December 1, 2020

Automakers

Electrification is happening all around us, especially at Hyundai . While some automakers go all-in on EVs, Hyundai is taking the variety approach and announced Wednesday it plans for 10 electrified cars on sale in just two years. Reminder, “electrified” can mean anything from a hybrid powertrain to a battery-electric car.



a car parked in a parking lot: From left to right, the Ioniq 6, Ioniq 7 and Ioniq 5. Hyundai


© Provided by Roadshow
From left to right, the Ioniq 6, Ioniq 7 and Ioniq 5. Hyundai

And that’s exactly what this electrification push includes. Hybrids , plug-in hybrids, electric cars and fuel cell vehicles are all a part of the plans, according to the automaker’s latest commitment. Most of these vehicles we already know about, though. The hybrids include the new 2021 Elantra, Sonata and Tucson. The plug-in hybrid group comes in the form of the Tucson and Santa Fe . The Nexo will continue to hold down the hydrogen fuel cell fort. The biggest piece of the puzzle comes from Ioniq.

Earlier this year, Hyundai announced plans to spin off the Ioniq name into its own brand and we know the automaker has three Ioniq-branded vehicles in the pipeline. Two of them will be here by 2022 — the Ioniq 5 and Ioniq 6. Right now, they’re better known as the Hyundai 45 concept and Hyundai Prophecy concept. The first will be a crossover/hatchback sort of thing with some seriously throwback design. The second EV will hopefully follow the Prophecy concept very closely because I think it’s gorgeous. These two cars will begin Hyundai’s turning point to more EVs, no matter how they look. In 2024, a large Ioniq SUV will come, for example.



a car that is sitting on a table: Hyunai's new Ioniq brand will give us three new electric vehicles, on a new EV-specific platform, over the next four years.


© Hyundai

Hyunai’s new Ioniq brand will give us three new electric vehicles, on a new EV-specific platform, over

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A number of car companies, including Fiat Chrysler (FCAU), General Motors (GM) and Hyundai (HYMTF), are offering 84-month car loans at 0% interest. That’s seven years without any interest. Others are offering 72-month loans at zero interest. Not only that, but buyers can put off making their first payment for 120 days, or about four months. That should be helpful for workers on furlough. (Hyundai, for one, is also offering other payment protection plans for owners who lose their jobs due to coronavirus-related disruptions.)

With loans that long and no interest at all, monthly car payments can be very low. That’s assuming, of course, your credit score is good enough to qualify. But, experts warn, don’t get so fixated on that very enticing interest rate that you forget to consider all your options. It may not be the best deal for you.

There are some risks with taking these very long car loans. The main one: That you’ll still be making payments long after the new car smell has gotten lost behind a forest of cardboard pine tree air fresheners.

You might not like the car so much by then, even if you loved it when you bought it. Also, your needs might change, said Michelle Krebs, an industry analyst with Autotrader.com. A lot can happen in seven years.

“If you’re going to buy a small car how would you know what your life is going to be like in that amount of time,” she said.

You might need a bigger car, maybe even an SUV or minivan, before then. Also, new cars with fancy new technologies could start to look appealing a few years down the line. Maybe you want to go electric some time before 2027.

Then there’s a fundamental math problem. The longer you stretch out your loan, the longer you’ll be “underwater” on your new car. That means you will owe more money on the car than the car is worth. All new vehicles lose value the minute you purchase them. The drop in value is steepest at the beginning — right after it changes from a new vehicle into a used vehicle — then tapers off to a gradual decline over the years.

Chevrolet dealers are offering 84-month 0% interest loans on many 2019 models including the Colorado pickup.Chevrolet dealers are offering 84-month 0% interest loans on many 2019 models including the Colorado pickup.

The amount you owe on the vehicle, on other hand, declines at the same rate each month as you make each payment. With a longer loan and smaller payments, that slope will be shallower. That increases the amount of time during which you’ll owe more money than your car is worth.

“It puts the transaction in a bit of a negative light in terms of ‘Oh man, I’ve got this car and it’s not even worth as much as my loan’,” said Jessica Caldwell, an analyst with Edmunds.com. “It’s just not a good feeling.”

If you’re happy with your car or crossover and plan to keep driving it, that’s not really a problem. It’s only a problem if your needs change or you just

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