used to be complicated and confusing for consumers. Federal regulations have made it much more transparent. When a price is negotiated, there are no hidden fees; the dealer discloses everything, including his profit. The only variables consumers have to worry about are damages above of the amount specified in the lease and mileage in excess of what’s specified.

Is leasing for you? Visit a dealer and see. You may be offered a deal you can’t refuse.

Detroit Auto Show Takes Efficiency and Luxury Up a Notch – and More

The 2012 North American International Auto Show, opening today in Detroit, is like a smorgasbord: There are so many good choices it’s nearly overwhelming.

Fuel economy gains are prevalent throughout the show and offered by every manufacturer.  The electrification of the car continues with more hybrids, plug-in hybrids and pure electric vehicles. Gains in the traditional combustion engine continue to reduce emissions and improve fuel economy even while increasing horsepower. Plus, there’s stepped-up competition in the luxury market; and the resurgence of American brands continues.

The Detroit show represents a full-on demonstration of auto industry progress. According to Shortline Auto Group’s Don Hicks, who’s attended each of the last three shows, “Last year we felt that the industry was better. Now we’ve proved that it’s back.” At media previews earlier this week, “I couldn’t get into all of the events I wanted to see because there were so many people,” Hicks said.

Big buzz accompanies the all-new Dodge Dart, built on a Fiat platform with jazzy styling, three engine and three transmission choices, a base price tag around $16,000, and projected combined city/highway 40 mpg. One report said it’s “so voluptuous even an Italian might blush.”

Chevy’s two concepts target younger drivers: the Code 130R rear-wheel drive, four-seat coupe with mild-hybrid technology and the Tru 140S hatchback front-wheel drive with start/stop technology. If produced they’d cost about $20k. Chevrolet plans to keep asking young people for design input. A hatchback RS Sonic also debuted, adding a sportier version of the subcompact that started selling in August.

The new Ford Fusion Energi hybrid plug-in is all about maximum economy – up to 100 mpg. Ford will offer Fusion in gasoline and hybrid versions, as well. Included are lots of high-tech goodies. Fusion may compete with the Accord Coupe concept that Honda says has “a dynamic and aggressive profile.”

Toyota’s Prius c (for “city”) is a five-door hatchback, shorter than a Chevy Sonic, with a projected 53 mpg from a four-cylinder engine assisted by electric motor and battery-pack. It’s got full connectivity and infotainment and nine airbags. Toyota’s NS4 plug-in hybrid concept, coming in 2015, offers multiple advanced safety features.

Volkswagen fires at Toyota’s Prius and Honda’s Civic Hybrid with its Jetta hybrid, the fastest compact hybrid available, according to VW.

Hyundai’s announcement that it will offer a lifetime battery guarantee on its hybrid batteries could be a game-changer. Will other manufacturers accept the challenge?  Hyundai introduced a racy-looking Veloster three-door coupe with more power and efficiency and took home North American Car of the Year honors with the Elantra – voted on by a panel of automotive journalists. “Sporty but sensible,” said one panelist. They named the Range Roger Evoque North American Truck of the Year.

The Evoque exemplifies manufacturers’ efforts to marry efficiency with luxury. Examples include two Acura concepts: the NSX sports car with a V6 and two electric motors sending power to the front wheels and the ILX, built on a Honda Civic platform, offering a couple of different motor options.

Mercedes-Benz is showcasing an all-aluminum SL roadster and two E-class hybrids. Lexus’ LF-LC concept shows hot design, but few clues about how it runs; hybrid is hinted at. BMW’s i3 and i8 concepts are a little more defined. The i3 is a battery-powered five-door hatchback with a rear-mounted 170 hp electric motor – coming next year. The i8 hybrid is a 2+2 with rear-mounted three-cylinder engine assisted by two electric motors. BMW also is showing its ActiveHybrid 3, touted as the first-ever full hybrid premium compact sports sedan.

BMW’s all-new 3-Series sedan and Mercedes’ C Class, will get some serious domestic competition from the Cadillac ATS with three engine options delivering from 200 to 270 hp, decent fuel economy and styling critics are raving about.

Are you full yet? There’s lots more for car aficionados to enjoy at this huge Detroit Auto Show smorgasbord.

Green holiday tax gift for your new car

The State of Colorado is offering buyers of “green” vehicles a terrific end-of-the-year gift: a tax credit. But, as they say on TV, act now, because this offer won’t last! You have until December 31 to buy a car, SUV, light or medium-duty truck that will also qualify for the credit.

The tax credit has a complicated title: “The Colorado Alternative Fuel Vehicle Income Tax Credit.” But the intention is simple: to get Colorado drivers into less polluting alternative fuel vehicles.

Lots of Fine Print

Qualifying vehicles include electrics and hybrids as well as vehicles that use clean diesel, compressed natural gas, propane, or 85 percent or more ethanol. Ethanol vehicles (E85s) and so-called “mild hybrids” without electric motors, don’t qualify. Vehicles must be registered and titled in Colorado and, as with many tax matters, there are some complicated ground rules. These are some general guidelines:

• The alternative fuels credit for vehicles bought, leased or converted to alternative fuels between January 1, 2011 and January 1, 2012 can be taken only on your 2011 tax return.
• If your credit exceeds what you owe in income tax, you can’t carry the excess credit over to next year, but you can claim a refund.
• You may claim the credit only once.
• If you received other credits, grants or rebates for fuel efficiency, such as from the Federal CARS program, your tax credit will be reduced by the earlier credit’s amount.
• You may claim a credit on a used vehicle if you have a history on the vehicle including proof that prior owners did not claim the credit and why. The state has a formula for calculating how much of a credit you can claim.

How Large Are the Credits?

To figure the amount of your credit, the state compares the price of alternative fuel vehicles with their gasoline-powered equivalents and offers credit for between 50 and 85 percent of the difference. So, the more efficient the vehicle, the higher the percentage credit offered. On alternative fuel luxury cars, it can amount to some pretty hefty discounts.

There are several categories of credits, based on Federal emission standards and the fuel-reduction technology involved. They usually include:

• The cleanest vehicles recognized by the Environmental Protection Agency, including electric, plug-in hybrid and hydrogen fuel cell vehicles – 85 percent credit.
• Diesel-electric passenger vehicles getting 70 mpg or better – 65 percent credit.
• Cars, light and medium-duty trucks converted to diesel-electric vehicles with a resulting 40 percent increase in fuel economy; medium-duty hybrid trucks that get 30 percent better fuel economy than a comparable gas or diesel-powered truck – 75 percent credit.
• Cars and light or medium-duty trucks powered by compressed natural gas (including those with converted engines) – 75 percent credit.
• Vehicles getting 40 mpg of gasoline/gas equivalent or more – includes many hybrids such as the Toyota Prius, Honda Insight, and Civic Hybrid– 75 percent credit.
• Vehicles getting 30 mpg of gasoline/gas equivalent or more, but less than 40 mpg – 50 percent credit. (Go to: http://www.epa.gov/greenvehicles/Index.do and enter the year, state, make and model to see if your vehicle choice qualifies)

Leased Vehicles Are Eligible

If you lease, you also can receive a credit. The amount of your credit is a complicated calculation. You can see an example in the above-referenced state tax publication.

A complete description of the entire tax credit program is available online at http://1.usa.gov/vx8xSB. Click on “Income 9: Alternative Fuel Income Tax Credits.” If you have questions about how it applies to a vehicle you bought or leased in 2011, be sure to consult a qualified accountant or tax attorney.

Colorado’s new car and truck dealers are offering some of the best deals of the year this coming week. This alternative fuels tax credit is just an additional incentive for buying or leasing before 2011 ends.

Christmas is coming – Car deals are getting fat

Whether you call it a sale or a sales event, what’s going on right now at Colorado car and truck dealerships is big-time discounting, especially on 2011 model-year vehicles. As the Nissan television ad vocalizes, “It’s the most wonderful sale of the year,” at least if you’re in the market for a car or truck.

There’s a lot of pent-up demand. Between high fuel prices and gloomy economic news, consumers have been holding on to their vehicles much longer than they once did. The average age of cars is now more than 10 ½ years. Consumer confidence rose in November to its highest level in more than eight years, according to The Conference Board. Meanwhile, gasoline prices have been dropping. According to AAA, by December 3 the average price for unleaded gasoline declined 18 percent, and is still going down. Colorado’s per-gallon average was $3.18 on December 12, with at least one station offering unleaded for $2.99 per gallon.

Lowest Prices of the Year

Probably the biggest reason to buy or lease now is price. Vehicle prices probably won’t go lower than they are now. One online guide for new car pricing estimates that between now and December 31 buyers will get the best deals and discounts of the year, with the New Year’s Eve discount estimated to average 9.3 percent – average – meaning some vehicles actually will carry much larger discounts.

A major reason prices are low on 2011 models is that when January 1 comes, all 2011 models are considered to be a year old, even if they’ve never been driven off the lot, automatically making them worth less, so manufacturers and dealers are eager to get them sold. Another reason for discounting – on 2011 and 2012 models – is that dealers are trying to hit year-end sales targets.

Best Financing of the Year

Excellent financing, cash rebates, and freebies are available. Financed deals start at zero percent for several brands, including some General Motors, Chrysler, and Ford models, and even some luxury vehicles, such as Jaguar. Other manufacturers are offering 1.9, 2.9 and 3.9 percent financing with the actual percentage depending on the number of months financed.

Cash rebates can start at $500 and go up, depending on the popularity and price of the vehicle. For example, GMC offers up to $5,000 on a Sierra 1500, Chevrolet is offering a cash rebate of up to $4,505 on a 2011 Silverado and Ford is offering cash back on several 2012 models.

If you want a Dodge Charger, you can choose all-wheel drive at no extra cost, instead of a cash rebate. Other Chrysler-made vehicles come with similar offers, including no-cost DVD entertainment system with purchase of new Town & Country minivan.

Leasing Looks Good

Lease deals are equally good. One example is “The Season of Audi” event that offers to waive the first month’s payment and security deposit on select 2012 models. Leases went out of favor for awhile but are finding new popularity with higher residual values, especially for drivers who stay below a mileage cap, want to turn new vehicles more often and/or need to keep monthly payments lower.

Year-end Tax Gifts

Small business owners who dream of a new vehicle for business use can get an attractive tax advantage for buying now. According to Colorado Springs-based accountants Stockman, Kast, Ryan & Co., heavy SUVs (those above 6,000 GVW) bought before January 1, 2012, can generate a bonus depreciation deduction in the year of purchase equal to 100 percent of the vehicle cost. There’s also a $25,000 “Section 179″ expensing allowance that can be deducted on used heavy SUVs.

Some Colorado tax credits for alternative fuel cars, fully in effect through December 31, reduce by 25 percent after January 1, 2012. Watch for this column soon for more information.

No matter what you call it – a “Season’s Best” event, “Year-End Wrap Up,” “Red Tag Sale,” “Winter Event,” or something more inventive or melodic, Colorado car dealers are wheeling and dealing and consumers are the winners.

Greetings from L.A, – Where cars rule

It’s no surprise that the Los Angeles Auto Show – open through Sunday – is one of the world’s biggest celebrations of the automobile. L.A. epitomizes Americans’ love of automobiles: home of the first freeway, the Pasadena/Harbor/110, opened in 1940, it’s estimated that about 12 million cars – out of 26 million registered – travel more than 300 million miles daily in the sprawling city.

The L.A. Auto Show is the first of the international auto show season, coming at the beginning of the model year.  It offers an eclectic mix of efficiency and muscle with almost 50 World and North American model debuts. One Honda executive neatly summed up its vibe at the press briefing last week, “People want something more economical and environmentally sensitive, but people’s true wants and needs haven’t changed.” In other words, speed + luxury + efficiency + technology!

Speed+ Chevrolet, Ford and Chrysler are staging the battle of the muscle cars.

Ford’s new Shelby GT500 has a 5.8-liter 650 hp engine while the Mustang 5.0-liter GT has 420 hp. Chevrolet unveiled a new 580hp Camaro ZL1 convertible.  Chrysler is offering its 300 Sedan with a 540 hp Hemi V-8.  Dodge goes back to the future with the Super Bee Charger and Yellow Jacket Challenger, both at 470 hp.

Foreign automakers fight back with the 560 hp V-8 BMW M5 that does zero-to-124 mph in 13 seconds. It also has a head-up display a driver reads directly on the windshield. Porsche’s redesigned 911 Carrera S does zero-to-60 in about 4 seconds on 350 hp. Jaguar’s new 550 hp V-8 convertible XKR-S will be available in the U.S. for $138k to only 25 lucky drivers. The 2011 Mastretta MXT from Tecnoidea, Mexico’s only automaker, only has 260 hp but at 2,900 lbs., goes zero-to-62 in 4.9 seconds.

Luxury+ Luxury alone isn’t enough to sell automobiles, but it helps.

Infiniti showed off its new seven-passenger JX crossover.  Its wood-trimmed interior is nice, but its biggest selling point is a collision-intervention system that detects objects behind the SUV and brakes automatically if the driver, when backing up, doesn’t.

There is big buzz at the Cadillac display where the new XTS is billed as the place where “art and science converge.” Both front-wheel and all-wheel drive versions come only in V-6 versions with 300 hp.  The draw is the new CUE – Cadillac User Experience – an infotainment system that operates sort of like an iPhone’s and, of course, syncs with smart-phones.  It even vibrates your finger to indicate when a command registers.

Lincoln continues to attempt blending its luxury reputation with higher hipness appeal to younger buyers in upgraded versions of the MKS sedan and MKT crossover. They have more power and better mileage.

Efficiency+ New models from Ford, Mazda, Honda and Fiat are generating interest in L.A.

Ford’s 2013 Escape with both 1.6 and 2.0 liter EcoBoost engines is more spacious inside and has the MyFord Touch with voice, touchscreen or steering-wheel button controls. It will compete with the Mazda CX-5 compact crossover with Skyactiv engine boasting 26 mpg city/33 mpg highway, which Mazda says is the best in its class.  Another competitor in this group is the restyled Honda CR-V with a more spacious interior that boasts an easy-to-flip-down rear bench seat. In this CR-V Honda finally offers in-cabin connectivity.

The Fiat 500 was a hit – the new 500 Abarth is a juiced-up model with a 160 hp engine, stiffer suspension, wider tires and performance design features. It’s targeted to Mini Cooper S buyers.

Notably absent from the L.A. show is the huge emphasis on electrics that was obvious at last year’s L.A., Detroit, NYC, Geneva and Frankfurt shows – not to mention our own Denver Auto Show.  In many cases, EVs seem to have been folded into their makers’ lines as just another option.  Even the “2012 Green Car of the Year” award went to the non-electric Honda Civic Natural Gas (can be powered by Colorado-grown compressed natural gas), instead of an electric.

 

Steve Jobs – The Man Who Changed the Driving Experience

When Steve Jobs died last month a cartoon made the rounds picturing St. Peter checking him into heaven on an iPad. Apple products are that ubiquitous. The automobile industry owes Jobs a debt of gratitude, too. His innovations are changing the driving experience.

Auto manufacturers are racing to keep up with the tide of technology. Since the tech world moves faster than the automobile world, it’s been a scramble.

The most obvious change is the full integration of personal entertainment devices – like iPods and more lately iPhones and iPads – into cars. More than 90 percent of new cars sold in America come with at minimum a connectivity option.

Technology rolled quickly beyond tape deck and CD adapters to USB ports and then to fully integrated iPhones /Smartphones that superseded iPods/MP3 players. Ford galloped ahead with its Sync system, giving drivers access to entertainment, climate controls, dashboard instruments and navigation, as well as contacts, business listings, traffic info and navigation. Latest versions also offer limited access to voice-activated text messages and Facebook and Twitter updates. Other automakers quickly followed Ford’s lead.

One of Jobs’ obsessions was streamlined design. His influence is obvious in new automobile cockpits. The myriad dials and gauges are gone, replaced with interactive screens – sleek, simple and user-friendly just like an iPod, iPhone or iPad.

A flood of new applications – “apps” – is geared to drivers. There’s an app for almost everything.

Steve Jobs’ last contribution was the Siri Assistant included with the iPhone 4S. It’s a voice-activated virtual concierge that finds whatever help you need: a locksmith if you’re locked out or a restaurant if you’re hungry.

No need for navigation devices; various apps offer maps, turn-by-turn directions and advice on fastest routes based on the time of day and traffic speeds. Apps locate nearest lowest-priced gasoline and pinpoint traffic jams and speed traps. iBreath plugs into your phone and records your blood alcohol level. There’s an app that starts your car from anywhere, and another that displays speed, distance and altitude (in planes, boats and trains, too).

There are apps that sound off when your parking meter is about to expire, and apps that locate a parked car. At least one helps find vacant parking places. Electric vehicle owners can get help locating plug-ins for 110v or220v. The rest of us can track fuel usage and car maintenance with several apps. There’s even an app (Park4U) available on some Audi and VW models that will park your car while you stand outside.

Travel apps abound. Some offer suggestions for roadside attractions, and to keep you occupied while you drive, there’s an app (Audible) making more than 85,000 audiobooks available. TuneIn Radio accesses more than 40,000 radio stations, both AM and FM.

The iPad is car-friendly, too. After-market iPad cockpit mounts are available. Volkswagen’s Bulli concept car integrated an iPad for both driver and front-seat passenger to use. Tablets’ advantage over Smartphones is that they have larger screens and most of the same apps. They also can be mounted on seatbacks so passengers (kids) can play games or watch movies: more versatile and less expensive than built-in DVD systems.

Finally, the Smartphone and iPad are helping with car-buying, with apps for finding and comparing cars, features and, of course, prices. At least one manufacturer, Mazda, equips sales reps with iPads so they can instantly customize models and show YouTube demonstration videos.

Only a few months ago, some manufacturers started loading owner’s manuals onto iPads. Now they’re already looking for the next cool must-have car app. Steve Jobs would approve.

At 100, Chevrolet still sets a fast pace

Chevrolet turns 100 on November 3, and it looks much better than most 100-year-olds. Despite the influx of Asian and European nameplates, Chevy retains its place as one of America’s top-selling brands. It still can lay claim to being “The Heartbeat of America,” as it once billed itself.

In Colorado, Chevrolet got off to a fast start after its introduction. By the beginning of the 1920s, according to Bud Wells in The Colorado Car Book, Chevrolet was one of the top-selling brands in the state.  Nationally, Chevrolet was selling more than a million vehicles a year by 1927.

Few people know the history of Chevrolet in Colorado better than A.J. Guanella of John Elway Chevrolet in Englewood.  A.J. has been part of the Chevrolet family since he started dusting parts bins part-time in 1949.  When he graduated from Englewood High School in 1951, A.J. went full-time and in the years since (except for a short stint in the U.S. Navy) he’s stayed with one brand. “Chevrolet was the backbone of America,” he said recently, remembering the days when 51 percent of General Motors’ business came from Chevrolet.

“Chevrolet had the foresight to build the right cars at the right time,” he said, noting that Chevrolet is still leading with the development of the extended-range electric Chevrolet Volt, the 1911 North American Car of the Year. The Volt’s range of 379 miles on a charge is a natural for eco-conscious Colorado drivers.

A.J. gets most enthusiastic, though, when he talks about what the Chevrolet business was like after World War II.  ”There weren’t any cars from 1941 through 1945,” he remembered. Burt Chevrolet “… survived doing service, and converted the showroom to a tire recap plant.”

By 1949, when he joined Burt, “There were cars. If you had a car in your driveway, you had everything. And chances were that you had a Chevrolet. The car was everything. If you wanted to do anything you had to have a car.”  Guanella started in Burt’s parts department and worked his way up through the ranks at Burt to management and part-ownership. The dealership was sold to Elway and his partners recently– but Guanella is still very active.

Almost since the beginning, cars were more than transportation. They were entertainment. The 1922 Chevrolet could be equipped with a Westinghouse radio for an additional $200. And by the 1950s drive-in restaurants and theaters were popular. The Scotsman on 49^th and Federal was a storied teen hangout for cokes and french fries. Cruising on Denver’s Sixteenth Street was a Friday and Saturday-night ritual.

Cars were about privacy, too. Necking at the drive-in movie theater was an American institution. Eyes twinkling, Guanella remembered the post-war Chevy, “It was a motel on wheels, but … T.V. kind of slowed things down.”

Few brands have been celebrated in popular culture as much as Chevrolet. From 1954, when Dinah Shore sang that Americans should “See the USA in your Chevrolet,”on television’s “Dinah Shore Chevy Show,” through Young Jeezy’s “My Camaro” last year, songwriters have woven Chevrolet into their music, including Elton John in “Crocodile Rock,” and Prince in “Little Red Corvette.”  Perhaps best known are the iconic ’57 Chevy featured in Don McLean’s “American Pie,” The Beach Boys’ “409,” and Bruce Springsteen’s “Racing in the Streets.”

Remember “Route 66?” The show’s true star was the Chevy Corvette and the show’s theme music topped the 1962 charts. Bob Seger’s “Like a Rock” described Chevrolet so well it was turned into Chevy Trucks’ theme song for more than a decade. Who would have imagined it back in 1918, when Chevrolet introduced its first truck?

There have been many pacesetting developments in Chevrolet’s first 100 years, including the all-metal body 1933 Chevrolet; the 1953 fiberglass body Corvette; the 1959 El Camino, that married a car with a truck; the 2004 Silverado hybrid, the world’s first full-size hybrid pickup; and now, the electric Chevrolet Volt.

A.J. Guanella anticipates a new century of Chevrolet consumers wanting different cars than their parents, but still wanting cars. “There’s still a love affair with automobiles.”

Exciting Frankfurt Auto Show a Preview of What’s Coming in Cars

The automotive year kicked off September 15th with the 64th annual Frankfurt Auto Show, properly known as the Internationale Automobil Ausstellung. It’s clear from what I saw there (the show closes this weekend) that manufacturers continue to ramp up innovation at all levels. It was the most energizing automotive display I’ve attended, including Detroit, Chicago, New York, Los Angeles and Paris, living up to its tag line: “The Future Is Standard.”

Manufacturers went all out. It was huge in terms of sheer size of exhibit space – about 2.5 million square feet in nine exhibition halls – and huge in numbers of exhibitors – more than a thousand from 32 different countries, including parts makers, after-market manufacturers and gadget makers. Automakers presented almost 90 world premiere vehicles, half German-made including Audi, BMW, Mercedes, Porsche, Smart (Daimler) and VW.

The Germans really tried to top one another: BMW’s indoor, two-lane demonstration track; Mercedes’ three levels of cars and Audi’s building-with-a-building which rivaled the exhibits at Epcot Center and cost an estimated 12 to 15 million Euros.

One key impression from Frankfurt was that carmakers are trying to cover their bets by developing and manufacturing both energy-efficient models at the same time as making faster, more powerful cars.

Green vehicles, spurred by government mandates and high energy costs, included full electrics (EVs), hybrids and plug-in hybrids, clean diesels and diesel hybrids, a couple of hydrogen-powered and compressed natural gas (CNG) models and the so-called “city cars” that usually seat just one or two and have limited ranges and speeds.

BMW caused quite a stir with i3 subcompact and i8 luxury concept electrics. The i3 (production target of 2013) has a 100-mile range per charge on lithium-ion batteries, carries a 170 hp-equivalent engine, and takes an 80 percent recharge in less than an hour. The i8 plug-in hybrid, has new laser headlight technology; it can do 0-100 km in five seconds. Volvo showed off its first all-electric C30.

Ford created buzz with two Ford Focus models, an all-electric version and the ST hatchback with a 2-liter EcoBoost 247 hp gas engine emitting 20 percent less CO2 and using 20 percent less fuel. Ford’s Fiesta ST concept with a 1.6-liter turbocharged, direct-injection four-cylinder engine gets up to 180 hp. Industry observers think it will go into production soon.

Other notable more energy-efficient cars I saw included the VW Up, a small (139.4 inches) car accommodating four with a 1.0-liter, three-cylinder engine; it hits European showrooms this winter. Natural gas and electric versions will follow, but no plans for the U.S. market. Mercedes’ small B-class vehicles will come to the U.S. next spring, beginning with a turbocharged four-cylinder gasoline direct-injection model, to be followed with hydrogen fuel-cell, compressed natural gas and EV versions.

Looking for the cool factor? Volvo showed a You concept with an interior display screen that projects on the windshield and activates only when you look at it. Volvo’s design chief says it’s the “ultimate intuitive car.” Audi’s A2 concept with “Semi-Autonomous Drive” moves the car for you in stop-and-go traffic and assumes a bunch of other boring tasks. The Ford Evos concept electronically monitors driver heart rate and vision focus. Cars that park themselves are becoming old hat quickly. Internet connectivity is becoming standard in many cars.

For muscle and luxury, watch for the new Porsche 911 Carrera: it’s longer, wider, lower and more fuel-efficient and does 0-60 mph in 4.4 seconds. Maserati offered the Kubang SUV concept built on a Jeep Grand Cherokee platform; Bentley showed a convertible Continental GT for $250k; while Rolls-Royce’s $246k Ghost is a smaller executive sedan and the Aston Martin V-12 Zagato – only 150 produced – is going for a mere half-mil.

I could go on and on – like I said, it was very exciting, and some models, concepts and those destined for the American market, will show up at our own Denver Auto Show next March.

New Vehicle Fuel-Efficiency Standards Costly to Consumers

It looked like the federal government, the United Auto Workers (UAW), most automobile manufacturers and environmental organizations achieved a kumbaya moment in late July when President Obama announced new fuel efficiency standards for cars and light trucks. But while it appears there’s solid accord on the standards that would approximately double average fuel efficiency to an average of 54.5 miles per gallon by 2025, serious concerns remain.

Many Americans rightfully support the nation’s reduction of dependence on foreign oil and cutting greenhouse gas emissions. Yet we also believe there will be some significant problems attached to that quest of which American consumers should be aware.

The July 29th announcement was backed up by some impressive assertions about what the new CAFE (corporate average fuel economy) standards would deliver:

• Savings of nearly 12 billion barrels of oil over the life of the program (2017-2025)
• Fuel cost savings of $1.7 trillion
• Reduction of up to a third of oil imports by 2025
• Reduced carbon dioxide pollution of more than six billion metric tons

Almost lost in the fanfare, however, was the information that the higher CAFE standards would also mean large price increases in new cars. The estimates range from $3,500 to $7,000 per vehicle, in today’s dollars, which would negate much of the gas-pump savings consumers would reap.

While manufacturers endorsed the new standards and have been working to produce more fuel-efficient models, no manufacturer today has a combustion engine powered vehicle in production that comes close to getting 54 mpg, which is the average to be achieved across a manufacturer’s entire product line. Some models may get less than 54 mpg, so they would have to be balanced by models getting more. Better technology and materials will have to be developed by manufacturers to achieve the fuel standards. It will be an expensive process.

According to the National Research Council even achieving 35 mpg (the 2016 fuel standard) will require incorporating a lot of electric and hybrid vehicles into the mix. This will necessitate a big breakthrough in battery technology. There are subsidiary concerns about whether America’s current electrical generating capacity could power a lot more electric vehicles. Another concern is how to deal with disposing of spent batteries. Both of these lead to additional concerns about increased air pollution (electricity generation) and environmental damage (battery disposal).

Inevitably, to get better fuel efficiency, manufacturers will be forced to lighten vehicles, using more plastics, composite materials and lightweight metals. A couple of factors should be noted. First, the cost of commodities – such as aluminum – is rising on world markets due largely to rising demand, especially from Asia. Second, using these materials makes vehicles lighter, but also makes them less safe. According to Investor’s Business Daily, the weight of today’s Lincoln Continental is about the same as a 1974 Ford Maverick. These lighter vehicles account for an additional 2,600 traffic fatalities each year.

Besides these concerns is the simple question of what Americans want. While higher gasoline prices have contributed to greater demand for smaller and more fuel-efficient models, every time energy prices ease, consumers go back to larger and more comfortable vehicles. It’s likely that manufacturers will artificially lower prices on their most fuel-efficient vehicles (subcompact and compact cars) and make up their increased costs by raising prices on less fuel-efficient vehicles (light-duty trucks including pickup trucks, SUVs and minivans).

This is particularly important in Colorado because while most of the nation buys more cars than trucks in about a 50-50 percent ratio, Coloradans buy closer to a 60-40 ratio, trucks v cars. That means we Coloradans, on average, will be paying more for our vehicles than the average American.

All these factors, both pluses and minuses, will make for some interesting times over the next few years as the higher fuel economy requirements ramp up. For now, the only thing that’s clear is that as American consumers make vehicle choices it’s important to consider all possible ramifications, both good and bad.

Automakers are making safer cars – The positive impact of advanced crash test dummies

What can possibly be good about 32,788 American traffic fatalities in one year? While it’s still too many, the number continues to decline. Based on estimates from the National Highway Traffic Safety Administration the number of traffic fatalities in 2010 is the lowest since the government started to keep track in 1949. And the most amazing thing is that it keeps going down even while the number of miles driven keeps going up. The 2010 figure for vehicle miles traveled was three trillion. That’s the third highest ever recorded and an increase of 0.7 percent, or 1.4 billion miles, over 2009.

There are several key reasons for the steady decline in traffic fatalities. These include: more information and better enforcement on drunk driving, legislation requiring seatbelt usage, and education along with legislation about distracted driving. However, the single biggest reason for these figures – miles up, fatalities down – is the huge improvement in car safety. Automobile manufacturers are striving to make stronger, better-built cars with many advanced and new safety features.

Seatbelts have been standard equipment for many years and beginning with 1999 models the government mandated front airbags, although most new vehicles had them before they were required. The National Highway Traffic Safety Administration (NHTSA) estimates that through 2008 more than 28,000 people’s lives were saved by airbags alone. The agency also estimates that the combination of seatbelts and airbags reduces the risk of death in a collision by 61 percent, while seatbelts alone reduced fatalities by 50 percent. In rollovers, which account for 33 percent of passenger vehicle fatalities (more than 10,000 victims), an occupant is 75 percent less likely to be killed when wearing a seatbelt.

Most manufacturers now offer side airbags as standard equipment, although the law does not require them, and they have been proven effective. In driver-side crashes side airbags with head protection cut a car driver’s risk of death by 37 percent and an SUV driver’s risk by 52 percent. Side airbags without the extra head protection feature reduced fatality risk by 26 percent for car drivers and 30 percent for SUV drivers.

The NHTSA is ratcheting up its efforts. Beginning with the current model year, the agency will apply more stringent standards to its annual crash tests and provide the results to consumers on the new-car window sticker in the form of stars: One star is the lowest rating, five stars are the highest and a three is the passenger vehicle fleet average. Already, some new cars are scoring five stars in several of the tested categories.

For 20 model years, from 1990 through 2010, the government subjected new cars to tests for frontal and side crashes and rollover resistance using medium-sized adult male crash-test dummies. The “Enhanced Ratings” will also include testing with:

• New, advanced medium-sized adult male dummies
• New dummies representing small-sized adult females
• New side pole crash tests (such as would occur if you lost control of your vehicle and it slid sideways into a utility pole)
• More stringent ratings and injury criteria addressing additional body regions
• Combining results from all tests into an overall rating
• Information about new recommended advanced crash avoidance technology

There are three advanced crash avoidance technologies that are noted in the new NHTSA ratings. The first – Electronic Stability Control (ECS) – helps drivers maintain control of their vehicles when they try to turn very hard (swerve) or begin to skid on a slippery road. It will become mandatory on all new cars beginning with the 2012 model year. The other two are: Lane Departure Warning, that warns when vehicles drift unintentionally; and Forward Collision Warning, that detects vehicles in front of the driver’s and gives an alert of an impending crash.

Safety is just one factor you probably will consider when you buy your next new car, along with fuel efficiency, styling, comfort and bells and whistles like the sound and navigation systems available. As you begin your shopping, navigate over to www.safercar.gov for a downloadable brochure about the crash tests and safety ratings. The Insurance Institute for Highway Safety also conducts safety tests, and you can find its ratings at www.iihs.org/.