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November 14, 2013

It is critical to keep people perpetually in debt.

Why allow them to buy a new $6,000 car outright – or pay it off in two or three years

(as was common once – and within living memory of any person older than 40) when you can effectively force them to buy a $30,000 car (the average price paid for a new vehicle as of last year) and sign them up for 5 or 6 years of payments? And force them to spend $1,000 annually to insure it, too? That’s the truth of the thing. It’s not about “safety” – or any other such altruistic palaver. It is about power – control. And, of course, money. Why Not? » Eric Peters Autos

Posted by gerardvanderleun at November 14, 2013 6:48 PM. This is an entry on the sideblog of American Digest: Check it out.

Your Say

I don't see this as being driven entirely by top-down, regulatory fascism. I think a variety of factors have worked to enamor the business world with cash flows in place of payments -- Instead of hoping for repeat business, why not straitjacket a customer into an extended, pay-over-time relationship? Why sell when you can lease? Better yet, an extended contractual relationship and cash flow creates all kinds of opportunities for accounting hijinks.

Posted by: Umbriel at November 14, 2013 7:16 PM

I bought my first and last brand new ride in Oct 1990, a sky blue 1991 Chevy S10 short bed, regular cab, for $8,888.88 and made payments of $237.51 for 5 years. I am still driving it and it has 169,000 miles. The state required insurance costs $450/year, more than the blue book value of the truck itself. The last time I had an accident was in 1981. I cannot justify the cost of another new vehicle so I will drive my S10 til I die.

Posted by: ghostsniper at November 14, 2013 8:36 PM

Bought first and last new car in '67, Impala convertible 327 fuel injected buggy. $2500 cash. They were not overpriced then.

If you buy a new car now you're a fool. Buy a 5 year old car and pay cash. Drive it until it isn't safe to be on the road. That leaves a bunch of money for beer guns and bimbos.

Posted by: Peccable at November 15, 2013 2:50 AM

My wife and I had to make decisions early on about where our scarce dollars would go. We opted for a better house in a good neighborhood, a large family by today's standards, continuing college educations, (her PHD, me J.D.), and we financed it all by driving what our kids call "beaters." We figured at $500.00/month/car for each of us, that extra $1,000.00 over our 40 years of marriage has bought us a lot more than the latest shiny vehicle. Sure, sometimes we would like a new car but each time we investigate buying one we walk away. Trust me, you can buy a lot more goods and services for yourself and children if you don't feed the beast.

Posted by: tripletap at November 15, 2013 7:10 AM

An addition to my above post: When we need a vehicle we save our phantom car payment (500.00) month and after a year we take $6000.00 and buy a used vehicle. We have had wonderful cars and trucks over the years. Most of our vehicles get over 250,000 miles with very little repair dollars. My current 1998 Chevy truck has 360,000 miles and is just now getting a little tired. Wife just sold her 2000 Exterra 240,000 miles and bought a 2003 Suburban 127,000 miles. We should get at least another 125,000 miles on it. I suggest this to young people.

Posted by: tripletap at November 15, 2013 7:18 AM

It's not just the government regulatory fascists and the corporate rent-seeking fascists:

It's also the do-gooder fascists at organizations like Consumers Union, as arrogant a bunch of white liberal crapweasels as you will find.

Posted by: pst314 at November 15, 2013 2:17 PM

Never ask a barber if you need a haircut. YOU decide what you need and don't need. If you make financial decisions based on social cues you deserve to be broke and confused. It's your job to look out for your own best interest. It isn't the job of the banker or the car dealer to stop you before you make a mistake.

The world is hard. It's even harder when you are stupid. John Wayne.

Posted by: Scott M at November 15, 2013 3:17 PM

A bit over seven and a half years ago, while working as a car salesman, I bought a customer's trade-in. 1997 Ford Crown Vic, with barely over 70k miles. With all taxes and fees included, I rolled it over the curb for $2,000.

Just sold it two months ago, with 204,622 miles on it. Got $2,000 for it.

I've been away from car sales for the past four years now, doing commercial and residential roofing sales. One of my customers had the Crown Vic's replacement in her garage, waiting for me to come along and buy it.

She's an 82 y/o widow, and her late husband's 2000 model Ford F-150 XLT Supercab was gathering dust in the garage. Nice color matched fiberglass shell over the bed, too.

33,510 miles on the odometer.

$5,200 in her hand, and the truck is now mine. I expect it to see well over a quarter million miles in the years to come.

I'll never by a new car or truck again, ever. A Gold Wing motorcycle? Yes, but that's different. I only trust a bike that I've owned and maintained.

Jim
Sunk New Dawn
Galveston, TX

Posted by: Jim at November 15, 2013 3:35 PM

I am 63 and have never bought a new car. And never will. My newest car is a 1966 Chrysler Convertible. I rarely drive it because I prefer to drive my older cars. My 1931 Ford, my 1935 Ford pickup, my 1939 Ford (daily driver for 17 years)
my 1950 Crestliner, 57 chevy more than 25 years, the list is long. I dont think cars ever wear out. There are millions of Model Ts still running.
My cars are easy to repair and parts dont cost much. I feel a direct link with the past when I drive

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