Auto-buyers have lost all brand loyalty when they go to purchase a new vehicle, according to CNW Research.

Historically, it was almost a given that people would buy the brand they were already driving. Yet only one in five shoppers this past year replaced a vehicle with the same brand they previously had in their driveway. This is an unprecedented development.

Our loyalty to a particular nameplate has been broken. People want the best deal and the best vehicle for their money. This has been a disastrous development for auto marketers. The Detroit newspapers report that manufacturers are putting the blame on their ad agencies and firing them. But the real problem is that the market is too competitive and the quality of vehicles too good.

That's turned us into free agents with shifting allegiances. Our free agency puts continuing pressure on manufacturers to keep delivering quality vehicles at affordable prices.

But remember, you must be a non-emotional shopper and do your homework. Follow our step-by-step guide for tips. And be sure to consider multiple models from multiple brands to suss out the best deal.

The Cash for Clunkers program has already spawned its fair share of potential rip-offs online.

Unofficial websites are masquerading as the official Cash for Clunkers portal, according to an Associated Press report. These bogus sites will solicit personal information such as your Social Security number for supposed pre-registration…and then turn around and use it to steal your identity or money.

For those of you who may be unfamiliar, Cash for Clunkers is a new federal program offering rebates of up to $4,500 for trade-ins when you purchase a newer fuel-efficient vehicle.

The "cash for clunkers" program is taking form and promises rebates of $3,500 or $4,500 for trade-ins when you purchase a newer fuel-efficient vehicle.

The effective date for the program -- officially known as the Car Allowance Rebate System (CARS) -- has not yet been set. But Clark expects it to be sometime toward the end of July or the beginning of August. There should be a 2-month buying opportunity through October.

Let's say you start from a baseline of 18 mpg on your current vehicle. If the new car you intend to buy gets 22 mpg or more, then you'd get the $3,500 voucher toward the purchase.

Please note that participating dealers will apply this taxpayer-subsidized credit directly to your purchase.

You're only eligible for the full $4,500 voucher if your next purchase gives you at least 10 mpg more than your old vehicle.

Meanwhile, there's a lower threshold for SUVs and trucks. You'll get the $3,500 voucher if your new vehicle get 2 mpg or higher. If it gets 5 mpg or more, you then get the $4,500 voucher.

The vehicle you're trading in has to be drivable and the dealer has to agree to crush it. There are also several rules to prevent abuse of the program. For example, the car you're dumping has to have been registered and insured continuously for at least 12 months prior.

Other countries that have experience with similar programs saw an immediate big increase in sales as a direct result of the program. That's the hope for the American auto market too.

Remember, of course, that there are still some great deals on vehicles available regardless of the "cash for clunkers" program. The more shopping you do, the better the price you will get. See Clark's tips for buying a new car.

The deals on new cars are undeniably amazing because of vast oversupply. But has Clark's recent overwhelming enthusiasm about buying new left you exasperated with the consumer champ?

It's as if "Used Car Guy" is betraying his roots. Whatever happened to his advice to ride your old car until the wheels fall off?

Well, here's a rebuttal that may please you. AAA reports that the true annual expense of owning and operating a car is $7,800, according to an article in The Wall Street Journal. This figure takes into account insurance, gas, maintenance, interest, depreciation and other factors.

The real cost of buying a new vehicle comes when you take a huge hit on depreciation during the first few years of ownership. But that loss in value decreases each year until you're eventually practically driving for free.

So the math remains lousy if you buy a car and keep it for a short cycle. And it's even worse if you lease a car.

It appears certain that General Motors is going bankrupt. The government was hoping to keep GM afloat with a private workout, but they're running out of time and it's unlikely that will happen now. Since we've already sent them over 30 billion in bailout money, the question remains as to who will assume control of the bankrupt company -- the government or the debt-holders. Either way, stock holders and bond holders will lose.

What if you own a GM or Chrysler car? The good news is the feds have agreed to back the existing warrantees for both, as well as the dealers' extended-service contracts. The bad news: some of you who traded in a car that still had an outstanding loan may face a problem. Dealers who are going bankrupt are not always paying off the loan on your old car as agreed. Unfortunately, that leaves you responsible to pay off both loans, even though you traded it in.

Another problem with these dealer closings is loss of your service records. Warrantee agreements rely on these records to determine whether owners are doing the required recommended maintenance. Without them, claims can't be processed.

What does this mean for you? In this market, Clark advises you to not to trade in a car that still has a loan. Also: if you don't have all your service records -- and your dealer is still in business -- go to the dealership, request copies of all your records and file those away. On the plus side, if you're a buyer, inventory overstock will allow you to steal a deal! But you'll need to buy with the intent of keeping the car a long time -- ten years or so -- since your car will have little to no value in the used-car market.

Subprime borrowers may now be able to get a car loan through GMAC thanks to federal bailout money, according to The Detroit News.

Clark says it's like going back to the future with the lowered lending standards that got us in trouble in the first place across so many credit markets.

Applicants with credit scores of less than 620 will now be considered. Of course, if you have terrible problems with credit, it's probably not a good idea to take on a long auto loan.

It's clear this is happening right now because car sales were absolutely decimated last month. GM sales were down 45%; Chrysler was down 39%; Toyota was down 39%; and Honda was down 36%. The auto market overall was down an average of 37%.

So the nearly $6 billion made available by the government is being used to make loans to people who may not be able to pay them back -- all in an effort to try to move cars that aren't selling off dealer lots.

Clark thinks this is a bad idea. The answer to the lack of demand for these cars is not to go to the subprime market. Yet at the same time, he felt compelled to get the word out about this new influx of money if you're looking for a car loan.

Clark wants to issue a special warning about the unintended consequences of trading in a car.

Picture this scenario: You have a car and you're still paying off the note. You decide to trade it in and get a newer vehicle, taking out a new loan in the process. Several months later, you are contacted by the lender on your last car about missed payments.

What happened? The dealership never paid off your loan when you traded your car in…and you don't have the vehicle anymore.

Yet you are still responsible for payments on the car that you no longer own. Your credit is dinged because of the missed payments and your new car may be repossessed if you can't meet both loans!

A recent Associated Press article that Clark saw reports this is happening all over America. The car dealership that took your trade-in is not trying to cheat you. But dealerships are going insolvent left and right and they may not be able to pay off your note.

The AP report also had the following angle: The person who buys the car you traded in could have it repossessed from them because your original loan is outstanding. And they would still have the obligation on the loan they took out! Talk about a train wreck…

The real problem here is that state legislatures have not passed bonding laws that would protect consumers in the event a dealer goes insolvent. That's the real solution, but the dealerships have a powerful lobby.

So the takeaway is this: Do not trade in a car you still owe money on ever -- period. Pay it off before dumping it.

During a recent flight, Clark was talking with a seatmate who sold gap insurance for the automotive industry. The woman was talking about how people borrow so much on their cars, and how the great service she sells helps them if they're upside down in their vehicle when it's stolen or destroyed.

This woman had the solution to a problem that you shouldn't let happen in the first place. You should not buy a car with no money down because of the rapid level of depreciation. The average auto loan is now 63 months long. So it's very difficult to close the gap between your rapidly depreciating car and the value of the loan you've taken out.

The right way to buy a car is to save money first. Of course, it's probably unrealistic to think that you can pay for a new car entirely in cash; only 1% of Americans are able to do so. By saving a down-payment of 20%, for example, you can have a shorter loan and pay less interest.

So you can eliminate the need for gap insurance if you do things right from the start.

Ford is offering employee pricing to all customers because they can't get people to buy their SUVs and trucks. People often wonder if employee pricing is real. It is the real deal. The idea behind it is to reduce existing inventory before the new models come in.

The employee pricing is good on almost all Ford, Lincoln and Mercury 2008 and 2009 models -- from now until the first week of 2009. The only vehicle not covered is the Ford F-150 truck, which was once the most popular vehicle in America.

In related news, the auto bailout has a flat tire at the moment. That's good news for our country -- when you view it from a vantage point of sound economic principle. In short, it's a lousy idea to bailout industrial corporations.

There will be another big push for the automaker bailout when Obama comes in, but Clark hopes it doesn't happen. Not because he wants people to suffer and lose jobs, but because our country suffers when you bailout a company that made too many bad decisions.

Want proof of that statement? Read the New York Times' piece about the outcome of England's $16.5 billion of automaker British Leyland back in the '80s. Leyland ended up failing anyway and all that taxpayer money went down the toilet.

Meanwhile, other industries are lining up at the bailout teller window looking for a handout. We have to do more than just draw a line in the sand -- we have to stand up as a country and say "no more."

Think Clark is a hypocrite for opposing an automaker bailout, yet begrudgingly supporting one for Wall Street? You've got to realize that, as we see in the latter example, capitalism needs capital to function. But that's a far cry from bailing out a private industry.

If you are a small business or an individual, it should come as no surprise that it's difficult to borrow money. Even businesses trying to borrow through the SBA loan program are having difficulty. The reality is that credit is loosening for the big players, but not necessarily for individuals quite yet.

One consequence of the difficulty in borrowing is that GMAC has raised lending standards so that you must have a FICO score of 740 or above. That's only a little more than a third of Americans. Historically, that's a very different scenario than it has been in the past when they would lend to anyone with a pulse who wanted a car. Now the pendulum has swung the other way.

It's no surprise either that auto sales are the worst they've been in 25 years. But there's always a silver lining to be found somewhere. If you're in a position of economic strength, now is a great time to buy a large vehicle. There's a massive oversupply of SUVs, for example, that should hang around for another 3 to 6 months. With gas prices dropping, now may be the time to strike.

Clark often gets calls from people who wonder if extended warranties on cars are worth it. Though he's not a fan of them, extended auto warranties can make sense in some instances.

Now Clark is getting calls from people being offered a unique kind of extended vehicle warranty that seems to be a real bargain. They're told they can purchase the warranty, and then if they never use it, they'll get back the money they paid. Turns out it's just a ruse.

The Kansas City Star reports there is a lawsuit concerning the sale of these money-back warranties that's been going on for 6 years! The plaintiffs, obviously, are having difficulty getting their money back. The court has now ruled that the warranty company should give the money back but…surprise…the company has since filed for bankruptcy. Good luck getting your money back!

Here's the lay of the land when it comes to cash-back warranties: The warranty companies market directly to dealers and get them to sell their warranties -- instead of a manufacturer's own -- at huge profit margins to both parties. But the warranty company itself doesn't even have enough underwriting to pay for repairs. They just collect money with no intention of paying it back out. Then they do what's called a "bust-out," which is essentially like filing for bankruptcy, and disappear with their share.

The end result is that you as a consumer are stuck holding a worthless warranty. So don't believe the claim that you'll get your money back at the end. If you do buy a car warranty, you want to be sure it is the manufacturer's own. Otherwise, it only has a marketing company backing it up, and it isn't worth the cost of the paper it's written on.

Clark wants to share a brand-new trend in the car market that affects the mass affluent automobile crowd.

Historically, only a small sliver of Americans would buy a luxury brand. Then Lexus changed the psychology completely with its late '80s entry into the market. They targeted the aspirational wealthy -- those who have a little more money than most people, but are not yet truly wealthy.

Lexus' entry into the marketplace was followed by rival Acura, which also adopted the business model of selling both moderate-level and entry-level luxury cars. That move then prompted BMW, Jaguar and Mercedes to bring some of their comparative models into the American market. All these factors combined to create a true mass affluent car marketplace.

But right now, the mass affluent folks no longer have the income they once had. Their HELOCs are being shut off and their investments are plummeting. The result? They're not buying any longer. This creates real opportunity, especially for used luxury and near-luxury cars that are being returned at the end of a lease. There's way too much supply. This is a real sweet spot in the market right now.

Meanwhile, Toyota has a new offer of 0% financing that seems poised to take advantage of GM's cash troubles. The Japanese automaker is cash-rich while the American nameplate is in a real cash squeeze. There's no way GM could afford to do an offer of 0% financing. This highlights a real split in the marketplace as some brands can offer the great financing deals and others can't.

Sales trends in the car market often move with the price of gasoline. As the latter has sunk, so has demand for small cars. Pity the poor automakers; they just got production up to meet increased demand and now there's a reversal in people's tastes!

The flip side, of course, is that the oversupply means deals may abound on small vehicles right now. Clark always wants you to zig when others zag. The average American could really benefit from better fuel efficiency, so this represents a real window of opportunity.

Financing from the American automakers may be hit or miss. GMAC is tightening up on credit by raising its borrower score requirement to a minimum of 700. That move reverses the industry's historical bias toward lending to customers that other businesses won't. Ford, however, confirms it's still loaning and leasing cars freely. So the chances are there to get a real deal on some smaller American cars.

The bigger news, however, is that the Japanese automakers also have oversupply of small cars in most categories except hybrids. No worry there, though; small cars typically offer much better payback than hybrids. Look for Honda to buck that truism next year with a new line of affordable hybrids.

In related news, The Washington Post reports that auto arson rates have doubled as people seek to collect insurance money. There's even a term in the insurance industry for someone who torches their own car -- "owner give-ups." With owner give-ups under increased scrutiny, you'll be suspected as a possible criminal even if you have a legitimate car fire.

Clark has a special warning for you if you're looking to trade in your old car for a newer one. It's no secret that some dealers are closing their doors because of sluggish sales. If you're wondering what that has to do with you, read on.

The problem is that many people trade in their existing car for another one before they finish paying off their loan. If the dealership is in financial trouble, they may not pay off the loan on your behalf. Then you're responsible for the payment on a new vehicle plus the balance of the loan on the first vehicle you traded in.

The Wall Street Journal reports Bill Heard Enterprises is among the dealers facing financial troubles that could lead to a scenario like this.

So, how do you protect yourself?

Well, for starters, let's take a step back. Why are you trading in a car you haven't finished paying for yet? That's a bad financial move. You should consider holding onto it. If you simply must get rid of it, sell the vehicle on your own to a legit private buyer to help pay off the loan balance.

CLARKONOMICS: The Vehicle Affordability Index now shows that cars are the most affordable they've been since Jimmy Carter was president.

That's partly because of the intense competition in the car market that makes new vehicles a real deal at this point.

To arrive at this finding, researchers took the average income and figured out how many weeks you'd have to work to equal the average cost of a vehicle. The result? 23 weeks of work.

But here's the disturbing news: We're snatching defeat from the jaws of victory. First off, the average length of a loan is now 63 months, which is way too long. Second, repossessions have skyrocketed at all levels of car purchases -- partly because of the economic downturn.

42 months is the longest auto loan you should ever take out, according to Clark. If you can't afford the payment on a 42-month loan, then you need to buy a cheaper car. Paying cash upfront for a vehicle is always a good idea too.

Meanwhile, the price of used vehicles is down because there's too much supply. CarMax is among the major used-car sellers that's really taken it on the chin. So in addition to the great deals on new vehicles, there's never been a better time to buy a used car either. As always, remember to get a mechanic to carefully vet any used car before you actually buy it.

In related news, Clark recently read that an SUV purchased today will be worth a mere 30 cents on the dollar in 36 months. That's food for thought!

The car market continues to take a beating, with the latest blow coming from a horrible sales month in June. Fitch Ratings, meanwhile, has downgraded Chrysler and GM -- citing weak sales and rising fuel costs, among other things.

Ford is also struggling with collapsed sales. The F1 Series is falling further down the list, and Ford is delaying a new remake because they can't sell the old ones.

In short, any automaker that has had a heavy emphasis on unloved giant trucks and SUVs is hurting right now.

So what's a Big 3 automaker to do? Well, in the case of GM, they're offering sweeping rebates and great buying opportunities. Look for 0% interest on a 6-year loan and possible additional cash rebates.

Clark doesn't even like 5-year loans…and here they're pushing 6-year ones!

But here's the bottom line: If you are in the market for a new SUV or pickup truck, there's never been a better moment to buy one. You're also likely to steal great deals if you're looking at used vehicles.

One caveat: As Clark has mentioned before, you should try to get it in writing that your Chrysler warranty will be honored no matter what.

There's great news for your wallet coming to a car lot near you. Automakers have been trying hard to scale back production to get supply and demand in sync. But it's not working; demand is dropping quicker than they can cut back production. There's simply too much product out there. Couple that with the fact that repossessions are skyrocketing and the housing slump is cutting into people's car budgets -- it all adds up to a perfect storm for the savvy car shopper. The Wall Street Journal reports that domestic, Japanese and European automakers are all offering great deals such as 0% or 1% financing and big rebates.

Edmunds.com will keep you up to date with the latest incentives. Keep in mind that sometimes a credit union car loan at 5% with loads of cash back from the manufacturer is a smarter move than an offer of 0% financing from the dealership with no cash back. So arrange your financing in advance, know the market and avoid "the grind" at the dealership. Start pricing vehicles at CarsDirect.com. They'll give you a fixed price that you can use as a reference point. You may even find that their price is the best. Surprisingly, people love the Internet for researching cars, but they always go to the dealership and face "the grind" when they want to seal the deal. Old habits die hard.

Over the holiday break, Clark's executive producer Christa was in a car wreck. While she's fine, her SUV was injured. This is the same vehicle that she bought used and paid for in full about 4 years ago. While the SUV was being repaired, her insurance company gave her a minivan to run around in.

Christa is one woman who normally wouldn't be caught dead in a minivan. But after driving it for 3 weeks, she fell in love with the roominess and safety features it offered for parents with young children.

She phoned Clark in Las Vegas and asked him if he thought it was a good idea to buy a minivan. Clark didn't think so, nor did Christa's husband Mike. Then she saw an article in the paper about how buying 2007 minivans is a smart move right now. That's partly because this is the last year manufacturers will make surplus vehicles; going forward they'll be making them only when orders come in.

When Christa looked at the byline on the article, it said Clark Howard! Turns out Clark wrote this article several weeks before the holiday season and didn't remember his own advice!

So mama went ahead and got herself a Honda Odyssey minivan. She went through the Sam's Club buying service and loved the no-haggle process. She also got credit union financing that was just under 5 percent, and then the dealership was able to match the rate and offer additional incentives. But now she has a 60-month loan, which definitely pains Clark to hear!

Auto loan delinquencies are skyrocketing; they're reportedly the highest they've been since 1991. That's a sure sign of economic slowdown. Whenever people have been squeezed in the past they'd do a home equity line of credit. But now those equity lines are tapped. That's why it's very important to stay current on your car loan. The interest rates are generally good, but the penalties for default can be huge.

And let's not even speak of repo. Having your car repossessed is doubly harmful. Not only do you have to find other ways to get to work, but most states have what's known as "deficiency." This is what happens when the lender sells the repo car at auction and gets below wholesale value. They're then legally allowed to bill you for the deficient amount. If you can't pay it, they can sue you and get a judgment against you.

So if you're having trouble making your car payments, get in touch with your lender and try to arrange a forbearance to avoid repo. Under the terms of forbearance, the payments you can't make now will likely be tacked on to the end of the loan.

One final word about prioritizing your debts: If you're really pinched, don't pay that credit card! Pay your mortgage, food and medical expenses and your car loan first. Put the credit card collectors on ignore until you're able to begin paying them again.

The car market is going through some tough times right now. Sales are the worst they've been since the financial crisis of 1998. Toyota has reported lower sales for three months in a row, especially with their trucks. Ford's sales are down 20 percent over the last month and 14 percent over the whole year. GM is probably doing the best, which in this case means their sales are just on par with last year's figures. Meanwhile, dealers are scrambling because they're overloaded with '07s on their lots and the '08s are already in place. Add all of these factors up and it's clear that consumers are in charge of the car market.

People often ask Clark for a recap of what they should know when buying a new car. First off, get your financing in place before you buy. You'll usually get the lowest rates from a credit union or an online bank. Keep this rule of thumb in mind: If you can't afford a car on a standard 48-month installment plan, you're overbuying. Once you have your financing in place, check out Consumer Reports for recommendations about quality vehicles. Then check prices in the marketplace. Look at CarsDirect.com where you'll get a guaranteed price on a car. You should also test drive the car you want before buying. Visit a car rental business and see if you can rent one for cheap over the weekend. That way you'll have two days to decide if you like driving the car, not just 10 minutes. If you have to interact with a car dealer, try doing it by e-mail to avoid high-pressure sales pitches. And make sure the Internet price you get includes all junk fees like documentation charges.

Over the past five or six years, there's just been one deal after another when it comes to buying an automobile. It goes back to the months after 9/11 when GM tried to jumpstart sales with offers of zero financing for five years. Other automakers quickly followed with similar deals. But now people aren't buying cars as readily because of the fallout from the stock and real estate markets. Overall the industry is having dismal sales results. So that means that you have so much bargaining power right now that it's not even funny. Yet two-thirds of consumers squander that power by not doing the right things.

So what should you be mindful of when you go to buy a car?

First, do research online before you buy. Check Consumer Reports and sites like KelleyBlueBook.com and Edmunds.com to find out about reliable cars that won't need much maintenance.

Second, arrange for financing in advance before you get to the dealership. Credit unions offer interest rates on car loans that can be one to three percent lower than other lenders. You may also want to check online lenders. Even your auto insurer may be able to give you a competitive interest rate. Whatever you do, don't go with a traditional bank or dealer financing. Also, don't tell the dealer you're a cash buyer or credit union customer because they'll factor that into the price in a negative way.

Finally, buy your car before you get to the dealership. By this Clark means you should avoid going to the dealer and negotiating the purchase of your car or you'll face "the grind." The grind is when the salesperson says he or she will go talk to their manager about getting you the best deal. Instead they go watch TV for five minutes and come back and tell you that the manager couldn't help out with a good rate despite their best efforts on your behalf. This is total baloney. When it comes to price, you want to stay in your ballpark, not theirs. After all, they have home field advantage because they sell cars everyday while you may only buy a handful of times over the years.

As a final thought, you may also want to purchase through a warehouse club if you're a member. There you'll enjoy a set price and no haggling.

Clark recently spoke on the show about how what happens on Wall Street affects what happens on Main Street in America. One way you may feel a pinch is in the credit card field. Dow Jones recently reported that credit card companies are starting to tighten their standards. This will happen in a number of ways: Credit limit increases won't be so common; potential customers who may have previously qualified for a card may no longer qualify; and you'll probably be seeing less balance transfer offers.

Credit card companies have historically borrowed money short-term at very low interest rates. Then they turned around to lend that money to you via your credit card at an average interest rate of about 16 percent. But now their ability to borrow at ultra cheap rates -- what's known as commercial paper -- is being squeezed. Since they don't have such easy access to money anymore they can't offer their deals to you. The credit card companies are also worried about people's ability to pay their debts. A Dow Jones survey found that a number of banks are tightening their standards one by one. This is not being done across the board, it's more of an industry trend -- so you still may see some low-interest transfer offers in your mail.

The car loan field will also be clamping down too. You may be expected to have higher credit score, pay a higher interest rate or come in with a down payment on your vehicle if you want to qualify. All of these trends are signs that the pendulum is swinging back in the business world. For years we've had very low terms for borrowers. Now things are changing and some us are going to get pinched in the process.

When you use a car dealer to finance your auto loan, the dealer will mark it up as much as they can. But the average black customer buying a new car pays an interest rate that's 40 percent higher than the average white customer -- even after accounting for differences in credit scores. Hispanics, meanwhile, pay almost the same as non-Hispanic whites, just slightly higher. In the used-car market, one in three blacks pay an interest rate that is above 15 percent, while the average rate for a white person is less than 10 percent. Clark thinks it's a shame that this residual racism is still around in 2007.

If you dig deeper into this story, you'll really find that anyone who doesn't get pre-qualified for a car loan will pay more than they should. So Clark advises anybody seeking an auto loan to get pre-qualified at a credit union, which will offer lower rates than a bank. Think about it like this: You may have spent hours researching your car thoroughly, but you've got to do the same on the loan. Dealers are entitled to make money on a loan if you don't do homework and get pre-qualified elsewhere. Historically, that mark-up had been about 10 percent points. After all the legal settlements of the past few years, however, it now is usually three percent. That means if a bank offers you a car loan for 5 percent, the dealer will offer the same loan for 8 percent. So whether you're black or not, it pays to get pre-qualified for an auto loan.

The market for gas-guzzling vehicles is awful! Car companies like Chrysler and GM are trying 0% financing with rebates to try and pull consumers back in. You can get incentives on some vehicles, others will give you 0% financing, and some deals will give you both! Each company has a “summer drive,” so that they will advertise better deals for SUVs and trucks to make up for their high gas consumption. However, if you're thinking of buying an SUV but don't plan to own it for the life of the car, keep in mind that it is very tough right now to get rid of a used SUV. Practicality is now beating out style.

New statistics show that for the first time in almost 6 years, people are buying more cars than light trucks, which include SUVs, minivans, pick-up trucks and vans. That’s been the sweet spot in the car market for years, but now that’s shifted: Small cars are selling like mad, and big vehicles are not doing well at all. Cars.com does a list of the top ten cash back offers on the market, and Clark discovered that the discounts top 25% on several models. Number one is the Chevy Silverado, which is giving $4500 cash back (a 28.41% discount from the MSRP.) The Dodge Ram is giving a 28% discount ($6000 back) , the GMC Sierra a 27% discount, the Ford Freestar a 25% discount ($5000), and the list goes on. For those of you who want or need a large vehicle, there are some outrageously good deals out there for you. But the greatest deals are on the used ones - you can steal a deal right now. The flip side is that if you are buying a new SUV (or anything that’s not “in”), you’ll save a lot on your purchase, but you’ll get pinched on the trade-in value on your old one. If the vehicle you are trading in has enough years on it, however, the pinch you’ll suffer is not nearly as much in dollars as the benefit you get in dollars on the new one.

The average car loan in the United States has grown to 70 months in length. A year ago, the average length was 62 months, which was bad enough. But it’s gotten even worse. Payments on these loans don’t decline that much over time, but interest payments skyrocket. In addition, if you don’t keep the car that long you’re losing even more money. Cars are much more reliable these days so you can keep them for a long time. Yet, people are keeping cars just as long as they did a generation ago. Back then, people financed a car for the same amount of time they planned to keep it. If they took out a three-year loan, they kept it three years. Today, people take out much longer loans and they keep the car just a few years. So, they end up thousands of dollars upside down on the loan. Almost one in three car buyers are upside down in their car loans. The average car purchase last year was more than $29,000 and that is frankly more than most people can afford. You don’t want to be what’s considered “normal” nowadays. You want to keep a car an average 10 years. It will allow you to retire five years earlier and give you a lot less worry.

A rip-off that has been around for years was exposed again recently in a lawsuit against Ford Motor Company. When buying a car at a dealership, the dealer can mark up the rate significantly. People think the dealer has gone out and shopped the loan. But, in reality the dealer may secure a rate of 5 percent and jack it up to 14 percent when charging you. This practice came to light when it was discovered that car companies have been charging black customers much higher rates than white customers for some reason. Several lawsuits were filed against the companies, and Ford was one of the few automakers that fought the case in court. Well, a judge wasn’t having it and Ford has now had to pay up just like GM, Nissan and Chrysler. What you need to remember is that car makers make their money in the “F & I” department or “finance and interest” department. They don’t make much on the sale of the car. So, they are going to charge more for the financing. That’s why you have to do your homework. Get rates from a bank or credit union ahead of time. Then, go into the dealership and try to negotiate the interest rate on the loan. In that case, you are in the driver’s seat and you may get a better deal. Just make sure you do the work beforehand and know what you can get. Keep in mind that many auto insurers now make loans. So, get rates from you auto insurer and use that to your advantage, as well.

Clark is sick to his stomach about something he read in Consumer Reports. The trusty magazine recently wrote that more than half of the car loans people took out last year were for longer than five years. That’s outrageous! What happens to you when you take out a long term car loan? You will most likely be upside down on it for the life of the loan. Also, the longer the loan, the more chance you’ll be out of warranty when something goes wrong. So, what’s a reasonable length car loan? Consumer Reports says 36 months or less. Clark is willing to give you 42 months. But do not go beyond that! People take out these long loans because they want to get payments down to what they can afford. If you must go beyond 42 months, don’t buy that car. Get a used version or just accept it that you can’t afford it and get something else. You want to keep your payment affordable so you can pay it off instead of just paying on the interest.

More than half of all car loans in the United States are five years or longer, according to recent data. Just a few years ago, only a tiny percentage of people took out loans that long. And loans can be as long as 7 or 8 years! When you take out a long-term car loan, you always owe more on the loan than what the car is worth. It’s just how it works. Then, if you buy another car, you’ve got that loan on top of it. It’s never a good idea to take out a loan longer than five years. The longest you should have a loan is 42 months. If you can’t make the payments on a 42-month loan, you need to buy a cheaper car. That is Clark’s rule. Please put it into practice or you will be sorry.

The average car loan has gone from 48 months to 63 months just in the last few years. So, instead of being in debt for four years, people are in debt for five years. And some people are taking out six- or seven-year loans. In addition, the people who are buying these cars are often upside down in their current loans. So, you’ll end up owing money on the old car even after you’ve traded it in. It’s a recipe for disaster. If you learn your car is worth less than you owe, keep it. Even if you hate the car, you have to keep it. Kim, one of Clark’s producers, bought a truck a few years ago when finance charges were 0 percent. She was very excited about the deal at the time, but now she hates the vehicle. However, she’s sticking with it, even thought it has a five-year loan. Sometimes you just have to eat it. And if you’re looking at a car you really want but there is no way you can make the payments, you have to chose another car.

There is a lawsuit pending against Ford Motor Company, which alleges that the company has been overcharging and cheating black customers at certain Ford, Jaguar, Mazda and Land Rover dealerships. There are always undisclosed mark-ups in the loans dealers give you when you do financing at the dealership. It’s typically about 2 to 2.5 percent higher than the offer they get from the actual lender. But Vanderbilt University found that black customers were charged $862 more for a loan, while white customers had only a $475 mark-up. Vanderbilt also found that blacks were uncharged two-thirds of the time, while whites were charged more one-fourth of the time. Ford claims that it had no idea this was going on. But it did happen. Avoid mark-ups all together by financing with your bank or credit union instead of the dealership. You can’t get taken if you don’t do business with these people. If you think the car dealership can beat the offer you get from your credit union, offer it up. Maybe the dealership can beat it. But make sure you have an offer when you go in. Never conduct business the other way around.

Most people take out a loan when they buy a new car, and that’s fine. The problems arise when people take out loans that are too long. Clark discourages loans longer than four years. Five years maybe, but six or seven is not smart. The shocking news is that people are starting to take out 8-year loans! That means that you buy a car this year and stop paying for it in 2012. That’s ridiculous. When you take out these loans, the lender must charge a higher interest rate because the risk is greater. People start to dislike their car and want to sell it soon after. So then they try to sell it and end up “upside down” in their loan. That means that you’re tired of the car at a point when you owe a lot more than what’s it’s worth. One car dealer Clark recently talked to said about 80 percent people are upside down in their loans. The national average is about 40 percent. The smart thing to do is to buy an older model or a cheaper car. When you have a desire to buy a fancy set of wheels, step back from it.

You will suffer a huge mark up in cost if you finance a car at a dealership. According to a Vanderbilt University study, 31 percent of white customers and 48 percent of black customers had their loans marked up. At GM, 28 percent of whites and 53 percent of blacks had their loans marked up. And at Nissan, 47 percent of whites and 72 percent of blacks were affected. Obviously, there is a racial component to all of this. But everyone’s loans are tweaked in some way at these companies. And an investigative report by the Detroit News found some shocking mark-ups. In one case, a customer was able to get a loan of 11 percent, but the dealership marked it up to 24 percent. If your credit is really solid, a dealer is going to have more difficulty marking up a loan. But if you have questionable credit, dealerships will take advantage of you more easily. The typical mark up is more than $1,000. So, you think you have gotten a deal on the car and then you end up paying an extra grand. There is nothing wrong with you making a profit, but you choose how much you’re willing to give them. So, make sure you know your credit score before you buy, and never let emotion drive you. Do your research online and compare prices. Clark likes to go to the dealership only to test drive a car and to take delivery of a car.

Clark thinks the car business is cleaner than it used to be, and there are actually decent people selling cars these days. But there are still some dirty players out there, and unsuspecting customers get taken all the time. There is a lot of emotional investment in buying a car, and many people are walking in blind with an inferior position. Clark recently heard a story from a former car salesman that was so unbelievable Clark thought it was a joke. The man said that once a week all of the salesmen and saleswomen get together at a bar for happy hour to vote for the person who ripped off a customer the most. That person was rewarded by having everyone else pay for his or her dinner and drinks. Christa overheard two men discussing the same accomplishment recently while she was out having dinner with her family. There will always be dirty car salesman. So, make sure you do your research before you buy. Check out kbb.com and Edmunds.com for car prices before you buy. Making the purchase of a car a true study before you buy is the key.