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Luxury Vehicles Are Eclipsed in Dependability by Workaday Brands



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Not only are cars and trucks getting more reliable, but everyman vehicles over all are now more dependable than luxury brands. That’s according to the 2019 J. D. Power Vehicle Dependability Study, which looks at how well 2016 models have held up.

Lexus was first, followed by a tie between Porsche and Toyota, with Chevrolet taking fourth. Buick, Mini, BMW, Audi, Hyundai and Kia rounded out the top 10.

“The industry continues to make more and more reliable vehicles despite putting more and more technology on those vehicles,” said David Sargent, a J. D. Power vice president.

That doesn’t mean perfection has been achieved.

Owners complained about a wide variety of problems, including batteries that fail, wind noise, transmissions that shift oddly and things that just break, Mr. Sargent said in an interview. While they may upset owners, these issues are not likely to leave them stranded, he said.

J. D. Power, which sells automakers the right to advertise good ratings from its research, has conducted the Vehicle Dependability Study for 30 years. For 2019, almost 33,000 owners of 31 brands were asked about problems in eight major categories, including engine, transmission, controls, entertainment and navigation.

The vehicles and automakers are ranked on the number of problems for every 100 vehicles, with lower numbers being better. The industry average this year was 136 problems per 100 vehicles. That’s down from 142 in 2018 and 156 in 2017.

When J. D. Power combined the scores of “mass market brands,” it came up with an average of 135 problems per 100 vehicles. That compared with 141 for the luxury marques, which weren’t helped by Volvo (204) and Land Rover (221). They took the 29th and 30th spots. Fiat (249) was ranked last.

A Land Rover spokesman said the automaker had problems with its infotainment system and was correcting those. A Fiat spokesman said the automaker expected to move up as a result of a quality improvement program. A Volvo spokesman did not respond to a request for comment, but Mr. Sargent said that Volvo had just introduced its new 2016 XC90 and that it was not unusual for new models to have problems.

The difference isn’t just that luxury owners are more likely to complain because they spent more money. That’s always been the case, yet this is the first time the mass-market brands came out ahead, Mr. Sargent said.
The major reason comes down to infotainment systems, with features like navigation, voice recognition and the ability to link a smartphone, Mr. Sargent said. It amounts to a triumph of the simple.

On mass-market cars and trucks, the systems are less complicated. Consequently, they are easier to operate, work better and are less likely to frustrate their owners. Luxury automakers’ efforts to dazzle and amaze may instead confuse and annoy.

“Complex, infuriating systems have a much, much greater impact,” Mr. Sargent said.

Another factor is an improvement in good, old-fashioned engineering. “The mass-market manufacturers have gotten a lot better at fundamental reliability, the absence of things going wrong, wearing out, falling off,” he said.

While the luxury automakers as a group faltered, some brands triumphed. It’s the eighth consecutive year at the top for Lexus, with 106 problems per 100 vehicles. Porsche followed at 108, along with Toyota.

For the first time, Porsche and the other German brands were all better than the industry average. BMW was seventh, Audi eighth, Volkswagen 12th and Mercedes-Benz 13th.

One shift during the past decade is that Japanese automakers no longer dominate. A decade ago, five of the top 10 were Japanese. This year, only Toyota and Lexus, its luxury brand, were in the top 10.

Mr. Sargent said that reflected fierce industry competition — and how some officials who had worked for Japanese automakers moved to help competitors.

Honda, once a regular in the top 10, is 18th — four spots below the average. The 2019 study looked at 2016 models — the year Honda introduced a new Civic and Pilot.


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NY Fed says auto loan delinquencies at highest point since 2010




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Borrowers are behind in their auto loan payments in numbers not seen since delinquencies peaked at the end of 2010, according to the Federal Reserve Bank of New York.

More than 7 million Americans were 90 or more days behind on their car loans at the end of last year, 1 million more than eight years ago, according to a report from the bank. That’s a potential sign of trouble for the auto industry and perhaps the broader economy.

The New York Fed reported that auto loan delinquency rates slowly have been worsening, even though borrowers with prime credit make up an increasing percentage of the loans. The 90-day delinquency rate at the end of 2018 was 2.4 percent, up from a low of 1.5 percent in 2012, the bank reported. Also, delinquencies by people under 30 are rising sharply, the report said.

But economists and auto industry analysts say they aren’t sounding an alarm yet. The number is higher largely because there are far more auto loans out there as sales grew since the financial crisis, peaking at 17.5 million in 2016. The $584 billion borrowed to buy new autos last year was the highest in the 19-year history of loan and lease origination data, according to the report.

Other signs still point to a strong economy and auto sales that will continue to hover just under 17 million per year for the near term.

“I think it’s a little too soon to say that the sky is falling, but it’s time to look up and double check to make sure nothing is about to hit you on the head,” said Charlie Chesbrough, senior economist for Cox Automotive.

U.S. consumers have about $1.27 trillion worth of auto debt, which is less than 10 percent of the total consumer borrowing tracked by the New York Fed. Mortgages and student loans are both larger categories than auto debt.

The jump in unpaid auto loans is a worrying sign for low-income Americans, though not necessarily a sign that an economic downturn is near.

“The substantial and growing number of distressed borrowers suggests that not all Americans have benefited from the strong labor market and warrants continued monitoring and analysis of this sector,” researchers at the New York Fed concluded in a blog post.

Average new car sales prices and loan payments have been increasing steadily for the past five years, hitting $36,692 last month, according to Kelley Blue Book. Loan payments averaged $547.75 per month last year.

Prices are high because people are switching in dramatic numbers from lower-priced sedans to more expensive SUVs and trucks. Because they keep the vehicles longer, they’re loading up the rides with luxury options such as leather seats, sunroofs, high-end sound systems and safety technology. Also, the Federal Reserve has been raising interest rates, causing auto loan rates to go up.

Jeff Schuster, a senior vice president at the forecasting firm LMC Automotive, said the higher prices and payments mean that some people may have taken on more than they can handle. “Not that they’re unemployed or they can’t afford a vehicle,” Schuster said. “They may have bought too much of a vehicle.”

Schuster said that by itself, the rising delinquency rate isn’t cause for alarm because unemployment remains low and economic growth has been “chugging along,” factors that contribute to the ability to make auto loan payments.

Analysts say that people are reluctant to default on vehicle loans. After all, they need their cars to get to work, pick up children at school and run errands.

“A car is your ability to participate in the economy,” said Signe-Mary McKernan, an economist and co-director of the opportunity and ownership initiative at the Urban Institute, a think tank based in Washington, DC.

McKernan said that when purchasing a vehicle on credit, she recommends having an alternative loan option from your bank or credit union before agreeing to the terms provided by a dealership. She also said that people facing late payments should contact their creditor as quickly as possible and get any agreements on repayment in writing.

If you are behind on your loan payments or worried about affording a loan, follow these tips:

Make sure you can afford what you’re buying .

Try talking to your lender to renegotiate the loan terms, defer payments, or try reducing monthly payments by stretching out the loan repayment period.

Shop for financing outside the dealership such as banks, credit unions and online lenders. If you get your car loan through an auto finance company often found on car lots, your chances of getting a bad deal that increases your debt load will increase. Less than 1 percent of auto loans issued by credit unions are 90 days or more late.

Trade in your car for a more affordable model. You might not get the best rate though compared to selling the car on your own.
Improve your credit score before getting into a loan contract. Those with lower credit scores may may 14.5 to 20 percent on car loans compared to 4 to 6 percent for those with good credit.



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Why rob a bank when you can hack a crypto?





Robbing a bank doesn’t pay off like it used to. On average thieves walk away with only $6,500 per heist, according to FBI data, roughly half as much as a decade ago. No wonder bank robberies have declined by 40% since 2006.

But hacking into a cryptocurrency? Now you’re talking real money.

Two groups are running off with an average of $90 million per hack and have stolen $1 billion so far, according to a report today by Chainalysis, a New York firm that tracks transactions in bitcoin and other digital currencies.

One hacker group, Alpha, is described by Chainalysis as “a giant, tightly controlled organization at least partly driven by nonmonetary goals.” The other group, Beta, “seems to be a less organized and smaller organization absolutely focused on the money.”

Big crypto marketplaces such as Mt. Gox, Coincheck and BitGrail have experienced break-ins that have cost investors hundreds of millions. The reason marketplaces are attacked is they act as vaults where bitcoin and its many look-alikes are held. The New York Stock Exchange and other such places don’t have this problem because commercial banks store their securities in return for a fee.

The chronic crime problem helps explain why institutional investors have avoided speculating in cryptocurrencies. Bitcoin is worth $3,460 today—far below its peak of nearly $20,000 around this time last year.

Hacks are of course big news in the crypto community, and the perpetrators wait until after the furor has died down before turning their haul into dollars, euros or yen. Typically the thieves wait 40 days, Chainalysis said, and at least 50% of the hacked funds are cashed out within 112 days.

“Given the potential rewards, there’s no question hacking will continue,” Chainalysis said.


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tesla 2019

HAPPY NEW YEAR, and welcome back. 2019 is young, and we’ve already got a transportation bombshell on our hands: New York governor Andrew Cuomo announced he wants to cancel a planned subway line shutdown in the country’s largest public transit system. He says a panel of experts found a smarter way to fix tunnels damaged by 2012’s Hurricane Sandy—and according to engineers we spoke to, Cuomo might be right. But what happens now? Will the city stick with its plans, formed over the course of three years, to revamp bike and bus lanes and pedestrian spaces? Transportation advocates hope so.

Meanwhile, we’re still a little stuck on 2018, which was filled with exciting advances for Tesla, scooter-share, and even self-driving cars (sometimes). Read about the happenings, before it all fades away. It’s been a few weeks. Let’s get you caught up.


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