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Ford Whips out the Big Guns
Aug07

Ford Whips out the Big Guns

The Nice Guy has left Dearborn

By Blake Muntzinger

08.07.2008


No one knows better than the Ford staff that the sales market is rough. While first half of 2008 set a sales record in Europe, July sales stateside fell 15 percent from last year. But Ford’s not standing still; it’s defending itself. Ford invited the media to the Dearborn Development Center for the 2009 Ford, Lincoln and Mercury Model Year Drive. It provided the media with information regarding its manufacturing processes, new powertrains and engines, and technologies that customers will see sooner than later, proving that with the changing, greener times, Ford will be there setting the trend.

Digital manufacturing has enabled Ford to go head-to-head with the best in the industry. Designing products right the first time – without design or worker ergonomics issues – saves money. Several years before a vehicle is built, engineers assess the manufacturing process of their workers in a virtual factory. Sensors are placed on a worker who then is asked to assemble a virtual part. The system checks for proper hand clearance to ensure the worker won’t be injured, helps predict the worker’s posture, and evaluates the muscles to prevent carpal tunnel syndrome.

If the workers are safe and healthy, quality will be high and while labor costs remain low. This type of manufacturing has already yielded good results. It’s helped Ford lower its warranty repair costs by 50 percent since 2004, saving the company $1.2 billion in 18 months. In fact, Ford’s 2005 models have a 59 percent lower repair rate than 2004 models.

While fuel economy seems to be a new, but permanent, fad for American consumers, performance has always been ingrained in the American psyche in one form or another. Ford found a way to combine the best of the two into one quite wicked package: EcoBoost.


EcoBoost is a family of four and six-cylinder motors using turbocharged direct-injection technology for 20 percent better fuel economy while releasing 15 percent fewer carbon dioxide emissions. Lincoln’s MKS will be the first receive the engine – a 3.5-liter EcoBoost V-6 generating 340 hp – in 2009; the Ford Flex will follow. On the track, the MKS already impressed with its responsive 3.7-liter DOHC Duratec V-6 with 273 horses. But with 340 hp and a smaller displacement, the MKS will be a force to reckon with. By 2013, EcoBoost will be incorporated into 90 percent of the lineup, including the new “redefined” Explorer with fuel numbers described only as “jaw-dropping”.

EcoBoost wasn’t the only thing Ford was boasting about. A new generation of fuel-saving six-speed transmissions is poised to replace Ford’s current four and five-speed offerings. Eighty-five percent of Ford’s products will receive six-speed transmissions by 2010, a number jumping to 98 percent by 2012. The new gearboxes combine an automatic transmission’s convenience with a manual transmission’s fuel economy. The new F-150, along with Ford’s Escape and Mercury’s Mariner, will get this transmission yielding one mile per gallon increases.

The Escape and Mariner continue to be improved upon from last year’s redesign. They both get a 171 hp, 2.5-liter I-4 engine – an output increase of 11 percent – that eliminates 1.7 seconds on its 0-60 mph acceleration. With 28 mpg, its highway mileage rating is higher than the Toyota RAV4 and the Honda CR-V. The Hybrid models will also use the same motor, delivering 34 mpg in the city and 31 on the highway – the most fuel-efficient SUVs on the market.

As the market gears itself up for more economical vehicles, overlooking the truck market is easier to do. But Ford continues its innovation with its fleet of commercial vehicles. In 2009, Ford’s E-Series vans, F-150 XL, STX, XLT, and FX4 trucks will feature Ford Work Solutions. It focuses on four key areas to help business owners be more productive and save money.


The first component is Tool Link, which enables owners to keep real-time inventory of equipment stored in the vehicle. Crew Chief is next, which allows small fleet owners to manage their vehicles, keep maintenance records, and send workers to job sites. The Cable Lock secures equipment to the cargo area. The most money-saving feature will likely be the in-dash computer with an available wireless mouse and printer, effectively turning the driver’s seat into a desk chair. Invoices can be printed on the spot without having to drive to the office, saving fuel and money. When the Transit Connect joins the lineup in 2009, it will offer all Work Solutions applications except the Cable Lock feature.

Blind spots are arguably one of the most unsettling parts of driving. Ford’s Edge will be the first vehicle on the market to work on curing that problem with the Blind Spot Mirror. Inspired by its fleet of heavy duty trucks, the side mirror contains a second mirror on the upper right corner. The tiny square on the mirror’s corner doesn’t look too effective, but it does increase rear visibility while driving. The mirror will eventually be incorporated into every Ford, Mercury, and Lincoln vehicle.

From a technological standpoint, Ford is making its presence known. Already on the market is SYNC, a voice-activated communication and entertainment system co-developed by Ford and Mircosoft. And on the market soon, Ford recently announced a new feature arriving later this year called 911 Assist. Active when a mobile phone is connected to SYNC, 911 Assist calls 911 emergency services when it senses an accident has occurred. If the driver of the vehicle determines this isn’t the case, a 10-second window of time is provided to cancel the call. If it’s not canceled, emergency personnel will be notified. 911 Assist will be offered with no monthly fees to current and future SYNC owners.

Also attributed to SYNC is the Vehicle Health Report (VHR), which, once initiated, collects a vehicle’s diagnostic data and sends it to Ford. An online report is created containing updates on information, such as recalls, scheduled and unscheduled maintenance, and recommended actions. Owners will receive an SMS or e-mail message on the status of their vehicle’s major electronic systems free of charge.


SIRIUS Travel Link provides a plethora of real-time data to occupants ranging from nationwide weather updates including five-day forecasts, accident reports, the closest cinema and the featured films, fuel price information for over 120,000 stations, and the closest Starbucks for that Iced Peppermint White Chocolate Mocha. Owners can also upload photos via CD into the computer. As with SYNC, it’s voice-activated and the screen is easy to navigate.

Ford proved today that it saw the signs, and while it’s taken slightly longer than hoped to understand them completely, Ford’s taken heed and is charging forward. This is definitely not the same Ford consumers saw four years ago; Ford will evolve again in the next four years too. It suffering from an SUV hangover now, but its European models and EcoBoost infused into the North American lineup will help prove that this Ford is and will be a new Ford – One Ford, focusing more on its core self rather than the periphery.

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Chrysler and Nissan Consider More Product-Sharing
Aug07

Chrysler and Nissan Consider More Product-Sharing

The new Dodge Logan?

By Brendan Moore

08.07.2008

says that Chrysler LLC is in talks with Nissan to jointly produce mid-size cars. The two companies have already inked deals to share a full-size pickup truck (the Dodge Ram will become the new Nissan Titan) and a sub-compact car (the Nissan Versa will become a Chrysler product as-yet-unnamed), so now it looks as if they’re going for the big fat middle of the market.

I have no doubt that this report is accurate. Just what Chrysler is going to do to survive in terms of product has been a subject of speculation here at Techshake; they don’t have a huge inventory of overseas fuel-sipping product to draw on like Ford, and they don’t have a lot of new product in the pipe and a large amount of international models to choose from like GM. So where does that leave them?

It leaves them where they are now, trying to do a deal with someone to get some product they can sell on a private-label basis until they develop something of their own. Or, as others have conjectured, until they can get Chrysler in a good enough financial condition to sell the company. Either way, they need a partner, because they have next to nothing on their own. They need someone else’s vehicle that they can put their badge on so they live another day as a company.

Chrysler has already signed a deal with Chery, the Chinese automaker that will bring Chrysler a sub-compact at some point, and is currently in talks with Tata regarding a version of the Nano, but a tie-up with Nissan would have much larger ramifications for the American manufacturer. The volumes produced by a joint effort with Nissan would be much larger, and the potential long-term ripples would be of far greater importance.

It is now not inconceivable that Chrysler could be brought into the Renault-Nissan orbit fairly soon in the future, which would have some interesting effects on the American market and to a lesser extent, in some of Renault-Nissan’s international markets. Imagine a Dodge version of the hot-selling Renault Logan in the U.S. or small commercial vehicles developed off Dodge truck platforms for sale in other countries under the Renault or Nissan brand.

Neither Nissan or Chrysler would comment on the report, but this is not the end of this story by a long shot. Look for some announcement in the next thirty days, even if it pertains to just one vehicle initially.

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Boylan’s Dream Garage
Aug05

Boylan’s Dream Garage

Part 3

The Utilities

By Roger Boylan

08.05.2008

Many of the most beautiful cars in the world sit in my dream garage on the fantasy Mediterranean: Facel Vegas, Jaguars, Ferraris, etc. Now it’s time for some homeliness, with a little practicality thrown in. I call them utilities: vehicles built primarily to be practical and/or utilitarian, but which also have personality, even presence. Some of them recall my youth, and a dash of nostalgia covers a multitude of sins.

1) 1996-99 LaForza Magnum V8 4X4


SUVs have their uses, on the trail, in heavy rain, or at the home improvement emporium, and in their way they’re almost as much fun to drive as sports cars, especially under the right circumstances. In real life I’ve owned two, both Nissans, and I’ve driven many others, mostly Jeeps and Fords; but for my dream garage I’ve chosen something a little more original, with the Verdiesque name LaForza (The Force). Yes, it’s somewhat ridiculous, like many large SUVs, but impressive, too. It’s elegant inside, and, as a former military vehicle, it’s downright indestructible. Originally built in Turin for the Italian army, this is basically an Iveco truck with leather seats and a walnut dashboard and, in the Italian versions, an Alfa 6-cylinder engine. Although I’m sitting above the Med in my dream garage, I’ll take the late ’90s American version powered by the GM Vortec 6.0 V8 with Eaton supercharger (earlier export versions got a Ford 5.0 V8), just for extra punch. The LaForza sold almost not at all over here, and in Italy the military had a near-monopoly. But the truck’s toughness is legendary. So is its thirst, positively Hummer-like; hence the smaller Alfa engine in Italy, land of $10-per-gallon gasoline. But this is my dream world, so hang the expense. I’m off to hit a couple of Alpine trails.

2) 1996 Buick Roadmaster Estate Wagon


A magnificent coda to the family-wagon epic, harking back to the American suburban paradise of the ’50s and ’60s that I missed, growing up abroad, and that probably never existed, anyway. Never mind; this Buick’s appearance in my dream garage is a way of recapturing what I never knew. The Roadmaster Estate survived well into the age of the SUV, now waning, if not quite as fast as its diehard opponents might wish; still, despite the untimely demise of the Dodge Magnum, the station wagon’s time seems to be coming again, although future wagons will certainly not be on the same scale as the venerable Roadmaster, which was sui generis. It was a station wagon for the upscale suburbanite, sheathed inside in acres of leather and faux wood, with ample room for six. The signature rear-facing bench seat, when deployed, provided the kiddies with a fine view of the traffic behind–or pursuing highway patrol, for this Buick in its final incarnation was powered by the same 260-hp V8 that booted the Impala SS and the Corvette along.

3) 1978 Citroen Acadiane


A streamlined 2CV light van, of the type dear to those movie buffs who remember Henri-Georges Clouzot’s thriller Les Diaboliques (1955), in which a duplicitous corpse is transported in a lurching 2CV camionette from Niort to Paris, with a chain-smoking Simone Signoret at the wheel. That old-line 2CV fourgo was a fixture in French lumberyards and factories for about 30 years; back in the ’60s I hitched a ride in the cargo area of one, intending to go only 20+ miles, but so gentle was the rhythmic up-and-down of its suspension along the long straight routes nationales that I was lulled to sleep amid the pallets and wicker baskets and woke up in the suburbs of Paris, about 150 miles away.

The old 2CV trucklet evolved into the more elegant Acadiane, a Dyane with a raised roofline that from 1978 until 1987 plied the highways of France, lurching less than its 2CV forebear, thanks to a suspension redesign. It was entirely practical if hardly exciting, although its 700-cc engine did its best (a burly 35 hp and top speed of 100 k.p.h.), with a maximum payload of 350 kg (770 lbs), to keep things moving. The Acadiane was adept at carrying gardening supplies, crates of fruit and vegetables, off-the-rack clothes, and the like, and would do so with only occasional visits to the local Elf or Total filling station, and it seldom or never needed the attentions of a mechanic. Many were owned by countercultural types, who love to suffer in the name of solidarity. I don’t, but I admire simple elegance, and I need something like this in my garage as a foil to the Ferrari, so here it is. I can make runs–well, waddles–down the coast to load up on beer, baguettes, and Brie.

4) 1998 Land Rover Defender 90 50th Anniversary Edition


The last of the traditional Land Rovers, directly descended from the Series I–III made famous in such movie safari classics as Hatari and the Born Free trilogy in the 1960s.


The original trans-Zambezi bushwhacker, the Series I, was a bare-bones classic that endured forever; some estimates say that 75% of all Series I, II, and III LRs ever made are still running. One reason for this longevity is the fact that the early LRs were made of Birmabright, an ultratough alloy of aluminum and magnesium spawned by steel shortages and a sur of aircraft aluminum in postwar Britain. The alloy’s resistance to corrosion justified the original LRs’ reputation for durability, a reputation that has, alas, not attached itself to recent, more upscale Range Rovers heavily dependent on engine computers and elaborate wiring. Wartime leftovers also accounted for the original car’s snot-green uniform; in the ’40s there was a lot of drab camouflage-green airplane paint sloshing around for suddenly superfluous Lancasters and Spitfires. The LR Series I-III model acquired the name “Defender” in the late ’80s, and in 1998, in honor of the marque’s half-century, the most luxurious version to date was produced, with air conditioning, auto box, V8, and leather upholstery. This is the one I have chosen for my garage, and for stately progressions into the foothills of the Alps, where I might bag a chamois or two–on film, of course.

5) 2003 VW Eurovan


Yes, some version of the old magic bus was inevitable, but I’m not going to risk life and limb in one of the old T2 Grateful Dead/Ken Kesey buggies, with their 32-hp engines, inch-thick forward panels and tendency to scuttle laterally in a stiff breeze. Your knees are your security system in one of those beauties, to paraphrase the estimable Tom and Ray Magliozzi; the safety factor is akin to sitting in a lawn chair in heavy traffic. The Eurovan, the burly descendant of the original, inspires more confidence. Essentially a giant German bread van, this VW made a convincing mini-RV, with flip-out dining table, bunk beds, kitchenette (stove, sink, cupboards), and overhead canopy, and in ’02 it finally got a decent powerplant, the 201-hp VR6 used in the peppier VWs, notably Golf GTIs. The Eurovan had a towering driving position, superb all-around visibility, pretty decent mileage, and gobs of space for family and friends; in short, it inherited all the atavistic character of the T2 with none of the quirks, except for a tendency to wiggle a little in crosswinds. I’m not big on camping, but it’s fussing with tents that annoys me the most. Sleeping under the canopy of this big Brotwagen somewhere in a chirping forest glade might just recapture a moment of pure childhood bliss–until the witches begin to arrive for Walpurgisnacht.

6) 1956 Ford F-100
I see this classic pickup as a piece of American industrial art, a sculpture on wheels. I’ll have mine in classic red, please, with the Ford-O-Matic transmission and the not-inconsiderable punch of the 173 hp churned out by its “Y-block” 4.5 L V8, a wildly innovative combination for a small farm truck back in ’56 (a/c, too, would soon be available). But this little utilitarian’s raison d’être is practicality, not performance. Built for hauling American goods, it would be at its best with a few crates of chickens clucking in the bed, cruising along a straight prairie highway rolling to the edge of the vast horizon under a billowing Western sky, a landscape à la Thomas Hart Benton. Incongruous in my Mediterranean dream garage? Not really. Pickup trucks are widely admired in Europe, as are most intrinsically American objets, but they aren’t common because of fuel costs and the widespread availability of more economical local products (see the Citroen Acadiane, above). But the unique artistry of this Ford’s lines would be apparent against such anachronistic surroundings, in much the same way as a 2CV stands out more as an artifact than as a car in, say, Texas. And you could fit an abundance of wine and cheese in the cargo bed.

7) 1944-48 Jeep CJ


General Eisenhower’s and Field Marshal Montgomery’s car–and Sergeant Boylan’s. My father served in the signal corps of the 29th Infantry Division of the National Guard, first part of the first unit to land on Omaha Beach on 6/6/44, as any who have seen The Longest Day will recall (and will also remember Robert Mitchum playing the 29th’s commanding officer, Brig. Gen. Norman Cota). Dad got to drive around equipment and probably an officer or two in one of the first CJs (the CJ-2), introduced in that same year, 1944, by Willys. The same basic concept lives on today, after 7 versions and 3 corporate parents, as the Wrangler, top of the pops with tanned college kids in the American Southwest. The postwar CJs were commercial versions of the wartime Jeep, with some improvements, such as a larger engine, vinyl seats, and a single-piece windshield, designed to make them more livable. It’s still pretty basic, though, and therein lies its charm, as with the Citroen Acadiane. This marvelous old machine would be the centerpiece of my dream garage: a monument to the heroes of WW2, to the beauty of basic things, and to old-fashioned American know-how. (The origin of the name Jeep, by the way, is as mundane as the vehicle: “G” meant government issue; “P” indicated an 80-in. wheelbase reconnaissance vehicle–voilà, “GP,” which evolved into one of the best-known names in the world.)

8) 1978 Renault R16TX


This fine family car was designed by Philippe Charbonneaux, who was one of the designers of the original Chevy Corvette. The R16 is the ancestor of the popular Renault multi-purpose vehicles, the Laguna, Mégane, and Scenic, and it was one of the first feasible family hatchbacks, offering both comfort and a reasonable degree of performance. The R16 was one of my favorite cars in the ’60s and ’70s. I thought they were well-styled and chic, but I could never afford to buy one. My amateurish enthusiasm was matched by no less an authority than Stirling Moss, who praised the car as ““. The R16 won European Car of the Year in 1965. The version I’ve chosen, the TX, was the ritziest, with several features, such as power tinted windows, central power locking, a sliding sunroof, and air conditioning, that were uncommon or nonexistent in most European family cars of the day. The leather seats, garnished with automatic seatbelts, folded flat into beds. The gearshift lever (5-speed manual, 4-speed automatic) was mounted on the steering column; the R16 was the last production car in the world to have this feature. The 1647-cc engine, 93-hp engine was hardy and frugal and permitted a sustainable top speed of 105 mph. All this, taken together, explains why, between 1965 and 1979, every other vehicle on the roads of France seemed to be an R16. After all, during that period, nearly 2 million were sold.

9) 1965 Fiat 600 Multipla Taxi


OK, so I rejected the original VW Microbus on the grounds of safety and here I am proudly driving around my dream garage in this flimsiest of ’60s concoctions, with only my kneecaps for protection against collisions. Do I contradict myself? Very well then, I contradict myself. (I am large, I contain multitudes.) But please take note of the “Taxi” designation, for this Multipla is an exercise in purest nostalgia, a souvenir from an increasingly distant past. When I was an American bambino traveling in Italy, green-and-black Multiplas lined up in droves outside train stations and grand hotels and stood to attention at taxi stands. They swarmed down the avenues and snarled at pedestrians and raced each other across the broad piazze. In the good times, when we could afford taxis, many a Multipla transported me and my parents across Rome and Milan. They did so at a modest pace, not being capable of much more than 100 k.p.h. (60 m.p.h.), which was why one seldom saw them on the autostrada, but inside they were voluminous and could easily swallow an entire family and its luggage and have room left over for the shopping. In mine in the early morning I drink my cappucino and listen to “Yesterday” or “Volare” and I pretend it’s 1965 again.

10) 2007 Mercedes-Benz Gelaendewagen 55 AMG Kompressor


Precisely what the real-world utility of this thing might be I have no idea, but several major militaries, including the German and the French, use it or one of its many derivatives, and the U.S. Marines swear by the Interim Fast Attack Vehicle, or IFAV, which is a modified G-Wagen built, as are all G-Wagens, by the venerable firm of Puch in Graz, Austria. Never mind, I had to have a Benz in here somewhere, and this Benz is egregiously over the top, so to speak, with all the architectural elegance of a storage crate and a wildly politically incorrect 500-hp V8 engine that imbibes its premium five-star with the ferocity of a dipsomaniac. Just the thing, eh? Throw in the magnificent leather- and dark-wood-shod interior, the three locking differentials that will let you drive straight up the side of the Matterhorn, the solidity of a concrete bunker, and a price tag ($75,000+) guaranteed to keep the rabble at bay, and you have the ideal millionaire’s plaything, especially if his local rambles take him occasionally into the rugged hinterland of the Alpes-Maritimes to inspect his vineyards.

Note also, incidentally, that the Holy See, as mentioned in a , has found a use for its own version of the G-Wagen. If it’s good enough for the Pope, it’s good enough for me and my dream garage.

Curtain

And here the curtain falls on the little stage of my dream garage. In it I’ve conjured up 30 of the vehicles I’ve known or would like to know better, and which I would seek out immediately, if I ever had the means. I’ve called them the , the , and these, the Utilities. I hope these little automotive fantasies have provided some pleasure. Few will agree with all my selections, and many will find some of them ludicrous or even offensive. Fair enough. C’est la vie. Let us all design and stock our own dream garages, and never mind the detractors. Dreaming is an art form, too.

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Innovative Private Transportation: Part Deux
Aug04

Innovative Private Transportation: Part Deux

Paris plans on providing electric cars for the public

By Blake Muntzinger

08.04.2008

Leaders in Paris are taking the idea of Vélib’ – its successful low-cost bicycle rental program – one step farther by offering electric cars, according to the Associated Press. Called Autolib’, the city anticipates having 4,000 electric cars available by the end of the decade – 2,000 vehicles downtown and another 2,000 in the suburbs in an effort to lower pollution.

Featuring stations dotted throughout Paris, locals and visitors can rent Vélib’ bicycles 24 hours a day, seven days a week. With an annual subscription fee is €29 ($45), it’s an affordable pollutant-free alternative for those preferring to stay above ground for local travel. Other French municipalities have programs similar to Vélib’ – all of which are convenient and easy to use.

Autolib’ users should expect to be charged per minute, but no price has been officially set. It’s primarily for those who need or want a vehicle but – understandably – don’t want to hassle with parking or insurance. Prices at press time in the Paris area for one liter of diesel ranged from €1.29 to €1.74 ($7.60 to $10.25 per gallon). At those prices, driving an electric car would eliminate dealing with nasty fuel prices too. Officials stated that zero-emission hybrids would be used if a manufacturer could not be found with the proper production capability.


Many questions remain regarding cost, security, and qualifications, including if cars will be returned to their station of origin or at any available station as with Vélib’. Another potential issue is the question of just how many Parisians will actually be able to participate in the program as obtaining a driver’s license is coupled with high fees. In addition to the cost, some Parisians opt to not get a license based on convenience since getting around Paris is a breeze car-less. It’s easy as well to find the potential legal nightmares here. Traffic rules don’t differ too much from the US, but imagine someone fresh off of a six hour flight deciding to drive to their hotel in the 1st Arrondissement near the Louvre. Any sane individual on those streets would be crying for their mother in 10 minutes, maybe even five.

Autolib’ could work for someone living in the outskirts away from a subway line or for someone living where there are few public transportation options. It should, however, offer more cars in the suburbs where space is at less of a premium because benefits are minimal in downtown Paris. It’s a myriad of congested one-way streets, alleys, lane-less boulevards, buzzing scooters, and jaywalking pedestrians; Paris is also home to one of the most efficient subway lines in the world. Seasoned travelers and locals own a Navigo Pass, a quick pass good for the métro (subway), buses, the RER (regional trains), and in some cases, the Vélib’. This combination could easily be faster than driving but cumbersome if hauling a plasma TV for 10 metro stops and two lines.

Zipcar is America’s closest equivalent to this program. Members living in over 40 cities in the United States, Canada, and the United Kingdom can pay hourly or daily rates. All vehicles have insurance, parking, fuel, and 180 free miles with each reservation. Programs similar to Autolib’ could be hugely successful in America, especially with those wanting to go “green”. Given the general infrastructure of American cities, unused parking lots and dilapidated buildings could yield American counterparts to Autolib’.

It wouldn’t be the first time a French “green” idea has attracted attention in the US. In 2007, Chicago Mayor Richard Daley visited Paris to see if the Vélib’ program would work in his city. With Zipcar already in 25 neighborhoods in Chicago, could an Autolib’ clone be next? If so, perhaps contracts with American auto makers to produce electric cars would give the industry another much-needed shot in the arm.

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Detroit Pushes Long Loans for Trucks and SUVs
Aug01

Detroit Pushes Long Loans for Trucks and SUVs

Will the extra-long vehicle loan be the salvation of the SUV or simply offer false hope?

By Brendan Moore

08.01.2008

Now that the American car companies have decided to effectively stop leasing pickups and SUVs, they’re hoping they won’t lose sales because of it and people will just finance their vehicle with a long-term installment loan.

Well, maybe.

Consumer auto installment loans in the United States have continued to get longer and longer over the last decade. As we noted in a column last year, consumers were already increasingly opting for longer-term auto loans in order to get the monthly payments they want on increasingly expensive cars and trucks. Its worth noting that this situation was only becoming worse before the leasing meltdown with the percentage of 72-month or greater installment new-car loans now up to 19% of the total new-car loans outstanding, compared to 7% of the total new-car loans outstanding in 2005. What is it going to be if the domestics get their wish and would-be leasing customers switch to extended-term loans?

It’s also worth noting that there was a similar increase in 72-month or greater installment auto loan activity for used car loans for these same time periods.

The trend looks unstoppable with many lenders now offering 84-month loans for those who want even longer-term loans, and many of those same lenders considering adding 96-month loans to their product lineup. These terms are for both new car loans and used car loans.

So, maybe those long auto installment loans will keep increasing in length, and maybe they’ll become more widespread. But consumers should be aware that, just as in the rest of life, it pays to know what you’re getting into when you sign that l-o-n-g contract. You may want to do a little math beforehand because the amount paid in interest looks kind of scary on, say, an 84-month loan.

What does this mean in practical terms for consumers? Here’s an example: A $20,000 vehicle loan at 7.55 percent simple interest for 48 months costs the buyer $7,025 in interest. The same loan, carried over 84 months, at the same rate, costs $13,871 in interest. You can do the math – that’s almost twice as much in finance costs. That’s if you can get your lender to give you the same rate for 84 months as 48 months, which would be unusual. They’re probably going to want a higher rate at that long a term. And at 15,000 (average annual miles in the U.S.) miles a year, that means you have 105,000 miles on the car when you finish paying it off at 84 months (7 years x 15,000 miles), so then it’s probably time to buy a new car. And that’s for an inexpensive $20,000 new car! A new $40,000 SUV racks up even more breathtaking interest amounts, as you can imagine.

I have to believe that some percentage of people that actually still want an SUV (which is an ever-shrinking number to start with) will just say “no thanks” when they look at those interest charges on a long-term loan.

It’s going to be a tough sell to get people to take out an installment loan (and pay a lot of interest) for a long period on a vehicle that they used to be able to lease for a short period for the same amount per month, and, get another new one of whatever they’re leasing in their driveway every 36 months. That is going to be a tough sell.


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