RICHMOND, Va. -- CarMax, Inc. the nation's largest retailer of used cars, reports that searches on carmax.com
for smaller, more fuel-efficient vehicles increased in June. According to
carmax.com, search frequency rankings for several vehicles with higher
estimated miles per gallon (mpg) have increased.

    — The Mazda3, with an estimated 24/32* mpg, leaped from 39th in March
to 16th in June.

    — The Toyota Corolla, with an estimated 28/37* mpg, jumped from 9th to
4th place over the same time period.

    — Outside the top 20, the Volkswagen Beetle, with an estimated 21/28*
mpg made a big leap from 71st place to 40th since March.

    “With gas prices continuing to rise, fuel efficiency has increased in
importance for many shoppers,” said Ann Yauger, director of carmax.com. “On
carmax.com, we offer a robust research section that allows consumers to
find the best car for their needs.”

    Of the three makes and models highlighted, there are a combined total
of nearly 1,000 of them, as of this release, available on carmax.com for
sale and can be transferred to the nearest CarMax store.

    The CarMax website can be used to research information on vehicles of
various makes and models. Online shoppers can search the company’s
inventory of more than 25,000 new and used cars. The website showcases
vehicles with multiple photos, the no-haggle price, and information on
features, options, fuel economy and customer reviews. Visits to carmax.com
continue to increase, and approximately 70 percent of in-store customers
visit the website before coming to the store.

Could gas at $4 a gallon or higher be one of the culprits behind late car payments, too?
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Mark Zandi, chief economist at Moody’s Economy.com in West Chester, Pa., said auto loan delinquencies will keep climbing for another 12 months. By his estimate, auto delinquencies would hit a peak in the second half of 2009.

His reasoning? We’ll be looking at a weaker job market, falling values for SUVs and trucks, high levels of debt — and yes, budget-busting gas prices.

Think of it this way: If some consumers are already paying an extra $65 to $70 a month to put gas in one car, they have even less money to put toward a $400 or $500 monthly car payment.

And what happens at $5 a gallon?
Late loans rising

Auto delinquencies have been on a fairly steady uptick.

The percentage of auto loans 30 days or more overdue hit 1.92% in the first quarter — up from 1.9% for the fourth quarter of 2007 — for loans made directly to the consumer by banks or credit unions, according to the American Bankers Association’s Consumer Credit Delinquency Bulletin. The percentage was 1.68% for the first quarter of 2007.

The percentage of overdue auto loans hit 3.09% for loans made through auto dealers or third parties, according to the American Bankers Association. That’s down from 3.13% for the fourth quarter in 2007.

However, auto delinquencies for loans made through dealers have shot up since late 2004 when the rate was 1.35%.

Zandi said his numbers indicate that auto delinquencies are showing no signs of stabilizing.

Debt pressure builds

Families are facing a financial squeeze on many fronts.

James Chessen, chief economist at the American Bankers Association in Washington, D.C., said consumers are finding themselves with fewer resources to manage debt, as they cope with rising food prices, rising gas prices, cuts in overtime hours, job losses and little income growth.

“Increasingly, it’s a story about a broader economic slowdown,” Chessen said.

Late payments on home-equity lines of credit hit an 11-year high in the first quarter, according to the American Bankers Association.

Higher gas prices put more of a squeeze on households.

In Michigan, the average price for regular gas hit $4.18 a gallon as of July 3, according to AAA Michigan. That compares with $3.07 a gallon a year ago, $2.99 a gallon in 2006 and $2.29 a gallon in 2005, according to Nancy Cain, a spokeswoman for AAA Michigan.

Someone who drives 15,000 miles a year — and gets 20 miles a gallon — would now be paying roughly $260 a month for gas — up from about $192 a month last year.

Brian Bethune, chief U.S. financial economist for Global Insight in Lexington, Mass., said troubles for auto loans won’t improve until the housing market turns around.

After all, many overstretched consumers may try to pay the mortgage before making a car payment — especially if that car is an SUV or truck that’s dramatically declining in value because of higher gas prices.

Contact SUSAN TOMPOR at 313-222-8876 or stompor@freepress.com.

Gas prices are going up and up and up. Washington State is not an exception

The AAA auto club says the average price of a gallon of gasoline in Washington is $4.34.

That’s up 22 cents in the past month and $1.25 in the past year. It’s 25 cents higher than the national average.

The AAA survey for Monday found the average price of a gallon in diesel in Washington at $4.87. That’s down six cents in the past month but $1.86 higher than a year ago.

The survey found that gasoline prices are highest in Bellingham at $4.46 and lowest in Spokane at $4.06. Some other average prices around the state, according to the AAA:

- Seattle $4.38

- Tacoma $4.35

- Olympia $4.40

- Vancouver $4.32

- Yakima $4.28

- Tri-Cities $4.23

BELLEVUE, Wash. — The AAA auto club says the average price of a gallon of gasoline in Washington is $4.34. That’s 36 cents higher than a month ago, $1.22 higher than a year ago, and 27 cents higher than the national average.

The AAA’s survey for Monday found the most expensive gas in Bellingham at $4.46 and cheapest in Spokane at $4.05.

Some other prices around the state, according to the survey:

Bremerton $4.36, Seattle $4.39, Tacoma $4.36, Olympia, $4.39, Vancouver $4.34, Yakima $4.24 and Tri-Cities $4.16.

The AAA says the average price of a gallon of diesel in Washington is $4.89 a gallon, up 4 cents in the past month and $1.87 in the past year.