New GM to experiment with cars sales on eBay Motors

If you live in California, General Motors will have a new experimental program to allow buyers to purchase cars through an eBay auction. The company has signed an agreement with eBay, but few details are available.

The program will be run through California dealerships and include an option to buy the car at a fixed price.

This marks the latest manufacturer attempt to provide a way for consumers to buy cars directly off the Internet and avoid price haggling in the sales office. However, bidders may find dealers still try to sell extended warranties, fabric and paint protection, and VIN etching once at they arrive at the sales office to complete the paperwork. 

Previous efforts to allow consumers to buy cars directly through manufacturer or third-party Web sites were not successful. But dealers now have many years of experience selling used cars on eBay, so they may be more comfortable with this program. If the experiment is successful, GM hopes to make it available more widely, said GM CEO Fritz Henderson in a speech this morning.

Read: “What the post-bankruptcy GM means to you” and also: “Winning at eBay.”

— Eric Evarts

Consumer groups seek warnings on used Chrysler vehicles

A group of five consumer groups is calling for window stickers warning potential buyers of Chrysler vehicles built before the carmaker’s May 30th bankruptcy. The sticker would point out that the company will not be liable if passengers are injured or killed in an accident caused by safety or manufacturing defects. Consumer Action, Center for Auto Safety, Center for Justice and Democracy, Consumers for Auto Reliability and Safety, and National Consumers League sent a letter to the Federal Trade Commission petitioning for this disclosure.

Under the bankruptcy agreement, the new Chrysler was absolved of any responsibility for vehicles built before the government-aided restructuring. An estimated 30 million such vehicles are still on the road. The consumer groups claim thousands of injuries will likely be caused by defective models. Chrysler opposes the stickers.

The new Chrysler will back vehicles built after Fiat took a significant stake in the company. The consumer groups argue that without the stickers, two identical models could be sitting next to one another on a dealer lot, one with consumer protection and one without.

The petition is being reviewed by the Federal Trade Commission. FTC action would require changes in the Used Car Rule of 1984. As the consumer groups explained: “The Used Car Rule is intended primarily to prevent oral misrepresentations and unfair omissions of material facts by used car dealers concerning warranty coverage. To accomplish that goal, the Rule provides a uniform method for disclosing warranty information on a window sticker called the ‘Buyers Guide’ that dealers are required to display on used cars.”

An agency spokesperson said the rule-making process could take more than a year.

—Jim Travers

What the post-bankruptcy GM means to you

General Motors quickly emerged from its May 31st Chapter 11 filing this morning, benefiting from the Chrysler bankruptcy process before them and Auto Task Force drive to get the corporate giant back on its feet. The transition from old to new GM should be rather seamless for consumers, at least initially.

GM has culled four divisions from its portfolio and down the road it plans to significantly reduce its dealer body by not renewing franchise agreements. These 1,100 dealerships, representing about 18 percent of GM’s total dealers, will have until October 2010 to sell their remaining cars. The product line up will drop from 48 to 34 nameplates in the process.

This Q&A addresses some common questions, and we will continue to provide additional insights and advice as General Motors and Chrysler both begin their new chapters. For more information, go to our Auto Crisis page. Also, learn how bankruptcy works.

Who owns the new GM?
Earning the nickname “Government Motors,” the American tax payers are the majority owner for the new company. GM ownership breaks down to:

• The United States government—a 60.8 percent stake
• A trust fund (VEBA) that provides medical benefits for United Auto Workers retirees—17.5 percent
• The governments of Canada and the province of Ontario—11.7 percent
• Bondholders of the old GM—10 percent.

What brands and models are available?
The new GM will include Buick, Cadillac, Chevrolet, and GMC brands. GM has stripped itself of Pontiac, Hummer, Saab, and Saturn. The latter three divisions are being sold to other companies, so those brands are expected to continue to be available in the United States. Future GM models include the Buick LaCrosse; Cadillac CTS coupe, CTS Sport Wagon and SRX; Chevrolet Cruze, Orlando, Spark, and Volt; and GMC Terrain.

Will I be able to get parts and service for my GM car?
GM dealers will continue to provide service, as before. Hummer, Saab, and Saturn dealers will be supported until they are sold off, enabling them to continue without interruption. In emergency situations, most of these vehicles can be serviced at any GM dealer. Perhaps the greatest consumer impact will be the significant reduction in dealerships, making car maintenance less convenient.

Keep in mind that you don't have to take your car to a dealership for servicing, even if it’s under warranty. A good independent shop, especially one that specializes in your car’s brand, should be able to handle routine maintenance and many repairs. Moreover, independent repair shops are often less expensive than dealerships and, according to our Annual Auto Survey, generally provide a higher level of satisfaction. You will need to go to a dealership, however, for warranty and recall work.

Will GM still back my warranty?
Yes, GM will continue to support its vehicles’ warranties. Responsibility for warranties for Hummer, Saab, and Saturn rests with "old" GM and will eventually transfer to the new owners.

What if I want to sell my GM car?
Models from brands that are being phased out or sold will probably see a drop in value. But if the company re-establishes itself as a strong, stable automaker in the future, ongoing models could see a rebound in value. If you plan to keep the car for a long time, depreciation is less of a factor.

Should I buy a GM car now?
No reason not to buy a Buick, Cadillac, Chevrolet, or GMC vehicle. However, there are some considerations when choosing from an “old” GM brand. For instance, the future of Hummer, Saab, and Saturn is not yet carved in stone. Even when it is, it is unclear who will support current versions of those products, or for how long. Sales of these divisions are in process. Pontiac is being phased out, and finding long-term support for its products may be more difficult than with other brands.

That said, GM is offering some tempting sales incentives on many of its models, including ones that we recommend. And with slow auto sales and too much inventory, dealers are ready to negotiate. So, it’s likely that you could get a very good deal.

Several recent GM models have done well in our testing and are very competitive in their classes. Consumer Reports recommends the Buick Lucerne V8; Cadillac DTS; Chevrolet Avalanche, HHR, Malibu, and Silverado; and the GMC Sierra. The Cadillac CTS, and GM’s quartet of three-row, crossover SUVs (Buick Enclave, Chevrolet Traverse, GMC Acadia, and Saturn Outlook) all did well in our tests, but are not recommended due to below-average reliability in their first years. (Links in this paragraph go to model overview pages, where online subscribers can review ratings, pricing, reliability, and road tests.)

It’s important to remember that any deal is only as good as the vehicle you’re buying. As always, we recommend that you thoroughly research the performance, reliability, safety, owner cost, and owner satisfaction of any model you’re considering. Subscribers to ConsumerReports.org have access to our Ratings in all of those areas.

What if I have a claim against GM?
Under pressure from the government and consumer groups, GM has agreed to stand behind product liability claims for all GM cars and trucks that are filed after the company emerges from bankruptcy. However, hundreds of consumers with existing personal injury claims against GM will be left scrapping for the meager remains of the old GM.

To get answers to the most common questions and concerns about Chrysler’s and GM’s bankruptcy and reinvention, check out our Auto Crisis hub.

Toyota, Lexus get new telematics system

Toyota is launching a new telematics system called Safety Connect to replace Lexus Link, a rebranded version of General Motors’ OnStar service.

Rolling out beginning with 2010 Toyota and Lexus models, Safety Connect will offer subscribers a menu of services similar to OnStar’s, including emergency crash notification and assistance, stolen vehicle locator, and roadside assistance. Like all telematics systems, Safety Connect uses a combination of cellular telephone, GPS, and computing technology to track vehicle location and communicate with a call center.

In the event of a collision serious enough to deploy air bags, the system will automatically notify the call center and report the vehicle location. An operator will then call the car to speak with occupants and determine what help is needed. If the operator is unable to speak with anyone, emergency personnel will be dispatched. Subscribers also will have the option of calling the center anytime with the push of a button for roadside assistance.

Lexus owners will have the option of upgrading to Lexus Enform, which adds services like weather reports and turn-by-turn directions. Users can contact the call center and ask an operator for directions to a specific address, nearby gas station, restaurant, or other location. The operator will then download turn-by-turn directions to the car.

Lexus Enform subscribers will also have the option of sending directions to their vehicle from any computer. Once they log into their account, the eDestination feature will allow owners to ask for directions to a specific address or access the same point of interest database used by Lexus’ navigation systems.

Prices and specific vehicle availability for Safety Connect and Lexus Enform have not yet been announced. A company representative said Lexus Link subscribers will be able to continue to use that service for the life of their vehicles. The Lexus Web site lists Lexus Link as a $900 option, with a $199 annual subscription. Adding turn-by-turn directions costs another $100 a year. In contrast, OnStar is standard equipment on most new GM vehicles, and its Directions and Connections plan is $299 a year.

To learn about the latest, high-tech road trip gear, check out our mobile electronic guide. There you can learn about the latest options in car audio systems such as satellite and HD radio, and MP3 connectivity; GPS navigation systems including Ratings of the latest models; and car video systems to help you take the show on the road.

—Jim Travers

Gas prices: Are they past their peak?

July is historically a peak travel time in the United States, as gas prices surge in response to the demand, but indications show that prices may have already cooled off this summer.

A number of factors contributed to some anxiety over fuel costs this season and brought back memories of the sticker shock from last summer. Drivers saw prices increase by more than a $1 a gallon so far in 2009 and almost 60 cents from early May. This was due to an increase in demand while supply was low and an initial boost in consumer confidence. (See our blog “Why gas prices are going up?”).

However, the past two weeks prices have seen a decrease after an eight-week climb. Crude oil prices have dropped to about half of what they were last summer when they reached over $130 a barrel. A reduction in demand coupled with an increase in supply and production have helped to push prices back down a little earlier than expected. Plus, the economy and recession has forced many to change travel plans and stay closer to home. AAA expected July 4th travel to be down almost two percent from last year.

The Energy Information Administration (EIA) said in its latest, weekly report that “it appears that the summer market may be near, if not past, its peak.” And looking at the trends from past years, as illustrated in the embedded EIA graph, it is easy to see that prices historically dip after the July 4th weekend.

Unless there is a major hurricane or storm that affects refineries or an unexpected economic change, the June 22nd price of $2.69 a gallon could be the highest we’ll see for sometime. And that’s good news for people who still have road trips and other driving adventures planned for the rest of the summer.

—Liza Barth

Sneak peek: Magellan Maestro 4700 GPS

Magellan seems to be on the rise. The GPS-maker has seen its portable navigation devices (PNDs) perform better in our ratings lately, with recent products showing notable improvement in our tests over the previous mediocre models. And key rival Navigon has left the U.S. market. Now, a new, large-screen model joins the product range, the Maestro 4700.

Priced at $300, the Maestro 4700 has a 4.7-inch screen and premium features, such as Bluetooth hands-free connectivity, lane assist, spoken street names, and voice command. It also boasts some of the latest elements seen in competitors’ devices, such as historic traffic data for intelligent routing, parked-car finder, pedestrian mode, and 3D landmarks.

Other features of note include the AAA TourBook guide with information on hotels, restaurants, and attractions. Six million points of interest can be accessed by search and also by exit, so travelers can see what is coming up at the next turnoff.

Maps include Canada, Puerto Rico, and the United States.

The Magellan navigators added to our GPS ratings last month, including the RoadMate 1220 and Roadmate 1440, had abundant features, improved graphics, and better ease of use than prior models we had experienced. We will see if the promising Maestro 4700 continues the trend, once we run it through our extensive test regimen.

—Jeff Bartlett

For more information on portable automotive GPS navigation systems, see our Ratings and buying advice and watch our video guide. Discuss GPS devices in the forums.

First impression: Zero S electric motorcycle

Several manufacturers are now marketing electric motorcycles, but they remain a rare enough sight that riding one can draw a certain amount of attention.

While riding one of the newest electrics, a Zero S, in the neighborhood surrounding our Yonkers, N.Y., offices, people engaged in sidewalk conversations stopped and stared mid-sentence as I whirred past. I know this because I could hear them talking, even going by at 30 mph. The Zero is that quiet. It even drew attention from the local police, who pulled me over just to ask questions about the battery-powered bike.

So, what is it?
Santa Cruz, California-based Zero has been making an off-road motorcycle since 2008, but the Zero S is their first street bike. Like the competing Brammo, the Zero S is lightweight at 225 pounds, nimble, and easy to ride. (Read: “Brammo electric motorcycles coming to Best Buy.”) There is no clutch or gears to shift; you just twist the throttle and go. Disc brakes front and rear provide smooth, sure stops. With performance roughly comparable to a small, 250cc gasoline-powered motorcycle, the Zero S is targeted at commuters and urban dwellers who don’t need a lot of cruising range or high-speed capability. 

Company officials say the Zero S has about a 45-60 mile range, depending on how hard and fast it is ridden. Top speed is about 60 mph, and the lithium-ion batteries recharge in roughly four hours using any household 110-volt outlet.

Rather than using a traditional dealer network, Zero plans to sell their bikes direct to customers through the company Web site. This, they say, will help keep the price down. At $9,950, the Zero S is still expensive, and it is about 2-3 times the cost of comparable gasoline-powered models. But it’s also about $2,000 less than the competing Brammo, and the company says state and Federal tax credits could shave another $1,000-$3,000 off the price, depending on where you live.

Most of the cost is in the batteries, but CEO Gene Banman is confident his bikes have a future and that battery costs will come down. Banman says he’s seen a 25 percent drop in the last 12 months, and that he expects to be able to reach price parity with gasoline-powered motorcycles in about five years. That could make electric motorcycles a viable option for some, and maybe even make them popular enough that you don’t get pulled over just for riding one. 

See our motorcycle and scooter buying advice and ratings.

Also, see our recent first impressions of:
Aprilia 850 Mana
Can-Am Spyder motorcycle
Piaggio MP3 motor scooter

—Jim Travers

Announced: 2010 Honda Accord Crosstour

Honda has two core strategies for new model introductions:

1. Display a “concept” at major auto shows that turns out to be near-identical to the production model.
2. Skip the shows altogether and just put the car on sale, leaving the competition guessing.

The latter strategy is being tapped for the all-new Accord Crosstour, scheduled to go on sale in fall 2009. No further official information has been released.

However, spy photos reveal what appears to be a Honda interpretation of the Acura ZDX body-type undergoing field testing. Shown here in “concept” form, the ZDX is a genre-bending four-door sedan with a coupe-like profile and hatchback. Pricing has not been announced, but a spokesman said the ZDX will be positioned above the MDX SUV in the Acura lineup.

Despite speculation that Crosstour and ZDX share mechanical commonality, Honda has confirmed to us that they are different, distinct vehicles. The Crosstour is expected to be closely related to the Honda Accord, while the ZDX has much in common with the MDX. The Crosstour will likely offer both a four-cylinder and V6 engine.

The concept of a hatchback Accord is intriguing. It would appeal to Acura and Honda enthusiasts looking for a bit more versatility, but reluctant to transition from a car to a much thirstier SUV.

Details and official photos will be released and reported closer to production. 

—Jeff Bartlett 

Updated 8/9/09

More Americans buying diesels as choices diminish

We’ve been seeing more diesel-powered vehicles on the market, but almost all are from European automakers. And news reports now indicate that many plans for any non-European diesels in the U.S. have been canceled. (See our video report from the 2008 Detroit auto show, when the future looked brighter for diesels in the States.) These shelved plans include diesel engine options for the Acura TSX, Chevrolet Silverado (and-or its twin, the GMC Sierra), Dodge Ram, Ford F-150, Nissan Maxima, and an unnamed Toyota model.

Some analysts have blamed the production changes on the added expense of diesel emissions equipment and on volatile diesel fuel prices—now $2.13 below this time last year. New Corporate Average Fuel Economy (CAFE) ratings that emphasize city driving also undermine a key diesel selling point—highway efficiency. (In our tests we have found that diesels offer an average fuel savings of 30 percent on the highway.)

Meanwhile, according to Automotive News Volkswagen reports sales of its Jetta diesel models have accelerated from 30 percent of overall Jetta sales last month to more than 36 percent this month. Plus, a whopping 83 percent of Jetta Sportwagens are sold with diesels.

Now BMW is planning to expand its diesel range even further with a new small SUV, the X1.

What do you think? Would you consider a diesel for your next car? Give us your take in the Comments section below.

Read: "Diesel power just in: Mercedes GL320, BMW X5 3.0 diesel, BMW 335d."

—Eric Evarts

Hyundai begins giving cash for clunkers rebates

Hyundai has begun giving cash for clunkers rebates, even though the official Car Allowance Rebate System (CARS) doesn’t roll out until around the July 23, according to the official cars.gov Web site. (Read: "Cash for clunkers not ready yet.") Consumers shopping other brands who want to take advantage of the cash-for-clunkers trade-in deal from the government may be left in limbo for the next three weeks, unless other automakers step up with similar dealer-assistance programs.

The CARS bill that President Obama signed into law on June 24 says the program is good from July 1 to Nov 1. But the program doesn’t officially take effect for 30 days, or until about July 23. Those three weeks provide the National Highway Traffic Safety Administration (NHTSA) time to establish the specific methodology for the federal government to reimburse dealers, ensure the old cars that qualify are crushed, and prevent fraud.

So for most of July, consumers with clunkers they want to trade in are left waiting – unless they want to buy a Hyundai. On Monday Hyundai announced a new incentive program loaning dealerships the money to take clunkers in trade before the program officially gets rolling. The company says it has already sold taken its first “clunker” in trade, a 1995 Ford Explorer traded on a Hyundai Elantra Touring wagon.

Other brands could follow Hyundai’s lead, though the National Automobile Dealers Association (NADA) is recommending its members don’t start accepting clunkers in trade for rebates until NHTSA starts the program.

Before buying a Hyundai, or a model from any other brand, be sure to check the Consumer Reports ratings to ensure you are getting a good car and a good deal. See a complete list of Consumer Reports recommended models in our interactive new car selector, available to online subscribers.

Also read, "Cash for clunkers: Recommended cars that qualify for a voucher" and “Cash for clunkers: The best gas guzzlers to junk.”

—Eric Evarts