Outrageous: Folding Dealers Shock Car Buyers(AP)
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Outrageous: Folding Dealers Shock Car Buyers(AP)
I read this in the paper today, thought it was actually from Monday's paper. Link to the full article at the bottom of the page.
https://news.yahoo.com/s/ap/20090201/...ealer_defaults
Less of an argument for car-free as much as it is an argument against car-culture.
ACRAMENTO, Calif. – The national wave of auto dealership closures has come crashing down on thousands of people who are on the hook for used-car loans that dealers were supposed to absolve.
When a car buyer still owes money on a vehicle he is trading in, the dealer promises to pay off the outstanding loan, then resells the vehicle. But as more dealers go out of business, some are sticking consumers with the bill. Lenders can then go after the previous owner who thought the debt was paid, or repossess the car from the new owner who assumed it came with clear title.
"It's devastating for people when it happens because they have two car payments and they can't afford them," said Rosemary Shahan, president of Consumers for Auto Reliability and Safety, a Sacramento-based nonprofit that lobbies on behalf of vehicle owners. "Their credit is destroyed for no fault of their own because the dealer defaulted."
Regulators in California and other states, including Florida, Iowa and Washington, are seeing a surge in consumer complaints. They warn the problem is sure to grow this year because of the deepening recession and continued trouble in the auto industry.
About a quarter of all car buyers are vulnerable because they still owe money on their trade-in or lease when they buy another vehicle, according to industry tracker Edmunds.com. It's become more common for a driver to owe money on a trade-in as people stretch their car payments over six or seven years to make them more affordable.
When a car buyer still owes money on a vehicle he is trading in, the dealer promises to pay off the outstanding loan, then resells the vehicle. But as more dealers go out of business, some are sticking consumers with the bill. Lenders can then go after the previous owner who thought the debt was paid, or repossess the car from the new owner who assumed it came with clear title.
"It's devastating for people when it happens because they have two car payments and they can't afford them," said Rosemary Shahan, president of Consumers for Auto Reliability and Safety, a Sacramento-based nonprofit that lobbies on behalf of vehicle owners. "Their credit is destroyed for no fault of their own because the dealer defaulted."
Regulators in California and other states, including Florida, Iowa and Washington, are seeing a surge in consumer complaints. They warn the problem is sure to grow this year because of the deepening recession and continued trouble in the auto industry.
About a quarter of all car buyers are vulnerable because they still owe money on their trade-in or lease when they buy another vehicle, according to industry tracker Edmunds.com. It's become more common for a driver to owe money on a trade-in as people stretch their car payments over six or seven years to make them more affordable.
Less of an argument for car-free as much as it is an argument against car-culture.
#3
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If you read the whole article, this happened to a couple who bought not 1 but 2 Mercedes and now cant afford either of them! lol
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"Steel: nearly a thousand years of metallurgical development
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Which one would you rather have under your butt at 30mph?"_krazygluon
#5
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Hyundai has a new plan where they'll take back your new car in the first 12 months, with no damage to your credit rating. Hyundai is also the only car company to ost an increase in sales in January. I bet the other car manufaacturers will be following suit real soon.
In other car news, GM just offered EVERY one of their more than 20,000 hourly workers a buyout. They get $20,000 + a new car. The speculation here in a big GM town is that the only workers who will take the buyout are those who are pretty sure they'll be laid off anyway.
In other car news, GM just offered EVERY one of their more than 20,000 hourly workers a buyout. They get $20,000 + a new car. The speculation here in a big GM town is that the only workers who will take the buyout are those who are pretty sure they'll be laid off anyway.
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Wait, so are you saying this article is a good reason to be against car-culture? If so, it doesn't follow. The problem there isn't people having or buying cars, but bad practices or loopholes in the system that can screw the customer over.
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I had no idea until several months ago that auto loans were being carried over when a new car was purchased. This simply confimed what I believed all along that motoring has become too expensive for the middle class to continue.
Whenever I looked at new car prices, it made me cringe at how expensive these vehicles were and how can anyone afford this! When I found out how people were doing it, I felt more than ever, my decision to become car free was correct all along. The bad news for the motorist seems like it never ends.
The only solution for these folks with car loans from bankrupt dealers is to go car free.
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Debt caused the Great Depression, now debt is causing the Bush Depression.
What did that Santayana fellow say about those who forget history? Hmmm. Can't remember. It probably wasn't important any way.
What did that Santayana fellow say about those who forget history? Hmmm. Can't remember. It probably wasn't important any way.
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But this doesn't make sense, for several days now I've been hearing on the radio that the government is trying to craft the stimulus package so that people stay in debt and spend money rather than saving or paying off credit card balances. If debt is the cause then the government would want to design the stimulus package to remove the cause not keep it the same or make it worse. We keep harping on the idea that living car-free helps us live debt free, are we bringing the economy down by not being in debt or did we make the Bush Depression less severe with our lack of debt? It can't be both. If I were upside down on a car loan, would I be helping the economy or hurting it? According to the discussions on the radio I shouldn't use any windfall from the stimulus package to get out of debt but rather stay in debt and buy more stuff. It sounds like from the radio broadcasts that they think the debt free are the ones who hurt the economy.
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But this doesn't make sense, for several days now I've been hearing on the radio that the government is trying to craft the stimulus package so that people stay in debt and spend money rather than saving or paying off credit card balances. If debt is the cause then the government would want to design the stimulus package to remove the cause not keep it the same or make it worse. We keep harping on the idea that living car-free helps us live debt free, are we bringing the economy down by not being in debt or did we make the Bush Depression less severe with our lack of debt? It can't be both. If I were upside down on a car loan, would I be helping the economy or hurting it? According to the discussions on the radio I shouldn't use any windfall from the stimulus package to get out of debt but rather stay in debt and buy more stuff. It sounds like from the radio broadcasts that they think the debt free are the ones who hurt the economy.
Me? I prefer to be debt free and have savings in the bank, versus driving the newest and shiniest car on the block, or a big house in the suburbs that takes two salaries to support. I can pick and choose the things that please me and not be a slave to the paycheck. Very few people in today's society can say that.
Run a search for Fractional Banking...makes for some interesting and scary reading.
Aaron
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"Steel: nearly a thousand years of metallurgical development
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Which one would you rather have under your butt at 30mph?"_krazygluon
Webshots is bailing out, if you find any of my posts with corrupt picture files and want to see them corrected please let me know. :(
ISO: A late 1980's Giant Iguana MTB frameset (or complete bike) 23" Red with yellow graphics.
"Cycling should be a way of life, not a hobby.
RIDE, YOU FOOL, RIDE!"_Nicodemus
"Steel: nearly a thousand years of metallurgical development
Aluminum: barely a hundred
Which one would you rather have under your butt at 30mph?"_krazygluon
#12
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But this doesn't make sense, for several days now I've been hearing on the radio that the government is trying to craft the stimulus package so that people stay in debt and spend money rather than saving or paying off credit card balances. If debt is the cause then the government would want to design the stimulus package to remove the cause not keep it the same or make it worse. We keep harping on the idea that living car-free helps us live debt free, are we bringing the economy down by not being in debt or did we make the Bush Depression less severe with our lack of debt? It can't be both. If I were upside down on a car loan, would I be helping the economy or hurting it? According to the discussions on the radio I shouldn't use any windfall from the stimulus package to get out of debt but rather stay in debt and buy more stuff. It sounds like from the radio broadcasts that they think the debt free are the ones who hurt the economy.
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But this doesn't make sense, for several days now I've been hearing on the radio that the government is trying to craft the stimulus package so that people stay in debt and spend money rather than saving or paying off credit card balances. If debt is the cause then the government would want to design the stimulus package to remove the cause not keep it the same or make it worse. We keep harping on the idea that living car-free helps us live debt free, are we bringing the economy down by not being in debt or did we make the Bush Depression less severe with our lack of debt? It can't be both. If I were upside down on a car loan, would I be helping the economy or hurting it? According to the discussions on the radio I shouldn't use any windfall from the stimulus package to get out of debt but rather stay in debt and buy more stuff. It sounds like from the radio broadcasts that they think the debt free are the ones who hurt the economy.
I personally think it's a sick perspective. Cars are the perfect debt vehicle. They are expensive, have a pretty strong demand curve, they depreciate fast and the loan methods are well documented.
They say that savings impede cash flow. But I think that's BS. The banks have your savings, but I guess they aren't lending that out. But the individual is getting blamed. As we know, the bailout bucks are going to buy banks, and pay bonuses, not getting lent out. Then again, if you are savings, you are not in the loan market.
So me, I'm glad I've got savings not debt. It's just one more way to rebel.
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Last edited by Artkansas; 02-04-09 at 10:18 PM.
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Me? I prefer to be debt free and have savings in the bank, versus driving the newest and shiniest car on the block, or a big house in the suburbs that takes two salaries to support. I can pick and choose the things that please me and not be a slave to the paycheck. Very few people in today's society can say that.
Aaron
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In reality, the current economy is like a campfire burning down. The stimulus package is like a small cup of gasoline. You toss the gasoline on the fire and you get a quick, impressive flareup that makes everyone feel better for a few moments. But without any more real fuel, the fire goes right back down and no long term improvements have been made. The fire is still burning down.
Az
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I found this snippet from "Social and Economic Consequences of Buying on the Instalment Plan" was published by Wilbur Plummer, Ph.D. from the University of Pennsylvania. It was written in 1927. He blames cars just like Dahon.Steve does. "the automobile is said to be responsible for our looking at this old practice in a new light. "
It seems like the 1920s, the 1960s and the 2000s(Bush years or Naughts) have brought us culture shifts. I guess the depression ended the generation of spendthrifts didn't it?
The Effects of Installment Buying on the Character of the Individual
Instalment Buying Is Creating a Generation of Spendthrifts — It is the view of some people that "this system of allowing individuals to buy more than they can pay for" is creating a generation of improvident people--spendthrifts. It is causing individuals to form habits of extravagant spending, rather than the socially desirable habit of saving. The practice of thrift has been a copybook maxim for generations and our parents brought us up to believe that saving is a virtue. There was a time when being in almost any kind of debt was considered somewhat of a family disgrace. Moreover, buying on the instalment plan was considered one of the lowest forms of debt that one could contract--it was looked down upon socially. It was considered an arrangement for persons who were poor, improvident--not able to take care of their own affairs. They needed a collector to tell them under threats how to dispose of their money on pay day. Now what has happened? Respectable people, without any feeling of shame, ride around in motor cars, even expensive one, which are not paid for. When one's neighbor drives out in a new car, the odds are exactly three to one that he is borrowing from the future, living beyond his means. Respectable people are wearing expensive furs and jewelry, bought on time. Instalment buying has acquired an air of respectability; the automobile is said to be responsible for our looking at this old practice in a new light. It is the opinion of some people that the conditions here described are having a deteriorating effect upon the character of individuals. And what is more important, children are being reared in this environment, and they, not having had lessons of thrift instilled into them, will be economically less responsible than their instalment-buying parents.
It seems like the 1920s, the 1960s and the 2000s(Bush years or Naughts) have brought us culture shifts. I guess the depression ended the generation of spendthrifts didn't it?
The Effects of Installment Buying on the Character of the Individual
Instalment Buying Is Creating a Generation of Spendthrifts — It is the view of some people that "this system of allowing individuals to buy more than they can pay for" is creating a generation of improvident people--spendthrifts. It is causing individuals to form habits of extravagant spending, rather than the socially desirable habit of saving. The practice of thrift has been a copybook maxim for generations and our parents brought us up to believe that saving is a virtue. There was a time when being in almost any kind of debt was considered somewhat of a family disgrace. Moreover, buying on the instalment plan was considered one of the lowest forms of debt that one could contract--it was looked down upon socially. It was considered an arrangement for persons who were poor, improvident--not able to take care of their own affairs. They needed a collector to tell them under threats how to dispose of their money on pay day. Now what has happened? Respectable people, without any feeling of shame, ride around in motor cars, even expensive one, which are not paid for. When one's neighbor drives out in a new car, the odds are exactly three to one that he is borrowing from the future, living beyond his means. Respectable people are wearing expensive furs and jewelry, bought on time. Instalment buying has acquired an air of respectability; the automobile is said to be responsible for our looking at this old practice in a new light. It is the opinion of some people that the conditions here described are having a deteriorating effect upon the character of individuals. And what is more important, children are being reared in this environment, and they, not having had lessons of thrift instilled into them, will be economically less responsible than their instalment-buying parents.
#18
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But this doesn't make sense, for several days now I've been hearing on the radio that the government is trying to craft the stimulus package so that people stay in debt and spend money rather than saving or paying off credit card balances. If debt is the cause then the government would want to design the stimulus package to remove the cause not keep it the same or make it worse. We keep harping on the idea that living car-free helps us live debt free, are we bringing the economy down by not being in debt or did we make the Bush Depression less severe with our lack of debt? It can't be both. If I were upside down on a car loan, would I be helping the economy or hurting it? According to the discussions on the radio I shouldn't use any windfall from the stimulus package to get out of debt but rather stay in debt and buy more stuff. It sounds like from the radio broadcasts that they think the debt free are the ones who hurt the economy.
#19
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But this doesn't make sense, for several days now I've been hearing on the radio that the government is trying to craft the stimulus package so that people stay in debt and spend money rather than saving or paying off credit card balances. If debt is the cause then the government would want to design the stimulus package to remove the cause not keep it the same or make it worse. We keep harping on the idea that living car-free helps us live debt free, are we bringing the economy down by not being in debt or did we make the Bush Depression less severe with our lack of debt? It can't be both. If I were upside down on a car loan, would I be helping the economy or hurting it? According to the discussions on the radio I shouldn't use any windfall from the stimulus package to get out of debt but rather stay in debt and buy more stuff. It sounds like from the radio broadcasts that they think the debt free are the ones who hurt the economy.
I see the current job losses as an opportunity for many Americans to examine their lives and decide if they like what they see. Perhaps some will decide to pursue a more beneficial and enjoyable existence. I wish the global economy could be realigned without this recession but given human nature, I see it as a necessary evil/wakeup-call. I'd love to see more articles in mainstream media about the benefits of a smaller economy where Americans work less and lead richer lives.
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In a debt-driven consumer economy, the thrifty savers ARE hurting the economy. If Americans begin saving more and paying off debt they will buy fewer superfluous goods and services. Decreased demand will force many companies to decrease production and layoff workers. This is production and work that wouldn't have existed if most Americans had chosen to live within their means.
That'll be the day. Media's advertisers would choke. But dreaming is good.
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And there's nothing funny about getting screwed over by an unscrupulous business, even if it happens to people who buy stupid symbols of the comsumptive lifestyle like Mercedes cars.
#22
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Actually, they could afford them. The $40K they owe is the car dealer's debt that they've been forced to assume, so this was the dealer's screwup and not theirs. I think that owning luxury cars is ridiculous too, but still, ya gotta get the facts right.
And there's nothing funny about getting screwed over by an unscrupulous business, even if it happens to people who buy stupid symbols of the comsumptive lifestyle like Mercedes cars.
And there's nothing funny about getting screwed over by an unscrupulous business, even if it happens to people who buy stupid symbols of the comsumptive lifestyle like Mercedes cars.
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This is production and work that wouldn't have existed if most Americans had chosen to live within their means. The same thing will occur if more people become less "stuff" oriented as many in this subforum would hope. It just makes sense that if people buy less stuff then less stuff needs to get made and those who profit off of or work for such industries will find themselves out of a job.
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In a debt-driven consumer economy, the thrifty savers ARE hurting the economy. If Americans begin saving more and paying off debt they will buy fewer superfluous goods and services. Decreased demand will force many companies to decrease production and layoff workers. This is production and work that wouldn't have existed if most Americans had chosen to live within their means. The same thing will occur if more people become less "stuff" oriented as many in this subforum would hope. It just makes sense that if people buy less stuff then less stuff needs to get made and those who profit off of or work for such industries will find themselves out of a job.
I see the current job losses as an opportunity for many Americans to examine their lives and decide if they like what they see. Perhaps some will decide to pursue a more beneficial and enjoyable existence. I wish the global economy could be realigned without this recession but given human nature, I see it as a necessary evil/wakeup-call. I'd love to see more articles in mainstream media about the benefits of a smaller economy where Americans work less and lead richer lives.
I see the current job losses as an opportunity for many Americans to examine their lives and decide if they like what they see. Perhaps some will decide to pursue a more beneficial and enjoyable existence. I wish the global economy could be realigned without this recession but given human nature, I see it as a necessary evil/wakeup-call. I'd love to see more articles in mainstream media about the benefits of a smaller economy where Americans work less and lead richer lives.
In reality a person that saves up and pays cash has more purchasing power, because they are not wasting money on interest and credit fees. The big losers in a cash transaction are the banks and credit card companies and other financial interests. I paid $15,000 cash for my last truck. If I had to finance that same truck it would have cost me over $20,000 if I had made payments. That is $5,000 that I still have and the banks do not. However that same $5,000 is in the bank which means it is available to the bank as collateral, or I can use it to purchase another product.
Credit by itself is not an issue but excessive use of credit and over extension of credit as well as misuse of credit is in part what has led to the current problems. Throw in revolving credit on credit cards. This is a neat interactive calculator. Too many people ran up credit card debt, then used their homes as a cash account and took out HELOC's and other interesting things, paid of the credit card debt and ran them up again. Nothing like having that fancy steak dinner you ate a year or two ago as part of your home mortgage.
Aaron
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ISO: A late 1980's Giant Iguana MTB frameset (or complete bike) 23" Red with yellow graphics.
"Cycling should be a way of life, not a hobby.
RIDE, YOU FOOL, RIDE!"_Nicodemus
"Steel: nearly a thousand years of metallurgical development
Aluminum: barely a hundred
Which one would you rather have under your butt at 30mph?"_krazygluon
Webshots is bailing out, if you find any of my posts with corrupt picture files and want to see them corrected please let me know. :(
ISO: A late 1980's Giant Iguana MTB frameset (or complete bike) 23" Red with yellow graphics.
"Cycling should be a way of life, not a hobby.
RIDE, YOU FOOL, RIDE!"_Nicodemus
"Steel: nearly a thousand years of metallurgical development
Aluminum: barely a hundred
Which one would you rather have under your butt at 30mph?"_krazygluon
Last edited by wahoonc; 02-06-09 at 05:23 PM. Reason: Clarify!
#25
Senior Member
People who are not willing to spend lots of money on personal possessions may still contribute a lot to the economy. It wouldn't hurt us to try to keep our economy afloat by spending lots of money / time creating homes that aren't dependent on fossil fuels for electricity and temperature control. It would be just fine if we spent lots of money and time creating superb train systems for eco-friendly transportation. It wouldn't hurt if some of our economic activity went into making sure that, to the extent we lose jobs to foreign countries making cheap goods for our consumption, the manufacturers will steer clear of child labor, life threatening working conditions, and unfair pay rates. (surely if $3 per hour is too little in the USA, $0.20 per hour is too little in any country!) Maybe we'd feel the need for fewer wars if our country put more effort in to stopping the exploitation of the world's least wealthy people for our own benefit.
Sort of...I have plenty of things and paid cash for most if not all of them. Access to easy credit allows people to spend more than they normally would, good thing for the economy...as long as they pay their bills.
In reality a person that saves up and pays cash has more purchasing power, because they are not wasting money on interest and credit fees. The big losers in a cash transaction are the banks and credit card companies and other financial interests. I paid $15,000 cash for my last truck. If I had to finance that same truck it would have cost me over $20,000 if I had made payments. That is $5,000 that I still have and the banks do not, but that same $5,000 is in the bank which means it is available to the bank as collateral. Credit by itself is not an issue but excessive use of credit and over extension of credit as well as misuse of credit is in part what has led to the current problems.