Should you buy a Hummer, Saab, or Saturn?

Buying from these three orphans of the General Motors bankruptcy process carries newfound consumer risks, making it difficult to endorse buying their vehicles right now. Further, there are just three models between them that meet Consumer Reports standards to be recommended: Saab 9-3 sedan, Saab 9-5, and Saturn Aura XR V6. And of those, the Saabs are decidedly dated cars overdue for a redesign.

While Hummer, Saab, and Saturn are not part of Motors Liquidation Company, where the so-called bad assets from the former GM corporation are staged, these brands are pending imminent sale or other resolution. Think of them as the kids who didn’t make the varsity team. They may get picked for junior varsity, or simply sent home.

Each brand has a likely purchaser lined up (Hummer – Tengzhong, Saab – Koenigsegg, Saturn – Penkse Automotive Group), though the deals have not been finalized. We can report on the current vehicles and state expectations that parts, service, and warranties will be honored by the next owners. But the reality is, we don’t know for sure what the future holds. Do you want to gamble with your own money, even though incentives are likely to be high?

Another factor is the dealer body. Many dealerships have closed under the weight of the recession, while others will be relinquishing their franchise rights when they expire. Hummer, Saab, and Saturn dealerships are not nearly common as Chevrolet stores. If the local dealership closes, how convenient would it be to visit another? And, what if the new owners withdraw from your region, choosing instead to focus on areas that would maximize per-store volume?

Plus, there is an underlying concern for consumer protections with lemon law and personal injury claims, as reported previously with Chrysler and GM.

The bottom line is that there are significant unknowns that add risks to buying what are in most cases mediocre vehicles. If your heart is set on purchasing from these brands and you are looking from a great deal, I suggest you wait a few months to see how the ownership situation shakes out.

Read: "What the post-bankruptcy GM means to you."

—Jeff Bartlett

Back to school: Tips for choosing the right vehicle for a young driver

For some students, going back to school may mean getting a new or new-to-them set of wheels. There are many factors to consider in choosing the right model for a young driver, though a used car is a smart place to start. A 2-3 year-old pre-owned vehicle can be a good value since it likely still has some factory warranty left and usually comes with cheaper insurance and taxes than a new vehicle. In addition, a used vehicle has already taken its biggest hit in depreciation and there may be less family stress over preserving it in showroom-caliber condition.

Buying used is often a way to get a better-equipped vehicle than you'd be able to afford new. Features such as electronic stability control, side curtain air bags, and antilock brakes are important especially for an inexperienced driver. These valued safety features will be more readily found on recent models. Buying a car for a young person is a compromise on features, style, and budget, but you should jump through hoops to buy a vehicle with the most safety features you can afford, plus good crash protection. Our model overview pages present crash test results from the Insurance Institute for Highway Safety and the National Highway Traffic Safety Administration, as well as our own dynamic test findings. 

Reliability is another key consideration when looking for a used car. You want a car that will last long and have few problems.

To make your search simple, see our list of best and worst used cars to find the most reliable vehicles that also scored well in our testing. Or target the best used cars for under $20,000. 

Besides safety and reliability, young drivers need versatility to transport luggage, furniture, and people—especially those who are heading off to college. Sedans and hatchbacks are good choices that offer additional cargo space when the rear seats are folded and roomier trunks. We do not recommend your young driver get into SUVs or pickups since they can have trickier handling and are more prone to rollovers. Sporty cars are too tempting to be driven fast and have a high crash and insurance rates. Plus, their fuel economy lags behind smaller vehicles.

Check out our list of recommended cars for teens and our best used car deals to find the models that will best suit your needs and wallet.

—Liza Barth

Test driving vehicle history reports

If you’re relying on a vehicle-history report when buying a used car, you could be making a costly mistake.

Carfax, AutoCheck, and other car-history report services can be useful for what they tell you. But it’s what they can miss that’s the problem.

In a recent Consumer Reports investigation, we obtained history reports for dozens of seriously damaged vehicles being sold on eBay Motors and other Web sites. Some of the reports came back “clean” even though the vehicles were being displayed with photos showing the extensive damage, along with descriptions of the problems and vehicle identification numbers.

For example, a smashed 2007 Acura MDX, described on one auction site as a “ROLLOVER; ALL OVER,” got a clean report from Carfax and a rating of 89 out of 100 from AutoCheck.

If you’re buying a used car, by all means, take a look at a vehicle-history report, especially if it’s being provided at no cost to you by a dealer or private seller, as is often the case. But don’t stop there. Drive and carefully inspect the vehicle. Most important, have it checked out by qualified mechanic, preferably one with auto body experience. A thorough inspection is critical, no matter how new the car is or how clean it looks, or even if it’s covered by a warranty.

See our full car-history report investigation, including some stunning photos of wrecked cars that came back with clean titles.

—Anthony Giorgianni

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

July 4th deals make some new cars cheaper than buying used

There’s no shortage of sales incentives available on new cars these days. And by comparing deals you can find some new vehicles that are as affordable as late-model used versions. In some cases, you can even buy a new car for less than a one-year-old model, when considering purchase price and interest on a five-year loan. For example, when we looked at Honda’s special low-interest financing offer, available through the 4th of July weekend, we found that a new 2009 Honda Accord LX-P would cost less and have lower monthly payments than a similar used 2008 model. The 2009 Accord would have monthly payments of $308 vs. $314 for a 2008 model, which would save you about $340 over five years. The offer is in conjunction with a dealer sales incentive of $1,500.

Similarly, you could save $13 a month, or $815 over the life of the loan, by buying a new Honda Odyssey instead of a used 2008 model. And a new Acura RDX SUV could save you almost $10 a month, or $600 over the five-year loan term, compared with a 2008 version. The new Odyssey and RDX also include dealer sales incentives of $2,500.

In some cases the price of a new car with interest isn’t much more than that of a similar two-year-old car. For example, a new 2009 RDX would cost just $555 more to buy over five years than a two-year-old RDX with 24,000 miles on it. A Chevrolet Silverado 1500 Crew Cab Pickup would cost just $38 more a month than similar a used 2008 model, or a total of about $2,300 over five years.

If you’re cross-shopping between new and used cars, you could make similar comparisons yourself by using the calculators in the “Car Buying Advice” section.

Usually, buying a late-model used car is a better overall value than buying a new one. But with a new car, you don’t have to worry about how the car has been maintained. And having the benefit of the full new-car warranty gives you greater independence from repair bills for at least three years, and longer with many automakers.

Moreover, you can take advantage of new government programs when buying a new car right now. For instance, you can deduct any state and local motor-vehicle sales taxes. And if you’re driving an old gas-guzzler and don’t mind waiting until July 23, when the Car Allowance Rebate System (aka “cash for clunkers” bill) takes effect, the savings from buying a new car could be even greater. Neither program covers used-car purchases.

It’s important to remember that any deal is only as good as the vehicle you're buying. 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.

As mentioned, these calculations are based on a model’s purchase price and financing interest. ConsumerReports.org subscribers can also compare a model’s total owner cost for 3-, 5- and 8-year periods. Our owner-cost estimates include depreciation, fuel costs, insurance, interest, maintenance and repair, and sales tax.

All our calculations assumed vehicle financing for a 60-month term and 10% down payment. We used average new- and used-car financing rates from Bankrate.com, except where manufacturers offered lower rates on new cars that would be readily available to consumers. Used car retail values assumed average mileage of 12,000 miles driven per year.

You can get the latest retail and dealer incentives in Consumer Reports’ New Car Price Reports or through the New Car Buying Kit. These also include CR’s Bottom Line Price, which factors in the dealer invoice price and any incentives and holdback amount to give you a good starting point for your negotiations. This frees you from relying on the word of the salesperson for the best price. For used car values, check out CR’s Used Car Price Reports.

		Price			Monthly payments			Total 5-year cost
Model name	MSRP	New CR Bottom Line Price	2008	2007	2009	2008	2007	2009	2009	2009
Acura RDX	$33,895	$28,457	$26,600	$25,675	$470.52	$479.95	$461.26	$28,230.97	$28,796.89	$27,675.53
Chevrolet Silverado 1500 4x4 Crew Cab	$34,295	$31,689	$24,800	$22,825	$475.34	$437.05	$397.15	$28,520.40	$26,223.00	$23,829.00
Honda Accord LX-P	$21,905	$18,641	$17,400	$13,825	$308.22	$313.90	$241.67	$18,492.94	$18,833.88	$14,499.97
Honda Odyssey EX	$29,455	$24,313	$23,000	$20,250	$402.00	$415.58	$360.02	$24,119.89	$24,935.04	$21,601.27
Toyota Prius base	$23,375	$22,040	$17,625	$16,025	$355.55	$311.58	$279.25	$21,332.77	$18,694.58	$16,754.94
Toyota Tacoma  4x4 Access Cab V6 5AT	$25,475	$23,916	$21,100	$20,500	$395.43	$378.00	$365.87	$23,726.04	$22,679.84	$21,952.47

Note: All financing calculated on 60-month term with a 10% down payment. Honda special finance rates good through July 6. Used vehicle financing using average from Bankrate.com of 7.206%. We assume used vehicles have been driven 12,000 miles per year.

Cash vs. low-interest financing
Sometimes automakers offer consumers a choice of incentives between a cash rebate or a low financing rate. You should calculate the purchase both ways to see which would give you the better deal.

When we looked at current incentives offered on two Toyota models, for instance, choosing the low-interest financing rather than a rebate could save more than $1,000 over the course of a five-year loan.

For the Prius hybrid, buyers can choose between $1,000 cash back or 2.9-percent financing for the Prius hybrid. Choosing the financing would save $19 a month, or $1,150 over five years compared with taking the cash back.

On the Tacoma compact pickup, buyers can choose between $750 cash back or 3.9-percent financing. Taking the lower interest rate would yield a savings of $18 a month, or $1,070 over five years.

Model	Incentive	MSRP	Down payment	Cash incentive	Interest rate	CR bottom Line Price	Monthly payment	Total 5-year cost
Toyota Prius base	financing	$23,375	$2,204	$0	2.90%	$22,040	$355.55	$21,332.77
	cash			$1,000	7.19%	$21,040	$374.71	$22,482.43
Toyota Tacoma Access Cab 4x4 V6 5AT	financing	$25,475	$2,391.60	$0	3.90%	$23,916	$395.43	$23,726.04
	cash			$750	7.19%	$23,166	$413.26	$24,795.73

However, leaving the cash on the table would mean you may have to come up with more money up front, for taxes at least, and possibly a larger down payment if your bank bases the down payment on a percentage of the loan amount.

Either way, this summer looks like a great time to get a good deal on a new car. If your old one leaves you wondering whether you’ll ever make it to work and back every day, a reliable set of wheels could mean real freedom over this Independence Day weekend.

--—Eric Evarts

Hyundai gas promotion

Last summer, when gas prices hit $4 and higher, consumers flocked to more fuel-efficient vehicles. So manufacturers of less fuel-efficient vehicles began using gasoline as an incentive to help drive sales. Fortunately, gas isn’t expected to reach last year’s level and this week it is averaging $2.64 a gallon, $1.45 below the price this time last year.

Still, Hyundai figures almost-$3 gas is high for consumers during the busy summer driving season and is now offering a program that will lock in the gas price at $1.49 a gallon for a year on most Hyundai models leased or purchased between July 1st and Aug. 31st.

The program will be standard on new Accent (excluding the base model), Tiburon, Elantra, Elantra Touring, Entourage, Sonata, Azera, Santa Fe, Tucson, and Veracruz models. Two of these models are discontinued for 2010 (Tiburon and Entourage). Some are also eligible for the $3,500 or $4,500 government CARS program (Cars Allowance Rebate System).

After purchasing a new vehicle, new Hyundai owners need to register their credit card online to enroll in the program and receive the Hyundai gas card. The card can be used in about 93% of gas stations nationwide. Consumers can purchase a maximum number of gallons equal to 12,000 miles divided by the EPA combined mpg for that vehicle.

For more details visit Hyundai.com.

Check out our new car selector to see our Ratings on Hyundai vehicles.

--Liza Barth

Perils of being an auto tester

Returning home from an evening walk with the family, an oncoming car slowed down at it approached us: a 2009 Toyota Camry. I didn’t recognize the sedan as belonging to anyone I know. Then it stopped, the driver’s window motored down, and I immediately see it is one of my neighbors. Before I can say a word he says, “Gene, thank you for recommending the Camry. The previous Camry that I bought based on your recommendation was absolutely reliable just like Consumer Reports said it would be. I put over the 250,000 miles on that car over the last eight years, and it never let me down. So I bought another Camry. Thanks again, Gene, I really appreciate the advice.”

After some small chit-chat, the neighbor drove away. My wife and son think I’m “The Man” for giving out such great advice. I must admit I felt pretty good, too.

We continued walking toward our home when a Honda Odyssey passed us and cut into a driveway. It’s another neighbor, and I can see the mother is remotely opening the passenger-side power sliding door to let in her daughter. The retracting door caught my eye; it was binding on the track as it opens. I heard it scraping against the body-side of the car. I tried to walk by quietly, but then I saw the mother peering out from the rear-view mirror. She saw me. I think that I’m only a heartbeat away from being busted.

As I passed the driver’s side of the car, she opened the door and yelled to me, “Gene, did you see that door open? It’s scraping a gash across the rear panel of the car. I thought you said the Odyssey was a reliable, recommended minivan? That’s the last time I listen to you.” I tried to reply quickly that Honda did have some reliability issues with power doors, but that is not what she wanted to hear. She backed out quickly and was gone before I can get another word out.

My witty wife looked at me and said, “You’re an idiot. From now on, you take your walks alone and don’t give anyone in the neighborhood car advice.”

Yep, in less than five minute I went from expert car guy to just another chump. Such is life. Consumer Reports performs extensive testing and research on cars, though anecdotal problems do occur that defy our results and survey ratings. Hopefully we are making more people satisfied buyers than not.

As for me, I think I will buy a treadmill. Anyone have any advice on a good model to buy?

—Gene Petersen

Crash test videos: Over 300 car crashes and counting

More than 300 vehicles evaluated by the Insurance Institute for Highway Safety (IIHS) are available to view in our crash test video player at ConsumerReports.org/crashtest. These free videos show in detail the vehicle condition and occupant protection of each model in front and/or side impact tests.

Presented with IIHS ratings, the videos are helpful for car shoppers to determine the safety of a model you are considering buying and they illustrate the importance of safety. For owners, it’s also interesting to see how your current vehicle fares.

We recently posted the crash videos of the 2009 Audi Q5, 2010 Lexus RX, 2009 Toyota Venza and 2009 Volkswagen CC. (Read: "IIHS Top Safety Picks: Audi, Lexus, Toyota, Volkswagen.") All current model year videos are also available in our model overview pages (available to subscribers), where you can find Ratings, reliability, fuel economy, safety ratings and more.

Learn more about how IIHS evaluates and tests vehicles in "Crash test 101."

—Liza Barth

President Obama signs cash for clunkers bill

President Obama today signed the “cash for clunkers” law, now known as “Car Allowance Rebate System,” that has been touted as a key stimulator for the auto industry and an environmental aid. The law provides $1 billion in funding, with $50 million allocated for administration. The specific guidelines for the program will be revealed in the next 30 days, when the plan takes effect on August 1.

The CARS program is intended to encourage consumers who own an older, gas guzzler to purchase or lease a new, more fuel-efficient vehicle. In doing so, it is expected to give the auto industry a sales boost, while at the same time transitioning participating car owners to thriftier vehicles and thereby reducing national fuel consumption.

The National Highway Traffic Safety Administration (NHTSA) working with manufacturers, dealers, and recycling centers to develop the program specifics. Dealers will need to register to participate.

Car Allowance Rebate System basics
While the details are being finalized, the government has released some elements from the program, which have changed little since our previous reports.

To qualify, the trade-in vehicle must:

• have been manufactured less than 25 years before the date you trade it in
• have a “new” combined city/highway fuel economy of 18 miles per gallon or less
• be in drivable condition
• be continuously insured and registered to the same owner for the full year preceding the trade-in

To check the combined city and highway fuel economy, consumers are directed to fueleconomy.gov.

Leases on new vehicles are eligible, so long as the lease is for at least five years—a very long time for a lease. The manufacturer's suggested retail price cannot exceed $45,000. Used cars are not part of the program.

Purchased vehicles may be from domestic or foreign brands, through participating dealers.

The chart below spells out the scenarios, matching the trade-in and purchase to the credit. These funds would be applicable at time of purchase.

Car Allowance Rebate System

	Passenger car light-duty	Small truck	Large light-duty truck (6,000 – 8,500 pounds)
Minimum fuel economy for a new vehicle (EPA  combined)	22 mpg	18 mpg	15 mpg
$3,500 credit	Mileage improvement of at least 4 mpg	Mileage improvement of at least 2 mpg	Mileage improvement of at least 1 mpg or trade-in of a work truck.*
$4,500 credit	Mileage improvement of at least 10 mpg	Mileage improvement of at least 5 mpg	Mileage improvement of at least 2 mpg

*Trade-in must be at least pre-2001.

The government has launched a Web site to answer common questions at www.cars.gov , where the law pdf can be reviewed.

Read:
Cash for clunkers: Recommended cars that qualify for a voucher
Cash for clunkers: The best gas guzzlers to junk
Cash for clunkers bill cuts fuel consumption–running the numbers

—Eric Evarts and Jeff Bartlett