Next victim of mortgage mess: Auto sales

Rising concern about home values and mortgage payments is causing more buyers to slam the brakes on new car purchases.

Already-battered U.S. auto sales could be the next victim of the problems with mortgages, declining home and stock prices as potential car buyers delay purchases due to uncertainty.

Industrywide U.S. auto sales in August could be off 10 percent from a year ago, according to an early read from sales tracker Edmunds.com. That follows July sales that were 19 percent below year-earlier levels

Jesse Toprak, executive director of industry analysis for Edmunds.com, said that the downturn in home values and credit issues that were seen in the July numbers could be an even bigger factor this month.

"I think the issue is becoming more pronounced," he said.

Sales weren't just weak at domestic automakers, such as General Motors, Ford Motor and Chrysler Group. Year-over-year sales fell in July at Toyota Motor and Honda Motor as well. Many forecasters are cutting full-year auto sales targets in the face of these weak summer sales. And some experts say the turmoil in housing could throw even more dirt in the gears.

CNW Research, which specializes in surveys of car buyers, found in its latest reading that 13.6 percent of the potential market's customers were canceling or postponing plans to make a new-vehicle acquisition any time soon, up from 10.1 percent last year.

And of those postponing or canceling plans, home-related issues jumped to the No. 1 reason, cited by 17.6 percent of those staying away from dealers' showrooms, with nearly 11 percent of that group citing a decline in their home equity and another 6 percent citing an increase in their monthly home payment.

Of those postponing purchases, 10.7 percent cited problems with credit scores, as some sources of car loans are tightening lending standards. Gas prices are a distant third, cited by less than 5 percent of those delaying purchases.

"We're probably going to see some pretty bad [auto sales] numbers for the rest of the year," said Art Spinella, president of CNW. "To put it simply, housing is now the major hurdle to new car purchases. The next three to four months are not going to be much better if it's better at all. People are not interested in buying a new vehicle."

Only two years ago, the CNW survey found just 2.3 percent citing home-related issues as a reason to postpone a car purchase, while 5 percent cited credit score problems and about 3 percent cited gas prices.

Automakers, led by GM, are upping cash-back offers and other inducements to try to breathe life into sales in the face of headlines about home foreclosures and market meltdowns.

GM spokesman John McDonald said that GM isn't seeing any sharp drop-off in sales it can trace to the current mortgage and housing slowdown.

"It is one of a number of headwinds," he said. "There's fuel prices, there's interest rates and there's housing prices. But we're not seeing anything new that we've not been talking about for more than a year."

But one auto industry executive, who spoke on condition that his name not be used, said that the higher incentive spending by automakers, particularly on GM pickups, may mask some of the bite that housing is putting on sales.

"The home was not only a source of financing for some car purchases, it contributes to a positive feeling psychologically," said the executive. "That led to a confident outlook, a view that 'I can go ahead and spend from paycheck to paycheck and buy new cars when I want to because the value of my home and portfolio have gone up.'

"It's silliness to say the credit crunch doesn't matter," said the executive. "If the final sales numbers for August have any strength, it will be because of incentives."

Current Auto Rates
36 month new: 6.82%
48 month new: 6.94%
60 month new: 6.94%
72 month new: 7.01%
36 month used: 7.40%

Experts in the field say that car purchases are one of the first items that consumers can and will put off if they are nervous about their own financial outlook, long before they'll cut back on eating out or other discretionary purchases.

Bob Schnorbus, chief economist for auto research firm J.D. Power & Associates, said that the August sales probably won't tell the full story about the drag that the housing turmoil is causing for auto sales.

"I wouldn't expect it to have that quick impact; I would expect it to be more of a drag throughout the rest of this year than a plummet in August," he said.

And Schnorbus said that while consumers may keep making other types of purchases, even as they pull back from buying new cars and trucks, the slowdown could spread to other types of spending in the future if the market does not improve.

"A new car is one of the more postponable purchases that people make," said Schnorbus. "That new vehicle purchase could be a good leading indicator if consumers are going to cut back. Over the next few months, we could be getting some very interesting signals."
(C)CNN

Top 10 Summertime Toys

One of these sexy drop-tops could be the perfect reward for your hard labor. There are plenty of options, from affordable to extravagant, so you don't have to blow your retirement savings.

Buying a car purely as a personal indulgence may be more within reach than you think. The article list of Top 10 Summertime Toys includes racy convertibles that start at about $20,000 and go up to more than 10 times that.

But exactly how much wealth do you have to amass before you can safely justify purchasing even a moderately priced convertible purely for the sake of enjoyment?

First, have enough money invested to fund your retirement until at least age 95, possibly even longer, says John Wasik, personal finance columnist and author of The Merchant of Power. “If a dream car purchase puts you into debt, then it's unwise,” he says. “Financing a depreciating asset is always a bad idea, but if a sports car makes you feel alive and you aren't financing the thrill with money you'll need later, then by all means you should put the pedal to the metal.”

We’ve concocted a list of entertaining convertibles in a wide range of prices that serve as rolling rewards for a life well lived. Far from being rational choices, ragtops convey a sense of freedom and emotion that no other vehicle can offer, which makes them popular choices as personal extravagances.

If price is a primary concern, there are affordable convertibles like the Mazda MX-5 Miata and Pontiac Solstice, both of which made our top 10 list of summer reward cars. Mid-range drop-tops like the BMW Z4 and Mercedes-Benz SLK-Class step up the luxury and performance without busting a decent-sized budget. Then there are special roadsters like the Dodge Viper SRT10, Ferrari F430 Spider and extremely rare Spyker C12 LaTurbie, an automotive testament to one’s net worth and, perhaps, need for attention.

An Emotional Choice

A car can speak volumes about its driver, says Dr. Charles Kenny, a psychologist who has conducted research for the likes of General Motors, Nissan and Toyota. He says that most car purchases fill an emotional need, whether the buyer cares to admit it or not.

“Single women do not usually want to drive four-door sedans, no matter how nice or how luxurious,” says Kenny, who is president of psychology firm The Right Brain People. “They feel that driving a four-door car says to others that they are committed, taken, settled down and are older and stodgy.”

On the other hand, those who buy ultra-luxury models might expose a need for status and uniqueness, while sports car owners may seek to impart youthful exuberance and rejuvenation. “Buying, owning, being seen in and driving fast, exciting sports cars is a way for people to reassure themselves and tell others that they can in fact be in control of their impulses — like driving too fast and doing almost anything else you can imagine to excess — while still having fun, escaping and expressing themselves,” Dr. Kenny says.

Though research shows that some drop-tops, like Volkswagen’s New Beetle Convertible, tend to have a higher percentage of female buyers, the quickest and costliest convertibles attract more of a testosterone-fueled following. See our feature on the Top 10 Luxury Vehicles Driven by Men for more on this topic.

“Men are drawn to higher-priced, ‘performance’ cars, with 41 percent citing looks and design as a key consideration,” says Doug Scott, Senior VP at the market research firm GfK Automotive. Women, on the other hand, want more conservative, value-oriented models that are fun yet affordable and practical, he says.

Chicago attorney Kathleen Zellner bucks the trend. As an avid car buff, her personal fleet currently includes a 2003 Mercedes-Benz SL55 AMG and a 2006 Porsche 911 Turbo. In a reluctant nod to practicality, as well as to her husband’s bird-hunting hobby, she also drives a Lexus LX 470 SUV.

“Driving sports cars is one of the things I’ve done to reward myself — it’s where I’ve allowed myself to be extravagant in an otherwise extremely disciplined and structured life,” Zellner says. “Plus, it’s a way to stand out in what is a male-dominated business — I like to show the guys I’m every bit as skilled a driver as they are, and probably more so.”

Renting Versus Owning

Fortunately for those who can’t afford (or can’t justify buying) a costly sports car, a growing rental market for upscale rides can help even those with more moderate salaries scratch the itch to feel affluent for a day.

For example, Altitude Dream Cars in Denver, Colo., will rent you a Lotus Elise for as little as $299 a day, or a Porsche Boxster for $349. If you want to make the ultimate impression, a Lamborghini Gallardo will set you back a staggering $1,395 for a 24-hour period. Still, that’s around $179,000 less than actually buying one to impress the former homecoming queen at your high school reunion. Click here to read more about exotic car rentals.

Regardless of how much you spend on a flashy, fun roadster, owning or even just renting one is a great reward. “Driving a good car is one of the few things in my life that I don’t overanalyze and worry about,” Zellner says. “It’s just something I enjoy.”

To make this list, cars had to be convertibles with only two seats. We left out four-seaters because of their bias toward practicality under the premise that two-seat roadsters make no such pretenses — they’re the embodiment of automotive style and encourage driving purely for the sake of enjoyment. The list reflects ForbesAutos editors’ subjective opinions based on collective reporting and test-drives.

10. Most Underrated Roadster

2007 BMW Z4
MSRP: $36,400 - $52,100

The Z4 carries all the visceral appeal of classic European roadsters, yet it tends to get lost in a crowded market. It's extremely satisfying to drive, practical enough for daily use and surprisingly calm with the top down.

Everything about the Z4 warrants a closer look, whether in the quick 215-hp 3.0i, quicker 255-hp 3.0si or quickest 333-hp M Roadster version, each of which delivers progressively sharper handling.

9. Best Budget Ragtop

2007 Mazda MX-5 Miata
MSRP: $20,500 - $26,520

A modern version of the classic roadsters from the 1960s and '70s, the MX-5 Miata remains one of the most entertaining rides at any price. An optional power retractable hardtop keeps the fun rolling when the temperature dips.

The MX-5 Miata packs a lively, 170-hp 2.0-liter four-cylinder engine with a short-throw six-speed manual gearbox among its three transmission choices. It also hugs corners like few others, making it a real value in terms of driving enjoyment per dollar.

8. Best Flash for the Cash

2007 Pontiac Solstice
MSRP: $21,500 - $27,115

Though not quite as polished as the Mazda MX-5 Miata, the two-seat Pontiac Solstice delivers exotic-car curb appeal thanks to curvaceous, low-slung styling. But don't expect a lot of storage space.

The base Solstice backs up its good looks with decent performance from a peppy 177-hp four-cylinder engine. The turbocharged 260-hp GXP version is more satisfying.

7. Most 'Affordable' Luxury Roadster

2007 Mercedes-Benz SLK-Class
MSRP: $43,350 - $62,500

Combining elegant styling and deft German engineering, the SLK doesn't force you to compromise comfort and luxury — even in cooler months. A retractable power-operated roof makes it a true four-season convertible.

Buyers can choose from 228-hp and 268-hp V6-equipped models, as well as the hot-blooded SLK55 AMG that features a burly 355-hp 5.4-liter V8 engine shoehorned under the tiny hood.

6. Best Car for Weekend Racers

2007 Lotus Elise
MSRP: $46,270

The diminutive Elise looks and acts like it belongs on a racetrack more than a roadway. Lightweight aluminum construction allows this two-seater to wring maximum velocity out of its 190-hp 1.8-liter Toyota-sourced engine and hit 60 mph in just under 5 seconds.

Serious racers should opt for the $2,495 Track Pack, which includes Bilstein dampers, an adjustable front sway bar, a rear control-arm brace and provisions for a bolt-in harness bar, all designed for hardcore track driving.

5. Best Modern Classic

2007 Chevrolet Corvette Convertible
MSRP: $52,590

The Chevrolet Corvette is the quintessential American sports car; anyone who grew up during the '50s, '60s or '70s probably lusted after a 'Vette. Now is a great time to get one — the current version is arguably the best ever, yet it stays true to the original.

A 400-hp 6.0-liter V8 engine catapults the Corvette to 60 mph in 4.5 seconds. Besides grinning on the straights, you'll smile when the roads turn twisty thanks to its tight suspension. A burly exhaust sound and coarse nature keep that classic muscle-car persona alive.

4. Best Brute

2008 Dodge Viper SRT10
MSRP: $85,000 (estimated)

With its 600-hp V10, firm suspension, massive wheels and minimalist cockpit, the aggressively styled Viper SRT10 is all about visceral appeal and raw performance. It makes no apologies for its brutish nature, which can definitely be intimidating.

Its 8.4-liter V10 engine generates enough muscle to catapult the Viper to 60 mph in less than four seconds, while bulked-up brakes will bring it back to a standstill from that speed in just 100 feet.

3. Best Attention Getter

2007 Ferrari F430 Spider
MSRP: $192,484

Few cars scream excess and sex appeal more loudly than a red Ferrari. The F430 Spider is currently the only Ferrari with a drop-top. Though engineered for speed, it's actually comfortable for casual cruising, too.

Like a work of art, the F430's mid-mounted 4.3-liter V8 engine sits beneath a glass cover. It's not just for show, though, and generates 490 hp for a 0-60 mph time of around 4 seconds.

2. Best Display of Wealth

2007 Spyker C12 LaTurbie
MSRP: $345,625

We're hard pressed to find a car as rare and impressive as the Spyker C12 LaTurbie, which hails from Holland and could make a Porsche seem mundane. The workmanship of its interior is stunning, with aeronautical details that evoke the company's history of building planes.

Hand-built in limited numbers, this dramatically sculpted Dutch treat exploits a mid-mounted, Audi-sourced 500-hp W12 engine to register a 3.9-second 0-60 mph time and a wildly illegal top speed of 196 mph.

1. Best All-Around Performer

2007 Porsche Boxster
MSRP: $45,600

With classic, uncluttered styling, a comfortable interior, commodious cargo space and stellar performance, the Porsche Boxster excels in every aspect. Thoughtful design — like not one, but two trunks and an easy-to-use top — make it practical enough for daily use.

The base model is more than fast enough, with its 245-hp 2.7-liter six-cylinder engine behind the seats. The S version takes performance to a higher level with a 3.4-liter 295-hp six-cylinder. Also key to the Boxster's appeal is long-standing reliability.
(C)Forbes

Your Money: Hit the Road, but Get Cover

Millions of drivers will take to the roads for the great Bank Holiday getaway next weekend.

But with one in five having no breakdown cover, there are sure to be plenty of motorists stranded by the roadside.

Those who don't have cover could end up paying a hefty call-out fee of up to pounds 100 at peak times in the UK, plus anything between pounds 2 and pounds 25 a mile for recovery of a broken-down car. These costs can be even more expensive if you are driving abroad.

And even people who do have cover often fail to shop around for the best deals. Our table on the right shows some of the best-buy comprehensive breakdown cover policies for the UK and Europe.

Richard Mason, of comparison website moneysupermarket.com, said: "Motorists can avoid wasting precious holiday time on the hard shoulder by ensuring they have adequate breakdown insurance. It is important to choose not only the most competitive policy, but one which is comprehensive enough for your needs.

"UK breakdown policies do not automatically provide cover for driving abroad, so those planning to cross the Channel should check they have the appropriate cover. After all, the last thing you want is to stump up an exorbitant call-out fee or organise your own recovery service while stranded abroad."

As well as taking out comprehensive cover, if you are planning on taking your car overseas you should also check you are covered in case you have an accident. Look at the small print of your policy to see if it includes foreign use.

This will either be included as standard, or it can be purchased as an optional extension.

A spokesman for consumer finance website Find.co.uk said: "If it is included as standard, your insurer may stipulate that you are covered for a maximum of 90 days driving abroad in total per year, but that each trip must not exceed 30 days.

"So if you were on an extended driving holiday, you would have to return to the UK at the end of 30 days to maintain cover. If this were not feasible, you would need to arrange extended cover at the outset."

You may find your insurance policy includes breakdown cover, but this often doesn't extend to Europe. Only 10 per cent of policies include European breakdown cover and 24 per cent offer this as an option at extra cost. Some providers, such as M&S Car Insurance, include this cover as standard for both UK and Europe, but usually you have to pay extra.

James Harrison, of Insurancewide.com, said: "Before you scour the market for a separate breakdown policy, check whether your existing car insurance covers you and to what extent.

"If you are not covered and need to add breakdown on to your existing policy, it won't necessarily be cheaper with your existing insurer.

Be very clear what you want to be covered - don't blindly make do with the cheapest policy."

CHECK THE COST

Based on comprehensive annual cover for man, 25, driving 2001 car 12,000 miles a year Provider Premium below.

UK BREAKDOWN COVER
RescueMyCar.com pounds 31.00
First Call pounds 32.00
Europ-Assistance pounds 41.30
GEM Motoring Assist pounds 60.75

EUROPEAN BREAKDOWN COVER
RescueMyCar.com pounds 68.50
Drive 24/7 pounds 76.50
First Call pounds 76.95
Car Breakdown Discounts pounds 89.00

(C)Sunday Morror, London

Auto Leasing: Pros and Cons

If you are considering leasing, you need to do your homework. Here is some advice on how to get the best deal.

Aside from having a new car every few years, a major attraction to leasing is that "you get more car for the same monthly payments," says Robert Haber, a New York City art dealer who is leasing his Lexus RX 330 SUV.


These pluses will seem convincing to many new car shoppers, but to lease successfully, you need to understand the transaction. The concept is simple, but the execution is often highly complicated. When you lease, you pay, in effect, for the loss in value of a vehicle for the three or four years you are leasing it, plus interest on that amount.

Dealers will want to talk only about monthly payments, but to lower those payments you need to understand all the moving parts.

How Leases Work
Leasing comes with its own jargon. The most important factor in determining payments is the difference between the starting cost, known as the capitalized cost, and the estimated value at the end of the lease, called residual value. Auto brands that have high resale value, such as Mercedes-Benz, are good candidates for leasing.

Usually the best available lease deal will be the one offered by the manufacturer's captive finance subsidiary (see definition below). They often offer subvented, or manufacturer subsidized, leases, a promotional effort designed to help move certain vehicles. These deals are most common for luxury brands, and typically the residual value will be fixed, as will the interest rate. Thus your only weapon to lower payments is to negotiate down the capitalized cost — just as you would try to lower the purchase price if you were buying the car instead.

Leasing has its pitfalls, as well.

Do’s and Don’ts

Don't sign a lease longer than the warranty on the car. You don't want to be paying for repairs on a car you don't even own. On Ford, General Motors and DaimlerChrysler cars, three-year warranties would call for no longer than three-year leases.

Don't sign a lease with mileage limitations that are unrealistically low for your driving habits. Excess mileage costs at the end of the lease can be very expensive. You will likely save money by negotiating up front for a limit higher than the typical 12,000 miles a year, if you think you will need it.

Do protect yourself against theft or serious collision loss early in the lease. If the vehicle is stolen or totaled, your insurance will pay only the depreciated market value of the car at that time, which may be less than the total you owe on your lease. So-called "gap insurance" will pay you the difference between your insurance settlement and the total amount you still owe on the lease. Most leasing companies offer this coverage, and it is one of the few add-ons that makes sense to accept. Gap insurance as part of the lease usually won't cost you any more than getting it from your insurance agent, and is more convenient.

Do brush up on leasing jargon, so you can be a savvy negotiator.

Leasing Terms to Know

Capitalized Cost: The lease transaction's equivalent of the selling price. Payments are determined largely by the difference between the capitalized cost and the residual value (see below).

Capitalized Cost Reduction: Jargon for down payment in a lease transaction. You can use it as a way to reduce payments if, say, you have the proceeds from selling your old car, or if you are trading in your old car.

Excess Mileage Charge: A penalty for driving more than the mileage allowance in the lease — typically around 12,000 miles a year. To avoid this penalty, make sure your lease has a mileage allowance matching your driving habits.

Captive Finance Companies: These subsidiaries of major auto companies, such as Ford Motor Credit and General Motors Acceptance Corp., make auto loans on the companies' brands. Often they have better rates than those offered by the dealership itself.

Subvented Leases: Subsidized by the manufacturer, these leases are generally designed as promotional efforts to help move vehicles. Often, these can be one of the best deals for the consumer considering leasing as an option.

Residual Value: What the vehicle will be worth at the end of the lease. It may or may not match true estimates of the used car value at that point. When a manufacturer wants to promote leasing of a certain model, it will lower payments by artificially boosting the residual value.

When Does it Make Sense to Lease Instead of Buy?

A choice to lease or buy with a loan is largely one of personal preference and driving habits. If you typically trade for a new car every four years or less, drive less than 12,000 miles a year and keep your vehicle in good condition, you may be a good leasing candidate.

Especially among luxury brands, the best deals are often ones from the company's own finance arm. Because they prefer promotional leases to giving rebates, companies such as BMW, Lexus and Mercedes-Benz often offer leases that have low interest rates, above-market residual values or both. The result is lower monthly payments.
(C)Forbes

2007 Mercedes-Benz GL-Class Test Drive

Mercedes-Benz takes a crack at the full-size SUV market with a vehicle that marries expected luxury with surprising off-road prowess.
MSRP: $52,400 - $54,900

The Mercedes-Benz GL450 competes directly with the Audi Q7 and is among a new breed of big SUVs that takes advantage of a more sophisticated unibody construction (meaning a superstructure, body panels and underbody platform welded together as a unit, which is how most cars are made), rather than the traditional and less refined body-on-frame arrangement (a cabin box bolted to an old-fashioned, ladder-like chassis, which is how most pickups and traditional SUVs are built).

General Motors now has similar offerings in this more car-like configuration, including the Buick Enclave, GMC Acadia and Saturn Outlook.

Go to the SUV Buyer's Guide to find out more about the difference between unibody construction and ladder frames, and why it matters.

The GL450 was designed for U.S. and European markets, meaning that it has to be big enough for America’s oversized needs but still be maneuverable enough to navigate Europe’s smaller roads.

Mercedes compromised by making the GL450 six inches narrower than some of its competition, limiting rear seat width. Furthermore, its seven-seat setup can’t be turned into a nine-seat configuration, as is optionally available in some other full-size SUVs, like the Suburban. But the GL450 does carry one distinct advantage: the three-pointed star. And although the logo has been tarnished by recent, broadly publicized quality-control problems, it’s still iconic enough to mean, “I’m Special.”

Don’t confuse this vehicle with the Mercedes-Benz G-Class SUV, an ancient, juice-box-square, civilianized military vehicle that is still being sold to sheikhs, gentleman ranchers and people who find Range Rovers just a little too technologically advanced for their tastes. Compared to the G-Class, the GL-Class is an honest, thoroughly modern, three-row SUV.

The GL is not built in Germany, but at a Mercedes plant in Tuscaloosa, Ala., where the midsize M-Class SUVs have been assembled for nearly a decade. On one hand, vehicle-assembling robots in Alabama are probably just as competent as the robots in Germany. But on the other hand, it’s still hard for some to accept that a company that has made German craftsmanship a part of its brand mystique for more than a century is now building vehicles in the Deep South. Draw your own conclusions.

Exterior

The GL450 looks like a beefed-up M-Class. It seems to tower over other cars, thanks to its ample size and jacked-up stance.

Another Mercedes model, the R-Class, could possibly be cross-shopped against the GL-Class. Looks-wise, the R-Class skews more toward a wagon or minivan, though Mercedes is particular about not calling it either one.

The R-Class comes with a V6 instead of a V8 and doesn’t offer the ultimate towing and off-road abilities of the burlier GL450. But for most drivers simply looking for a stylish, safe vehicle with room for up to seven plus cargo, it certainly fits the bill. And it’s less expensive, too.

Despite TV commercials from multiple manufacturers showing SUVs summiting mesas and plowing through alpine snowdrifts, many of these vehicles no longer make any pretense at being genuinely off-roadable. They typically don’t have the requisite ground clearance, low-range gearing or appropriate four-wheel drive capabilities to do anything more adventuresome than driving on well graded dirt roads. (Read more about these features in our SUV Buyer’s Guide.)

The GL450, however, can be equipped with an optional off-road package that tacks on another 1.5 inches of ground clearance to its already-best-in-class 11 inches. The package also fits a transfer case with low-range gearing and adds lockable center and rear differentials for true four-wheel drive, as opposed to the standard GL’s totally transparent, automatic, full-time all-wheel drive. Mercedes estimates that only 2 percent of GL-Class buyers will opt for the package, which they feel is probably an accurate representation of how many SUV owners in general have any interest in real off-roading.

Interior

While the GL450’s ample ground clearance may be perfect for off-road situations, it’s less than optimal for more mundane pursuits, like getting in and out of the vehicle. It’s a long step up to any of the seats; getting back down is likewise a leap of faith. To further facilitate off-road prowess, the GL450 doesn’t have running boards or assist steps, so if you’re short, this could be a deal-breaker. This is where the lower-to-the-ground R-Class is at an advantage.

The third row is accessed by manually folding the middle-row seats forward, and no contortions are needed to crawl all the way aft, which usually isn’t the case for these setups. Once back there, you’ll be amazed by the relative comfort and ample headroom of the two backseats. Deep footwells and nicely designed foot space under the middle-row seats eliminate the knees-in-your-face experience common to many third-row arrangements. Plus, the seats are actually sculpted, not just slab-like cushions designed more for stowing than seating. For reference, I’m 5 feet, 11 inches and the rear seats fit fine. There’s also a fixed glass panel in the roof over the rear seats to lighten the atmosphere back there.

The third-row seats also quickly power-fold flat into the floor at the touch of a button, creating a cargo area that betrays the GL’s narrowness: with a volume of 83 cubic feet, it’s smaller than that of most other full-size SUVs, and roughly the size of a typical midsize ute’s hold.

As far as middle-row space is concerned, I sat there comfortably behind a gorilla of a guy during the test-drive, and suffered no ill effects. And not only did Mercedes get the spacing between the seats right, the backs of the front seats are also concave, for additional knee room.

Performance

Besides making the whole vehicle lighter and stiffer, the unibody construction lowers the GL450’s center of gravity and gives it a surprisingly refined, car-like ride, without a hint of excessive leaning through turns. Its extremely long wheelbase also works to eliminate any truck-like hobby-horse movements, the back-and-forth pitching sometimes found in smaller SUVs.

A sophisticated air suspension system helps keep the car level — in place of coiled steel springs, high-pressure air bladders cushion all four corners, and electronics instantly pump up the ones that need more support to counteract body movement while cornering or hard braking. The air suspension can also be used to raise the entire vehicle three inches above its normal ride height — 4.5 inches more if you opt for the off-road package — for increased ground clearance.

Speed-sensitive, power-assisted rack-and-pinion steering is nicely weighted and precise. It completely eliminates the on-center imprecision that was characteristic of generations of earlier Benzes with recirculating-ball steering — a mechanism the Germans have since consigned to the company museum.

The GL450 has a smooth-shifting, complex, seven-speed automatic transmission controlled by a stubby, extremely simple column shifter. The only options are forward and reverse, with an electronic park-engage button on the end of the stalk. If you want to select an individual gear, there are two switches located on the back of the steering wheel which allow manual up- and downshifting.

Mercedes demonstrated the GL450’s respectable off-road capabilities to journalists on a hilly, muddy vineyard track in the Napa Valley of California. The GL450 being tested had special deep-lugged off-road tires that aren’t part of the optional off-road package, but none of us were allowed to drive ourselves. The organizers admitted that part of the course was simply “too muddy to use” after a substantial rainstorm, although I suspect a Jeep demo would have relished the challenge.

One last interesting feature that’s also part of the standard GL450: pushing the DSR (Downhill Speed Regulation) button on the dash lets you set a speed anywhere from 4 to 12 mph so that the GL450 will hold a set speed and crawl down steep descents. Certainly the GL450 showed that it has the chops to perform serious off-road work, but let’s hope there’s always a Jeep — or one of Mercedes’ own G-Class — around to pull it out if it gets stuck.
(C)Forbes

2007 Nissan Sentra SE-R

Pocket Rocket With a Gee Factor.

Type: Compact front-drive performance sedan.
MSRP: $20,525 - $22,880 (tested).
Engine: A 2.5-liter in-line 4-cylinder (200 horsepower, 180 pound-feet of torque); six-speed manual transmission.
Consumption: E.P.A. mileage estimate is 24 m.p.g. in town, 31 on the highway.
Alternatives: Honda Civic Si sedan ($21,685), Chevrolet Cobalt SS ($19,515), Hyundai Tiburon GT ($19,995), Mini Cooper S ($21,850).

Here is a car-marketing rule of thumb: the more letters and suffixes tacked onto a car name, the more gaudy accouterments — inside and out — the car will possess. So naturally you’d expect something called the 2007 Nissan Sentra SE-R Spec V to be pretty well endowed.

But the Spec V — let’s simply call it that — is surprisingly subdued in its excesses. Although it’s decked out with the requisite rear spoiler, bright red seat belts, and 17-inch aluminum alloy wheels, which have an awkward spoke pattern and look like stove-top gas burners, I felt relieved that things weren’t bigger, shinier and worse — with one exception.

A G meter sits front and center on the gray dashboard. It measures the G forces — how many times the force of gravity is pulling on your body. It also measures the extent to which Nissan has gone too far.

Not only is the Spec V a performance version of the Sentra, it is the performance version of the performance trim version — the SE-R — and sort of a pocket rocket squared.

The SE-R made its debut in 1991 as the Sentra’s top trim level. It came with a more powerful engine and was an instant underground hit with enthusiasts. For most of the decade, the SE-R was one of just a few performance-oriented compacts sequestered below the lackluster mainstream.

But then came the movie “The Fast and the Furious,” and automakers were suddenly made aware of a whole new market to exploit. In 2002, it was no longer enough to have just an SE-R. Nissan added a Spec V. In 2007, you needed a G meter.

I kept my eye on that G meter for the better part of five days of driving. Most of the time, the needle sat right on zero, but it wasn’t for the lack of trying. Oh, I tried. I pegged the car on on-ramps and off-ramps. I stopped short and started hard. The most I coaxed out of the Spec V was 0.1 g. Maybe it was broken. Maybe it is unnecessary.

Based on the sixth-generation Sentra, the Spec V is more powerful than the previous version. The 2.5-liter 4-cylinder engine returns 200 horsepower, which is 23 more than the SE-R and 60 more than the 2-liter 4 found in the regular Sentra. And the sound is beautiful, a smooth, graceful hum all the way up to the redline of 6,800 r.p.m.

The Spec V is available only with a close-ratio six-speed manual gearbox, which does the job without quirks or wobbles between gears. The electronic power steering feels direct, with a good amount of weight on surface streets, but on freeways the power assist seemed overdone.

You get the sense that all of the mechanical bits have been tweaked according to focus groups and research data to walk the delicate line between performance and comfort. The Spec V is definitely bigger and more spacious than ever. But it is also roughly 400 pounds heavier than the 2006 model. To stiffen the chassis, there is a larger front stabilizer bar and a V-brace behind the rear seats. A sport-tuned suspension and four-wheel disc brakes (including 12.6-inch rotors up front) also help the Spec V tuck in its weight. But all of that equipment fails to hide the bulk altogether.

The Spec V feels athletic but not chiseled. Road & Track clocked it at 6.6 seconds from a stop to 60 m.p.h., so its acceleration is better than ever. But the weight is the biggest factor in the overall feel of the car, which pales in comparison with the more enthusiastic pocket rockets of its ilk, like the Honda Civic Si and the Mini Cooper S.

And for a car with a name as long as the Nissan Sentra SE-R Spec V, it is more of an everyday driver than you’d expect. It’s still sporty and fun, but it is likely to disappoint extremists, especially those in search of higher Gs.
(C)NYT

Engine: Clean or Efficient?

From the outside, the dark blue Saturn Aura accelerating to a steady 50 miles an hour on the high-bank oval here at General Motors’ proving grounds looked altogether unremarkable.

In fact, it was not much to look at under the hood either, despite an experimental engine using a method of burning gasoline that may prove to be the next major advance in fuel economy and emissions control. Only a couple of stray electrical connectors hinted at the differences distinguishing this engineering prototype from thousands of other Auras on road.

From the driving position it’s another story. A laptop computer placed between me and a G.M. engineer, Jun Mo Kang, displays a graph that plots the car’s changing engine speed against the load on the engine, just colorful enough to draw my attention away from future cars and trucks in full disguises zipping by in the faster lanes of the track.

My time behind the wheel last month was the first test drive G.M. has given to a journalist of its prototype homogeneous-charge compression-ignition engine. An H.C.C.I. engine runs on a combustion process that researchers say holds the potential for significant gains in overall engine efficiency. G.M is one of several automakers developing H.C.C.I. technology.

In principle, the H.C.C.I. engine takes advantage of the best characteristics of gasoline engines — low emissions that can be controlled effectively with available technology — and diesel engines, which offer low fuel consumption.

As I press and release the Aura’s gas pedal, a small orange dot on the laptop screen darts in and out of a wedge-shaped area on the graph. The point of the wedge begins slightly above idle speed, at about 1,000 r.p.m., and ramps up to its widest point at 3,000 r.p.m.

“Don’t push the pedal too hard or fast,” counsels Mr. Kang. “Try to keep the dot within the zone. That’s where the engine is running in H.C.C.I. combustion.”

After less than a lap of practice on the immense track, I find it easy to feather the pedal so that the orange dot constantly floats in the sweet spot on the graph, earning a smile from Mr. Kang.

When H.C.C.I. is finally ready for the road — G.M. won’t say exactly when that might be — computers will take over the task of keeping the engine in its ideal operating range. And though much work to refine the engine’s operation lies ahead, experts say the technology is worth the investment.

“I believe H.C.C.I. represents the next great advance of the internal combustion engine,” said Chris Gerdes, associate professor of mechanical engineering at Stanford University, which is one of G.M.’s partners in H.C.C.I. research.

“With minimal changes to the engine hardware, H.C.C.I. gasoline engines should be able to produce diesel-like efficiencies while simultaneously lowering emissions,” he said.

Dennis Assanis, director of the Walter E. Lay Automotive Laboratory at the University of Michigan in Ann Arbor, says the H.C.C.I. combustion process offers potential for raising gasoline engine fuel efficiency by 15 percent to 20 percent while offering reductions in oxides of nitrogen, an important contributor to smog that is difficult to control.

The 2.2-liter engine in the test Aura is based on the G.M. Ecotec four-cylinder; a 2.4-liter version of this engine is available in the Aura for 2008. G.M. rates the H.C.C.I. engine at 180 horsepower and 170 pound-feet of torque of torque; by comparison, the ’08 Aura engine makes 164 horsepower and 159 pound-feet, and is rated at 22 miles a gallon in town and 30 on the highway.

G.M. would not give fuel economy figures for the H.C.C.I engine beyond the expectation of a 15 percent improvement in mileage.

The H.C.C.I. process is something of an answer to the long quest for so-called lean-burn engines, which use less fuel in relation to the volume of air ingested. Such engines present other problems, though, especially in terms of emissions control, because it is hard to ignite the air-fuel mixture evenly.

The H.C.C.I. gasoline engine aims to solve this by igniting an almost evenly distributed (hence the term homogeneous in its name) mixture of fuel, air and captured exhaust gas in the cylinders. Combustion is spontaneous, a result of heat in the cylinder rather than a spark plug, similar to the way a diesel engine operates.

Until recently, H.C.C.I. combustion was little more than a laboratory experiment. Engineers could coax the process to work successfully on special single-cylinder test engines running at a constant speed. But when applied to multicylinder engines operating under various loads, speeds and atmospheric conditions, H.C.C.I. refused to cooperate.

To get around the difficulty of making it idle smoothly and quietly under high loads, G.M. has, for now at least, limited its H.C.C.I. mode to the 1,000- to 3,000-r.p.m. zone used in the Aura test car, a range that covers most typical driving. Below and above that range the engine uses conventional spark ignition.

Making H.C.C.I. compatible with a broad range of fuels; reducing the faint rattling noise during the transition from compression ignition to spark ignition; and reducing emissions at low loads are other issues being addressed.

“H.C.C.I. relies on a very delicate balance of chemistry happening thousands of times per minute in the cylinder,” said Paul Najt, a manager in G.M.’s powertrain research laboratory who has been working on H.C.C.I. for more than 30 years.

“Controlling the chemistry is the difficult part to implement,” he said. “If the temperature and gas composition aren’t precisely correct, either nothing happens or something very bad happens.”

Bringing H.C.C.I. to production has become a top priority among the world’s major automakers. One sign that the technology is inching closer to production is that automakers are attaching brand names to their various H.C.C.I. programs.

At next month’s Frankfurt auto show, Mercedes-Benz will announce details of its Controlled Auto Ignition system, which it has named DiesOtto in homage to diesel and gasoline engine pioneers. Volkswagen’s Combined Combustion System is under development, and Honda’s H.C.C.I. system, originally conceived for racing motorcycles, is being tested in a four-cylinder auto engine.

China’s automakers and government-backed research institutes are also intensely interested in H.C.C.I. technology, judging by a survey of technical papers presented at last year’s congress of the Society of Automotive Engineers.

G.M.’s decision to move its H.C.C.I. program out of the laboratory and into what Mr. Najt calls the advanced engineering phase, as well as beginning road tests, signals the automaker’s steady progress in critical technology areas, said Matthias Alt, manager of the company’s global H.C.C.I. program.

“In the first half of 2007 we achieved significant gains in the system’s computer controls,” he said. “This moved the program ahead faster than even we ourselves expected.”

But while Mr. Alt and his team of engineers and scientists have made great progress, they acknowledge that many challenges remain before H.C.C.I. combustion is happily percolating inside new G.M. engines.

“As our development of the enablers and computer controls continues, we’ll extend the H.C.C.I. operating range up and down the load range,” Mr. Alt said. The optimism of Mr. Alt and his engineers suggests that the H.C.C.I. Aura won’t be stuck in the slow lanes of the test track much longer.
(C)NYT

2007 Chevrolet Avalanche Test Drive

Despite a more civilized demeanor, the new Chevy Avalanche maintains its unique versatility and raucous persona.
MSRP: $32,460 - $36,165

Trading a little of its maverick character for a dash of distinguished poise, the redesigned 2007 Chevrolet Avalanche has become a stronger player in a growing market of luxury-appointed four-door pickups. Its added refinement won’t shock the system of the Mountain Dew-chugging target customer, as the Avalanche remains rugged and highly useful for unwieldy recreational and utilitarian demands.

Its individuality hinges on an innovative "Midgate," a fold-down wall behind the rear seats that extends the pick-up bed by several feet and offers numerous passenger/cargo configurations. And now that the Avalanche occupies a place on GM’s growing roster of FlexFuel vehicles, which can operate on E85, the corn-based fuel composed of 85 percent ethanol, the Avalanche seems to court “green” shoppers as well.

Following sales of about 400,000 units in five years, the Avalanche enjoys one of the industry’s highest customer-retention ratings. This loyalty could be due to the fact that, for drivers with such particular requirements in a vehicle, there aren’t too many other options. The Honda Ridgeline looks somewhat similar, and is competitively priced, but it doesn’t offer the Midgate functionality. And the Cadillac Escalade EXT does allow its pick-up bed to extend into the cabin, but at a far higher price.

Built in Silao, Mexico, the new Avalanche is available in LS, LT and LTZ trim levels with two- or four-wheel drive. The base LS is well equipped with disc brakes at all corners, a 320-hp 5.3-liter V8, GM’s OnStar communications and diagnostics system, stability control, a tow hitch, CD player and cloth-upholstered front/rear bench seats. All of these features are available at the starting manufactuer’s suggested retail price (MSRP) of $31,615 for two-wheel drive; four-wheel drive tacks on $3,000 for all trims.

The LT models give buyers the opportunity to pile on luxury amenities. LT1 upgrades to cloth bucket seats, 17-inch alloy wheels and power mirrors. LT2 adds leather, automatic climate control and a six-disc CD changer. LT3 adds side-curtain airbags, heated seats, Bose seven-speaker premium audio, power adjustable pedals, XM satellite radio and ultrasonic rear parking assist.

The fully-optioned LTZ sports all of the LT3 features plus an Autoride suspension, a real-time damping system that also levels the vehicle’s ride height when towing or carrying heavy loads. Chevrolet expects most customers (75 percent) to opt for the mid-level LT setup with the remaining split evenly between the base LS and decked-out LTZ. A new, all-aluminum 6.0-liter V8 rated at 366 hp is available in the popular Z71 off-road package.

Our test model was an LT3, packing four-wheel drive and such options as a navigation system, 20-inch wheels, rear-seat DVD player, sunroof, locking rear differential, rearview camera, luggage rack and rain-sensing wipers for a total MSRP of $45,600. It’s not Cadillac Escalade territory, but ten grand more will put you into an Escalade EXT, if that matters to you. And the Escalade EXT is basically a dressed-up Chevy Avalanche.

Exterior

When compared to the outgoing model, sleeker styling and all-around tighter tolerances improve the Avalanche’s appearance. The formerly hard edges have been replaced with rounded corners that contribute to a less tense design overall. The original trapezoidal headlights later found on so many other Chevy trucks are now less angular and better complement the horizontal front grille and bulging hood.

The sides of the pick-up bed are still tall and deep, requiring a tip-toeing 58-inch lift-over effort to place cargo inside. Long arms are also handy for reaching inside the bed’s lockable side storage bins. The massive tailgate is easy to operate, thanks to a torsion spring in the hinge, and it thoughtfully locks and unlocks along with the doors remotely. The entire bed can be secured with a rigid, removable three-piece cargo cover.

The cargo bed is the Avalanche’s crowning achievement. The 5’3” hold stretches almost three feet, to 8’2”, when the midgate is lowered. Operation is simple: First, flip and fold the 60/40 split, rear bench seat. Then turn a knob in the middle of the Midgate crossbar and gently lower the panel that divides the cabin from the pick-up bed. That’s it.

The same stout composite material that lines the cargo bed continues into the cab and features the identical tractor-tire tread pattern for skid resistance. With the rear window and cargo cover in place, unwieldy objects like surfboards, dining room tables, large fluorescent light bulbs and 4x8 sheets of plywood can be swallowed whole and securely locked.

The cabin’s rear window can be removed and stored to accommodate bulkier cargo, or to provide an open-air ride. The Avalanche doesn’t offer a power rear window like the competing Hummer H2 SUT, but Chevy says owners keep the window in place 90 percent of the time and, when necessary, leave the midgate down and cargo-bed cover in place to maintain security while carrying larger items.

Interior

Compared to the previous model, the 2007 Avalanche’s interior styling is more contemporary and materials have been upgraded, although neutral-colored plastic remains the norm. While it offers a commanding driver’s position, the Avalanche’s rear visibility is compromised by the tall side panels and bed. Thankfully, the optional rear-view camera gives a clear view when the transmission is shifted into reverse. It also makes aligning the tow hitch with a trailer much easier.

The Avalanche is roomy, easy to drive and very much in its element on long road trips. There’s considerably less wind and road noise than in the old Avalanche cabin, and easy-to-use controls and a compliant suspension make cruising quite comfortable. The navigation and Bose audio systems likewise help in this regard. A new rack-and-pinion steering provides ample feedback from the road, and the brakes — which have long been a sore point in GM trucks — finally inspire confidence with a solid, linear pedal feel. In crowded urban driving or parking garages, however, the Avalanche’s 18.5-foot length, muscular bulk and 43-foot turning circle can be frustrating.

Performance

As with the previous model, it can also be a little frustrating to pull away from the gas station in the Avalanche as you watch the fuel needle plummet towards “E.” My 753-mile trip over California coastal highways used 47.5 gallons of regular gas, equating to a rather dismal 15.9 mpg.

After finding California’s only E85 pump (at the time), I logged another 219 miles on the highway and spent 19.2 gallons, achieving an underwhelming 11.4 mpg. There is no loss of power when using E85, as the Avalanche’s engine is designed to take advantage of the fuel’s higher octane level.

Despite the current positive publicity generated by automakers and corn farmers around the renewable nature and reduced emissions of E85, if this fuel isn’t at least 28 percent cheaper than regular gas, there are no financial benefits to using it.

E85 cost $3.15 a gallon at the Regional Transportation Center in San Diego at the time of the fill-up, compared to $3.39 for regular gasoline. The week before, E85 was 50 cents cheaper; the week after I visited, 22 cents higher. The owner of the fueling station said that in order to promote E85, he never sells it for more than regular unleaded.

Full-size trucks that have the ability to tow 8,000 pounds or haul a 1,400-pound payload probably aren’t going to offer 30 mpg or better anytime soon. It’s a reality that truck owners accept, in exchange for a vehicle that serves serious recreation and utility needs, or the needs of their ego.

But the changing customer base has demanded a quieter, more refined ride, plus more comfort and amenities. And the Chevrolet Avalanche proves to be more than capable of delivering on these requests.
(C)Forbes