Automakers warn new ethanol mandate could damage vehicles

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Detroit says it will ruin your engine. The EPA says it's safe. 

Farmers say it's better than foreign oil. Oil companies say it's more expensive than gasoline. 

But as Washington looks to compel refiners to blend more and more ethanol into gasoline, consumers are still left with the basic and critical question -- how much ethanol is safe to put in their cars? 

Automakers warn the government's ethanol mandate could damage vehicles if it continues to grow.

"We just feel that it is not safe for the consumer. It's not safe for their engines," said Charles Drevna, executive president of American Fuel & Petrochemical Manufacturers.

The questions about ethanol arise after Congress first mandated it in 2007. Ninety-six percent of gasoline sold in the U.S. is now 10 percent ethanol, a high-octane fuel derived from corn. But under that bill and rules favored by the Environmental Protection Agency, refiners are now being forced to blend up to 15 percent ethanol into gasoline sold at stations around the U.S.

The auto industry, though, says E-15 -- as the blend is known -- corrodes pumps, fuel lines and injectors. And manufacturers say they won't cover damages caused by the higher blend.

The American Automobile Association agrees.   

"Ninety-five percent of today's cars are not suited for E-15 based on what people who make those cars say," said AAA CEO Robert Darbelnet.

The ethanol lobby claims automakers and refiners are overreacting.

"E-15 has been sold in this country for the past nine months with no issues whatsoever. This is a lot of hysteria that's being driven by the oil companies," said Bob Dinneen, head of the Renewable Fuels Association.

While there have been no issues reported so far, the new blend has only been sold in a handful of stations in the Midwest. But refiners are mandated to use 13.8 billion gallons ethanol this year requiring the 15 percent blend. The EPA says it is safe for cars built after 2001, but acknowledges it is inappropriate for boats and small motors, including lawnmowers and chainsaws.

Automakers advise new owners not to fill up on E-15 and say doing so may violate warranty terms, leaving customers to pay costly repair bills. Toyota and Lexus even placed warning labels on gas caps and owner's manual instructions caution not to use E-15.

"We think ethanol is a pretty good product, up to a point," said Drevna. "But when Congress mandates such massive quantities that we can't put into the fuel system, that the autos and the lawnmowers people and the marine manufacturers are saying 'We won't warranty, we won't put this in our engines, there is a problem'."

Ethanol supporters dispute that and claim studies back them up. Ethanol blends of 25 percent have been used for years in Brazil with no ill effects on the same cars sold in the U.S.

"We support what the EPA did because we know that E-15 is safe for the vehicles for which they have approved," said Dinneen."Let the marketplace decide. Let consumers that have a newer vehicle, that want to use E-15, give them the choice. If they want to use E-15 because it is lower cost, because it's domestically produced, because it's the only thing we have that's going to reduce greenhouse gases, then they ought to have that choice."

After a lengthy comment period, the EPA is expected to decide soon whether or not to relax the blend mandate. Some lawmakers are considering similar legislation should the EPA fail to do so. Right now, it is a lobbying war pitting farmers against oil refiners and automakers.

"Look, this is pretty simple," said Dinneen. "It's about a battle for the barrel. Ethanol, renewable fuels, have been phenomenally successful over the last several years, and we are now 10 percent of the U.S. motor fuel market. And the refiners are saying, 'no more'. They don't want to see E-15 succeed. I think the American public still understands the value in reducing our dependence on imported oil and seeing more domestic renewable fuels used."

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App claims to reveal secret prices used car dealers pay for vehicles

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If you knew what a used car dealer paid for a car that you’re interested in, wouldn’t that give you a tactical advantage when negotiating a deal?

Of course it would.

Now one self-described used car dealer, who goes by the nom-de-guerre of Dennis Miller, is letting consumers in on the big secret.

Miller and his colleagues have launched a new app called SnafuScan that gives prospective buyers information they say has never before been available to the general public, and could help them win the battle of the bargain.

“This is an app that gives you the prices that dealers pay for cars at dealers’ auctions,” Miller, founder and CEO of SnafuScan.com tells FoxNews.com. “The auction price is much lower than the Kelly Blue Book price, which reports on the prices of cars as sold to the public. Consumers have been very much keyed in to the Kelly Blue Book for years.”

According to Miller, most of the used cars at dealerships are bought at special dealer-only auctions closed to the general public, not directly from consumers, and the prices paid can be $5,000-$10,000 less than what’s on the window when you kick the tires.

Miller is not giving this information away for altruistic reasons. He is, after all, still a used car dealer, and wants to sell you his app for $9.99 for a 30-day subscription.

As a spiff to get customers in the digital door, he’s offering a free version of the app that allows users to get all the details on safety recalls for a particular car. The information will enable consumers to check the VIN number of a vehicle and find out if there is any outstanding work that needs to be done.

“We’re hoping to get the word out about recalls, and generate attention to our site as a resource for automotive information,” says Miller. “If millions of people use this as a recall scanner for their current cars, when they want to buy a new car, they will know about us, and can spend the $9.99 to get more detailed information about other cars.”

The free application idea came to Miller first, inspiring him and his investors to take the product to a higher level of design and functionality.

“When we buy a used car at an auction, we always look up recall information, so the cars can be upgraded, for free,” says Miller. “Some are benign, some are serious, like a faulty gas pedal or airbags. We want to prep the car and get rid of it as soon as possible.”

Most used cars, he explains, are bought by the dealer on credit, and it could cost them $200 or more every month the car sits on the lot, so they want to move the metal quickly.

The pricing info provided by SnafuScan will come in most handy for consumers if the car has been on the lot for more than 30 days, when the dealer’s profit margin really starts narrowing and he’s ready to deal.

Working with computer software developers in Russia and the Ukraine, Miller has come up with an algorithm that takes the last five years of transaction data from used car auctions, crunches the numbers, and comes up with the probable price the dealer paid for a particular used car, “within a few hundred dollars over, or under.”

Miller says that less reputable used car dealers in the past have gone as far as forging receipts from auctions to show to prospective buyers, claiming that their margin of profit on the car was less than it actually was.

“Let’s say we buy a vehicle for $6,500,” Miller says. “The industry has made up receipts that look like auction receipts, but which say the car cost $10,200 at auction. Meantime, Kelly Blue Booksays the car is worth $12,000. So you can see there is a lot of room for negotiation there.”

But what do Miller’s colleagues think about his turncoat move?

When contacted by FoxNews.com, the National Independent Automobile Dealers Association, which represents many of the nation’s used car dealers, had no comment.

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AT&T to offer 4G LTE in General Motors vehicles

AT&T Inc. is scoring a win over rival Verizon Wireless as it takes over the contract to supply wireless connections to cars with General Motors' OnStar service.

Verizon Wireless and its predecessor companies have supplied the network for OnStar since the service launched in the 1990s, but AT&T will take over with the 2015 model year, AT&T and GM said Monday.

The news comes as cellphone companies are jostling to connect non-phone devices to their networks. Now that nearly everyone has a phone, the phone companies have to look elsewhere for growth. Dallas-based AT&T has been particularly aggressive in this area, garnering, for instance, the contract to connect Amazon Kindle e-readers.

AT&T will connect OnStar cars to its new "4G LTE" network, which can supply much higher data speeds than current OnStar connections. That means GM could deliver car software updates wirelessly, instead of making owners take their cars to the shop. It could also enable video streaming for passengers, in-vehicle Wi-Fi "hotspots" and give GM a better view of what's going on inside a car, and whether it needs maintenance. Owners might even be able to call up views from their car's cameras, remotely.

"They're basically smartphones on wheels," said Glenn Lurie, head of AT&T's "emerging devices" division.

Verizon has an LTE network that delivers speeds similar to AT&T's, with wider coverage. Lurie said that by the time AT&T takes over the contract, its LTE network will cover 300 million Americans, or 96 percent of the population. It also has older, slower networks as a backup.

Verizon Wireless said it was looking forward to continuing to provide service to current OnStar customers.

AT&T and GM made the announcement just before the opening of Mobile World Congress, the world's largest wireless trade show, in Barcelona. The companies didn't reveal financial terms. The 6 million current OnStar users pay $19 per month or $199 per year, plus per-minute calling fees. Turn-by-turn GPS navigation costs extra, too.

British automotive research firm SBD believes that 100 million cars worldwide will have built-in wireless capabilities by 2015.

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