FROM SWEDEN WITH LÖV

With the tour of the 2010 XC60 just underway, Volvo has redefined its customer ownership experience, and by the sounds of some of the reviews, it’s LÖV at first sight!

The 2010 Volvo XC60 Crossover takes safety to a whole new level. The car even stops itself! It’s called “City Safety,” and it is standard equipment on all XC60s along with Standard Bluetooth, HD Radio with SIRIUS Satellite Radio (comes with a complimentary six month subscription), Dual Zone Climate Control, Leather Seating Surfaces and both USB and AUX input jacks.

For all pre-orders taken prior to March 31, 2009, Volvo is offering a complimentary lifetime SIRIUS subscription. An additional standard feature offered only during the launch is complimentary two-panel Panoramic Sun Roof. Optional packages include navigation, heated seats, a factory installed rear park assist back up camera and much more.

After 80 years, Volvo continues to live up to the slogan “Volvo for Life” with the addition of the XC60 to its already superb lineup. When you add Complimentary Factory Scheduled Maintenance and a Turbo Charged engine that uses regular gasoline, you might be thinking “It doesn’t get any better than this!”

Volvo is convinced that this vehicle will not only bring in new customers but will also be an attractive switch for its already loyal customer base. And Volvo customers are among the most loyal I have ever seen.

Time and time again customers tell me that they wouldn’t drive any other brand. One customer even confessed that she thought she might be missing out on something, so she tried another manufacturer and couldn’t wait to get back into a Volvo. “I won’t make that mistake again,” she said.

The XC60 is considered a Small Premium Utility vehicle and competes with the Acura RDX, BMW X3, Infiniti EX35 and the Lexus RX350. The XC60 utilizes a Volvo engineered 3.0 liter, 281 horsepower T6 engine. With All Wheel Drive, Instant Traction and a six-speed Geartronic™ automatic transmission, this car could already be ahead of the competition.

But Volvo doesn’t rest on its laurels when it comes to safety. By far the most compelling feature of the XC60 is City Safety. According to talking points from Volvo Cars of North America , City Safety is the “world’s first standard equipment driver support system aimed at preventing or mitigating collisions occurring at speeds of 19 MPH or less. These represent about 75% of all collisions with about half occurring in city traffic situations.” But what does that really mean?

Say you are driving along in normal stop-and-go traffic and the car in front of you slows down to a crawl. City Safety is active at speeds from 2 to 19 miles per hour and uses a "closing velocity sensor" that is mounted ahead of the inside rear view mirror to determine whether a collision is likely. So when the car in front of you slows down to 9 MPH or less your XC60 recognizes the slowdown and immediately reacts to prevent or lessen the impact of a rear end collision. At the same time, it prepares the restraint system to optimize protection in the event of an unavoidable collision.

The XC60 also offers stand alone safety options like integrated second-row child booster seats, trailer stability assist, Blind Spot Information System, Volvo's Personal Car Communicator with heartbeat sensor and keyless drive.

Technology packages will feature a 650-watt Dynaudio surround sound audio system, a six-disc CD changer, navigation with real-time traffic and a rear view camera.

According to Volvo of Calabasas General Manager Mike Abell, the XC60 will quickly become a best seller at his store. "I drove the car and was really impressed at how well it handled. I was amazed at how well the City Safety feature worked. It's also loaded with the amenities everyone asks for like built-in bluetooth and HD Radio, which are standard," he said.

The first batch of XC60s will be six cylinder Turbos with All Wheel Drive and a base price of $37,200. Base models will follow shortly thereafter, but when you throw in all the standard features, I think you will agree that this car is definitely an affordable alternative to others in its class.

Call 1-800-GO-VOLVO for an invitation to a sneak preview of the 2010 Volvo XC60 at Volvo of Calabasas in mid-February. This is an "invitation only" event, and space is limited, so call today. Customer deliveries will begin in March 2009.

You can also go to http://www.volvocars.us/new%20XC60 for more details.

I Always Pay Cash For My Cars

Some customers insist that paying cash for their new vehicle saves them money in the long-run. This is not necessarily true in every case, and I’ll explain why.

First of all, in times of economic uncertainty like we face now, why would you tie up a large amount of expendable cash on a depreciable asset like a vehicle? Unless you are purchasing a rare car that is projected to have a higher resale value in years to come, you will most likely lose money in depreciation alone.

Second, most manufacturers offer significant “incentives” or “rebates” to customers who lease. In some cases, this could be worth between $5,000 and $10,000 depending on the make and model you choose.

“But I don’t want a monthly payment.” Fair enough. For this customer, I suggest a “prepaid lease” that offers all the rebate offers of a traditional lease except you pay the entire 24 or 36 months upfront instead of monthly payment. Here is an example:

The total drive off to pre-pay a 24-month lease for a $39,450 vehicle is $11,126.06. They have no monthly payments for two years as if they had paid cash for the car. An added benefit to a prepaid lease is that at the end of the lease they have two choices: 1) turn in the keys and take delivery of a new vehicle or 2) purchase the vehicle at a reduced residual value that is locked in at the start of the lease.

For customers who want to build good credit, paying cash for a vehicle does absolutely nothing for their cause. In fact, when the time comes to make a large purchase on credit like a house, “no previous auto credit” becomes a disadvantage.

I’ve run across several cases where the parent wants to shield their son or daughter from a car payment. In one instance, the 23 year old son is actually going to make monthly payments to the parent, but it’s “interest free.” In the long run this is really doing the young adult a disservice because they are robbing him from the opportunity to build credit. He’s making steady payments, but he’s not getting credit for it. Where cash is available at the time of purchase, I suggest that instead of paying for the entire car upfront, go ahead and finance it with one of the parents as a co-signer. Then put the money in an interest bearing checking account and set up automatic payments. This way the customer is building auto credit, there’s no chance of late payments and the assets are still liquid in the event of an emergency.

Let’s get back to leasing. Here is a real-life lease situation from December 2008. This customer chose a 36-month lease and wanted her payments to be less than $350 a month. This is how it worked:

Vehicle MSRP: $31,150
Customer cash down: $ 2,000
Manufacturer Rebate and Incentives: $ 5,750
Monthly Payment including tax: $ 344

At the end of 36 months, Ms. Customer can purchase her vehicle at 43% of the MSRP or $13,394.50 plus tax! Or not. At the end of three years, she has the option to turn it in or purchase it. Either way, she paid a total of $14,384 (36 monthly payments plus her cash down) to drive a $31,150 car for three years. Not bad, huh?

If she had paid cash for the car, she would not have qualified for the $5,750 manufacturer rebate and dealer incentive, and she would have paid thousands of dollars in upfront sales tax based on the total sale price of the vehicle. Not to mention that a good portion of her available cash is no longer available.

I’m not claiming that leases are for everyone. Some manufacturer rebates are better than others. They change the rebate and incentive programs each month, and they are only offered on certain models. Each customer has individual needs when it comes to owning or leasing a vehicle including their personal preferences and driving habits, so the “deals” vary depending on the manufacturer, the model you are considering and, most importantly, your credit score.

That being said, leases are definitely worth thinking about.

I Don't Think I Need an Extended Warranty

I hear this a lot. Consumers seem skeptical of purchasing extended warranties in general because they believe it's just another way to increase profits for the store. This may be true for some electronic products but high tech cars are especially vulnerable to high cost repairs.

Chances are your vehicle came with a great warranty package that covers most mechanical breakdowns and repairs. But, like all good things, this coverage will come to an end eventually, and the responsibility for repairs to your vehicle will fall on you.

The time to extend the original manufacturer warranty is well before your factory warranty expires. This will save you money over time compared to having to pay for repairs as they happen. Warranty premiums are calculated by age of vehicle and miles, so the newer the car and the fewer the miles the less you pay in premiums. I compare this to life insurance which is cheaper to buy when you are young and have no health issues.

Most vehicles today have very sophisticated computer systems that could fail without notice, and while the part itself may not be that expensive, the labor alone to remove a dashboard to get to that particular part could result in a $4,000 repair bill. Major components like an engine or a transmission will cost between $4,000 and $5,000 to repair. The more high tech features you enjoy like navigation, park distance control, cruise control, rear seat entertainment, etc., the more components you have to worry about failing. These repairs can cost thousands of dollars per visit in parts alone - not including labor. Take a look at the Edmunds.com website where they publish a “True Cost to Own” for most vehicles, and you will see for yourself the average cost for maintenance and repairs.

This is especially important when you purchase a used vehicle that is close to the end or past the original manufacturer warranty. For example, if you purchase an extended warranty for approximately $3,000, on average you will receive up to THREE TIMES the value of the premium in car repairs alone.

And that’s not all. If you decide to sell or trade your vehicle, you can cancel the warranty and get a pro-rated refund based on time and miles. You have nothing to lose and will enjoy peace of mind that your vehicle is protected long past the original warranty.

TRUE STORY: Don’t make the same mistake as one customer. She didn’t see the point in extending the warranty on her vehicle despite the fact that she absolutely loves her car and has now owned it for over 10 years. To date, service records confirm that she has paid over $30,000 in maintenance and repairs. But if she had invested in an extended warranty and maintenance plan, she could have avoided most of these bills!


CAUTION: Be wary of unknown warranty companies that solicit you at home or even on your cell phone. In most cases, this is a scam and chances are, they will collect your premium over the phone with your credit card, and you will never hear from them again or they won't be around when you need to file a claim for a repair.


Be sure to check with your local dealer, and discuss the plan to best fits your driving needs. For instance, if you drive 20,000 miles a year, you should choose a warranty with less years and the most miles. If you don't put a lot of miles on your car, opt for the most years and the least total miles. Be sure to choose the plan that offers the most comprehensive coverage instead of basic engine, transmission, suspension plans. Sure, you will pay less for the basic warranty plan, but in the end you could pay more in repairs because - it never fails - the particular item that breaks on your vehicle isn't covered.

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