Less Than Zero

Unless you've been living in a cabin at Walden Pond, you have certainly heard of zero-percent financing, the General Motors-originated masterstroke that kept car sales humming after the September 11 terrorist attacks. At first glance, the marketing tactic seems very straightforward. Instead of paying interest on your new-car loan, you simply pay off the principal in a prescribed series of monthly payments. What could be simpler? But looking behind the hype, things do get a bit murkier. In fact, some self-proclaimed consumer advocates call zero-percent a bait-and-switch scam. Tough words. So what's the reality? Well, we think it lies somewhere in between.

Let's look at a few potential pitfalls of zero-percent financing. The biggest pitfall, of course, is that you might not qualify for the zero-percent rate in the first place. Interest-free deals are reserved for customers with excellent credit, which means that often the very lowest credit score you need to qualify is 660. Some companies might require a minimum credit score of 700 or even higher to qualify, and that eliminates the bulk of American buyers right there. Most major automakers are affiliated with their own "captive" finance companies with their own credit qualifications, so it is worth checking on their requirements and your credit score before you enter a dealership.

Of course, the car companies are betting you won't do that. They trumpet the zero-percent deals in their advertising hoping they will lure you into the showroom to get a whiff of new-car fever. They figure that even if you don't qualify for the zero-percent loan -- and only about one in 10 buyers do opt for zero-percent financing -- they can entice you with rebates, other financing deals, and the allure of new-car smell. Because of this, some self-titled consumer watchdogs label zero-percent a bait-and-switch tactic, but in defense of the car companies, they do actually write zero-percent deals every day and their criteria for qualification are standardized and available.

Beyond simply qualifying for zero-percent, you must determine if it is offered in conjunction with a loan term that will be to your liking. While a manufacturer or two has tried to prop up its sagging fortunes by offering zero-percent loans for terms as long as five years, most zero-percent deals are for much shorter terms, typically two or three years. What this means is, that while you don't pay interest, your monthly payments will be higher than for a longer-term loan even with some interest. Here's a typical example: Let's say you plan to borrow $20,000 to help pay for your new car. With a three-year term at zero percent interest, you would have to pay about $555 a month in car payments, while a five-year loan at 3.9 percent will carry monthly payments of $367.43. Sure, over the entire term of the loan you will pay an additional $2,045 for the vehicle taking the longer-term loan, but you might well find the tradeoff for a lower monthly outlay to be worthwhile. So the length of the zero-percent loan can be another hangup.

But the biggest problem with zero-percent financing from the car-buyers' standpoint is that it brings on laziness. Instead of comparison shopping, instead of comparing rebate-interest combinations, instead of doing the thorough job that a car-buyer really needs to do to get the best deal, many consumers figure if they are getting zero-percent financing, they are automatically getting a good deal. Well, my friends, in the car-purchase game nothing is automatic.

First, no matter what financing offer you are planning to use, negotiate the purchase price of the car. Do your homework by learning the invoice price for the vehicle and discovering any factory-to-dealer cash incentives the vehicle might carry. With this info in your databank, shop at least three same-brand dealers aggressively, telling them truthfully that you will buy from the store that gives you the best price and best service. With a firm purchase price in hand, weigh the benefits of a zero-percent financing deal versus a non-manufacturer financing deal accompanied by a factory rebate ("cash back.") You might find that taking the factory cash and financing through an independent financial institution like a credit union might well yield a better result than taking the zero-percent deal from the factory.

Remember, each individual's situation is different, so it is impossible to outline a one-size-fits-all solution to the car-buying question, but know this: if you don't extend some effort, you won't get the best deal, even if you do qualify for zero-percent financing.


Driving Today Managing Editor Jack R. Nerad wrote The Complete Idiot's Guide to Buying or Leasing a Car. He is frequently consulted by the media on car-purchase questions.

Who Killed Mickey Thompson?

They called him "Mr. Speed," "The Speed King," or simply "The Man." For a time he held the title "Fastest Man in the World" after becoming the first to break the 400 miles-per-hour speed barrier, and he participated in over 10,000 races and drove over one million race miles. While most racers specialize in just one type of motorsport, he won one championships in an incredible variety of racing categories. Midgets, sprint cars, off-road, stock cars, drag racing, and sports cars - it was all the same to Mickey Thompson. Blessed with an uncommon mechanical sense and a fierce desire to succeed, he won in them all. And then somebody shot him dead.

You'd be hard-pressed to find a more cold-blooded murder than the one that occurred on the sunny morning of March 16, 1988. Thompson, then 59, and his wife Trudy, 41, walked out the front door of their Bradbury, California, home ready to go to work together as they had done for more than a decade. But as the birds sang and the neighbors watched in horror, the pair was gunned down execution-style by two hooded black men who then escaped on bicycles.

By that time in his life Thompson had left driving behind to become a racing promoter, and, as good as he was behind the wheel, many feel that promotion was his true calling. The guy knew how to sell a series and put together a deal. Take, for instance, off-road racing. A less viewer-friendly type of racing would be hard to imagine since the races were run in deserts miles from the nearest Godforsaken town. But Thompson saw something in the sport and transferred it, part and parcel, to baseball and football stadiums. The result: a big moneymaker.

Another result (at least allegedly): Thompson's untimely death. You see, Thompson's involvement in off-road stadium racing led to a business deal with a guy named Michael Goodwin, who did for off-road motorcycle racing pretty much what Thompson did for the car, truck, and dune buggy versions of the sport. Called by some "The Father of Supercross," Goodwin teamed with Thompson to put their complementary racing shows together, but the deal between two bull-headed guys went sour quicker than a quart of milk on a south-facing porch. The two sued each other; Thompson, ever the winner, emerged with a half-a-million-dollar settlement in his favor, and Goodwin emerged vowing revenge.

So when Thompson and his wife took bullets in the head in particularly brutal fashion that late-March day, the Los Angeles County Sheriff's Department had a ready-made suspect in one Michael Goodwin. But Goodwin had a tight-as-a-snare alibi for the morning in question, and the shooters vanished into the ether never to be seen again, even after composites ran on Unsolved Mysteries America's Most Wanted, and damn near every news show from sea to shining sea.

Now, grind forward 14 years. Still no sign of the shooters. Goodwin, still free but with significantly diminished income (being accused of murder severely limits one's marketability), is now approaching the age Thompson was when his face hit the driveway asphalt. And the police and prosecutors are still looking for a way to put Goodwin on trial.

Finally, they find it when new witnesses allegedly come forward to put the taint of incrimination on Goodwin, enough new evidence to justify an arrest and win an indictment. The most damaging is Goodwin's ex-girlfriend, who is expected to say that the motorcycle promoter admitted responsibility for having Thompson gunned down after viewing an Unsolved Mysteries episode on the case on TV. Another witness has testified to an Orange County, California, grand jury that Goodwin once told him Thompson was ruining him financially so he was going "to take him out." Presumably not dancing, either. Finally, other witnesses now claim they saw Goodwin scoping out the Thompson household just days before the murder.

Now the case is set to go to trial, but the big question is: does the prosecution have enough evidence to tie The Father of Supercross to the death of The Speed King without identifying the shooters? For the answer to that, we'll just have to stay tuned.


Driving Today Managing Editor Jack R. Nerad wrote Fatal Photographs, a book detailing the notorious bathing suit model murder case. He has been following the Mickey Thompson investigation from the beginning.

Joining a Dream Team

Some of us dream of driving racecars on the Winston Cup circuit; others dream of turning wrenches that will allow others to get the glory of winning races. For the latter group, the NASCAR Technical Institute represents a unique opportunity to learn what top mechanics already know about keeping cars together while traveling at 200 mph.

The school offers students two programs: a 57-week Automotive/NASCAR technology track and a 69-week Automotive/NASCAR/Ford FACT (Ford Accelerated Credential Training) track. For the first program, which costs $24,350, students will attend 39 weeks of traditional automotive service technology training and 18 weeks of NASCAR-specific training. The Crew Chief Club, an advisory board comprised of NASCAR Winston Cup Series crew chiefs, is assisting in developing the NASCAR portion of the coursework. For the 69-week program, which costs $29,100, students will go through the 57-week training, plus 12 weeks of the Ford FACT program.

Coursework includes engine construction, electrical, fuel and lubrication systems, drive trains, body and chassis fabrication, and racing theory principles. Students will also learn the history and rules and regulations of NASCAR, as well as the teamwork needed in today's automotive and racing industries.

"This is a chance of a lifetime for students," said Dennis Hendrix, school director of the NASCAR Technical Institute. "Thanks to UTI, NASCAR, NASCAR licensees, industry sponsors, and many others, we are able to provide students with a modern facility, the latest equipment and training aids, instructors direct from the industry, additional scholarship support and an exciting environment to learn in."

While the school might not boast a great football team or beautiful co-eds, its 146,000-square-foot facility, located on 19 acres, houses more than 45 classrooms, over 49,000 square feet of hands-on shop training areas, various labs and dynamometers, and two automobile manufacturers' custom training programs. There also is a 50,000-square-foot expansion area for future development, so that football stadium might appear if the alums consider it important.

The school offers co-operative education and internship programs within the automotive industry, as well as race teams. This will enable students to develop more hands-on experience, while allowing the automotive industry and NASCAR teams to evaluate and recruit. Scholarships also are available, with the Dodge Motorsports Diversity Scholarship Program offering 10 annual scholarships, including full tuition and board. UPS Racing Technical Edge Scholarships will provide $80,000 in financial assistance to qualified minority applicants.

For admissions or more information about the NASCAR Technical Institute, call toll-free (866) 31-NASCAR or visit the Universal Technical Institute Web site.

Your On-Road Connection

When you think about it -- and sadly not too many people do -- your tires do a whole lot of work for you. They drive your car forward; they stop it; they hold it to the road, and they accomplish all this with so little muss and fuss over so many long miles that many people just plain forget about them. But the fact of the matter is, you shouldn't forget about them. Providing them with a little care could mean the difference between a tire that does the job for you over the long haul or one that lets you down just when you need it the most.

Consider this fact: the only thing that holds your vehicle to the road is the combination of four patches of synthetic rubber, each about the size of a grapefruit. That's not a lot of material to hold a two-ton machine in place, much less to help it go and stop when you want it to.

To find out how you should care for your tires, we enlisted the help of an expert. Phil Pasci is Executive Director of Consumer Tire Brand Marketing at Bridgestone/Firestone, so you would be hard-pressed to find anyone who knows more about the tire business than he does. And he heartily agrees that the relatively small contact patches that connect your car to the road are keys to driving safely.

"When we go around the country educating our dealers on tire safety, the analogy we use is an 8 x 11-inch piece of paper, because that's something everyone is familiar with," he said. "That's the sum-total of all four contact patches that are on the road, and that is why it is critical that you check your tires' air pressure frequently and examine your tires for unusual wear."

Regular tire maintenance doesn't have to take a lot of time. In fact, it shouldn't take you more than 10 minutes each month, but failure to keep an eye on your tires can lead to serious consequences.

"The thing that is most critical is air pressure in your tires," Pasci told Driving Today. "You should check air pressure at least every month, and while you're washing your car, bend down and take a look at your tires to see that there are no irregularities."

Then next time you wash your car, Pasci recommends that you run your hand across the tread of each tire. What you should feel is an even surface indicative of nice, even wear. If there are big bumps or dips in the tread surface or if it seems as if the tread depth on one side of the tire is much shallower than on the other side, you could have a wheel balance, shock absorber, or wheel alignment problem that is causing uneven wear. If you note a problem like this, drive your car to a reputable tire dealer who can advise you about the solution to the problem. Most often the solution is simple and not very expensive - especially compared to the consequences of a tire failure.

In addition to checking air pressure at manufacturer-suggested levels and manual tire checks each month, Pasci says that you can keep you tires working properly with a little old-fashioned elbow grease.

"To keep your tires looking good, there's nothing better than good old soap and water and a good scrub brush," he said.

He warns against using some products that promise to make the tire look shiny and black, because he says many such products will actually remove vital antioxidants and waxes that help protect the tire from the environment. When a tire has been run and then cooled, those components "bloom" to the surface, and if they are removed by chemicals it means a protective layer is being removed. Instead, he suggests a light scrubbing with soap and water rather than a heavy scrubbing that will remove the protective coating that forms after use.

Tires are so well-engineered and built these days that 40,000, 50,000 or even 60,000 miles on a tire is not uncommon. Bridgestone/Firestone now offers tires that are warranted to an incredible 80,000 miles. But just because tires are good, doesn't mean they can be ignored. Take care of your tires, and you can be sure they'll take care of you.


Jack R. Nerad is managing editor of Driving Today and the co-host of the syndicated radio program "America on the Road" heard on more than 300 stations nationwide.

Getting Mo' Satisfaction

Going through the car-buying process -- many people regard this prospect with the same revulsion as being subjected to a Pauley Shore film festival. But while many people still hate buying a car, a new study shows that consumers are increasingly satisfied with their auto purchases.

For the third year in a row, the automobile industry matched its record-high score, according to the American Customer Satisfaction Index. In fact, the automobile index (at 80 in the most recent survey) is not markedly worse than more highly praised industries, such as household appliances (82) and consumer electronics (81); and it is noticeably better than the category score for personal computers (71). While the critics have decried the customer handling record of the auto industry, the fact is the industry average has always stayed within a three-point range, from 78 to 80, throughout the nine years the study has been conducted. The ACSI is published by the University of Michigan Business School's National Quality Research Center, which compiles and analyzes the quarterly ACSI data.

When it comes to winners and losers, BMW, Buick, and Cadillac once again scored the highest customer satisfaction with marks of 86, while several car brands, including Dodge, Ford, Chevrolet, Pontiac and Hyundai, registered the lowest scores, all at 78. Mazda and DaimlerChrysler's Jeep division showed the most improvement -- 4 percent -- with ACSI scores of 81 and 79, respectively. In contrast, scores for Mercedes-Benz and Hyundai declined by the same percentage.

Professor Claes Fornell, director of the University of Michigan Business School's National Quality Research Center, says that while the overall ACSI score for automobiles has not changed much over time, the difference between the highest-scoring and lowest-scoring automakers has shrunk from 18 points in 1994 to just eight points today. What this means is the former laggards have either changed their ways and drastically improved the satisfaction they have delivered, or they have exited the market. And since only Daewoo has entered the market and then disappeared during the Nineties, it is safe to infer that the back-of-the-pack manufacturers have tightened up their acts. While this behind-the-curve improvement has been taking place, the industry has stayed on a level plane for three years in a row.

"In other words, car manufacturers have not managed to increase their customers' satisfaction, but the ACSI has not deteriorated either," Fornell said. "The industry continues to score very well. Today, all car manufacturers deliver high levels of customer satisfaction, but the difference between them is fading."

Jack West, past president of the American Society for Quality, a co-sponsor of the ACSI, says that this holds true even when comparing domestic automakers with their international counterparts.

"When the ACSI started in 1994, the Japanese were well out in front with high quality and customer satisfaction scores, with European car companies right behind them," he said. "U.S. auto manufacturers trailed both, but today they have pulled just about even with the Japanese, while the Europeans now have a narrow lead overall."

To give credit where it is due, car companies and car dealers seem to be doing a good job of satisfying their customers. The big question is: can they satisfy you?


A student of the human condition, Tom Ripley frequently writes on satisfaction-related issues from his home in Villeperce, France.