I'm offended.

[mrsmaalox]

I'm no economic wiz but I don't think we can let the big 3 go under. I'm just glad my dad's pension is safe.

Joe where did your dad work?

[beefanus]

I guess most people wouldn't agree or better yet wouldn't give a one way or the other but I'm pretty well offended by the latest round of auto advertising. Seems like every other commercial consists of "bailout" pricing. "Come on in and get your piece of the bailout"..."Come down and take advantage of our bailout blowout"..."bailout specials all weekend long"..."special one time only bailout financing options are now available" so on and so on.

I think its pretty ty that a financial meltdown is going to be the catalyzt for doing good business. That somehow the misfortune and mismanagment of our country would equate to you getting the deal of a lifetime. This mess has ruined the lives of many many people and I hardly think its something that should be pitched as an opportunity of a lifetime.

The first thing that came to mind was what next "come get your 9/11 anniversary blowout"..."come on in this 9/11 Sunday Sunday Sunday because prices are falling like twin towers"..."come get your special financing, we've hijacked the banks and NO. APPLICATION. IS. REFUSED".

Its an abomination. Its disgusting that mainstream advertising can tap into the very destruction of our Country because it "might move a few more units". Nothing seems more logical than the demise of a large portion of this industry. I'd personally love to see this monopoly of manufactures shrink down and re-organized into a much more productive industry but thats an entirely different discussion.

Once they really do recieve their bailout money this type of advertising is going to be expanded like we've never seen before. "The government has authorized the reduction of everything on the lot blah blah blah". Its going to be the employee pricing scam all over again only they'll call it "bailout bonanza" and you'll ing love every minute of it.

yea ok its pretty ed up, seriously but the reason the economy is screwed is because no one will put money into it thats the reason it hasnt bounced back, americans r not spending money witch means the big corps. r not getting as much money as the r used to (causes lose of jobs) so they r not investing becasue of the fear they will lose the money they do have, and when no money is put into the stock martet then it contunies to chrash so actually, idc as long as they start getting people to spend money how they do it it is for the better

[Solid D]

It's not any more offensive as putting customers on hold, even though you know the person they ask for isn't there....or not saying "please" when you ask for something.

[JoeChalupa]

Joe where did your dad work?

He worked for GM in Defiance, Oh until he retired in 1992. He is hard core Union and we go round and round about that.

[BacktoBasics]

It's not any more offensive as putting customers on hold, even though you know the person they ask for isn't there....or not saying "please" when you ask for something.

[JoeChalupa]

All three wouldn't go under. Perhaps one. Jobs would be lost yes but it'll pave the way for more productive business practices.

I hear ya but you can't have more productive business practices if the business no longer exists.

[JoeChalupa]

What would happen if they did all 3 go under?

It would suck from a "buy American" rally point, but Toyota has plants here in the US which employ many Americans.....

True, but Toyota isn't at risk of going under. I'll still buy "American" cars only. Not built in America.

[Blake]

True, but Toyota isn't at risk of going under. I'll still buy "American" cars only. Not built in America.

well what happens to our economy if the big three all go under?

[BacktoBasics]

yea ok its pretty ed up, seriously but the reason the economy is screwed is because no one will put money into it thats the reason it hasnt bounced back, americans r not spending money witch means the big corps. r not getting as much money as the r used to (causes lose of jobs) so they r not investing becasue of the fear they will lose the money they do have, and when no money is put into the stock martet then it contunies to chrash so actually, idc as long as they start getting people to spend money how they do it it is for the better

The problem isn't that people don't want to spend. The problem is that the banks won't lend. Without the banks lending the auto industry is in shambles. Sure the public isn't buying as many small ticket items..say below 2k. There is no shortage of buyers seeking big ticket items only a shortage of banks willing to lend. I live it everyday, my peers are going thru the very same thing I'm going thru.

I'm not talking about the kind of lending that got them in this mess in the first place. I'm talking about the meat of lending the people with 600 to 640 FICOs that are probably realtively good lends who used to earn near prime rates with zero to minimal down. The very same people who can actually still get qualified but at 15+% and are required to put 2-4k down. Those customers want to buy but end up walking at the absurdity of their terms. The criteria is way out of whack. I understand the need to avoid the risky lends but the banks cut nearly all of it out.

Fix the lending fiasco and the auto industry will rebound nicely.

[JoeChalupa]

, I don't have the best credit score by any means but I can still get a car loan right now. I'm just not buying right now.

[Drachen]

I think evoking 9/11 is worse because while the overall effects of this will be greater, the fact is that 9/11 was completely sinister and evil in its nature. This is more the result of greed and incompetence plus the fact of the matter is that people spending money will do good and if we're not bailing out these companies so that they can sell more cars then what exactly are we bailing them out for?

Like I said, I haven't seen them but I find it really difficult to believe that they can be on par with anything like a 9/11 anniversary sale (which I've never seen FWIW).

Does no one here remember the "Keep America Rolling" campaigns from the big 3 with 0% financing and great deals on cars right after 9/11??? Yes they took advantage of that too.

[BacktoBasics]

I hear ya but you can't have more productive business practices if the business no longer exists.

You can if the others restructure and grow off the residual existing buyers who would have bought from the company had they not gone under....the company dies not the potential customer who will simply buy from the next in line. Most of those lost jobs can be recreated within the other companies who naturally grow from the shrinking of the industry.

[BacktoBasics]

, I don't have the best credit score by any means but I can still get a car loan right now. I'm just not buying right now.

Great example. Lets say you were in the market. Two years ago your 630ish FICO would earn you 4.99% and 0 down on a 15k car. That would be 350 a month for 48 months.

Now you'd earn 12.99% and it'd be 1500 down. So you're out the 1500 and your payment is roughy 405.

So some are still doable lends but the terms suck balls. they used to offer prime rates or near prime rates all the way down to 550 scores if the bureau was realitively clean. Those people can't get loans at all right now.

The banks froze the market and priced themselves out of decent buys.

[mrsmaalox]

He worked for GM in Defiance, Oh until he retired in 1992. He is hard core Union and we go round and round about that.

Yea I thought I remembered you saying something like that before. I have 2 uncles and one aunt who are retired from Ford in Lorain, Ohio. Of course all the cousins ended up there too. And all hard core union.

[2Blonde]

I'm curious as to how Kelley Blue book and edmunds.com will handle this. If the big 3 were really serious about lowering prices then the sites that give you appraisals wouldn't be able to keep up with the changes and the banks would have a hard time figuring out how much they would loan. Would it turn into a situation like the mortgage companies.? Would they have to get an appraisal for every car that is based on what similar cars in the area where you live have been sold at in the last 3 months?

Short of screwing with an established system for financing, how could they really drop their prices significantly enough to increase the number of people who will buy new cars?

[BacktoBasics]

I'm curious as to how Kelley Blue book and edmunds.com will handle this. If the big 3 were really serious about lowering prices then the sites that give you appraisals wouldn't be able to keep up with the changes and the banks would have a hard time figuring out how much they would loan. Would it turn into a situation like the mortgage companies.? Would they have to get an appraisal for every car that is based on what similar cars in the area where you live have been sold at in the last 3 months?

Short of screwing with an established system for financing, how could they really drop their prices significantly enough to increase the number of people who will buy new cars?

Two things

New car sales are based on invoice not NADA or Kelley.

When a bank decides how much they're willing to loan on something used it'll look at how much the NADA or Kelley (more specifically NADA) compares to new when the real value is in question. They do this if the dealership provides a full bookout of the unit but it seems high. More importantly the level of depreciation isn't really going to change because of all this. Even though the real market is lean compared to actual book value....all they'll do is look more closely at base value vs. a value inflated with a ton of features and options. Most banks already base their lending on base price rather a full book out with options but even more so on credit worth than the actual value of the car.

This is why people with good credit can buy older cars because the loan is based on who they're lending to not what the actual collateral is because in the end a good lend is a good lend.

Above and beyond all that If the banks feel like the deal is higher than it should be they'll request that the buyer put money down to make up the difference.

Nothings going to change. You'll never hear NADA or others say they can't keep up with real market values even though it never has or ever will.

[2Blonde]

The problem isn't that people don't want to spend. The problem is that the banks won't lend. Without the banks lending the auto industry is in shambles. Sure the public isn't buying as many small ticket items..say below 2k. There is no shortage of buyers seeking big ticket items only a shortage of banks willing to lend. I live it everyday, my peers are going thru the very same thing I'm going thru.

I'm not talking about the kind of lending that got them in this mess in the first place. I'm talking about the meat of lending the people with 600 to 640 FICOs that are probably realtively good lends who used to earn near prime rates with zero to minimal down. The very same people who can actually still get qualified but at 15+% and are required to put 2-4k down. Those customers want to buy but end up walking at the absurdity of their terms. The criteria is way out of whack. I understand the need to avoid the risky lends but the banks cut nearly all of it out.

Fix the lending fiasco and the auto industry will rebound nicely.

Interesting. Thanks.

[Fascinated]

Canada is looking better every day.