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

Chrysler hires Lexus executive to revive marketing

Chrysler has hired Deborah Wahl Meyer as the vice president and chief marketing officer of Chrysler.

Meyer spent the past six years with Toyota and was recently vice president of marketing for Lexus. Meyer, 44, will report to Steven Landry who is the executive vice president of North American sales.

“She’s young, she’s hip and she’s a fast-tracker from Toyota,” said Jack Nerad, editorial director for the auto-buying guide Kelley Blue Book.

Meyer was not directly recruited by Chrysler’s CEO, Nardelli, although he did meet with her after he was hired on August 5th. “Bob really encouraged Deborah to be a part of his team at the new Chrysler,” Chrysler spokesman Jason Vines said.

Meyer will officially join Chrysler starting August 28th. Robert Nardelli, ex Home Depot CEO, was hired on August 5th.
(C)CarTech

Buick ties Lexus for No. 1 in car reliability

Survey finds Detroit brands making headway against Japanese competitors.

For the first time in 12 years, Toyota's Lexus luxury brand has to share its top rank in J.D. Power and Associates' annual Vehicle Dependability Study.

And it has to share it with an American car.

General Motors' Buick brand tied Lexus in the study, which measures the number of problems owners experience with their cars after three years of ownership.

Following Lexus and Buick in the rankings were GM's Cadillac luxury brand, Ford's Mercury brand and Honda's Honda brand.

Toyota's mass-market Toyota brand ranked sixth.

"Consumers don't necessarily need to pay premium prices to obtain high quality and dependability," said Neal Oddes, director of product research and analysis for J.D. Power and Associates.

"With three non-premium nameplates - Buick, Honda and Mercury - ranking within the top five," he said, "and particularly with Buick tying with Lexus for the top rank, consumers seeking a vehicle with strong dependability have good choices at various price levels."

J.D. Power Vehicle Dependability Study is based on responses from more than 53,000 original owners of 2004 model year vehicles.

Owners of the top-ranked Lexus and Buick vehicles experienced 145 problems per 100 vehicles. Owners of second-ranked Cadillac vehicles experienced 162 problems per 100 vehicles.

The lowest-ranking brand was Land Rover, Ford's European luxury SUV brand. Land Rover owners experienced 398 problems per 100 vehicles, according to the survey.

J.D. Power and Associates also ranked specific vehicles within their respective categories. The top-ranked sub-compact car, for example, was the Scion xA from Toyota's youth-oriented Scion brand.

The top-ranked compact car was the Honda Civic and the top-ranked Sporty car was the Mazda Miata.

The Chevrolet SSR, a low-slung convertible pickup, and the Ford Mustang tied as the most dependable midsize sporty cars, and the Ford Crown Victoria ranked as the most dependable large car.

Lexus vehicles topped five categories, more than any other brand. Lexus had the top-ranked premium SUV, large premium SUV, premium sporty car, large premium car and midsize premium car. Toyota's Toyota brand topped four categories.
(C)CNN

Top 10 Least Expensive (TCO) Luxury Vehicles to Own

Cars at the lower end of the luxury class are the least costly to own because their lower starting prices minimize the effects of depreciation.

Luxury car buyers looking for the best long-term value should cross-shop vehicles at the lower end of the price spectrum. The lower the starting price of a vehicle, the more likely it is to mitigate the single largest financial hit associated with car ownership — depreciation.

This is the second feature in SMART-NEWS's series on vehicle ownership costs, and here we rank the top 10 luxury vehicles with the lowest cost of ownership over five years.
See also our list of the Top 10 Most Expensive Vehicles to Own.

Depreciation is the largest ownership cost for any vehicle. Therefore, models with lower sticker prices end up dunning owners less than models with higher manufacturer suggested retail prices (MSRPs).

That's true even if a higher-priced model holds its value better: The Audi A3, the fifth least expensive car to own according to our research, depreciates a whopping 71 percent from its base MSRP over five years. By contrast, Porsche’s 911 Turbo — the sixth most expensive car to own — loses just 54 percent of its base price in five years. But the A3 starts at around $25,000, compared to $122,900 for the 911 Turbo. And 71 percent of $25,000 comes out to $17,750, which is a lot less than the 54 percent of the Porsche’s $122,900, or $66,366.

Looking at those numbers, it starts to become clear why the top 10 luxury vehicles with the lowest ownership costs all have base prices below $35,000.

Lower-priced cars also cost less in other categories, says David Wurster, president of Vincentric, the research firm that provided data for our rankings. “You see that in taxes and insurance,” he says.

But bear in mind that Vincentric’s projected ownership costs are only estimates. Actual expenses will vary by region. “There are large variations in maintenance and repairs when you look at a state where costs of living are higher, because labor rates are higher,” Wurster says. Similarly, people living in high-tax states will likely pay more in vehicle taxes and other fees. Insurance rates also change by region, as do fuel prices, he says. All of these are factored into the five-year ownership costs used to rank the vehicles on our list. Click here to see the full list of vehicles in the slideshow.

Drivers do have some control over ownership costs, regardless of where they may live. For instance, driving style and distances traveled determine fuel, maintenance and repair expenses. Plus, insurance premiums remain lower with good driving records.

“There are substantial variations in insurance rates between carriers even in the same region,” says Michael Calkins, who tracks ownership costs for AAA's national office as manager of its approved auto repair program. “You have to be a smart shopper for everything, not just for the car, but also for the insurance.”

Owners who care well for their cars can even beat the deprecation average. “You need to maintain your vehicle properly,” Calkins says. “Keep it in good condition cosmetically and mechanically to maximize its trade value.”

Japanese and Swedish brands dominate our list of the 10 least expensive luxury vehicles to own, likely due to the fact that they tend to have lower starting prices. One German and one American nameplate help balance out the rankings.

The 10 least expensive to own luxury vehicles are determined by estimating six expenses over five years: depreciation, interest and opportunity costs, fuel, maintenance and repairs, insurance, and taxes and fees (see explanations below). The rankings include 2007 models only.

Vincentric breaks down ownership costs for every variation within a model line, so the ownership costs used to rank vehicles on this list are averages of all variants in a given model line. For example, Acura sells four versions of its TSX sedan, the least expensive luxury car to own. Vincentric computes separate lifespan costs for each of the four variants.

The data used in this ranking is from late May 2007 (Vincentric updates cost-of-ownership estimates monthly). Interest expenses assume a five-year loan at 6.86 percent with a 15 percent down payment. Opportunity costs consider what owners would have earned if car expenses went into certificates of deposit instead. Insurance costs are for a typical driver under age 65, with a clean record. Vincentric used the EPA's 2007 Fuel Economy Guide to calculate fuel costs.

10. Lincoln MKZ
Starting MSRP: $29,305
Five-year cost of ownership: $55,011
Depreciation: $19,718
Interest and opportunity cost: $10,456
Fuel: $10,983
Maintenance and repairs: $3,880
Insurance: $7,851
Taxes and fees: $2,123

The Lincoln MKZ is the only model from a Michigan-based auto company that makes the list of either the 10 least or 10 most expensive luxury cars to own. It squeezes onto the 10 least list by dint of its relatively low sticker price. With a base MSRP under $30,000, the MKZ can get away with a high depreciation rate. Averaging $19,718 for the front-drive and all-wheel-drive versions sold by Lincoln, the MKZ's depreciation takes 67 percent of its starting price.

9. Lexus ES 350
Starting MSRP: $33,470
Five-year cost of ownership: $54,585
Depreciation: $19,549
Interest and opportunity cost: $10,905
Fuel: $10,648
Maintenance and repairs: $3,888
Insurance: $7,315
Taxes and fees: $2,280

The ES 350 from Lexus, the luxury division of Toyota, has been called a Camry in fancy attire. That may account for its showing among the 10 luxury leaders in lowest total ownership cost. The sedan is the highest-priced model that makes the list, with a starting MSRP of $33,470. That raises its loan interest and opportunity cost, as well as its taxes and fees. But the Camry's reputation for dependable quality rubs off, so the Lexus does well with depreciation, and it also enjoys the second lowest insurance cost.

8. Acura RDX
Starting MSRP: $32,995
Five-year cost of ownership: $54,502
Depreciation: $17,826
Interest and opportunity cost: $11,323
Fuel: $12,542
Maintenance and repairs: $3,538
Insurance: $6,950
Taxes and fees: $2,323

The Acura RDX is the only SUV that runs with the 10 luxury vehicles that are least expensive to own. With the gas-guzzling rap against SUVs, it seems appropriate that the RDX has the highest estimated fuel cost in the group. At $12,542 over five years, the Acura squanders 20 to 25 percent more fuel than some passenger cars in the ranking. Still, for a sport utility, its EPA fuel economy rating of 19 mpg city/23 mpg highway is good — especially for an all-wheel-drive hauler with pep and pizzazz.

7. Lexus IS 250
Starting MSRP: $30,255
Five-year cost of ownership: $53,220
Depreciation: $16,998
Interest and opportunity cost: $10,793
Fuel: $10,480
Maintenance and repairs: $3,700
Insurance: $9,060
Taxes and fees: $2,189

As a sport sedan made for more aggressive posturing, the Lexus IS 250 carries the highest average insurance cost among the 10 least expensive luxury cars to own. That excess alone moves it lower on the list. With better resale value — and therefore lower depreciation — than four of the six luxury models that have lower lifespan costs, the IS 250 would rise at least one spot in the ranking, even though its purchase price is higher than the six models that score lower lifetime ownership costs.

6. Volvo V50
Starting MSRP: $26,690
Five-year cost of ownership: $52,906
Depreciation: $18,306
Interest and opportunity cost: $10,054
Fuel: $10,346
Maintenance and repairs: $4,006
Insurance: $8,176
Taxes and fees: $2,018

Like other European models among these economy leaders of the luxury class, Volvo's introductory-priced wagon stumbles with a high depreciation rate that saps its value. The average depreciation of the three V50 versions Volvo sells, at $18,306, comes to 69 percent of the car line's starting MSRP, among the highest in the group. The V50 wagon would do better, but the higher priced, all-wheel-drive version pulls its average ownership costs upward.

5. Audi A3
Starting MSRP: $25,340
Five-year cost of ownership: $51,513
Depreciation: $18,092
Interest and opportunity cost: $9,863
Fuel: $10,026
Maintenance and repairs: $3,697
Insurance: $7,815
Taxes and fees: $2,020

As a hatchback, the Audi A3 is the only model among the 10 least costly luxury cars to assume that classic economy car shape. Fittingly, its five-year fuel cost estimate, at $10,026, is the lowest among the least expensive to own. But the A3 suffers from rapid depreciation. The model line's five-year depreciation, averaging $18,092, steals 71 percent of the A3's starting price, the highest percentage among the 10 lowest cost luxury cars.

4. Saab 9-3 SportCombi
Starting MSRP: $27,495
Five-year cost of ownership: $51,499
Depreciation: $17,457
Interest and opportunity cost: $9,672
Fuel: $11,521
Maintenance and repairs: $3,159
Insurance: $7,740
Taxes and fees: $1,950

Vincentric's David Wurster explains that higher purchase prices point to higher ownership costs. The Saab 9-3 SportCombi shows how. The wagon's starting price is just $1,245 higher than its kindred, the 9-3 Sedan. Over five years, the SportCombi depreciates about $200 more, takes about $300 more in interest and opportunity costs, $300 more for insurance and $100 more in taxes and fees. Add about $300 worth of additional gas consumed by the heavier wagon and the SportCombi drops two places below the 9-3 Sedan among the least expensive to own vehicles.

3. Volvo S40
Starting MSRP: $24,240
Five-year cost of ownership: $51,484
Depreciation: $16,941
Interest and opportunity cost: $9,736
Fuel: $10,783
Maintenance and repairs: $4,005
Insurance: $8,104
Taxes and fees: $1,915

Starting at $24,240, the Volvo S40 sedan is the lowest-priced luxury car among these 10 models with the lowest ownership expenses. But its average depreciation, at a whopping 70 percent of the base price over five years, hits hard. Not only will you spend more to own the S40 than you will for the top-rated Acura TSX, you'll also spend more when you visit the repair shop. At $4,005, the S40's maintenance and repair expenses tie with the Volvo V50 wagon as the highest among these lowest 10.

2. Saab 9-3 Sedan
Starting MSRP: $26,250
Five-year cost of ownership: $50,282
Depreciation: $17,247
Interest and opportunity cost: $9,352
Fuel: $11,197
Maintenance and repairs: $3,159
Insurance: $7,437
Taxes and fees: $1,890

The first of five European luxury models with the lowest lifespan costs, the Saab 9-3 Sedan benefits from its relatively low purchase price. That puts it in second place among the least expensive to own vehicles, even though depreciation grabs 66 percent of its starting MSRP. At their base prices, you'll pay less to purchase a 9-3 Sedan than an Acura TSX, the least expensive luxury car to own. But through five years, the 9-3 will gobble up $3,000 more.

1. Acura TSX
Starting MSRP: $28,090
Five-year cost of ownership: $47,084
Depreciation: $13,808
Interest and opportunity cost: $9,730
Fuel: $10,279
Maintenance and repairs: $3,002
Insurance: $8,285
Taxes and fees: $1,980

Half the models on this least expensive to own list wear lower sticker prices than the Acura TSX. But after five years, this sporting sedan ends up the most economical. Acura's reputation for vehicle reliability helps hold up resale value, so that the TSX depreciates just 49 percent over five years — the lowest depreciation among the 10 luxury cars that consume cash most lightly. It also boasts the lowest maintenance and repair expenses among these 10 lowest cost luxury models.
(C)Forbes

What does "Hybrid" mean?

"Hybrid" doesn't mean just one thing. Cars and SUVs can be set up in different ways to meet different needs. Here's a look at the various systems.

The hybrid menu
Hybrid gasoline/electric vehicles are often lumped into one, all-inclusive catagory. People will say "I'm thinking of buying a hybrid" without thinking about which model or type.
The fact is, hybrid vehicles vary enormously. It's not just that some are SUVs and some are cars. Their hybrid powertrains, themselves, can differ greatly in their design and programming. (Computer software has a lot to do with how a hybrid works.)

Right now, Toyota is the unchallenged hybrid leader. The Toyota Prius is the best selling hybrid by far, accounting for more than half of all the vehicles sold.

Toyota's "full hybrid" system is also used in Nissan's Altima Hybrid, and it's the same technology used in the Ford Escape and Mercury Mariner Hybrid SUVs.

General Motors, long seen as a laggard in hybrid technology, now has three types of hybrid systems on tap.

One, commonly called a "mild hybrid" system, is on the market now. Another, the "two-mode" hybrid system, will be introduced in the fall. A third "series hybrid" plug-in electric vehicle, is on the path to production, but no specific timetable is set.

Full Hybrid
Toyota Prius - the vehicle that most readily comes to mind when someone says "hybrid" is the Prius. It's a good car in many respects: The Prius has the interior space of a midsized Camry in a smaller package.
It's a "full hybrid:" in that it can run on its electric motor alone for short distances at low speeds.

The Prius was designed, from the outset, to be a gasoline/electric hybrid vehicle. That enabled designers to create the body around the hybrid system rather than cramming batteries and an electric motor into a body designed to house just a gas tank and an engine. For that reason, the Prius has plenty of usable storage space.

With its unique body design, it's also instantly recognizable as a high-tech hybrid car, which only increases its appeal.

Mild hybrid
The Saturn Aura Green Line vehicles, the Aura sedan and Vue SUV, are "mild hybrids," in which the electric motor provides assistance to the gasoline engine but lacks the power to drive the vehicle on its own.
Fuel is saved by shutting the gasoline engine down altogether whenever the vehicle comes to a full stop.

Also, since the electric is there to provide additional thrust, the gasoline engine doesn't need to be as large. (The Aura Green Line, for instance, has a 4-cylinder engine where non-hybrid versions have V6's.)

The advantages of a system like this are cost and size. The system requires little alteration to the basic engine and transmission layout so that it costs much less to manufacture than a complex "full hybrid" system.

Also, since electricity needs are lower, the system requires only a small battery pack which, again, saves on costs, but also saves weight and space. Other hybrid sedans, such as the Nissan Maxima and Toyota Camry Hybrids, lose trunk space to make room for batteries.

The downsides are that the system's impact on fuel economy is relatively small while the drag on driving performance is sizable.

When not boosting performance, the Green Line electric motor/generator remains fully engaged, acting like an anchor bogging the car down whenever the gas pedal isn't being pressed.

Performance hybrid
The Lexus LS600h offers the performance of a V12 with the fuel economy of a V8, Toyota boasts.
Compared to those cars, the Lexus looks downright thrifty. Not only does it get better fuel economy - it even costs a lot less. The V12-powered BMW 760li gets 15 mpg and costs about $20,000 more. The Lexus gets 21 mpg.

And the LS's performance really is impressive. Step on the gas and the 600 horsepower engine pushes you back in your seat with an easy whisper, barely straining as the needle on the electric boost gauge moves into "performance" territory.

Toyota doesn't expect to sell very many of these cars. Market experience shows that hybrid shoppers are mostly interested in one thing: burning as little fuel as possible. High-end luxury hybrid buyers represent a market that has not yet shown itself. One can make a case for a performance-oriented six-figure hybrid car, but for now the jury is still out.

Two-mode hybrid
GMC Yukon Hybrid. This fall, General Motors will be coming out with hybrid versions of the company's most popular full-sized SUVs, the Chevrolet Tahoe and GMC Yukon.
It might seem silly to make hybrid versions of these big vehicles, but if you consider the amount of fuel ultimately saved, it actually makes a lot of sense. Even a modest improvement in the efficiency of a vehicle that uses a lot of fuel will save more gallons than a large improvement in an already-efficient small car.

There are performance challenges in creating a large hybrid SUV, though. If the hybrid version can't tow or haul just like the non-hybrid, consumers won't buy it. Instead they'll just go back to non-hybrid SUVs. So the hybrid SUVs have the same big V8 engines as their non-hybrid counterparts, ready to pull a trailer when needed.

When not needed, however, GM's "dual mode" hybrid system employs a variety of fuel-saving tricks when the vehicle is traveling at highway speeds.

Four of the eight cylinders will shut down when their power is not needed. (The hybrid uses a large engine - 6.0 liters - so that half will still provide adequate pull and the SUV can spend more time in 4-cylinder mode.)

The SUV's electric motor also connects to the wheels one way at low speeds and another at high speeds, allowing it to provide maximum assistance at any speed.

As with many other hybrid vehicles, the GM hybrid SUVs can travel under electric power alone for short distances at low speeds, and the gasoline engine shuts down altogether whenever the vehicle stops.

Plug-in Hybrid
Chevrolet Volt. Even though it has a gasoline engine and an electric motor, GM is careful not to call the Chevrolet Volt a hybrid car. We've included it here, though, because it's commonly referred to as a "plug-in hybrid." GM calls it a plug-in electric vehicle with on-board power generation.
The point is that, while the Volt has a gasoline engine, the engine does not power the car's wheels. The wheels are powered by an electric motor. Batteries for the electric motor can be charged by plugging the Volt into an ordinary electrical outlet.

After the batteries are fully charged, the car can be driven for up to 40 miles without needing additional charging. If batteries do run low, the gasoline engine will run to generate electricity as needed.

The only difference then between the Volt and what you would ordinarily call "an electric car" is that it can charge its own batteries - whenever that may be needed - in addition to using power supplied by your local electric utility.GM has no official on-sale date for the Volt. More research is still needed on the battery, and there's no way to put a timetable on the needed breakthroughs, the company has said.
(C)CNN

Most Affordable Luxury Cars

Entry-level luxury cars offer most of the bells and whistles of higher-end models, but at a reasonable price.

Preparing to plunk down $61,715 on a brand-new Lexus LS 460? Save your money. Instead, buy a $30,000 IS 250. Toss in another $5,000 worth of options, and you get the prestige of the Lexus plus many of the same bells and whistles, including heated and ventilated front seats, bi-xenon headlights and an optional sound system that includes a DVD player.

Call it the trickle-down theory of economics for cars. For a fraction of the price of their more expensive counterparts, entry-level models are getting top-of-the-line features.

Consider the 2008 Cadillac CTS. It allows customers (with some options) to play music off an iPod, a memory stick, a CD, satellite radio or terrestrial radio. It even allows the customer to pause and rewind live radio broadcasts.

The $32,500 (estimated) car, which goes on sale in August, also boasts an innovative "infotainment" system that uses several digital formats. Besides music, the dashboard system can play DVD movies when parked. The optional navigation system runs off the car’s hard drive, as opposed to a removable DVD or CD-ROM. As technology improves, customers will someday be able to download updates wirelessly.

It makes sense that starter luxury cars are increasingly being outfitted with top-of-the-line features, says George Peterson, president of Tustin, Calif.-based auto industry consulting firm AutoPacific.

"Entry-level luxury cars need to demonstrate the capability of their brand — just as the more premium entries do," he says. "As more and more has been added at the top of the pile... these features become expected as part of the standard [or typical] feature load of even the lowest level luxury-brand vehicle."

Examples for the mechanically inclined include: six-speed manual transmissions or automatic transmissions with up to seven speeds that you can shift manually if you want.

To get more than four automatic gears or to shift your automatic manually, you used to have to buy a Porsche with a Tiptronic transmission, or a six-speed BMW, or even a Ferrari, with Formula One racing-style "paddle" shifters mounted on the steering wheel.

Technical Touches

But as much as transmissions have improved, nothing is trickling down faster in this digital age than electronic gizmos, especially car stereos, and new-and-improved navigation systems.

It takes three to five years for automakers to make substantial changes to the car itself, but the lifecycle for electronics gear can be six months long, says J. Ferron, automotive partner at PricewaterhouseCoopers in Detroit.

"So there's an eight times shorter cycle [for electronics]," Ferron says. "There’s a collision between that and what’s shaped in the marketplace in terms of customer expectations versus what a car can do."

Some of the vehicles on this list can have 10 or more audio speakers, as much wattage as an in-home system, half a dozen ways to download and swap music between formats, plus many different ways to control it — buttons on the dash, buttons on the customer's MP3 device, buttons on the steering wheel or even voice control.

Sounds great, but keep in mind that "entry level" is a relative thing. The most expensive car on our list is the redesigned 2008 Porsche Cayenne, at $44,295 (including required $895 delivery). That’s not cheap, but it's the least-expensive Porsche. All the cars (and two trucks) here are the least-expensive new models offered by their respective luxury brands. Since it’s nearly fall, most are already 2008 models, but a few are 2007s, pending model year changeover.

The least expensive overall is the little Volvo C30, an all-new 2008 model, at $23,395 (also including delivery). Even so, it comes standard with a six-speed manual transmission, a feature that once was found only on high-end BMWs.

"These entries today need to be fully featured and are," says Peterson. "They need to support their brand identity and mostly do."

Audi A3 2.0T
Starts at $25,340

The 2007 A3 has several features that once were found exclusively on more expensive cars, like a six-speed manual transmission; an optional six-speed automatic, which can be shifted manually; and electronic brake-force distribution to reduce skids. Thanks to turbocharging, the A3's standard four-cylinder engine produces 200 horsepower. Optional upgrades include a more powerful six-cylinder engine with Audi Quattro all-wheel drive.

BMW 328i
Starts at $33,175

The least-expensive BMW--until the 1 Series lands next year--the 2007 328i has a 230-hp, six-cylinder engine. A six-speed manual transmission is standard. The optional six-speed automatic has a "Steptronic" mode, for manual gear selection without a clutch. High-tech brakes include Brake Standby, which almost but not quite applies the brakes when the driver suddenly lifts off the accelerator pedal, anticipating hard braking.

Cadillac CTS
Starts at $32,500 (estimated)

Sales of the 2008 model start in September.

The 2008 CTS, with a 304-hp, 3.6-liter V-6 engine, is a redesigned model. Its innovative "infotainment" system uses several digital formats. Besides music, the dashboard system can play DVD movies when parked. The optional navigation system runs off the car's hard drive, as opposed to a removable DVD or CD-ROMs. As technology improves, customers will someday be able to download updates wirelessly.

Infiniti G37
Starts at $32,000 (estimated)

Sales of the 2008 model start in August.

The G37 Coupe, with a 330-hp V-6 engine, replaces the 2007 G35. Optional features include advanced four-wheel active steering, where the rear wheels help steer the car. Like the Cadillac CTS, the optional navigation system shows "3-D" landmark buildings. And like some more expensive cars, the G37 has optional "intelligent cruise control," which, within limits, maintains a set distance to the vehicle ahead.

Jaguar X-Type 3.0
Starts at $34,995

X-Type sales are down more than 40% year to date through May, but the entry-level 2008 model Jag has its fans. The X-Type has standard all-wheel drive, which is unusual but "trickling down" among luxury cars. Other upscale features include electronic brake force distribution to prevent skids, wood trim and a 120-watt sound system.


Land Rover LR2
Starts at $34,700

The smallest Land Rover is an all-new 2008 model, with a 230-hp, 3.2-liter V-6 engine. Like its bigger siblings, it can "wade" across streams up to about 20 inches deep. Its six-speed automatic transmission has different settings for different slippery conditions. The LR2 isn't exactly roughing it, however: It has a nine-speaker, 320-watt audio system with an MP3 plug-in.

Lexus IS 250
Starts at $30,970

The 2007 Lexus IS 250 has a once-rare six-speed manual transmission, plus a 204-hp, 2.5-liter V-6 engine. An optional luxury package includes features that were scarce a few years ago, like heated and ventilated front seats; bi-xenon headlights; adaptive headlights, which redirect the beam of light around a corner for better visibility. An optional sound system includes DVD-audio and DVD-video playback.

Lincoln MKZ
Starts at $29,305

The 2008 MKZ on sale now has a powerful, 263-hp V-6 engine and a size advantage over some of its entry-level competitors. Options include a thumping 600-watt, 14-speaker audio system.




Mercedes-Benz C300
Starts at $31,975

2008 model goes on sale August 7.

The 2008 C300 Sport Sedan, the first all-new C-Class since 2000, has a 228-hp, six-cylinder engine. (There is also a slightly pricier "Luxury" variant.) Features from the flagship S-Class include a computer hard drive for the optional navigation system. "Selective damping" debuts first on the C-Class. It automatically provides a stiffer ride in sporty driving and a softer, smoother ride for highway cruising.

Porsche Cayenne
Starts at $44,295

The 2008 Cayenne, on sale now, is a new generation of the Porsche SUV. The priciest vehicle on our list is the third most powerful (after the Cadillac CTS and Infiniti G37), with a 290-hp, 3.6-liter V-6 engine. It goes from zero to 60 mph in 7.5 seconds, one second faster than the old Cayenne. Bi-xenon headlights are standard.


Saab 9-3
Starts at $26,995

The Saab 9-3 2.0T Sport Sedan has a 210-hp, turbocharged, 2.0-liter four-cylinder engine.

A six-speed manual transmission is standard. A five-speed automatic with manual shifting capability is optional. A 150-watt, seven-speaker audio system is standard. A nine-speaker Bose system is optional. Like most luxury cars, even entry-level ones, anti-lock brakes, traction control and stability control are standard.

Volvo C30
Starts at $23,395

Even the cheapest of our entry-level luxury cars has a six-speed manual transmission standard. Volvo calls the base model "Version 1.0." The upgraded model is "Version 2.0." A five-speed automatic with manual-shifting capability is optional. A turbocharged, five-cylinder engine previously shared with some of the bigger, more expensive models produces 227 hp. A glass hatchback is probably the single most distinguishing feature.
(C)Forbes

2007 Lexus ES 350 Test Drive

Lexus' next-generation ES 350 provides a premium experience in an entry-level luxury model.
MSRP: $33,470

Lexus compares the Lexus ES 350, completely redesigned for 2007, to its original LS sedan and suggests that today’s entry-level car is as good as, if not better than, the flagship model that helped redefine the luxury car market 15 years ago.

After test driving the ES 350, we found it to offer a worthy comparison to the original LS, a car that competes with the priciest, most extravagant models from Audi, BMW and Mercedes-Benz. While we can’t say definitively whether the new ES is a better car in all respects — too much time has passed since we drove the original LS sedan to allow a meaningful comparison — we do buy into the rationale. As Lexus points out, the all-new ES 350 offers more power and better acceleration than its first-generation LS, plus it’s quieter.

What this means is that Lexus — and by extension its Toyota parent — has come a long way. The ES 350 has always been, and continues to be, based on Toyota’s immensely popular Camry, a model that has been the best-selling car in America for eight of the past nine years.

Lexus’ challenge is to differentiate its ES from the Toyota Camry enough to convince those leaning toward luxury to step up to the Lexus brand. The model has accomplished its mission well over the years, with the ES the most popular vehicle in Lexus’ lineup. After considerable seat time in the 2007 ES 350, we think this all-new version should continue to do so.

The caveat here is that the Lexus ES 350 is not that sporty, so performance enthusiasts will likely prefer the Infiniti G35, German luxury sedans, or possibly Lexus’ own IS model. But for those who relish comfort and ease of driving, the ES 350 is hard to beat.

Exterior

The Lexus ES 350 has a slightly longer wheelbase and wider track (the space between left and right wheels) than the previous version, with a long hood, short rear deck lid and distinctive high-shoulder cutlines.

A sweeping roofline suggests sportiness, a subtle theme supported by integrated foglights, wrap-around taillamps, dual chrome exhaust-pipe tips and distinctive 10-spoke alloy wheels. It isn’t a look that necessarily screams for attention in a crowd, but there’s a feeling of thoughtful designe and masterful executed. It’s quite aerodynamic, yielding a rather lower 0.28 drag coefficient, which is a measure of wind resistance when the car is in motion.

The car’s new look reflects Lexus’ “L-Finesse” design language — a melding of simplicity and elegance that results in what Lexus global design manager Wahei Hirai calls a style that is “forceful and vivid and vigorous.” The ES represents the fourth Lexus sedan to benefit from this new design philosophy, following the LS, GS and IS models.

Our test car was equipped with a Panorama Glass Roof. This is no standard issue sunroof or moonroof, but rather an expanse of glass that extends over the entire cabin, providing a feeling of openness. The glass roof features a traditional sliding sunroof for front passengers and a fixed skylight for those in the rear. A frameless design allows the glass roof to blend seamlessly into the roofline without visible gaskets or unsightly gaps.
Sunseekers will love it, but it’s extraneous for those who prefer the shade. Bear in mind that sunroofs in general, and complex ones like this one in particular, add weight to the highest point of the vehicle and therefore raise the center of gravity. This has an incremental negative effect on handling, which benefits from the lowest center of gravity possible.

Interior

The interior’s overall design is appealing. The Lexus ES 350’s interior designer used the flowing lines of the traditional Japanese kimono as her design influence. This fashion-inspired fluidity is definitely evident throughout the cabin.

The ES 350 is also quite comfortable, with controls placed conveniently and intelligently. Front seats feature 10-way power adjustments; a power seat-bottom extender can be ordered to provide additional thigh support for the driver. This is particularly useful and recommended for tall drivers. One version of the ES 350 that we tested didn’t offer this adjustment and taller staffers found the lower seat cushion too short for proper leg support. Heated and ventilated seats are also available.

All seating positions provide adequate room and comfort for average-sized and small occupants. Those who are taller might find front and rear headroom lacking and legroom in back a bit tight.

Cloth seating is standard, with three different levels of leather appointments available in three colors — cashmere, light grey and black. The standard power tilting/telescoping steering wheel incorporates audio and other controls that are easy to use; upgrading to a wood and leather wheel is optional.

Overall, there’s a lot to appreciate in the cabin because upscale touches abound. It’s even more sumptuous and accommodating with the addition of some of the options.

As is standard practice for most modern luxury vehicles, advanced electronics are abundant, ranging from the SmartKey system that allows the driver to fire up the engine merely by pressing a start button, to the top quality sounds provided by the standard Lexus Premium Audio array.

The optional Mark Levinson Premium Surround Sound unit adds high-level audiophile features. Safety is also well covered thanks to items like electronic traction control and eight standard airbags, along with optional rear-seat side airbags, which we think are worth every penny for the protection they provide.

Like on all other Lexus sedans we’ve tested, the high beltline and low, sweeping roofline that are integral to the sleek look actually impede outward visibility, ingress and egress. And because the windows are smallish, there’s a sense of claustrophobia in models with dark-colored trim and upholstery.

Performance

Entry-level vehicles in the luxury sedan segment have in recent years taken a turn toward a sporting theme, which Lexus is addressing with its performance-oriented IS model. Now, with the debut of the new ES, the automaker feels it has a clear opportunity to satisfy the needs of its traditional comfort/luxury buyer, while also upping performance.

Driving the new ES 350 is a pleasure. This car handles well, offers brisk performance and provides the overall luxury experience expected of the Lexus brand. That said, some of our staffers who prefer a more visceral driving experience found the ES 350 aloof in the feedback it provides, numbing some of the tactile pleasure that car enthusiasts value.

Power is provided by a 272 hp, 3.5-liter aluminum V6 engine that’s more efficient and more powerful than the one that came before it. Gear changes are handled smoothly by a six-speed electronically controlled automatic transmission with sequential shift capabilities. When trying to drive briskly using the manual-shift mode, we found the ES 350 less gratifying than, say, an Audi equipped with that company’s excellent DSG.

Nevertheless, the ES 350 sprints from 0 to 60 mph in about 6.8 seconds and reaches a governed top speed of 137 mph. When driven more sedately, the ES 350 is estimated to deliver 19 mpg city/27 mpg highway. The ES also meets Ultra-Low Emission Vehicle II (ULEV II) standards.

A bevy of optional high-tech features further enhance the driving experience. Adaptive front lighting uses lenses and reflectors to throw beams of light in the direction of turns according to steering-wheel input. When in reverse, a rear-mounted camera projects the area directly behind the vehicle onto a dash-mounted screen, a handy feature included as part of the navigation package. Intuitive Park Assist uses ultrasonic sensors to alert a driver of nearby objects while parking. We find the rear camera and ultrasonic sensors to be increasingly indispensable as car design trends toward kicked-up rear-ends with smaller windows and high deck lids.

We do like where Lexus has taken the new ES. It’s smart, sophisticated and offers comfort and performance levels we found quite welcome during our time with this luxury sedan. That said, there’s a mildly nagging feeling that even though the car is well executed, it lacks the passion of some of its competitors and looks almost too similar to the three L-finesse-inspired sedans that have come before it.

Then again, maybe that similarity is not such a bad thing — especially from the perspective of an ES buyer. Because this is the model charged with attracting new buyers to the Lexus brand, emulating the look of more expensive Lexus sedans at the entry level could prove effective.
(C)Forbes

Luxury car, but crummy bumper

Insurance group's low-speed crash tests reveal weaknesses in cars' first line of defense.

In tests designed to replicate low-speed impacts, the bumpers of several luxury cars failed to prevent costly damage. In one case, a Mercedes-Benz C-class sedan sustained almost $5,500 in damage when hit in its front bumper at a speed of just 6 miles per hour.

The Insurance Institute for Highway Safety conducted four separate low-speed impact tests on 11 popular luxury cars.

The cars struck a barrier, designed to mimic the bumper of another car, straight-on from the front and from the rear at six miles per hour and diagonally into front and rear corners at three miles per hour. The Institute, a private organization funded by insurance companies, estimated repair costs after each test.

"[W]hat the test results don't reflect is the Mercedes-Benz holistic approach to occupant safety," Mercedes-Benz said in a statement. "This philosophy influences design and development even down to the front bumper, which is specifically mounted lower to help reduce injury for impacts with pedestrians (to avoid contact above the knee)."

The C-class performed poorly in large part because its front bumper slid down below the impact barrier during the test.

The vehicle sustaining the most total damage was the Infiniti G35, made by Nissan, which had total estimated repair costs of $14,000. In the straight-on front impact test alone, the G35 sustained $5,223 in damage.

"The cost of vehicle ownership and repair are important considerations at Infiniti," Nissan said in a statement. "We design each new model to resist low-speed collision damage and will continue to work closely with major insurance companies to keep premiums low for our customers."

The Insurance Institute's tests do not reflect likely real-world results, Nissan said.

The best-performing vehicle in the test was the Saab 9-3. Its total estimated repair costs for all four tests was $5,243, less than what the Mercedes-Benz would have cost to fix after just one front impact.

The Institute wasn't enthusiastic about even the Saab's performance in these tests, however.

"There's nothing exemplary about even the best performer, the Saab 9-3," said vice president Joe Nolan in a statement. "It simply avoided racking up the most damage in any single test and ended up coming out the best in a mediocre lot."

Saab said in a statement that it was proud of the 9-3's top-ranked performance in these tests.

In an earlier round of tests, released in early March, midsize non-luxury cars didn't fare much better. A Nissan product was the worst performer in those tests as well with the Nissan Maxima suffering a total of $9,051 worth of damage.

Many luxury and non-luxury cars suffer from the same problems, according to the Institute: bumpers that are simply too weak, impact absorbing structures that don't extend far enough to the corners and bumpers that are designed with visual appeal rather than damage control as the top priority.

Underneath body-colored plastic exteriors, most bumpers have metal beams that are supposed to absorb crash forces. These beams can be too weak or not placed where needed to adequately protect against various types of impacts.

In some cases, the Institute said, car bumpers can slide under the bumper of another vehicle during an impact, exposing headlights, grills and body sheet metal to damage.

Luxury cars have the additional problem of expensive replacement parts. A headlight for a Lexus ES costs $1,046, according to the Institute. (Headlights were damaged in 15 or the 22 front impact tests the Institute conducted.) The front bumper cover for an Audi A4, one of the best performing vehicles in the tests, costs nearly $600, according to the Institute. That doesn't include installation and painting costs.

Luxury car bumper tests

Estimated repair costs following Insurance Institute for Highway Safety bumper tests

Test Front full width Front corner Rear full width Rear corner Total damage Saab 9-3 $1,476 $1,076 $1,722 $969 $5,243 Audi A4 $976 $2,038 $918 $1,899 $5,831 Lincoln MKZ $1,001 $1,966 $2,330 $669 $5,966 BMW 3-series $3,658 $1,256 $989 $778 $6,681 Acura TSX $1,693 $1,274 $3,430 $1,157 $7,554 Volvo S60 $4,517 $543 $2,142 $1,022 $8,224 Lexus IS $4965 $2,223 $1,922 $737 $9,577 Lexus ES $3,921 $2,093 $3,709 $1,101 $10,824 Mercedes-Benz C-class $5,486 $963 $3,728 $877 $11,054 Acura TL $4,985 $1,244 $3,814 $1,156 $11,199 Infinit G35 $5,223 $3,544 $4,035 $1,181 $13,983

(C)CNN

About Paying for Cars With Cash

There are two questions that greet every car buyer who walks into a showroom: “Are you ready to buy today?” and “How do you plan to pay?”

If the answer to the first is yes, there are smiles all around. If the answer to the second is cash, that warm greeting may grow chilly.

To be sure, no dealer will turn away a cash-paying customer, not in the atmosphere that surrounds the automobile industry these days, but all things considered, they are less welcome than buyers who want to lease or finance their cars. “We actually love all paying customers,” said George Borst, the chief executive of Toyota Financial, “but we really want people to finance.”

On the other hand, many car dealers are trying to clear out big inventories at the end of the 2007 model year to prepare for fresh models that begin arriving soon.

But buyers who pay cash, whether they write a check or borrow the money elsewhere and bring it to the showroom, provide car dealers with fewer opportunities to make money on a car deal.

That ranges from the cut they get from arranging a lease or loan, to options like extended warranties or antirust coating that buyers are more likely to choose if they can fold it into the amount they borrow. In some cases, those extras account for up to 75 percent of a showroom’s profits.

But, to some dealers’ chagrin, cash deals are up in 2007. Some 11.7 percent of buyers paid cash for cars in the first half of this year, versus about 8 percent over the last few years, according to a survey by CNW Marketing Research, which studies car buying habits.

In all, about 26 percent of buyers are bringing cash to the table, whether it is out of their bank accounts or in pre-arranged loans through their credit unions, banks or home lenders, according to the Power Information Network, the research arm of J. D. Power & Associates.

That overall figure is up slightly from last year, but still below the one-third of buyers who paid cash in the 1950s, when customers, many with lingering memories of the Great Depression, came to showrooms with their check books or stacks of bills.

It is in line, however, with the rate during the 1970s and 1980s, before car companies made widespread use of cut-rate loans and discount lease plans.

One big reason for the recent rise in cash-paying buyers is the introduction of small and less-expensive cars into the American market, like the Honda Fit, Toyota Yaris and Nissan Versa, said Art Spinella, the president of CNW Marketing.

Because many consumers purchase small vehicles as second and third cars, and have a car loan for their primary vehicle, a number are choosing instead to pay cash rather than take on another loan, Mr. Spinella said. That is particularly true for women buyers, who account for about 42 percent of cash-paying customers.

Cash-paying buyers, who tend to be wealthier than typical consumers, are often reaping investment profits. This year, 34.8 percent paid for their cars by selling stock, the most common source of cash, compared with 31.8 percent who took money out of their savings, Mr. Spinella’s data showed.

Indeed, at brands like Mercedes-Benz, Volvo, Audi and BMW, as many as one-third of transactions are cash sales.

For these customers, sticker price can be no object. One shopper at Lexus of Ann Arbor, Mich., recently paid $116,000 in cash for the Lexus LS 460 Lh, the hybrid version of Lexus’s ultra luxury sedan, which went on sale in July.

Mark A. Louria, the general sales manager there, said about 25 percent of his customers paid cash for their new cars, keeping them for an average of six to seven years. Mr. Louria said he tried to encourage many customers to lease their cars instead, arguing that it was a better way to take advantage of ever-changing technology.

In the end, “it’s whatever works best for them,” Mr. Louria said.

Shopping sites like Edmunds.com, Cars.com, Kelly Blue Book (kbb.com) and Autobytel.com are places where consumers can research data like the invoice price, and the amount that manufacturers are giving to dealers in rebates and extra incentives.

Those who plunk down dollar bills often cite a single reason. “I just don’t like debt,” said Todd Larson of Shorewood, Minn. Mr. Larson and his wife, Linda, paid $33,000 cash for their 2005 Ford Freestyle, as well as a 2001 Jeep Cherokee.

For Matthew Galloghy, 30, who lives in Batavia, Ohio, outside Cincinnati, it is simply saving money. He recently paid about $20,000 for a Honda Accord, and plans to drive it for about 10 years.

Mr. Galloghy takes his thrift to another level. He said he would make a monthly deposit equal to a car payment, or about $300, in a money market account. “And now I certainly have a cushion for emergencies or anything else that may come up,” Mr. Galloghy said.

Cash purchases had all but died out in 1998, when buyers were snapping up cheap lease deals that allowed them to take home more expensive models, especially sport utility vehicles, for little down and minimal monthly payments.

After a rebound, they plummeted again in the months after the September 2001 attacks, when auto companies led by General Motors rolled out zero percent financing plans in an effort to spur auto sales.

Lately, these plans have been far more limited than they were earlier this decade, said Jesse Toprak, an analyst with Edmunds.com, a Web site that offers car-buying advice. Many automakers, who made zero percent financing available to virtually any customer six years ago, now offer it only to those with the best credit, he said.

Auto company finance arms and banks have been burned by oversetting these cars’ residual value, or the amount that they estimate the vehicle to be worth when the lease is finished. The higher the residual, the lower the monthly payment, but a too-high residual means the finance company takes a loss on the car after it is turned in.

These lenders also have been hurt by their practice of encouraging five and six-year car loans, which can lead to lower payments, but can result in a vehicle being worth less than the remaining amount to be paid off, a situation the industry calls “upside down.”

Zero-percent-financing plans, in which buyers need only pay for taxes, licenses and other documentation, can prove more beneficial to consumers with the best credit.

Likewise, a discounted lease of 36 months or less can allow trend-conscious customers to swap their cars for the next hot model without gambling on the car’s value, even though they will pay interest on the lease, transaction fees, and may need a down payment. No matter what, buyers need to haggle over the price first before discussing the details.

But some buyers simply want to own outright. In that case, these consumers need to do their homework before they begin negotiating, checking out the prices that are being paid in their area for the automobile they want on sites like Edmunds, which provides a tool it calls the “true market value.”

Buyers enter their ZIP codes, and then choose the options they want, and are provided with the price most frequently paid by purchasers in their area.

Without that knowledge, cash-paying customers risk not just a frosty dealer response, but a concerted effort to get them to change their minds, said Mr. Toprak, who sold cars early in his career.

“When I was at a closing and the customer said, ‘this is a cash deal,’ I knew I would not make any money for the next hour,” he said.

Mr. Toprak advised cash buyers to get prices from several dealers through their Web sites. If a sales person balks at honoring that figure because a customer wants to pay cash, the buyer can threaten to go elsewhere, he said.

Still, some buyers prefer to stick to their guns.

John Kealing, a St. Louis salesman, paid $34,000 cash for his 2006 Infiniti G35x, the second car this decade for which he has paid cash. Mr. Kealing said he deliberately waited until the last minute to tell the dealer that he was paying cash. “He found out when he put the loan document in front of me,” Mr. Kealing said.

The dealer “tried to talk me out of it, actually,” he said. “He told me he had some great rates, but I didn’t waver.”

Rob Butler, owner of the Butler Automotive Group in Indianapolis, said he doesn’t discourage customers who want to pay cash from doing so.

“If a guy likes to write a check, fine,” Mr. Butler said. “Cash is still cash.”
(C)NYT

2007 Hyundai Azera Test Drive

If you can do without a few frills, Hyundai's Azera rides with some heady competition in the near-luxury segment, but at a much lower price.
MSRP: $24,235 - $27,335

Hyundai’s Azera is a midsize, entry-level luxury sedan that replaced the XG350 when it debuted for 2006. It is, in so many ways, light years ahead of that model, which itself seemed to be at least a generation or more behind its Japanese rivals in terms of performance, styling and accommodations. The question, however, is whether the Azera, no matter the improvements over the car it replaces, qualifies as a true competitor to luxury vehicles like the Lexus ES 350, or whether it’s merely Hyundai’s slightly dressier version of cars like the Honda Accord, Toyota Camry or, for that matter, Hyundai’s own Sonata. We’ll take the middle ground and call it a reasonable, and in some ways superior, alternative to models like the Buick LaCrosse or Toyota Avalon.

The Hyundai Azera costs a couple of thousand dollars less than an Avalon, and a lot less than a Lexus ES 350. It’s well equipped with only a handful of options available, but offers nothing in the way of the “gee-whiz” electronics that tend to define the latest luxury vehicles. This helps keep the cost down, but it tends to limit its appeal among gadget freaks that seek status in extolling the virtues of features like adaptive headlamps, “smart key” systems and laser-guided cruise control to their country-club acquaintances.

The car carries over from its inaugural 2006 model year with only minor changes that include new backlit electroluminescent instrumentation of the sort that Lexus has employed since the original LS 400. An engine immobilizer security feature is now included to help shave a few dollars off the car’s insurance premiums for comprehensive coverage, and the side mirrors incorporate turn-signal indicators, a feature that is both practical but also a bit of a conceit, in that luxury cars like Mercedes-Benzes typically have such indicators in their side mirrors.

As with all other Hyundais, the Azera is covered by a warranty that puts most, if not all, of the luxury makes to shame. This includes a five-year/60,000-mile bumper-to-bumper protection that pretty much takes care of everything, save for maintenance and normal wear-and-tear; 10-year/100,000-mile powertrain coverage for major components; and five-year/unlimited mileage roadside assistance, which is essentially a free auto-club subscription for towing and other perks.

As General Motors has discovered, selling cars with a generous warranty is a great way to attract buyers who might otherwise eschew a particular brand for fear of reliability issues. While we have not heard any widespread complaints about the longevity of recent Hyundai models, and their initial build quality is eclipsing that of older brands, according to J.D. Power and Associates’ Initial Quality Study, we’d look at the warranty as a no-cost service contract, which would otherwise cost several thousand dollars if sold by a dealer’s finance and insurance department.

Exterior
Overall, the Hyundai Azera is a handsomely styled, though not particularly flashy, automobile. With the logos covered up, few casual onlookers would likely identify it as a Hyundai, and some might even mistake it for a Lexus or Infiniti. It lacks the overt visual personality of, say, a Jaguar S-Type or Mercedes-Benz CLS-Class, but it’s in no way unattractive.

A wide front grille is flanked by horizontal halogen projector-beam headlamps, and the front fenders flow cleanly to the rear of the vehicle without much in the way of clutter or adornment. Its roofline stays high until curving sharply downward just before the rearward edge of the back door. A higher and more horizontal roofline may not look as sleek as many competing sedans that follow the trend toward swoopy looks, but it does keep taller occupants from bumping their heads when getting in and out of the backseat. A prominent “Azera” logo in chrome between the taillamps is perhaps a bit too brash for what is otherwise a subtlety styled car.

The Limited version of the Hyundai Azera tends to look a bit dressier than the SE, given its larger and fancier 17-inch, 10-spoke aluminum alloy wheels, which are not available as a factory option on the base car.

As is the case with most upscale models, the Azera’s exterior colors tend to be on the sedate side, with silver, beige, green, light blue and gray being the dominant hues. The silver model we drove nonetheless had an attractive and well-executed paint finish.

Interior
If the Hyundai Azera’s outward appearance suggests it’s from one of the upscale Asian brands, the sedan’s interior literally shouts the inference. Its attractive design is straight out of the Lexus sketchbook, and it’s well finished with quality materials used throughout the roomy cabin.

The seats — our test vehicle’s were finished in leather — are supportive and offer sufficient comfort, even over longer treks. Eight-way power adjustments are standard for the driver; the front passenger gets four-way adjustments. It may take some time to find one’s “sweet spot,” as is often the case with multiple-choice cushions, but posterior nirvana is generally obtainable for even those of larger build.

Unfortunately, memory settings for the seats are only offered as part of the $2,550 Limited Ultimate Package on the top model. Heated front seats are standard on the Limited and are optional with the base car in the $1,800 SE Premium Package.

The rear seat offers sufficient room for two six-footers, with a third, albeit shorter, occupant able to fit between them as the need arises. Entry and exit to and from the rear seat is generally good. The rear seat folds flat in 60/40-split sections to maximize cargo-carrying abilities. The fold-down rear seat backs are mainly useful for toting longer objects, as opposed to big, bulky ones like televisions or desks; you’ll want a hatchback or SUV for those items.

A leather-wrapped tilting and telescoping steering wheel with integrated audio-system controls is standard; adjustable brake and accelerator pedals, a boon to motorists shorter or taller than the norm, are only available on the Limited model as part of the Ultimate Package.

The Hyundai Azera’s dashboard is attractive and controls are well laid out. It can be finished in beige, black or gray; choose either of the latter two treatments to avoid distracting reflections on the inside of the windshield on sunny days. While a GPS navigation system remains unavailable, one of the unintended bonuses is that the center stack of audio, climate-control and other switchgear is uncomplicated and intuitive to operate, without the necessity for a touch screen or confusing integrated multimedia controls you’ll find on many other upscale models. (Besides, you can always purchase an inexpensive portable navigation device for journeys into unfamiliar areas.) All buttons and switches are well identified and large enough to operate while wearing gloves.

The Azera SE comes adequately equipped with an AM/FM/CD stereo that can play MP3 files on discs, automatic air-conditioning and the usual power accessories. The Limited adds wood trim and a power rear sunshade. Front, front side and head-curtain airbags are included across the line, as are “active” head restraints designed to mitigate whiplash injuries in rear-end collisions.

A power sunroof and a CD changer are available on bot