Everyday, Clark and his staffers meet as a team to discuss show ideas. When the subject of Toyota came up, executive producer Christa voiced her disappointment as a longtime owner. She feels Toyota continues to be arrogant while lives are at stake and families have lost children.

Toyota has lost so much trust both here and overseas that's it not even in the running when people come up with their "funnel" -- those brands they'll consider buying. That's a logical consequence of the betrayal of trust.

Clark, however, is not afraid of Toyota like Christa and so many others may be. So the counterpoint here is that Toyota vehicles have suddenly become a real deal to buy if you can stomach it.

Toyota's Prius sales have collapsed in the aftermath of publicity about sudden acceleration. The Prius has seen a 40 percent decline in sales, which is nearly unprecedented. So if you're not afraid, this is your time to buy one. While looking around online, Clark saw a fully equipped 2010 Prius for $21,000...what a deal!

The Prius gets 44-51 miles per gallon on average, and it's now available at a cost equivalent to a typical mid-sized car.

When it comes to hybrids, the Honda Insight has also bombed in the market, perhaps because it looks so similar to the Prius. The Insight gets about 43 mpg. Prices are now down in the upper teens. If you're a good shopper, you can find it in the $18,000 range.

Remember, if you're interested in ultra fuel-efficient vehicles, now is the time.

Interestingly enough, Lexus sales remain firm even though a Lexus is just a Toyota by another name. But you will find deals on the youth-targeted Scion nameplate.

RIP-OFF ALERT: Like a plague, the car-selling sites are becoming infested with false offers for cars. Criminals are lifting pictures, text and info (including the VIN number) from legit postings on Craigslist, Ebay Motors and AutoTrader.com and duplicating them online or in newspaper ads.

In this rip-off, the "owner" typically says he or she has already deployed overseas with the vehicle and needs to unload it at a rock-bottom price.

Remember, however, that this violates Craigslist's first rule about scams: "DEAL LOCALLY WITH FOLKS YOU CAN MEET IN PERSON - follow this one simple rule and you will avoid 99% of the scam attempts on craigslist."

In one instance, a listener sent us a picture from one of these bogus ads. The "owner" said they were in the United Kingdom with the vehicle. But the accompanying photo showed palm trees in the background!

Remember, you want to see the car in-person when you're buying online. Otherwise the risk is off the charts.

Special thanks to our listener Douglas who tipped us off to this story.

This has not been Toyota's year. The Japanese auto giant put itself in such a bad position by failing to do the right thing.

In capitalism, your first responsibility should be to serve the customer. Now we have news that Toyota was ecstatic because they conned the National Highway Traffic Safety Administration over safety issues. They even had projections how much money they saved by not properly addressing brake problems. Come on, people!

The consequences are so clear, and there's a teaching lesson here. If you're in an MBA program, remember, a narrow-minded focus (aka myopia) is the curse that's hit so many companies.

For example, Sprint has had an uphill battle trying to remain viable after so many years of bad customer service. Clark recalls his wife bursting into tears when she was told to go into a Sprint store to resolve a problem. The company had such a bad reputation that people would rather wait in a government office!

In any business, if you take your eye off the ball of serving the customer, the marketplace will teach you a lesson. Toyota spent a generation building up brand equity and then their internal corporate culture fouled it all up.

If you've seen pictures of Toyota chief executive Akio Toyoda testifying here in the United States, you saw a portrait of a man who didn't want to be there.

Toyota now must survive in the short-term by discounting. You'll see special lease deals behind the scenes and offers of zero-percent financing. Clark has typically spoken out against leases, but when you can get a special manufacturer-subsidized one like Toyota will have to do, they can be a real deal.

The Detroit News reports Toyota is so on the ropes that they're even offering deals on the Prius.

So the deals will be there, but the question is will you even consider them?

Clark gets extremely excited about new developments in auto technology, and he’s often the first in line to try it out. Some of the ideas, he admits, were hair-brained, such as the three-wheeled Freeway he bought in 1980, which offered 100mpg, but no reverse gear!

Twenty years later, in 2000, he purchased one of the first hybrid prototypes, the Honda Insight. It was a miniature two-seater that averaged 58mpg. In 2007, he got hold of a Honda Civic GX that ran on clean natural-gas. (He sold it a couple years later at a profit, but still misses that vehicle!) These days, his college-age daughter drives a Honda Civic hybrid, while he has a Toyota Prius hybrid.

Imagine his excitement when he learned that Toyota is about to release a plug-in hybrid that will deliver an astonishing 134mpg! It will plug in to a standard outlet, and be fully recharged in about 90 minutes. The car operates solely on electricity for the first 15 miles, after which it seamlessly switches over to gas power.

Every year over the next decade will bring us huge improvements in fuel economy. Cars like the GM Volt, the Nissan Leaf and the Audi A3TDI station wagon will lead the way. As third world countries begin to absorb more of the world’s limited oil supply, the price of oil is destined to rise here in North America. So pay attention as the new technology arrives. And bonus: all this new science may not even cost us more at the dealership!

Kelley Blue Book has published its annual Best Resale Value Awards for model year 2010 vehicles.

When we buy a car, we think of the price as the true cost, along with the expense of insurance, gas and maintenance. But the real cost of a car is depreciation -- how much in value it loses during the initial years of ownership.

Here are the brands that are projected to hold their value the best during the next five years:

• Lexus
• Toyota
• Honda
• BMW
• Subaru
• Jeep
• Acura
• Infiniti
• Audi
• Nissan

Kelley Blue Book goes on to say that half of all 2010 model year vehicles are expected to maintain less than 20 percent of their initial value after five years. So consider that before buying a fancy new car. Buy a not-so-fancy used car instead and let somebody else handle the depreciation!

If you must buy new, plan on holding a car for 10 years or longer to absorb all the depreciation. As an alternative, buy a two-year-old car and hold it for three years or a three-year-old car and hold it for two years.

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.

Opportunity beckons in the car market. New data for September 2009 -- the most recent full reporting month -- shows that sales fell off a cliff in the aftermath of Cash for Clunkers.

Clark watches car prices continually and has noticed that they're starting to soften. During Clunkers, prices actually went up, but that trend has now reversed. The artificial stimulus of Clunkers is gone and now the marketplace has a collective hangover!

Dealers went from round-the-clock business to have nothing to do. Manufacturers put the factories back to work and now they've got to move that inventory. In addition, we're moving into a time of the calendar year when no one is interested in buying a new car.

As previously reported, the consumer champ had predicted that there would be a rough 60-day sweet spot in the market from just before Thanksgiving to just after the New Year. The new September stats now corroborate this.

The used car market is still disrupted from Clunkers. We're still short of inventory. After all, you can't just make used cars!

The result is that used cars will bring in more money at trade-in or if you sell it on your own, and your new car will be cheaper. All because of the market disruption of Cash for Clunkers.

Clark can't think of another time ever when he could say that new car prices are depressed at time that used car prices have firmed up. Of course, this will only be a temporary phenomenon.

Having said all that, should you be buying a car? That's the ultimate question. Just because something is a deal, it doesn't mean you should necessarily buy it. The true test comes when you honestly gauge your own financial situation and the reliability of your existing car. Getting new wheels simply because you want them is not a smart move unless you're in good financial shape.

RIP-OFF ALERT: Used car buyers can expect a glut of flood cars to hit the market in the wake of the flooding in the Southeastern United States. Clark wants to offer some tips so you can steer clear of these bum rides.

We're treading familiar ground here, actually. In the wake of Hurricane Katrina, we saw waves of flood cars coming out of Louisiana, Mississippi, Texas and other states.

Here's what to look for this time around:

• Be wary of any used car that shows up as recently titled in Georgia or Alabama when you research the VIN number through CarFax.com or a similar service.

• Use the National Insurance Crime Bureau's search tool at NICB.org to identify further identify flood cars.

• Make any used car purchase subject to inspection by an independent mechanic. You can leave a deposit if you wish, but specify in writing that the money must be returned to you if the car doesn't check out.

• And as always, know what fair market value is on the used vehicle in question!

There are times that we as individuals, institutions or companies mess up. After all, no one's perfect. The question is, how do you handle a mistake when you mess up?

Clark recently read a Wall Street Journal report about medical facilities that admit when they make an error. Traditionally, lawyers will tell you to deny, deny, deny any wrongdoing. But that's one of the prime problems in corporate America. People can't seem to say, "I messed up."

One corporation that did manage to own up to its mistake is Enterprise Rent-A-Car. The Kansas City Star reports that the nation's largest car rental agency found a unique way to save money as a fleet buyer. They deleted side airbags from Chrysler vehicles they were purchasing from GM!

It's important to realize that their decision was totally within the limits of the law. Typically, only front airbags are required by law.

The company saved nearly $12 million over three years with this cost-cutting measure. But here's where they went wrong: They didn't disclose that the side airbags were deleted when they resold the cars to consumers.

Enterprise has since contacted every single buyer and made full disclosure. They've also offered to buy the cars back -- regardless of condition -- at above market prices.

Kudos to the car rental giant on this one. They made a misstep and then took action to correct it.

If Cash for Clunkers was designed to help U.S. automakers work off excess supply, it's been a grand slam success. However, it's been more of mixed bag for dealerships.

Many dealers got a huge increase in sales. But those that were thinly capitalized now find themselves hurting as they wait for reimbursements from the federal government. In fact, GM has had to extend interest-free loans to certain car dealers so they can stay in business.

Now the Cash for Clunkers program will end on Monday. It was originally supposed to last until around Thanksgiving. This is now the second time the program ran out of money. The original billion went in a week. An emergency allocation of $2 billion lasted a little longer and is now gone.

Where does the overall car market stand in the aftermath of Clunkers? Right now, the manufacturers have lean inventories and will likely overshoot on production as they ramp up to build new vehicles. Couple that with the continuing weak economy and Clark thinks the next sweet spot for new car buyers will come from Thanksgiving until Jan. 31, 2010.

Our nation used to sell 17 million new cars a year. Now it's more like 9.5-10.5 million annually.

One of the other effects of the Clunkers program has been that the value of used cars has gone up, especially in the $6,000 or lower category. We're experiencing a shortage of these so-called "beater" vehicles, which drives their price up. Yet as the used car market replenishes with more beaters, their price will soften too.

USfidelis is perhaps the most heavily marketed extended auto warranty in the country. Consumer Reports has investigated this popular outfit and is warning people away from them.

According to the publication, USfidelis has failed to respond to more than 1,000 complaints from the Better Business Bureau. Among the complaints are gripes about the difficulty of canceling the warranty; obtaining a refund; the nature of the company's misleading ads; their misrepresentation of coverage; and their failure to remove customer names from mailing lists.

In addition, Consumer Reports reveals that USfidelis told them customers are not allowed to see their contract until after they purchase it. What's up with that?

Of course, many of these problems are not necessarily specific to USfidelis. They also plague the smaller players in the extended auto warranty business. USfidelis just happens to be the top dog, so that's why they were singled out.

Let's take a moment and review. If you can afford the potential cost of a car repair, you should never buy an extended warranty. But if you're unable to budget and save for repairs, then you should only consider buying the manufacturer's own warranty. Do not buy any third party warranty.

And if you stick to Consumer Reports' annual recommended list of vehicles, you shouldn't have to buy an extended warranty at all -- even if you have budgeting difficulties. The odds are such that their recommended vehicles won't have severe problems over time.

In a complete reversal from last summer, the average cost of a used SUV or truck has actually gone up. This while used vehicle sales overall are down some 30% year over year!

Tribune News Service reports used SUV prices are up 26% and used truck prices are up 27% year over year. Seems like the national gas average of $4.11/gallon that scared people away from larger vehicles one year ago is now just a distant memory.

As you might expect, smaller vehicles are now going unloved in the marketplace, as the price at the pump continues on its downward slope. In one very telling illustration of what's going on right now, Toyota abandoned construction of a Prius plant in Mississippi in mid-project!

Now is the time to zig when others zag, if you can afford it. Some small new cars are selling for under $10,000! And used vehicles that are smaller continue to be a real 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.

Are you one of the few Americans in the market for a car? There are more of you out there than you think.

CNW Research says 4 million used cars were purchased in the United States during the month of May. That's astounding when you consider that the market for new cars is only 9 million in the United States over the course of an entire 12 months!

Clark can't believe the advice he's about to give…but it's now possible to get a better deal on a brand new car than on a relatively new used car.

It's a classic case of supply and demand. The used car market is up about 25% and new car sales are down 34%, according to figures from The Boston Globe.

This is, however, a temporary phenomenon. Do not take this as gospel for the future! In most instances, a used car will almost always be a better buy. Just not right now!

Meanwhile, if you want to buy a new vehicle, Clark has new way to make the purchase easy. In the past, he's talked about CarsDirect.com and the wholesale clubs' buying programs.

But there's a new kid on the block known as Zag.com. This service gives buyers instant guaranteed up-front prices from a network of certified dealers. It also offers an easy delivery process that helps you avoid "the grind" at a dealership.

Zag is available to members and customers of Overstock.com, Capital One, UPromise and USAA at the moment.

So will Zag get you the lowest possible price? Well, it's a very good price, but a dedicated hard-working shopper can probably find a slightly better deal on his or her own.

The collapse of General Motors -- the largest failure of a capitalist enterprise ever -- almost defies description. Their debt stands at $172.81 billion, while their (very questionable) assets are at $82 billion.

Here in America, we used to have something called capitalism. If a business got in trouble, it could either fail or reorganize in bankruptcy with DIP (debtor in possession) financing.

If a business could get DIP money, it then shed its assets and renegotiated its business arrangements. Next, it looked for exit financing, where a lender who believed in the company would lend money so the company could exit bankruptcy.

Of course, as a practical matter, most businesses never saw the light of day ever again once they entered bankruptcy.

But in the case of GM, former President Bush gave them $13.5 billion in federal money during his last days in office. He also bailed out the company's lending arm GMAC. Then current President Obama gave them additional money, which took them up to the $20 billion mark, and also axed GM's CEO.

Now the government is looking at a minimum of another $30 billion going into GM.

So what happens from here? The government has already decided to guarantee GM warranties. That's the least they had to do in order to instill buyer confidence.

4 out of 10 dealers will close in the wake of the failure. The remaining ones will make tons of money. However, servicing at remaining dealerships may be more difficult in the interim as the survivors are flooded with business.

There's no denying that the deals on dead GM brands like Saab, Hummer, Pontiac and Saturn will be great. But if you buy, be sure you keep the vehicle for 10 years or longer; the resale value on orphan brands is very low.

Ultimately, GM will emerge from bankruptcy; they're going to shed nearly $80 billion of debt. But then over time, the marketplace will have to decide if their products are good enough to buy again.

And for those who are wondering if now is the time to buy GM stock, Clark answers with a resounding no! We already own about 60% as taxpayers.

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.

Several months ago, Hyundai announced their version of layoff coverage for new car purchasers. If you buy a new vehicle and lose your job during the first year of ownership, you can turn the car back in -- no harm, no foul.

Hyundai is trying to ease people's fears about jobs and the economy. And you know what? It's working. Their market share has increased on the strength of their promise.

Car sales are half of what they used to be now that people are keeping their cars on the road longer. So it's no surprise that car dealerships are hurting…and that at least one dealership is taking a page out of Hyundai's play book.

AutoNation will cover 6 months of car payments on new or used vehicles if you become unemployed. This program is rolling out first in Florida where consumers have been hit extra hard by the real estate bubble.

But is this enough of a reason to buy a car? No way, says Clark. If you're at risk of a drop in income, you've got bigger fish to fry than just what's going on with a potential car purchase.

During last year's hysteria about gas prices, Clark said it was a bad idea to buy a hybrid. Even at $4.11/gallon, the payback on hybrids simply did not make sense. In addition, dealers were doing what the marketplace allowed at the time and charging far above sticker price.

Now that the price of gas is back down, sales of hybrids have fallen by two-thirds. The Chicago Tribune found that the average supply of Priuses was at 2 days last year. Now it's sitting at 80 days! Keep in mind that a 55-day supply of vehicles on dealer lots is typically where supply and demand are at equilibrium.

The Chicago Tribune is also reporting some people have bought Priuses for $5,000 below MSRP, even though dealers are still pricing them high.

In another example of the declining demand, Chevy Malibu has a hybrid version that's priced above the gas engine model. But they sell less than 100 per month!

Meanwhile, Honda's new Insight hybrid is the first hybrid to be priced in the teens with a $19,800 list price.

The real opportunity, however, is not buying a hybrid new; it's buying one used. A lot of people who got caught up in the hybrid craze last year have discovered they don't exactly love driving around in a "putt-putt mobile."

So now may be the time to strike. Gas won't always be this cheap…

Car manufacturers have been rolling out just about the best deals ever in the last week and a half leading up to the Presidents' Day holiday weekend.

The somewhat tired offers of zero perfect financing have been coupled with other incentives to bring in the customers. So what, exactly, is going on here? Well, automakers have the ability to make 18 million cars per year. But they only sell in the 9 million range. You do the math. Something's got to give…and in this case it's on the dealers' end.

The shocker here is that you can steal a deal on a fuel-efficient vehicle right now because they're unloved. Now that gas prices aren't exactly soaring, people have returned to buying larger vehicles.

Clark and his wife were able to snag a Prius for around $21,000 -- that's a solid $9,000 below what they were selling for last summer during the peak of the high gas prices. The penny-pincher calculates they'll have a 4.5 year payback on the car. Likewise, there were tons of Yarises and Corollas also sitting unloved on the dealer's lot.

Finally, there's a real sweet spot in the market with used year-old fuel-efficient vehicles that people bought last summer and decided they didn't like.

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.

Vehicles now present the best affordability, best quality and highest level of safety ever since Henry Ford first rolled out the Model T.

The global oversupply of manufacturing capacity in the automotive sector is mind-blowing. The manufacturers built far too many factories in far too many countries around the world. That creates a lot of opportunity for anyone looking to buy new.

One particularly sweet spot in the market is the four-door sedan. Clark knows this isn't the "sexy" choice, but it is a Clark Smart one. You can buy a fully equipped sedan for under $20,000. Keep in mind that sedans will typically deliver 30% to 50% better fuel economy than a comparable crossover SUV.

A recent check of Consumer Reports' online database suggests a number of choices that offer both great value and a high safety rating. These include Chevy Malibu, Ford Fusion, Honda Accord and Hyundai Sonata to name just a few.

CLARKONOMICS: One common measure of an automaker's overall health is the days' worth of supply they like to have on their dealers' lots.

U.S. automakers traditionally aim for 60 days' supply on a lot. That means that if they closed every factory, it would take 60 days to sell off the existing vehicles. Japanese automakers, however, like 40-45 days of supply on their lots. Anything less than that and customers likely will be disappointed when they go to a dealership looking for a certain color, certain features, etc.

But right now Honda has 100 days of oversupply on its dealer lots. So it would take 3.5 months to work off the inventory if they stopped all production today. That massive oversupply means right now you can steal a deal on any of their models -- even the very popular Accord and Civic.

Honda isn't the only automaker with tremendous oversupply. The king of oversupply at the moment is Chrysler. They are sitting on 142 days' worth of supply on dealer lots. That's almost 5 months of unsold inventory!

Back in April 2008, Clark wondered about Chrysler's future and got an earful from the automaker. Today, it's no secret that they're on shaky ground. Chrysler's situation is so dire that they're only still open because of the bailout.

So know this: You buy a Chrysler product at your own risk. Should the company fail, the warranties will vanish and the resale value of their vehicles will diminish.

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.

There are some amazing opportunities right now in the car market. New stats show that luxury car sales are down 32% in the most recent monthly reporting period. Similar troubles have hit the market for regular cars too. This is, after all, an equal opportunity recession for people of all income levels.

Luxury cars makers are really getting it from all sides. Their products have fallen out of favor because they feel too ostentatious in our new no-frills era. In addition, much of the high-end market depends on corporate clients buying their cars as perks for employees. But employers have dialed back on making those purchases too.

What does it all mean? This could be a perfect storm of opportunity that you can sail through and benefit from should you want a fancy car.

If you're looking for hard numbers, J.D. Power estimates that Mercedes' sales will fall more than 40%. BMW is expected to slip 20%. The sales of Bentleys -- which still costs $250,000 -- are down 66%, while Porsche is down 50%.

The real deals, of course, can be had on used luxury cars. Just remember to get a potential purchase carefully vetted by a mechanic before you take the plunge.

Finally, when it comes to regular cars, Edmunds says the discounts off MSRP are 25% to 30% these days. In fact, it's even possible to find new economy cars for just under $10,000.

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.

RIP-OFF ALERT: In the wake of this season's hurricanes, you can expect to see flood cars deluging the auto market, according to Money magazine.

Here's the bottom-line: Dishonest people take flood vehicles into certain states where they can "wash" a car's title. That action removes any evidence that the vehicle was ever in a flood. Cars with "washed" titles can then be sold to any dealership across the country that either doesn't know or doesn't care that they're buying a flood vehicle.

To the naked eye, there's no telling that anything is amiss. But you'll know you've got a flood car when you encounter failed electrical systems throughout the vehicle.

So what can you do to protect yourself? Have any potential used auto purchase carefully vetted by a mechanic of your choosing. Know that most car dealers are honest, but it never hurts to be safe. Get it inspected by a mechanic as a condition of purchase.

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.

Car sales are at their worst level since 1993, with sales down 27% in the month of September. We've known for awhile that American automakers have been hurting, but the latest figures show that even Japanese automakers are ailing. Toyota's sales are down 32%; Honda is down 34%; and Nissan is down 37%

There are 2 main reasons behind the death spiral in the auto business. First, we've lost confidence in the economy and are afraid to spend money on big purchases. Second, even if you wanted to buy a car right now, many banks won't write loans because of the tightening of credit markets. That should work itself out as the behind-the-scenes credit markets thaw out and more money starts flowing again.

One tip -- try your local credit union if you are looking for an auto loan.

Suffering sales means that this is a great time to buy if you're able. The news about the slowdown hitting Japanese automakers means that you may be able to steal a deal on some coveted foreign nameplates. Of course, the best opportunity is always to buy used, especially if you're looking for a luxury model.

In related news, Clark reveals that he's sold his natural gas car, the Honda Civic GX. He credits T. Boone Pickens with raising awareness about natural gas vehicles, allowing him to capitalize on the market scarcity by putting his up for auction online. Clark sold it on eBay for far more than he paid for it a year ago. Now he drives his old standby Scion XB!

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.

The Detroit News reports that GM is running short of cash. The dire financial straits have prompted 2 recent major announcements from the automaker.

First, GM is offering a new warranty for used cars under their certified-car program. This is a highly unusual move that you can benefit from. This bumper-to-bumper warranty is for 12 months/12,000 miles.

The second announcement concerns employee pricing on new vehicles. This is not a gimmick. It's a longstanding perk that's been enjoyed by the employees of many American automakers. Now it's being extended to the general public in the hopes that they'll buy more GM vehicles.

Now is the time for great deals -- unless you're seeking a highly coveted small car or a hybrid!

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!

When it comes to research about reliable cars, there are two highly respected sources -- Consumer Reports and J.D. Power and Associates.

The latter's 2008 Vehicle Dependability Study shows that the most reliable cars are made by Lexus. They're followed by Mercury, Cadillac, Toyota and Acura.

When it comes to the worst of the worst, Land Rover is in last place -- again. Faring slightly better were Suzuki, Kia, Isuzu and Saab. In fact, Saab was named as the most-improved nameplate this year.

In addition to J.D. Power's tally, you should also check the April issue of Consumer Reports each year -- particularly if you're in the market for a used car.

Over the last few weeks, we've received hundreds of calls from people who wonder whether they should ditch their old gas-guzzling SUV/truck and buy a newer fuel-efficient vehicle to save money.

Clark usually says that it doesn't make sense to do so. But that's just general advice without looking at the numbers.

If you want to get really granular, Smart Money has a new interactive tool that features 11 variable fields where you can enter your trade-in value, gas mileage, daily driving distance, etc. The tool calculates how long it takes to start getting payback.

You may not like the answer you get. Sometimes the only way to make it work is to buy a used gas-sipper. In this respect, cars from Hyundai and Kia tend to depreciate much quicker than those from Honda and Toyota.

And if you're stumped on your trade-in value, know that Edmunds, Kelley Blue Book and others haven't stayed current with SUV/truck values. So deduct about 25% from whatever they say.

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.

Here on The Clark Howard Show, we have something informally known as "Car Call Mondays." Every Monday, Clark's staffers have to ration the car calls because people flood the phone lines after buying suspect used vehicles over the weekend.

With used car purchases, you buy "as is" -- no matter what condition the car is in. The vehicle and all its warts become your problem. If it comes with any warranty, it's usually very limited.

So Clark wants you to do your homework when you're buying used.

First, make sure the vehicle is worth what you're paying. Check Edmunds.com for the true market value so you come up with a feel for the price.

Second, run the vehicle number through CarFax.com to find out if it's a flood vehicle or if it's been in a horrible accident. For the past 15 years, the insurance industry has been able to block a proposed federal database that promised to give instant access to records about known calamity cars. But no more -- look for the database coming soon.

Finally, have the vehicle checked out by a mechanic as a condition of purchase.

The car business continues its downward spiral. New figures for March show that GM and Chrysler are down 20% and Ford is down 14%, year over year. Ready for the stunner? After defying slowdown, Toyota now is down 10%. Honda is the only of the Big 5 automakers that emerged flat but unscathed. Be on the lookout for deals!

One word about Chrylser, but Clark wants to preface this by saying he's hasn't heard or read anything to substantiate his beliefs, nor is he trying to kill business at Chrysler dealerships. He's just concerned because the company was recently taken private and is being run by non-automotive people. So should the company go belly-up, he fears the owners might just shrug their shoulders and move on to managing other assets in their handsomely diversified portfolio. Chrysler dealers might want to get assurances from corporate that warranties will be honored even if the company goes bust. Again, Clark has no inside knowledge about whether Chrysler is ailing or not. He's just thinking ahead about possible future scenarios.

Finally, if you like fancy cars, this is a good time. Porsche sales are down 26% and Lexus is down around 20%. The theory that the rich would continue buying status automobiles through the lean times has proven false. And keep in mind that cash is king at the dealerships as loans become harder to get.

In Clark's TV work, he recently reported on a website that offers an interactive tool that should help the owners of old gas guzzlers. The site addresses that all-important question: Does it make sense to keep it or dump it and get a brand-new fuel-efficient vehicle? Before you play around with this tool, you should realize that the cost of a car is more than just the price of a gallon of gas or a barrel of oil. You have depreciation, maintenance, insurance, repairs and interest on the loan if you're not buying upfront.

What kind of gas mileage are you really getting? To find out, fill up your tank, set your trip odometer to zero and drive your normal route over a tank of gas. Then fill up again and divide the number of gallons you buy into the number of miles you drove. Keep in mind that if you replace your gas guzzler with a used car of similar age that gets great fuel economy, well, the math is irrelevant for you. You've simply bought like to replace like, in terms of age.

Clark's been hearing some interesting things in the car market. For the longest time, 4 cylinder engines were unloved. Now they're back with a vengeance. If your last 4 cylinder went from 0 to 60 in a day and a half, the technology has changed so much over the last few years. Today's 4 cylinder engines are more powerful and get better fuel economy than yesteryear. Meanwhile, sales of ultra-small cars like the Honda Fit have shot through the roof. So Clark's advice is look one size bigger for a steal of a deal. You'll get less depreciation over time and the slight decrease in fuel economy won't be much to outweigh the potential savings upfront.

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.

Consumer Reports' annual auto issue is out and Clark is giddy with excitement. The April '08 issue definitively says that extended warranties aren't worth the investment. Clark has historically been neutral on extended warranties for vehicles, but now he'll have to revise his opinion. Only 20% of people ever recoup the cost of the warranty vs. the cost of repairs over the lifetime of a vehicle. If you're buying a Mercedes, you'll have the best chance (about 40%) in that regard. Other vehicles where a warranty may be a smart move include Pontiacs, Jeeps, Chryslers, Buicks and Dodges.

In other news, there's a new champ when it comes to reliable small cars: Hyundai Elantra. Other top picks included the Honda Accord (family sedan); Toyota Prius (hybrid); Toyota Sienna (minivan); and Hyundai Santa Fe (SUV). American cars are getting more reliable, but they're not quite on par with the Japanese vehicles yet.

When it comes to the best used cars, they're all Japanese: Toyota's Prius, Highlander, RAV 4 (4 cylinder), Corrolla and Honda's Accord (4 cylinder). A new category this year was vehicles that are unloved, but good to own. This category was dominated by Korean vehicles such as the Kia Rondo and the MAZDA5.

People are buying sub-compacts vehicles like crazy these days. Clark loves to ride around in sub-compacts when he's overseas in Asia. Foreign markets are all about the economy of packing as many people into a vehicle as possible. For example, Clark's Scion XB seats about 5 people over here, while 12 people will squeeze into the same vehicle over in Japan. Even high-end manufacturers like BMW and Mercedes are getting into the sub-compact market with their 1 Series and SmartCar brands, respectively.

Because of the sub-compact sales frenzy, you may now be able to buy one size larger for less than you would pay for a sub-compact. The fuel economy losses in going bigger may only be a couple hundred bucks a year. Even Clark who is obsessed with dinky cars knows there's more comfort in compacts like a Toyota Corolla. While Clark has pre-ordered the SmartCar, he may still decide to go with a compact instead. Dinky-mobiles deprecate at a faster rate than compact cars. Plus, the additional fuel economy they give may not offer you as much bang for your buck as you'd get by stealing a deal on a compact.

Clark recently overheard a man at the studio talking about shopping for a new car. One question that popped out of his mouth surprised Clark: "When did the average cost of a vehicle become $35,000?" It got Clark to thinking, "What kind of cars is he looking at?" Vehicles are the best deal they've been in a long time. We choose to gingerbread them with extra features and gussy up the price. But you can still get a fantastic new car for no more than $15,000.

There's a huge market for affordable auto transportation, and Clark means really affordable. Several years ago, he told you about a vehicle called the Logan by Renault. This 4-door sedan is available in Europe fully equipped for $6,000-8,000. Meanwhile, India has a $2,500 car entering its marketplace on Jan. 10. The vehicle is being introduced by Tata Motors, a company that's set to buy Jaguar. Talk about the opposite extreme of vehicle price!! Unfortunately, these kinds of affordable vehicles aren't available stateside yet. Many people are stuck in the '80s when it comes to thinking about affordable vehicles. If the terms "low cost" and "cars" make you automatically think "Yugo," you owe it to yourself to re-examine the new wave of today's low-cost cars. But keep in mind that, as Clark recently told you, the real deals in '08 will be with used cars.

Car prices are headed into a free fall. Records show that sales were anemic in 2007 -- the lowest they've been in 9 years. Now comes word that '08 sales are expected to be even worse! So the opportunity for car buyers right now is tremendous. Car dealerships are in complete turmoil because there are simply too many of them in the United States. Manufacturers, meanwhile, are trying to guess how much they should slow production. But they won't be able to dial back quickly enough. The Financial Times reports that the best opportunities in '08 will be in used vehicles, not new vehicles. There's a huge surplus of used vehicles because of repossessions, trade-ins or leases that have ended.

While Clark loves used cars, the only danger is that you'll buy someone else's trouble. So do it right from the start: Get the vehicle inspected by an independent mechanic -- even if it's been "inspected" at a dealership such as CarMax. Always beware that you buy as is when you buy a used car. In fact, salespeople in some states may be allowed to lie to you about the past history of a vehicle. So which dealerships are trustworthy? CarMax is one company that's beloved by Clark. They researched what people hated about the industry and eliminated it from the buying process. In Europe, a man who heard about Car Max opened a clone. Now it's the fastest growing dealership chain over there. You can't go wrong when you treat people right and make everything simple, honest and clear.

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!

Several automakers announced new plans for alternative energy cars at the recent Los Angeles Auto Show. Honda unveiled its Clarity, a hydrogen powered fuel-cell vehicle. The Clarity will emit zero pollution. A 3-year lease would run you about $600/month, so it's not exactly cheap. Honda will be marketing its vehicle in Southern California, where there are several dozen hydrogen-filling stations. Chevrolet/GM has plans to put around 100 of its hydrogen vehicles on the road in SoCal under the Equinox nameplate. Meanwhile, Ford is working to launch its plug-in hybrids. Those kinds of cars usually run on electricity for the first 40 miles before they kick over to a gas-powered engine. Clark salutes the entrepreneurial spirit of these automakers who are experimenting with new kinds of cars. Some of you may remember when Clark previously spoke about a car company called Tesla that's building a $100,000 electric sports car. Their goal is to use proceeds from initial sales to fund further research into developing alt-fuel vehicles that will be much more affordable for everybody. This is exactly the kind of entrepreneurial spirit that will help us move away from the environmental and national security dangers that go along with gas engines.

Your car is the second most expensive purchase you're likely to make after your home. So people often ask about which vehicles hold their value best after 5 years. To answer that question, Kelley Blue Book has just released its 2008 Best Resale Value Awards tally.

The winner is Volkswagen, which is making a comeback after some recent big losses. VWs keep just under half their value after a 60-month cycle. The other brands that round out the Top 10 are BMW, Acura, Honda, Porsche, Subaru, Lexus, Infiniti, Audi and Toyota.

On the other end of the spectrum, the worst brand to hold value has been singled out as Suzuki. With Suzukis, you only get about a quarter back for every dollar after 5 years. Other cars that really stink when it comes to holding value include Kia, GMC, Mercury, Dodge, Chrysler, Lincoln, Jeep, Ford and Jaguar.

On a related note, the Insurance Institute for Highway Safety (IIHS) says that the Subaru Impreza is the only small car that meets its strict safety standards. There were tons of midsized vehicles green-lighted by the IIHS, but not so in the large vehicle categories -- despite what you may remember from high-school physics!

Clark continues to receive many questions about the used Honda Civic GX he just purchased. Typically, a new GX runs about $25,000 versus $17,500 for a standard Civic. But some folks have been wondering if the extra investment is worth it. One boon to buyers is that you receive a $4,000 federal tax credit when you purchase this no-pollution natural-gas vehicle. Meanwhile, operating costs are about $1.20 per "gallon," though you don't fill up with traditional liquid gas. Clark instead uses compressed natural gas, which is largely produced here in the United States. He'll report back and let you all know if his GX purchase proves to be crazy or not. Meanwhile, the government has issued new fuel economy numbers for automobiles at FuelEconomy.gov. The push to get new numbers really gained momentum when people bought the Toyota Prius and found their sticker numbers could be inflated by 30 percent. But all 2008 vehicles going forward will feature the true miles per gallon figures. Note that you get greater value for your buck when you go from a vehicle that has 15 mpg to one that has 25 mpg -- rather than going from 25 mpg to 35 mpg. It's all about ratios. So it may make sense to buy a car with good mpg versus great mpg. It's that initial leap in fuel economy that gets you the biggest bang for your buck.

Last winter, Clark first started talking about natural-gas vehicles (NGV). He loves them because they don't pollute the air and they use domestically produced fuel. His wife encouraged him to get one, so he searched on the Internet and a found used 2007 Honda Civic GX. Clark admits that this could either be a really dumb purchase or a really smart one. Honda is making about 400,000 of these cars per year, but they're only for sale in California and New York. The cost is about $25,000 for an NGV versus about $17,500 for a standard Civic. One of Clark's challenges in having an NGV is finding a place to fill it up with specially compressed natural gas. There are a lot of filling stations on the West Coast and on the Eastern seaboard down through Richmond, Virginia. But in the Atlanta area there's only one single station in a more than 200 mile radius! Luckily that station is about seven miles from Clark's home. Clark believes that as a nation we need to start thinking outside of the box about our energy needs. Relying on foreign energy suppliers who want to harm us can only weaken our nation. Clark's Honda GX is his answer to this dilemma. What's yours?

Consumer Reports has released its annual vehicle reliability survey and Toyota has come out with a black eye. For the first time ever, the Japanese company's Camry has been dropped from the recommended list. Toyota made a corporate decision a few years back to become the world's largest automaker. In doing so, they had to take the focus away from making quality vehicles and shift it to growth. That explains why Toyota as a whole now checks in at No. 5 on Consumer Reports' tally of the most reliable vehicles sold in the United States.

Meanwhile, Ford has emerged as an unlikely hero in the report thanks to its enormous jump in quality. The "Not your Father's Ford" tagline is taking on a new meaning and people can no longer joke that Ford stands for "fix or repair daily."

The top carmaker remains Honda, followed by Acura and Scion. The first American nameplate on the list is Buick, followed by Mercury and then Ford. The least reliable car sold in the United States is Land Rover, followed by Hummer, Cadillac and Mercedes.

Cars speak to us emotionally. Clark's producer Joel bought a 2000 Nissan Altima recently that doesn't really stir his emotions; he simply views it as dependable transportation. Joel might have picked a Honda Element if he were buying on emotion alone. Christa, Clark's executive producer, has named the hybrid version of her standard Lexus RX 300 as her dream car.

Sometimes it's hard to step back from the emotional side and make a smart auto purchase. But think about the underlying hassle that comes with purchasing an unreliable vehicle.

When you're ready to go car shopping, get pre-qualified for a car loan from a credit union and then get Consumer Reports' annual auto buying guide. Try to find a balance of quality and that emotional X factor and you'll be on your way to a great car purchase.

Clark's associate producer, Joel, has been in need of new transportation and now he's got his hands on a great used vehicle. His old Honda Accord croaked on him and he'd been very patient looking online for a used car over the past few months. By checking Craigslist.org on a daily basis, Joel was able to snag a 2000 Altima with 139,000 miles for $3,200. Clark's executive producer Christa used AutoTrader.com to buy a Lexus EX 300 about three years ago. The car had 99,000 miles and looked like new. She initially narrowed her search to 10 cars, and eliminated five off the bat when she couldn't get the VIN number from the owners. A few cars she did get the VIN for had been in serious wrecks, so she was able to eliminate those ones early in the game too. The important thing to know is that you're less likely to have auto heartache if you're methodical and have the vehicle vetted by a mechanic and run the VIN number before purchasing. Both Joel and Christa paid cash, so they have no car loan. Meanwhile, Kim -- Clark's producer -- has had a pickup truck for about five years. She bought it on a whim when she wanted to take a road trip and got a zero financing deal. Within days she regretted her purchase -- she actually hates trucks! But she didn't compound her troubles by selling the vehicle and facing steep depreciation. Instead she's hung on to it and turned a not-so-great purchase into a financially viable one.

For years Mercedes Benz vowed that it would never bring its Smart Car to the United States. The luxury carmaker claimed there would be no market for it. But now that people wants smaller and more efficient rides, the Smart Car is set to hit our shores in 2008. The Smart Car is a two-person vehicle that Clark has been obsessed with since he first saw one in Europe. In fact, Clark and his wife have toured the factory in eastern France where these cars are made. Smart Cars were originally designed as a joint venture between Mercedes and the Swatch watch people before the latter company pulled out. A basic Smart Car has a list price of $12,000, but that can rise to $20,000 if you fancy it up. Clark recently had a chance to test drive a Smart Car for a TV story. He's not completely sold on the car yet -- even though he previously put a refundable $99 dollar deposit down. The fuel economy is great (between 40-60 miles around town), but it may be too small for his five-person family. Safety is another concern. The Insurance Institute for Highway Safety doesn't have a crash rating for the Smart Car yet. They think it may be too light to hold up well in a crash. While filming the Smart Car TV story at a Mercedes dealership, Clark couldn't help but notice some of the huge and fancy other vehicles on the floor. There was one Mercedes that cost $202,000. You could sure buy a lot of Smart Cars for that price!

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.

It's no surprise that we Americans are energy hogs. But everyday there are new developments that help us reduce our energy consumption. Soon auto shoppers will actually be able to believe the gas mileage stickers found on cars in dealer lots! The feds used to put fake numbers on the stickers because the test used to calculate mileage efficiency was bogus. So you could purchase a vehicle expecting to get something like 26 miles/gallon (city) or 38 miles/gallon (highway) and get substantially lower real mileage. Now the government is enforcing a legitimate mileage test, so all cars shipped to dealers after Sept. 1 will have real numbers posted on them. Why the sudden change? The Toyota Prius really pushed this along. People were expecting to get 50-60 miles/gallon but the actual numbers were so much lower that people really ripped off and complained.

Another positive change that's a little further off involves LED (light emitting diode) lighting. Clark and his wife often battle over using regular or CFL (compact fluorescent lamp) bulbs in their home. He has a number of CFLs from the '90s when the technology still had a lot of kinks. In fact, once he was doing a TV story about energy-smart homes and he wanted to demonstrate his lighting for the camera crew. The CFLs took about 70 seconds to come on after he flipped the switch! Today's CFLs are much better (and faster to light up), so his wife is now more open to using them in their home. But CFLs may soon be a thing of the past when LEDs hit the market. LED are now used in new billboards and offer just about the best artificial light possible while eating up low energy. They don't release extra heat and they last for years. LEDs will probably be in offices, retail stores and industrial parks before they're available for home use. Clark thinks within four years LEDs should become a popular consumer product.

For 15 years, Clark has talked about the advantage of keeping a new car for at least 10 years or buying a used car and keeping it for at least four years. Cars lose about half of their value during the first three years, but then the loss ratio drops off pretty steeply after that time. Consumer Reports has now done a study on the virtues of keeping a car for 15 years. Bear in mind that most owners only keep their vehicles for three or maybe five years. But by keeping a car for 15 years or 225,000 miles, you save $31,000 dollars. The report found that during the course of 15 years, your average maintenance will be $18,000 and your insurance will be $18,000.

Consumer Reports also identified 10 vehicles that are reliable enough to last 15 years -- and they’re all Japanese! Among the top ones are Honda’s Civic, CRV and Element; and Toyota’s Forerunner, Landcruiser and Highlander models. So what vehicles should you not buy? A lot of European models, according to Consumer Reports, such as the BMW 7 Series, the Infiniti QX 56 and select models of Jaguar, Mercedes, Volkswagen and Volvo. Meanwhile, how should you decide when it does not make sense to repair a car? Clark typically tells people the cutoff should be when the cost of repair is 50 percent or more of the car’s trade-in value. Now Consumer Reports says you can push that up to the actual trade-in value. Other times you should junk a car is when it’s rusted out; really unreliable, in a flood or in an awful accident.

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.

Clark's daughter has his Honda Civic hybrid at school and she's happy to be getting about 45 miles/gallon. It seems that hybrids with good fuel economy are now selling like gangbusters. Remember back just a few years ago when this wasn't the case? Ford had to offer incentives just to move their Escape hybrids. Now The Washington Post reports the Escape is so hot that dealers can't keep up with the demand. In fact, the vehicles are selling for thousands of dollars above the list price because people want to save money on gas. Psychologically it may feel OK to pay a little more now with the promise of bigger savings down the road, but Clark thinks you should really crunch the numbers before you make this kind of purchase. Buying with your emotions isn't advisable, nor is overpaying for new technology. Take the rational approach by doing some smart comparative auto shopping on a website like Edmunds.com. The same thinking applies when deciding whether to dump your current gas-guzzling ride for a new and more fuel-efficient vehicle. Look for a similarly depreciated vehicle and try to do a trade where you get an older set of wheels that's more fuel-efficient than your current car.

Diesels cars and other vehicles are poised to make a big comeback, according to the latest findings from J.D. Power and Associates. The survey said that one in four Americans would consider buying a diesel car; a year ago, that figure was more like one in 10. Clark remembers the diesel station wagon his family had when he was growing up. That automobile shook like crazy, had terrible acceleration and belched smoke and odor. But today's diesels are not like your daddy's diesel. Clark's driven some modern diesels throughout Europe and enjoyed great acceleration, quiet operation, good gas mileage and less pollution than a regular gas-engine car. So if you're looking for a car next year, diesel could be part of the picture. On a related note, J.D. Power also revealed stats about the reliability of vehicles after three years of ownership. Two brands tied for the top spot: the foreign-made Lexus and, somewhat surprisingly, the American-made Buick. In fact, several other American brands were toward the top of the tally, with Cadillac placing fourth and Mercury placing fifth. Meanwhile, Japanese standards like Honda and Toyota placed fifth and sixth, respectively. On the bottom of the heap were some foreign cars like Suzuki, Isuzu and Saab. But the single least reliable automobile -- based on how many problems were reported per 100 vehicles -- proved to be a Land Rover. Clark thinks it's interesting that some Japanese and European cars were selected as least reliable, while a lot of domestic rides are back on top. But perceptions take a long time to change, and people who grew up on foreign cars sometimes won't even consider a domestic vehicle.

The latest American Customer Satisfaction Index from the University of Michigan has been released. This quarterly survey has been around since 1994 and keeps tabs on the good, the bad and the ugly in multiple industries. The big news this year is that American automakers did very well. While the top automaker was foreign (Toyota's Lexus division), homegrown companies like Cadillac, Buick and Lincoln-Mercury all tied for second place. Meanwhile, Toyota's namesake division fell way behind on the tally. Clark thinks the Japanese automaker has been taking its eye off the ball lately. The Toyota business model is now geared toward growth and quantity, not quality. That accounts for why they've been issuing more recalls than ever. Fortunately for Toyota, there are some corporate initiatives in Japan to raise the quality of their namesake line of vehicles. In the computer industry, Apple is tops in customer satisfaction; Clark's wife has an Apple Macintosh that she loves. In the PC world, Hewlett Packard's HP line makes a beloved machine, yet HP's Compaq division has been voted the worst company in the industry. Meanwhile, Whirlpool continues its dominance in the appliances field, racking up its largest lead yet over the competition.

Clark made a prediction in January that ended up wrong. He said gas prices would be a lot lower by this summer. He says he really blew it on that one. However, he made another prediction several years ago that may just be turning out to be true. He predicted there would be increasing demand in the US for shared cars services. Two companies who are doing this are Zipcar and Flexcar. These are services where you can rent a car by the hour just to do your errands, and just return it to where it was parked when you're done. Gas and insurance are usually included. It's kind of like "public transit, private driving," and it's much cheaper than adding another car to the family fleet! It's expanding like wild fire to many American cities, and even to some suburban markets. Since cars are such a huge part of our daily budget, it can save you a lot of money. It's like owning 1 and 1/4 cars, instead of 2 cars, or a time share for a car. But everyone knows that's not a term Clark likes to use -- so he prefers to call it "shared ownership!"

The Chinese have come into almost every American market except for cars—until now! Starting in 2008, Chinese cars will be sold under the Chrysler name in the U.S. Mainland China has a goal to account for 10% of cars sold in the world. But quality is a huge issue with Chinese manufacturing. Hyundai started off with terrible products at first; China might too! China makes terrible toys, dog food, tires, and much more, because there aren't sufficient checks and balances in the manufacturing system. So it will be a challenge for them to get the quality right. But they'd better, because the quality of cars these days is top drawer. Cars are better, safer and more reliable than they have ever been, so it's a great time to buy.

Ford is working with the power companies in California for plug-in hybrids, which are electric-powered for the first 40 miles, after which the car switches to gas. These are awesome! They cost only 2 cents per mile, only a fraction of what you pay per mile for gas! And it's a great way to reduce our dependence on foreign oil.

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.

Certified used cars have become overwhelmingly popular these days. With everything that the dealer’s say about their “certified used cars,” you would believe that they are a safe bet. Don’t count on it. In a recent story, one lady bought a GM certified pre-owned car that turned out to be two cars welded together! And GM has said absolutely nothing about it. The average extra price paid for a “certified used car” as opposed to one that isn’t certified is $2,000. When you are paying “certified” price but aren’t really getting a “certified” product, it is just wrong. So avoid some of the pains you can have and pay an ASE certified mechanic to take a look before you buy. It might cost a little up front, but save you a lot in the long run.

About a year and a half ago, after Hurricane Katrina and the big run up of gas prices, Clark proposed an idea: discourage people from buying gas-guzzling vehicles and encourage them to buy fuel efficient models. He suggested taking vehicles that got bad fuel economy (less than 20 miles per gallon) and hit them with a $5000 gas-guzzler tax. If you buy a vehicle that gets between 20-29 mpg there would be no tax, and if you buy one that gets over 30 mpg, you’d get a $5000 rebate from the government. Some people were furious with that position. But now, the State of California is considering doing this. (The California tax would be $2500 for guzzlers, a $2500 rebate for efficient vehicles, and no tax for autos that fall in between.) Americans use far more fuel, electricity and energy than other countries of equal wealth. He believes that we hurt our national security and our national defense needs when we remain dependent on foreign sources that hate our guts. That’s why in Clark’s opinion encouraging people to use less energy of all kinds is a big deal.

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.

Why does Clark prefer that you buy used cars instead of new? Well, according to Kelley Blue Book, the value of a new car drops like a rock as soon as you leave the lot. Let’s say you buy a new American car and trade it in five years from now. How much of the original purchase price is it worth? Between 22 and 25 percent. In five years, it loses between 75 and 80 percent of its value. What about Japanese cars? Two vehicles that hold their vehicle better than any other car are the Toyota Camry and Honda Accord. They hold about 60 percent. So, there is a benefit to buying a new Japanese car versus a new American car in terms of resale value. But there is still a large drop. If you buy a used car that is a few years old and have it checked out, the car will keep its value much longer. There may also be some of the warranty left on the car, which is great. Even better news is that car prices are now going down and car companies are adopting a “no-haggle” buying procedure. So, the process is easier and cheaper. GM is one of the companies that tried the no haggle deal, and it did not work so well for them. So the company is implementing special incentives on top of the deals. It’s basically a great time to buy a used car. Just remember to always have your used car inspected by a certified mechanic and research the title history on carfax.com. That goes for “manufacturer certified” cars as well.

There are a ton of “young” used cars sitting on dealer lots right now. The marketplace is overrun, in fact, and prices have dropped significantly. So, if you like a car that is a couple years old, you have found the sweet spot in the market. Even more fantastic are the deals on used SUVs. Of course, you’ll be paying a lot more for gas. But the SUV market is overrun with vehicles. The average price on a three-year old SUV is about $13,000! If you do buy one of these used vehicles, just remember to have it checked out by an independent mechanic. What about buying new cars? Well, GM has come up with a program to get more women in the door. Women hate the car buying process because of the way they’re treated and they talk about it openly. At the same time, women influence 85 percent of all car purchases, whether they are the ones buying or are the partner of someone who is. So, GM has started “Girls Day Out.” When women arrive there are massages, makeovers and cooking classes, along with cars that women can test if they want to. Clark thinks it’s crazy. What needs to change is how dealers do business, not adding fluff around it. Carmax has the business model other dealerships should emulate.

A few years ago, Clark took the team to Japan. He kept seeing micro mini-vans that could fit about 8 people inside. The idea of the van is that they get the fuel economy of a sub compact, but they have the utility of a junior van. One of the cars he saw over there looked like a toaster on wheels. And what do you know? It’s now in the States and is known as the Scion. They are in certain parts of the country, but they have great prices. You can buy a fully equipped one starting at about $13,000, which is great. Clark couldn’t wait until the cars came to him, so he went and bought one. He loves his new Scion XB, but his wife hates it.

Years ago, Clark got quite a few phone calls from people who had bought used cars that turned out to be “flood cars.” It was after a series of hurricanes that totaled cars, which are then bought by salvage companies and the car titles are later washed. People involved in this unsavory business do something known as “title washing,” which basically shows that the car was never salvaged. Well, it’s about to happen all over again. Over the next several months, we could see hundreds of thousands of flood cars on the market in the aftermath of the four recent hurricanes – Charley, Ivan, Fran and Jeanne. People in the automotive industry are already bracing themselves for the influx of these cars, according to Edmunds.com and The Washington Post. Auctioneers are also concerned. One auction owner in Florida said he had already seen 5,000 flood cars. These cars often end up in the hands of “curb stoners,” which illegal dealers who run ads in the paper. They pretend that they are selling their sister’s car or their mother’s car and they hope you don’t know what they know. About 20 percent of these cars go to unsuspecting people overseas. The other 80 stay right here in the U.S.A. So, if you are buying a used car, be sure to do a Carfax report from carfax.com. The auto company, AAA, also does vehicle history reports for members. It’s imperative that you run one of these reports over the next six months because that’s when these cars will be out there. And, please spread the word to anyone who is considering buying a used car.

The three major Detroit automakers – GM, Ford and Chrysler – have come up with a new strategy for pricing cars. These companies are pushing through very large price increases on the 2005 models, even though the 2004, 2003 and 2002 models did not sell very well. In fact, these companies are raising the prices of vehicles AND increasing incentives. That is because there is a percentage of car buyers who purchase strictly on emotion. These people do no homework and they get caught up in the thrill of driving a new vehicle. The car market is basically splitting into three categories: people who do no research, people who do some research on the Internet and get a somewhat better price, and finally those people who do lots of homework. The third group treats buying a car like a part time job, but it’s a very small percentage of the pot. Automakers realize that only about 10 percent of buyers will really work for a good deal. So they can still mark up vehicles and increase their profit margins. Remember that knowledge is power!

You’ve probably heard that car dealerships make huge markups on cars. Usually, they mark-up the financing anywhere from 3 percent to 12 percent. They claim it really took a lot of work to get you that rate when really it was a cinch. This secret is not as well kept as it used to be, so people are going to credit unions more often. Most people just know better nowadays. But for those who don’t, one dealership outside of L.A. posts a daily list of credit scores and the rate those scores will get you. They’re trying to be more upfront with customers who may question the honesty of the rates, and it’s working out for everyone. The dealership is able to get people in and out in less time, thereby earning them more customers. And customers get an honest deal. But most dealerships aren’t that above board. So, you have to do the work yourself. First go to eloan.com and get your score. You can get it for free once. Then go to myfico.com and find out what rate you should be offered. Then, you’re armed with knowledge and can get the rate you deserve.

Clark is a big fan of keeping cars until the wheels fall off. So, he was quite excited when he saw some encouraging statistics in USA Today about how long people are keeping their cars. The report stated that a generation ago, the average car on the road was four years old. Today, the average car is eight years old. This is happening for several reasons. First of all, the typical car is made phenomenally better. That is because the industry has a lot more watch dogs, including the Center for Auto Safety and the National Highway Traffic Safety Administration. It means that people are in a position to keep cars for twice as long. Clark would like you to keep a car 10 or more years. If you do, you will be able to retire five years earlier. Think about how great that would be. You might not have the fancy car that the person next to you does. But that person will be working while you’re sunning yourself on the beach. If you don’t like the idea of keeping a car for 10 years, consider buying a fancy car that is a couple years old and then dump it after a few. The biggest loss in value occurs on a car in the first 24 months. So, it’s worth it to go a little older.

Many people think that they can return a used car after they buy it. But that is a misconception. When people sell you something door-to-door, you have a three-day right to cancel. But with cars, the minute you sign your name it’s a done deal. There are some forward thinking car dealerships that have different policies. But, in general, people in the used car business will lie and cheat to sell you a car. It may be a hunk of junk. And you have no recourse. In California, the legislature is doing something about this. The state is considering a “Used Car Bill of Rights” that would give customers three days to return the car. And, under the new law, the words “certified used car” would actually mean something. Right now, any dealership can say a car is “certified,” but it doesn’t mean anything. Legitimate certified programs are underwritten by a manufacturer, the best being Jaguar’s program. The manufacturer actually provides the buyer with an enhanced warranty just for buying the car. We’ve also had several discussions on the air about resales and the “extras” for which dealerships charge you. Under the law, any time a dealership sells you something with “extras,” the company will have to tell you exactly what the mark-up is. Typically, when you buy a used car it’s “as is” with no warranty. So, you should always have the car checked out by a certified mechanic before you buy.

If you’re interested in buying a new or used car, Clark always recommends the April issue of Consumer Reports. The entire issue is devoted to car buying and CR does a very thorough job inspecting what cars are the most reliable and which are the least reliable. In addition, there is no influence from the automakers. The issue is starting to appear on shelves now, and new this year are charts showing which cars are most reliable after one, three and five years of ownership. This is great for people who like to keep cars for a long time. Although brands sometimes jump around, in general the cars that are most reliable after one year are usually the most reliable after five. The most reliable of all brands is a tie between Infiniti and Lexus. Rounding out the top six are Honda, Toyota, Acura and Mazda. One car that has been plagued with bad publicity lately is Mercedes, one of the most expensive cars on the road. In the April issue, Mercedes comes in well below average after a year, second from the worst after three years and way below average after five years. How did BMW do? It looks ugly after a year, moves to better than average after three years and moves to just behind the leaders after five years. So, there are some initial quality issues, but they are reliable and durable over time.

How do you protect yourself buying a used car these days? Clark was looking in the auto ads this weekend and he saw ad after ad for “certified used cars.” What does that mean? Well, for many it has come to mean that the car has been checked out thoroughly, it hasn’t been in a wreck and it is okay to buy. When visiting car buying sites, you will often see a price for a regular used car and a price for a “certified used car.” There are legitimate certified programs, for sure. But don’t think that a dealership certification means it’s been checked out. Even if the dealership has a special label or sticker that they put on cars, it doesn’t means there is a warranty or guarantee. Legitimate certified car programs come from the manufacturer and come with some typed of extra warranty or guarantee. The program got its start from Jaguar, which has had a large number of leased vehicles. The company was having problems with the resale value of these leased vehicles, so the company wanted to ensure the cars were in the best shape possible. The length and comprehensive nature of the warranty are still the best of any program out there. So, the luxury brands still continue to lease vehicles, but they don’t take a huge hit if the cars come back. In one where both parties have an interest in keeping the car in great shape, the vehicle will go through a certification process. It will include the following:
• Anything wrong with the car will be fixed.
• The company won’t sell you a car that has been wrecked.
• It will come with a warranty.
• The best programs will even offer a "think about it" period of a few days so you can return the car no questions asked.
• It will cost you more money.
So, if buying used makes you nervous, one of these legitimate certified programs may ease your mind. Remember that these programs are not a substitute for having the vehicle checked out by an independent diagnostic mechanic. There is no substitution for that. So, you probably want to get the car checked out by an ASE certified mechanic just in case. According to J.D. Power, the sale of “certified” used cars is up 50 percent in the past few years. But you want real certified programs that come from the manufacturer and that come with a warranty. If it doesn’t have those two things, “certified” is just a word.