'New' GM, Chrysler Shed Liability Claims

Unresolved personal injury claims against Chrysler LLC and General Motors have little chance of advancing after their bankruptcies, experts say.

Despite persistent attempts by attorneys for the claimants to prevent it, both automakers have emerged from bankruptcy without liability for most of the claims, the Los Angeles Times reported.

Under the terms of their reorganizations, the "new" GM and Chrysler will be liable for damages caused by cars made after bankruptcy, but neither will be liable for damages from accidents taking place before their filings, the newspaper said, adding that GM will be liable for future accidents involving cars built before the bankruptcy filing, but Chrysler will not be.

"Bankruptcy is a very complex and difficult process," Chrysler spokesman Mike Palese told the Times. It was "really important for the future viability of the company that we would be free from this type of liability."

"They are taking care of parts, but they aren't taking care of people," said Christine Spagnoli, president of Consumer Attorneys of California.

Some 3,400 Americans are likely to be killed or injured in accidents involving alleged defects in GM and Chrysler cars in the next year, experts told the Times.

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GM Emerges From Bankruptcy, Sells Assets

General Motors Corp. completed its race through bankruptcy Friday morning, signing a contract with the U.S. government, a source close to the deal said.

Papers were signed at 6:30 a.m. at the offices of Weil, Gotshal & Manges that give the government 61 percent of the company with lesser portions owned by the Canadian government and the United Auto Workers union. Bondholders will also own a share, The New York Times reported.

The company will be temporarily named the Vehicle Acquisition Co., but soon will be renamed General Motors Co.

The plan for the company includes significant shrinkage. GM will no longer produce Saturn, Hummer, Opel or Pontiac brands. The assets that remain include Chevrolet, Cadillac and GMC.

Plans include closing factories and laying off 21,000 union workers.

Like Chrysler, which sold most of its assets to Fiat, the bankruptcy process was done at speeds that defy logic. GM filed on June 1 and emerged 40 days later.

GM planned a press conference for Friday morning.

Frederick "Fritz" Henderson will keep his post as the chief executive officer, while Edward Whitacre Jr. serves as the new chairman of the company.

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GM, Chrysler Fight House Bills: Measures Would Reverse Dealership Cuts

By Justin Hyde, Detroit Free Press

Jul. 10--WASHINGTON -- General Motors Co. and Chrysler Group stepped up their lobbying Thursday against bills in the U.S. House that would reverse their cuts in dealerships, arguing the moves threaten their survival out of bankruptcy.

Meanwhile, Michigan Rep. Gary Peters, a Bloomfield Township Democrat, was trying to launch a compromise proposal that would compensate dealers, workers and suppliers damaged by the GM and Chrysler bankruptcies.

Dealers have been pushing bills in Congress that would undo any changes made by Chrysler or GM in their dealer agreements during their bankruptcies.

One version now has 221 sponsors in the House, more than the 218 it needs to pass, and dealers who back the proposal plan to push the issue with House and Senate members during a lobbying blitz Tuesday, with a House vote possible Wednesday.

Mark LaNeve, GM's sales chief, and GM North America head Troy Clarke spent the day criss-crossing Capitol Hill, as did Chrysler Deputy CEO Jim Press.

LaNeve said he was attempting to explain to lawmakers why GM needed to close 1,300 dealers as part of its bankruptcy, emphasizing that the company gave dealers through next October to wind down their business.

Much of the outrage from Congress has been directed at Chrysler's decision to close 789 dealers with less than a month's notice as part of its bankruptcy.

LaNeve said in order for GM to be viable, the company had to have dealers who could face off against Toyota and Honda stores, which typically sell three to four times more vehicles per store than a GM franchise.

"In terms of creating a viable, competitive GM on taxpayer dollars, you can't look in the mirror and say we didn't have to restructure the dealer body," LaNeve said. "Everybody acknowledges, even dealers acknowledge, we had too many dealers."

In addition to reversing the dealer cuts, the bills would throw out the changes GM negotiated with the 4,100 dealers it chose to keep.

LaNeve said about half of those dealers had sent letters to lawmakers opposing the dealer bill.

Chrysler said in a statement that the House version of the dealer bill "would jeopardize the viability of the new company."

The proposal by Peters, which was still being circulated among lawmakers, suggested using money returned by banks under the $700-billion financial industry bailout.

Contact JUSTIN HYDE: 202-906-8204 or jhyde@freepress.com

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Late pays drop credit score 100 points.

The typical consumer who's missed one or more car payments has a credit score that's 98 points lower than someone who's made every payment on time.

A study by Experian, one of the three major credit reporting agencies, says the average credit score for consumers with no late auto payments is 703, while the average score for consumers with at least one late payment is 605.

That saddles those car buyers with the worst possible, subprime credit rating. They'll have a more difficult time obtaining another loan, and will have to accept more onerous terms and higher interest rates when they do get one.

f you've ever been late with a car payment -- and Experian says 12% of consumers have such a blemish on their record -- your credit has suffered. Here's what you can do to raise your credit score.

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How to raise your credit score

There are three simple steps you can take to improve your credit score.

They're well worth knowing and following because your credit score is one of the most important numbers you'll carry through life, like it or not.

No one asks if you want one. No one tells you when you get one. No one tells you what it is unless you ask -- and pay to find out.

Yet that score will play a big role in whether your application for a credit card, auto loan or mortgage is approved and what your monthly payments will be. The higher your score, the lower your interest rate and payments.

Credit scores are used for lots of other things, too, like setting car insurance premiums. The higher your score, the lower your premiums.

So we're not talking peanuts here. The difference between a high and low score can save you hundreds of dollars a month.

Your credit score is based on what banks, stores, utility companies and other creditors have told the three major credit rating agencies about how much you owe and how diligently you've paid it back.

There are no shortcuts to improving your score.

Don't listen to anyone who wants to "fix" your bad credit score for a fee. Some guy with an 800-line or an office between the check cashing store and carry-out pizza joint at your local strip mall can't help. Suze Orman, the well-known personal finance author is right when she says, "Credit repair is the biggest rip-off out there."

The latest Internet scheme is paying to become an "authorized user" on someone else's credit card. While you can't actually use the card, its impeccable payment record is added to your report, boosting your credit score by 30 to 45 points.

"Piggybacking" is expensive. Identity theft is a risk. Banks consider it fraud. And Fair Isaac Co., creator of the FICO credit score, will no longer count authorized users when its formula is revised this fall.

To legitimately boost your credit score, here's what you've got to do:

• Pay all of your bills on time. We know you have a lot going on in your life and bills get misplaced and writing checks is a pain. But you need a system to get every bill to every creditor, before the due date on your statement. Late payments, even to the gas or electric company, will be reported to the credit agencies and result in a lower credit score.
• Pay off debts, especially balances you've been carrying on credit or store charge cards. And that means really paying them off. Just transferring an outstanding balance from credit card to another using one of those nifty promotions that came in the mail won't help.
• Don't apply for credit on a whim. Your mailbox may be full of credit card applications offering low, low rates for a few months. And cashiers often push you to get a store charge card when you check out, tempting you with a discount on your purchase if you'll just fill out their form. But if banks and stores are constantly asking the credit agencies for your credit history, your score suffers.

Here's why.

Your credit score is computed using a formula created by Bill Fair and Earl Isaac. Nearly 50 years ago they figured out that if they could collect enough information about a person's credit history, they could calculate how likely that person would be to miss a payment or default on a loan.

That risk factor is represented by your credit score, or your FICO score as it's commonly called in the credit biz. The higher the score, the lower the risk. While it is theoretically possible to earn a "perfect" 850, a score in the 700s is considered good or excellent. If your FICO stands in the low-600s, however, you have trouble.

Your score is calculated using 22 different variables from your credit history.

About 35% of your score is based on how promptly you pay your bills. The second most-important element is the amount that you owe. That accounts for 30%. The number of years you have used credit counts for 15%. The types of credit you use -- credit cards, store charge cards, installment loans, mortgages, and so on -- is worth 10%. That looks at how many accounts you have opened recently and how many times companies have accessed your credit history.

Take special notice of one surprising thing that is not used to calculate your FICO score -- how much money you make. It doesn't matter whether you earn $10,000 or $10 million a year, income is not a factor.

There is a FICO score on everyone who has a credit file with any of the three national credit agencies, which accounts for 75% percent of U.S. consumers over the age 17 -- about 165 million people.

You're almost certainly one of them if you've ever had a bankcard, store charge card, auto loan, or any other kind of debt.

A new federal rule requires the three big credit-reporting agencies -- Experian, TransUnion and Equifax -- to provide a free copy of your credit history every year. Just go to www.AnnualCreditReport.com.

If there are items on your credit report that are wrong or that you think are unfairly portrayed, you can file a formal appeal with the credit-reporting agency. Each agency has an appeals process that you can find by contacting them at the Web sites or phone numbers listed below.

Your credit report does not include your FICO score. For that you have to either call one of the agencies or go to one of their Web sites, and pay $10 or $15.

Here's how to contact the credit reporting agencies:

• Equifax, by phone at (800) 685-1111, or online at www.equifax.com
• Experian, (888) 397-3742, or www.experian.com
• TransUnion, (800) 888-4213, or www.transunion.com

By the editors of Interest.com

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Car loans are surprisingly affordable

Most buyers -- particularly those who can bring a few bucks and at least average credit to the showroom -- can still finance a new ride on surprisingly good terms.

Our most recent survey of major auto lenders found that loans for borrowers with credit scores of 700 or better cost an average of about 7%, even for five-year loans.

Except for a few weeks this spring, that's as low as they've been in the past 10 years.

But we aren't going to kid you.

Lenders are not handing out auto loans as freely as they did before the financial crisis, especially to buyers with poor credit.

And they want at least a modest down payment -- cash, a trade-in, or a combination of the two -- from almost everyone. Edmunds.com, a Web site that tracks auto sales data, reported earlier this year that the average down payment was $3,211.

Here's what to expect from the three major sources of auto loans:

Auto financing companies affiliated with the car companies. You've got to use these lenders to take advantage of the discount loans you see in the television and newspaper ads.

And make no mistake about it, this is the cheapest way to finance a new car or truck, if you can qualify.

GMAC, for example, is offering 0% loans as long as 60 months, and even 72 months, on some Chrysler and General Motors models.

The discount deals aren't quite as good on most import brands -- 3% or 4% are more the norm. But that's still a good first choice.

The auto financing companies also are more likely to back buyers with below-average credit, though at considerably higher rates.

GMAC began lending to borrowers with subprime credit (FICO scores below 620) again this spring, and Toyota sales executives recently said they were trying to get its finance company to make more credit available to buyers with lower credit scores.

Credit unions: If you're a member, you'll find better rates than at most banks and a greater willingness to extend credit to borrowers with lower credit scores.

Credit unions also require smaller down payments. You might even find 100% financing -- something that's hard to find anywhere else.

Many continue to offer a $1,000 rebate for financing GM or Chrysler vehicles through them. This is in addition to any manufacturer or dealer rebates on the vehicle you want.

Commercial banks: They often have higher rates and tougher qualification standards than captive lenders or credit unions.

But the banks with the best deals are well worth considering.

Think Mutual Bank, for example, is offering 24-month loans for 3.99%, 36-month loans for 4.09% and 60-month loans for 4.29%.

Bank of America will provide loans up to 60 months for about 4.5% in most places. Here's where you can find the rate being offered in your state and apply online for a Bank of America auto loan.

Our extensive database of auto loan rates is a good place to check and compare rates from dozens of local and national banks.

And finally, a few words about leasing.

Lease rates for almost all cars and trucks have been so awful over the past year that this hasn't been a smart alternative to buying.

You may find somewhat reasonable deals from certain import makers -- particularly the luxury car names -- but the current economy is making it difficult to find anything like the killer lease deals previously available.

If you think leasing might still be a good option for you, our 5 questions to ask before leasing can help you make sure.

If you're ready to lease, take a look at our strategy for finding the best deal.

By Bill Visnic

Interest.com Contributing Editor

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Car loans are surprisingly affordable

Most buyers -- particularly those who can bring a few bucks and at least average credit to the showroom -- can still finance a new ride on surprisingly good terms.

Our most recent survey of major auto lenders found that loans for borrowers with credit scores of 700 or better cost an average of about 7%, even for five-year loans.

Except for a few weeks this spring, that's as low as they've been in the past 10 years.

But we aren't going to kid you.

Lenders are not handing out auto loans as freely as they did before the financial crisis, especially to buyers with poor credit.

And they want at least a modest down payment -- cash, a trade-in, or a combination of the two -- from almost everyone. Edmunds.com, a Web site that tracks auto sales data, reported earlier this year that the average down payment was $3,211.

Here's what to expect from the three major sources of auto loans:

Auto financing companies affiliated with the car companies. You've got to use these lenders to take advantage of the discount loans you see in the television and newspaper ads.

And make no mistake about it, this is the cheapest way to finance a new car or truck, if you can qualify.

GMAC, for example, is offering 0% loans as long as 60 months, and even 72 months, on some Chrysler and General Motors models.

The discount deals aren't quite as good on most import brands -- 3% or 4% are more the norm. But that's still a good first choice.

The auto financing companies also are more likely to back buyers with below-average credit, though at considerably higher rates.

GMAC began lending to borrowers with subprime credit (FICO scores below 620) again this spring, and Toyota sales executives recently said they were trying to get its finance company to make more credit available to buyers with lower credit scores.

Credit unions: If you're a member, you'll find better rates than at most banks and a greater willingness to extend credit to borrowers with lower credit scores.

Credit unions also require smaller down payments. You might even find 100% financing -- something that's hard to find anywhere else.

Many continue to offer a $1,000 rebate for financing GM or Chrysler vehicles through them. This is in addition to any manufacturer or dealer rebates on the vehicle you want.

Commercial banks: They often have higher rates and tougher qualification standards than captive lenders or credit unions.

But the banks with the best deals are well worth considering.

Think Mutual Bank, for example, is offering 24-month loans for 3.99%, 36-month loans for 4.09% and 60-month loans for 4.29%.

Bank of America will provide loans up to 60 months for about 4.5% in most places. Here's where you can find the rate being offered in your state and apply online for a Bank of America auto loan.

Our extensive database of auto loan rates is a good place to check and compare rates from dozens of local and national banks.

And finally, a few words about leasing.

Lease rates for almost all cars and trucks have been so awful over the past year that this hasn't been a smart alternative to buying.

You may find somewhat reasonable deals from certain import makers -- particularly the luxury car names -- but the current economy is making it difficult to find anything like the killer lease deals previously available.

If you think leasing might still be a good option for you, our 5 questions to ask before leasing can help you make sure.

If you're ready to lease, take a look at our strategy for finding the best deal.

By Bill Visnic

Interest.com Contributing Editor

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How to buy a great used car or truck

Buying used can be a great deal -- if you play it smart.

Most three- or four-year-old cars and trucks can be surprisingly reliable, because automakers have done so much to improve the durability of every model.

Used vehicles cost a lot less, too -- an average of $14,925, or just a little more than half as much as the typical new vehicle.

But buying used can be an expensive and tragic game of "rush-in" roulette, if you're too hasty.

You don't want to overpay, get a vehicle that's been abused, crashed or dunked in a flood and then dried out and shipped off to be sold to the gullible.

Let our 10 smart moves increase the chances your "new" used vehicle will be a great purchase:

Smart move 1. Check the reliability of the models you're considering. Two good sources of information are Consumer Reports magazine's April auto issue, available in the library or through the Consumer Reports Web site, and J.D. Power and Associates, an independent research company that polls buyers about their cars and trucks.

Think twice before buying a model that has significantly more problems than average, especially if major mechanical components such as the engine or transmission are prone to breakdowns.

Smart move 2. Insist on taking the vehicle to an independent mechanic for an examination.This is something any reputable seller should allow. If the seller refuses, walk away.

Make sure the mechanic examining the vehicle is familiar with the brand and has some kind of certification of expertise from a group such as the National Institute for Automotive Service Excellence or ASE. This checkup could cost $100 to $200 (get the price first), but that's cheap compared to finding out too late about serious problems.

Smart move 3. Check the history of the vehicle through a service such as Experian'sAutoCheck or Carfax. For about $20 you can use the vehicle identification number (VIN) to see in which state the vehicle was purchased and whether it has been registered in other states. Such checks are not perfect, but they may alert you if the vehicle was in a serious crash or other mishap such as a flood.

If you are buying from a dealer, insist that the dealer provide you with such a report for free and carefully compare the VIN number on the vehicle with that on the report to make sure they are the same.

Smart move 4. If saving money is your priority, you should try to buy from an individual rather than a new-car dealer.

When you've found a vehicle you like, use Edmunds.com or Kelley Blue Book to see how much it's worth.

Their calculators will ask for a lot of information about the car or truck, from the make and model to its mileage and optional equipment. In the end, you'll be given three values. The lowest is what the car would be worth as a trade-in; the others are the prices when sold by an individual or by a new-car dealer.

The "private party" price is always lower than the dealer price because there's more risk. You won't get a warranty (unless some of the original factory warranty remains) and some naughty people sell cosmetically reconditioned wrecks to bargain hunters just like you.

Smart move 5. If reliability is most important to you, and you are willing to pay extra for the peace of mind it provides, go to a new-car dealer and buy a certified used vehicle.

Certified vehicles are supposed to undergo rigorous inspection and testing by dealership mechanics before being resold. They typically have fewer miles and cosmetic problems, and come with some type of warranty, though such agreements can vary considerably.

This will raise the purchase price by an average of $1,680, according to J.D. Power and Associates.

Smart move 6. Check for a warranty. The Federal Trade Commission requires dealers to place a "Buyer's Guide" on the vehicle that tells whether the vehicle has a warranty and what that warranty covers.

If there's no warranty, the "Buyer's Guide" must be marked "as is." That means you take your chances.

Get any promises in writing. Verbal promises don't carry any weight in a dispute. Pull out paper and pencil anytime a salesperson says, "We'll fix anything that goes wrong."

Some newer vehicles may have part of the original manufacturer's warranty in effect. This will be particularly true when '08 models begin to be resold, because several automakers are offeringoutstanding warranties for this model year.

Just remember, parts of that warranty could be voided if the previous owner didn't do all the proper maintenance, so pay attention to the next recommendation.

Smart move 7. Ask the dealer or private owners for service records. Ask the dealer whether the original owner bought the vehicle at the dealership. Then, ask whether the owner had it serviced at the dealership. If the answer is yes, ask for the service records.

If the dealer balks, claiming there is a privacy issue, ask him or her to contact the previous owner and get permission, or to simply cross out the previous owner's name and address before showing the records to you. If the dealer refuses or a private owner says he doesn't have the records, go elsewhere.

Smart move 8. Don't rush into a deal. You do not have three days to return a vehicle and get your money back. That's a common misperception. To see whether your state gives you any special rights as a used-car buyer, go to your state attorney general's Web site and check under consumer protection.

Smart move 9. Avoid dealers with a poor reputation. Ask the Better Business Bureau and your state's attorney general whether they've had any complaints. Ask friends and family whether they know anyone who has had a good -- or bad -- experience with that dealership.

Be particularly wary of independent used-car lots. It's even more important to verify their reputation before you buy.

Smart move 10. Make safety a priority. Favor cars and trucks that offer such lifesaving features as anti-lock brakes, side-curtain air bags and electronic stability control, which automatically tries to correct for a skid.

Also, check out how well the vehicle did in crash tests. The most demanding tests available to the public are done by the Insurance Institute for Highway Safety. Think twice before buying a model that scored poorly on two or more of the Institute's tests.

Dealers that sell and service the brand of vehicle you're considering can use the VIN number to determine whether your car or truck has ever been recalled for a safety defect and whether the repairs were made.

This isn't a deal breaker. Automakers must fix safety problems for free, no matter who owns the vehicle or how long ago the recall was issued. But you should know what repairs are needed and be prepared to get them done before you buy.

By Chris and Cheryl Jensen

Interest.com Contributing Editors

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The best new cars and trucks for 2009

With more than 700 models to choose from, finding the right car or truck can be a challenge. Let us help by directing you to our top choices among many types of vehicles, from subcompacts to pickups. We are constantly updating our picks as new models come out, so don't be surprised if we suggest one you've never heard of.

SMALL CARS: If you're looking for an inexpensive way to get around, we recommend the Honda Fit, Nissan Versa or Scion xD. Drive one home, and you'll see how far subcompacts have come from the old econo-boxes.

COMPACT CARS: They're perfect for commuting during the week and doubling as a family car on the weekend. We think you should consider the Honda Civic, Mazda3 and Subaru Impreza.

COMPACT WAGONS: We understand if you'd like a little more room and a lot more personality. Here are three you'll love to drive: the Kia Rondo, Scion xB and Volkswagen Jetta SportWagen.

MIDSIZE SEDANS: These are the ultimate family cars, and our favorites -- the Honda Accord, Toyota Camry and Hyundai Sonata -- offer outstanding comfort, performance and value.

MINIVANS: These are still a practical, comfortable way to get your family and all their stuff around town or across the country. The Honda Odyssey, Dodge Grand Caravan and Kia Sedona should top your shopping list.

SMALL SUVs: "Cute utes" are perfect for anyone who wants more room and character than a compact car at a reasonable cost. We think the Honda CR-V, Toyota RAV-4 and Nissan Rogue are the best of the bunch.

MIDSIZE CROSSOVERS: These SUVs drive like a car but play like a truck. The Mazda CX-7 and Nissan Murano offer unsurpassed sportiness. The Chevrolet Traverse provides exceptional utility.

FULL-SIZE SUVS: These haul-anything, go-anywhere trucks aren't intimidated by hard work or rough roads. Yet the Ford Expedition, Toyota Sequoia and Chevrolet Tahoe are surprisingly easy and comfortable to drive.

FULL-SIZE PICKUPS: The Chevrolet Silverado, Ford F-150 and Dodge Ram are the most powerful yet refined trucks ever. They'll haul or tow almost anything, anywhere you and your family want to go.

MIDSIZE PICKUPS: Our favorites -- the Toyota Tacoma, Nissan Frontier and Dodge Dakota -- offer surprising comfort and convenience, with ample room for people, cargo or both.

CONVERTIBLES: An open top can turn a mundane errand into a joy-filled jaunt, and you don't have to spend a fortune. Our favorites -- the Mazda MX-5 Miata, Ford Mustang and Pontiac Solstice -- all cost less than $27,000.

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The 5 best warranties add value to any deal

great warranty is a great way to avoid costly repair bills.

But with General Motors Corp. and Chrysler LLC on the verge of bankruptcy, will they have the money, or even be around, to fix any problems you might have?

Probably. And even if they can't, the government will.

Because of all the recent turmoil in the auto industry, President Obama has taken the unprecedented step of establishing the Warranty Commitment Program.

It says the federal government will honor the full warranty on any new GM and Chrysler car or truck sold from March 30 until the automakers' financial problems are resolved -- even if that requires a trip through bankruptcy court.

(Here's where to find out all the details about the Warranty Commitment Program.)

It can't resolve all of the potential problems you might have.

If, for example, your brand is eliminated, its dealerships might close and someone else (such as another brand of dealers) might be hired to do the work.

That means you might have to travel further and trust your car to an unfamiliar repair shop.

But the bottom line is clear: If you buy a new vehicle, even from GM or Chrysler, your warranty almost surely will be honored, exactly as you've been promised.

That's good, because GM and Chrysler are among the auto companies offering the most comprehensive warranties we've ever seen.

The guarantees on many 2009 cars and trucks are so good that you could go five years, or longer, without a major expense, no matter what breaks.

There are two basic types to ask about and compare:

• A bumper-to-bumper warranty that covers virtually every part, from the radiator to the trunk latch. Every car has one that protects you for at least three years or 36,000 miles, whichever comes first.
• A powertrain warranty may extend that protection for the major mechanical parts that make the car go, including the engine and transmission.

Before clicking here to see a brand-by-brand rundown of all the warranties on 2009 models, check our choices for the best guarantees in the business:

General Motors starts Chevrolet, Saturn, GMC and Pontiac buyers off with a three-year, 36,000-mile, bumper-to-bumper warranty.

Cadillac, Buick and Hummer buyers have four-year, 50,000-mile. bumper-to-bumper protection (a typical guarantee for pricier, luxury vehicles).

When that expires, a five-year or 100,000-mile powertrain warranty picks up.

That coverage is transferable, which should boost the value of your car or truck if you sell before it runs out. And as long as any part of the warranty is good, you've got free roadside assistance.

That's not a trivial perk. Just call GM's 800 number and it dispatches a service truck that can tow you to the nearest dealer, change a flat, open the doors if you're locked out or provide a splash of gas if you're empty. You won't need to pay for AAA or other roadside programs if you have this.

Hyundai advertises that it has "America's best warranty." Kia isn't as brash but offers almost identical protection.

Buyers are initially covered by the longest bumper-to-bumper warranty you'll find -- five years or 60,000 miles. You can't get that kind of protection on a Mercedes-Benz or Lexus.

The South Korean carmakers follow that with a 10-year, 100,000-mile powertrain warranty that only covers the original purchaser. So if the vehicle is sold, it's over.

Roadside assistance is part of the deal for the first five years or 60,000 miles if it's a Kia, or five years with unlimited mileage if it's a Hyundai. However, Kia offers a five-year, 60K-mile courtesy transportation warranty that Hyundai does not, although you may be eligible for transportation assistance if you are within a 5-mile radius of the dealership.

Mitsubishi now matches the Hyundai warranty, including the five-year, unlimited mileage roadside assistance.

BMW has a four-year, 50,000-mile, bumper-to-bumper warranty with no additional powertrain coverage. Roadside assistance is provided for four years regardless of mileage.

While that is pretty much middle-of-the-road for those parts of the warranty, what makes BMW's warranty better than most is that it covers all factory-recommended maintenance.

Oil change? Covered. Brake pads? Covered. New spark plugs? Covered.

The joy of owning such a precision piece of machinery is often tempered by what it costs to maintain it. Now, BMW buyers can just sit back and allow their dealer to maintain their high-performance rides in impeccable working order without bringing their checkbooks with them.

Chrysler LLC provides Chrysler, Dodge and Jeep buyers with a standard three-year, 36,000-mile, bumper-to-bumper warranty and roadside assistance.

Then the new lifetime powertrain warranty picks up for as long as you own the car or truck. When Chrysler came out with this in 2008, it was the first time any automaker had offered an open-ended guarantee.

Unfortunately, it's not transferable, doesn't include roadside assistance and requires the vehicle to be inspected at a Chrysler dealer within 60 days of every five-year anniversary of the purchase date.

But the inspections are free, and unlike the seven-year, 70,000-mile powertrain warranty it replaces, there's no insurance-like deductible when repairs are needed.

A final word about the extended warranties dealerships and independent insurance companies may offer. With manufacturer warranties this good, you don't need to buy an extended warranty.

Save your money.

By Bill Visnic and Michael Strong

Interest.com Contributing Editors

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The 5 best warranties add value to any deal

A great warranty is a great way to avoid costly repair bills.

But with General Motors Corp. and Chrysler LLC on the verge of bankruptcy, will they have the money, or even be around, to fix any problems you might have?

Probably. And even if they can't, the government will.

Because of all the recent turmoil in the auto industry, President Obama has taken the unprecedented step of establishing the Warranty Commitment Program.

It says the federal government will honor the full warranty on any new GM and Chrysler car or truck sold from March 30 until the automakers' financial problems are resolved -- even if that requires a trip through bankruptcy court.

(Here's where to find out all the details about the Warranty Commitment Program.)

It can't resolve all of the potential problems you might have.

If, for example, your brand is eliminated, its dealerships might close and someone else (such as another brand of dealers) might be hired to do the work.

That means you might have to travel further and trust your car to an unfamiliar repair shop.

But the bottom line is clear: If you buy a new vehicle, even from GM or Chrysler, your warranty almost surely will be honored, exactly as you've been promised.

That's good, because GM and Chrysler are among the auto companies offering the most comprehensive warranties we've ever seen.

The guarantees on many 2009 cars and trucks are so good that you could go five years, or longer, without a major expense, no matter what breaks.

There are two basic types to ask about and compare:

• A bumper-to-bumper warranty that covers virtually every part, from the radiator to the trunk latch. Every car has one that protects you for at least three years or 36,000 miles, whichever comes first.
• A powertrain warranty may extend that protection for the major mechanical parts that make the car go, including the engine and transmission.

Before clicking here to see a brand-by-brand rundown of all the warranties on 2009 models, check our choices for the best guarantees in the business:

General Motors starts Chevrolet, Saturn, GMC and Pontiac buyers off with a three-year, 36,000-mile, bumper-to-bumper warranty.

Cadillac, Buick and Hummer buyers have four-year, 50,000-mile. bumper-to-bumper protection (a typical guarantee for pricier, luxury vehicles).

When that expires, a five-year or 100,000-mile powertrain warranty picks up.

That coverage is transferable, which should boost the value of your car or truck if you sell before it runs out. And as long as any part of the warranty is good, you've got free roadside assistance.

That's not a trivial perk. Just call GM's 800 number and it dispatches a service truck that can tow you to the nearest dealer, change a flat, open the doors if you're locked out or provide a splash of gas if you're empty. You won't need to pay for AAA or other roadside programs if you have this.

Hyundai advertises that it has "America's best warranty." Kia isn't as brash but offers almost identical protection.

Buyers are initially covered by the longest bumper-to-bumper warranty you'll find -- five years or 60,000 miles. You can't get that kind of protection on a Mercedes-Benz or Lexus.

The South Korean carmakers follow that with a 10-year, 100,000-mile powertrain warranty that only covers the original purchaser. So if the vehicle is sold, it's over.

Roadside assistance is part of the deal for the first five years or 60,000 miles if it's a Kia, or five years with unlimited mileage if it's a Hyundai. However, Kia offers a five-year, 60K-mile courtesy transportation warranty that Hyundai does not, although you may be eligible for transportation assistance if you are within a 5-mile radius of the dealership.

Mitsubishi now matches the Hyundai warranty, including the five-year, unlimited mileage roadside assistance.

BMW has a four-year, 50,000-mile, bumper-to-bumper warranty with no additional powertrain coverage. Roadside assistance is provided for four years regardless of mileage.

While that is pretty much middle-of-the-road for those parts of the warranty, what makes BMW's warranty better than most is that it covers all factory-recommended maintenance.

Oil change? Covered. Brake pads? Covered. New spark plugs? Covered.

The joy of owning such a precision piece of machinery is often tempered by what it costs to maintain it. Now, BMW buyers can just sit back and allow their dealer to maintain their high-performance rides in impeccable working order without bringing their checkbooks with them.

Chrysler LLC provides Chrysler, Dodge and Jeep buyers with a standard three-year, 36,000-mile, bumper-to-bumper warranty and roadside assistance.

Then the new lifetime powertrain warranty picks up for as long as you own the car or truck. When Chrysler came out with this in 2008, it was the first time any automaker had offered an open-ended guarantee.

Unfortunately, it's not transferable, doesn't include roadside assistance and requires the vehicle to be inspected at a Chrysler dealer within 60 days of every five-year anniversary of the purchase date.

But the inspections are free, and unlike the seven-year, 70,000-mile powertrain warranty it replaces, there's no insurance-like deductible when repairs are needed.

A final word about the extended warranties dealerships and independent insurance companies may offer. With manufacturer warranties this good, you don't need to buy an extended warranty.

Save your money.

By Bill Visnic and Michael Strong

Interest.com Contributing Editors

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The top new and used cars for teens

If your teen is ready to drive, you may need another car.

Not just any car. But a car that's safe and affordable enough to satisfy you, yet cool and trendy enough to satisfy your kid.

We can tell you what to look for and provide advice on the best new and used cars for high school students -- recommendations you and your teen can agree on without a lot of fussing and fighting.

Start by acknowledging that most new drivers suffer through an accident or two, even if it's just a fender-bender from a poorly judged parking maneuver.

So you'll need a car that's:

• Relatively cheap to buy and own.
• Small and easy to drive.
• Fully capable of protecting your kid in a wreck.

That's why we think anyone buying a car for a young driver should follow these three key rules:

Go for low horsepower. Kids just learning how to control a car aren't well-served by a high-performance engine. The happy circumstance is that the kind of vehicle you need -- an inexpensive compact -- is usually at the bottom of the horsepower food chain.

Another reason to avoid that V8 (or even V6) engine is that powerful vehicles almost always cost more to insure. An interesting report just released in 2008 by the Insurance Institute for Highway Safety shows why: Higher-horsepower cars have more costly collision claims.

Load up on safety features. For us, that means antilock brakes (ABS) and side air bags, at least for front-seat occupants, are a must.

We also leaned toward models that offer electronic stability control (typically you'll see its acronym as ESC or ESP), which prevents slides and skids.

The best thing about stability control is that it's designed to intervene before a dangerous skid even begins -- the perfect aid for inexperienced teens on slick or snowy roads, or for those who may just, uh, be going too fast around a corner.

Finally, we decided our top three new cars must have earned at least 4-star ratings for front- and side-impact crash safety, as rated by the National Highway Traffic Safety Administration.

You won't see any light trucks or SUVs on our list. Regular cars handle better and sit lower, meaning they're much less prone to rolling over in extreme maneuvers or emergency situations. Nor do we recommend 2-door coupes -- also more expensive to insure.

Look for a solid record for reliability and comprehensive warranties. The best way to keep your kid from being stranded somewhere is to buy a car that tends not to break. The best way to avoid high-cost repairs is to have a long warranty.

Here's where to check out our picks for:

The best new cars for teens.

The best used cars for teens.

By Bill Visnic

Interest.com Contributing Editor

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