Category Archives: Automotive News

Companies Fined Over Auto Harness Price Fixing

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A two year investigation by the U.S. Justice Department, has found evidence that a small group of automotive harness suppliers were working together to control prices for wiring harnesses and other crucial components. It was found that as many as a dozen companies globally, had secret agreements to fix prices and controlled the allocation of parts to automakers. In addition to a $470 million fine, several company executives will be serving prison terms of up to two years. These penalties follow a separate $200 million fine imposed by the Justice Department on Furukawa Electric Co. in November.

Over 45 suits have been filed in federal court against the companies involved. American suppliers, as well as auto dealers and consumers who believe they have paid higher prices because of the price fixing, have begun taking legal action separate from the Justice Department probe. The ongoing investigation is the largest the Antitrust Division has ever pursued.

Autonomous Automobiles And Legal Liability

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In 2012 when Google first tested their self driving car, they said that “even though the project is still in the experimental stage, it would provide a glimpse into the future of what automobiles will be able to do.” They felt that self driving cars would make it safer for motorist on the roads, improve fuel efficiency of vehicles and increase the number of people being transported.

Now, just a little over a year later, automobile technology has come one step closer to driver-less vehicles. Automobile manufacturers are already using autonomous technology to assist and in some cases correct drivers actions; but technologist, legal scholars and government regulators are debating the legal implications of the technology. They all agree that there is a potential to reduce human error and allow better fuel efficiency, but question of legal liability, privacy and insurance regulations still need to be addressed. According to O. Kevin Vincent, chief counsel of the National Highway Traffic Safety Administration, “the federal government does not have enough information to determine how to regulate driver-less technologies.” The technology relies heavily on global positioning satellite data and other systems, which are vulnerable to jamming by malicious computer hackers.

Google has already been lobbying states to permit autonomous driving, which indicates that the company may hope to introduce such vehicles soon. Nevada became the first state to legalize driver-less vehicles last year, , and similar laws have now been introduced before legislatures in Florida and Hawaii. It is expected that a similar bill will be introduced in California soon.

Wireless Technology Makes Autos Safer And Smarter

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Automobile manufacturers like General Motors, Ford, and Mercedes Benz are showing off some new technology that will allow customers to remotely track their cars, diagnose mechanical problems, and help drivers avoid collisions. The plan is to use the internet and develop new automotive technology that will give vehicles intelligence. Your automobile will not only get you to where you need to go, but will have the intelligence to be self aware of what’s happening around it and to it, and could even monitor how the driver is doing.

OnStar is encouraging developers to create apps that use its wireless service to control cars in new ways. The company already offers:

  • Automatic crash response
  • stolen vehicle tracking
  • turn-by-turn navigation
  • roadside assistance
  • real-time data such as mileage, fuel levels, oil life and tire pressure
  • remotely unlock doors, honk horns, shine lights, and start the engine

OnStar is also working with RelayRides, a neighbor to car-sharing service which will launch later this year on Apple’s iOS. The new app will allow car owners to unlock their cars remotely after the person renting their vehicle arrives, or even track where a renter has taken their car.

Most electric vehicles already use similar technology which allows customers to manage their car’s recharging cycles, and it is expected that over half of all new vehicles will be similarly equipped by 2016. But the growing volumes of information processed by the new technology not only creates distractions for drivers but also raises issues of privacy.

CA Auto Bill Wants New Rules For Dealerships

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California lawmakers are are hoping to protect working families by imposing tough new rules on “Buy Here Pay Here” automobile dealerships. Assemblyman Mike Feuer introduced the bill last week saying that it would limit unfair sales and collection practices used by these dealerships. Some of the changes include:

  • Dealerships would be required to display the price of the vehicles on the car where customers can see it.
  • Customers would not be forced to make payments in person at the dealership.
  • Dealers would not be allowed to call personal references after the sale is complete.
  • Dealerships would not be allowed to install GPS trackers or devices that can remotely shut down vehicles.

Lobbyist for the Independent Automobile Dealers Assn. of California, say that enforcement, rather than new regulations, would be a better way to handle problems with Buy Here Pay Here dealers. They say that the new bill would impose additional costs on all dealerships, putting legitimate dealers out of business. In the end, people with bad credit will find it even harder to get an affordable and reliable vehicle.

Federal Bill Increases Recall Fines

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Automobile manufacturers, dealers, rental companies and the U.S. Chamber of Commerce, have lost their fight against a federal bill that will significantly increase automaker fines for companies who delay automobile recalls. Currently, the maximum fine is just over $17 million, but once the bill goes into effect, the fines could go as high as $200 million. According to groups opposing the bill, “The increases are completely out of proportion to the current penalty structure for manufacturers under the Consumer Product Safety Act.” The bill was introduced in response to unintended acceleration recalls by Toyota in 2009-2010. Even though Toyota vehicles were cleared of electronic flaws causing unintended acceleration, the company ended up paying maximum fines for recall delays.

Other provisions of the bill include an increase in the maximum fine for odometer fraud; new regulations for vehicle pedal placement and push-button ignition; an improved recall database and website; and an anonymous complaint hot line for auto workers, dealers and mechanics to report vehicle safety problems.

Alternatives To Buy Here Pay Here Auto Sales

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Studies have shown that low-income people can increase their income, are more involved in the community, and have better access to healthcare when they have their own transportation. It is also estimated that one in four needy families do not have a car. The U.S. Transportation Department plans to spend over $100 billion on roads, bridges, public transit, and rail projects, but has little money allocated to help the poor purchase a car. Some feel that the government actually made it harder with programs like “Cash For Clunkers”. The program resulted in higher priced used automobiles by removing almost 700,000 running vehicles from roads. In some states, people receiving government aid are restricted to how much they can spend on a vehicle, leaving them with an unreliable car or no car at all.

Consumers that need a car, but have bad credit, feel they have no alternative but to turn to Buy Here Pay Here dealers. These dealerships advertise themselves as providing a valuable service to consumers, as they make big profit off the misfortune of others. Prices and interest rates are high, and the chance of having your vehicle repossessed is one in four, allowing the dealership to sell vehicles over and over again.

There is about 160 nonprofit organizations nationwide that try to provide affordable used cars to needy families. Some receive public funds, but for the most part they operate on donations and can help only a small percentage of families that need it. Rep. Gwen Moore (WI-04) has tried for years to get the government to help the poor buy cars. In 2005 and again in 2007, she sponsored legislation to provide $50 million a year for low-income car ownership programs. Both bills were rejected.

Buy Here Pay Here Auto Sales Make Big Profits

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People are finding a good investment in a niche of the used car business known as “Buy Here Pay Here” auto sales. In the last two years, investors have bought more than $15 billion in sub-prime auto securities with the hopes of cashing in on profits that average 38% for each vehicle sold. Two of the biggest, America’s Car-Mart Inc. and Credit Acceptance Corp., have seen the biggest gains well above the regular market.

The Buy Here Pay Here vehicle market focuses on helping people buy a vehicle when they can’t qualify for conventional loans. Because the customer is a risk and can’t get a loan anywhere else, the dealership can get away with selling the vehicle for more than it’s actually worth, charge interest rates up to three times the national average, and use aggressive repossession tactics when the customer defaults. Because Buy Here Pay Here businesses are both auto dealers and consumer lenders, it’s not always clear who has authority over them. As a result, each dealership tends to set their own rules.

Although they’re backed mainly by installment contracts signed by people who can’t even qualify for a credit card, most of these bonds have been rated investment grade, some receiving the highest ratings. But so were the financial strategies that drove the nation’s recent housing bust. “We think that investing in such companies is a ticking time bomb,” according to Joe Keefe, chief executive of Pax World Management, “It has ethical as well as systemic risk implications.”

California Says Hands Free Even At A Stop Sign

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According to a court ruling on Monday, drivers in California who use their non hands free cellphones while stopped at a red light or in a traffic jam will be ticketed if caught. This ruling comes after Richmond driver, Carl Nelson, received a ticket from an officer who saw him using his phone at a stop light in December of 2009. He argued he was not driving because the car was stopped while he made the call. Nelson referred to a 1991 Supreme Court ruling that said the term “drive” requires proof of “volitional movements”. In this case, a man suspected of drunk driving, was found asleep behind his running vehicle while parked on a residential street. Court threw out the case saying that there was no “volitional movement.”

In a 3-0 ruling, judges said that even though Nelson was paused at the time, he was driving on the road in the midst of other moving traffic, and distractions in this situation could create hazards to other drivers on the road. Nelson’s attorney said he plans to appeal to the state’s high court.