Cash for clunkers will get many people even more indebted

[Anaconda]

Quote from jprad:

The price of a couple of cars is squat in the scheme of things when you compare it to their monthly nut for the building(s), utilities, advertising, payroll, parts and car inventories.

If you want to be closed-minded and continue to believe what you want, fine. But, you really should check out autobytel for yourself and see that there are plenty of financed deals out there that are discounted just as much as a cash-only deal.

Not always, there's always going to be exceptions. But, by and large, there simply aren't as many people walking in to do cash-only deals these days.

Credit is no longer a privilege, it's a way of life.

What is your point? My original post in this thread was a rebuttal to your assumption that it is wise to finance the car rather than pay cash for it because the cash should be put to work to earn a return, not lose value with the car. You claim that the rich & smart people always finance even if they can pay for it. Well, you're wrong. Maybe the stupid rich aka paper millionaires do so, but the savvy wealthy know that with cash you negotiate down the price significantly.

All I really gather from you from your posts in this thread is that you are trying to justify your credit addicted lifestyle.

 

[IanMacQuaide]

Quote from saxon22:

Wait a second, they needed 3 guys to do this. Hire one illegal pay him 50$ and he could disable 100 cars a day. Only in America

We're destroying things that work in exchange for debt?
How long can we keep doing this?

 

[jprad]

Quote from asiaprop:

I never said credit is the same than cash, so not sure why you even mention it. The point is that in the past, right now, and in the future it is the basis of wealth and wellbeing to purchase only what I can afford.

Completely agree, no one should ever purchase more than they can afford, be it cash or credit.

Credit is backward looking it does not tell me about the credibility in the future, only give me a probability.

Cash is something the person I purchase from can use instananeously. So I see ZERO reason why I in fact get disadvantaged when I pay cash over someone who purchases everything on credit. I have zero credit risk the other guy poses credit risk to his counterparty. Thats the difference.

The fact remains that a credit score, regardless of how unfair you or anyone else thinks it may be, is the widely accepted standard measure of how financially responsible someone is.

Life's a game, and a credit score is part of the rules for playing it. If you don't like it there's nothing stopping you from inventing a ratings system that proves someone is a responsible person in a cash-only economy.

 

[jprad]

Quote from Anaconda:

All I really gather from you from your posts in this thread is that you are trying to justify your credit addicted lifestyle.

There you go again, attacking the person when you've got nothing left.

I do agree with you on one point though; cash is king. And, I'm not giving any more of mine away then I absolutely have to and only when I have to. Otherwise, all of my cash is put to work until I do have to part with it.

FTR, the only loan I have is my mortgage, a 15yr fixed @ 5.375. It used to be a 30yr fixed @ 6.25, but I took advantage of the '03 mortgage market and refinanced. And, no, I didn't take any equity out when I did.

Cars? Yeah, I've done the zero percent financing, just as I said I've done here. Didn't use a passbook though, there are better returns with minimally higher risk out there, just got to work harder for it.

Both that I have now were done as 0% financing, both were bought near the end of the model year, right after the dealer had to take their factory allotment and I did them at the end of the month. One was done right after the '00 market went bust, the other in '01. Both were 36 month deals financed by the manufacturer. One required 40% down, the other 25%.

You'd be surprised at how good a deal you can get, with financing, when it's timed well and you don't have a trade-in.

Credit cards? Yep, got two but, I use them like a debit card, they're paid off in full each month. If the CC companies start charging interest on day 1 of a purchase I may change that behavior somewhat. But, overall, the buyer protection that a credit card gives you is currently well worth the annual fee.

 

[Maverickz]

Quote from Anaconda:

Go to any regular car dealer that is using a 3rd party to provide financing. They are much more interested in getting their cash as you drive off the lot as opposed to waiting for the financing process.

Do you not realize that any dealership using a 3rd party finance company, GETS THEIR CASH? The finance company pays the dealership for the car up front, you are paying back the finance company, not the dealership. The dealer may get some sort of kickback for the loan though giving them more incentive to put you in a loan than take cash.

Quote from Anaconda:

Paying cash = cash flow for the dealership. Cash flow is king when it comes to running a business.

You can also get financing on your own before walking into the dealership and get the SAME RESULTS as CASH too.

EDIT: Before it gets said, I know that if you get financing on your own you will not get 0% you can still get very low rates now though. Also if a Dealership is offering 0% financing they are planning on making the money off of the car. Also since they are no longer able to make money on loans....guess what happens to cash customer pricing to make up for it?

 

[Anaconda]

Quote from jprad:

There you go again, attacking the person when you've got nothing left.

I'm not attacking you, I stated my general observation from your posts. It's not even clear what you are arguing, you just keep writing paragraphs upon paragraphs rationalizing a credit dependent lifestyle. Justify it anyway you want, but as you have confirmed, cash is king.

 

[Maverickz]

Oh I forgot to add that I have a good friend that worked in new and used auto sales for many years. His exact words to me were: "There is no such thing as a 'good deal' from a dealership. We only make you think you got one."

He went on to say that the discounts people think they are getting come from excess padding of the price the dealer wasn't worried about getting anyway. This way those that don't know how to negotiate get really screwed and those that do only get partially screwed.

 

[Scataphagos]

Quote from Maverickz:

Oh I forgot to add that I have a good friend that worked in new and used auto sales for many years. His exact words to me were: "There is no such thing as a 'good deal' from a dealership. We only make you think you got one."

He went on to say that the discounts people think they are getting come from excess padding of the price the dealer wasn't worried about getting anyway. This way those that don't know how to negotiate get really screwed and those that do only get partially screwed.

As usual, the truth is bitter...

 

[ByLoSellHi]

Quote from Maverickz:

Oh I forgot to add that I have a good friend that worked in new and used auto sales for many years. His exact words to me were: "There is no such thing as a 'good deal' from a dealership. We only make you think you got one."

He went on to say that the discounts people think they are getting come from excess padding of the price the dealer wasn't worried about getting anyway. This way those that don't know how to negotiate get really screwed and those that do only get partially screwed.

Spending money on a rapidly depreciating asset such as a car, discounted or not at the point of sale, is foolish no matter what.

The only way it makes financial sense if it's required to accomplish something (such as get to work or school) that will provide a net financial benefit (i.e. one that surpasses the cost of the purchase, depreciation, maintenance and insurance of the car).

Even if one assumes that the dealers and/or manufacturers aren't pocketing most or all of the voucher amount under cash for clunkers, the consumer isn't "saving" anything. At best, they'd be spending a little less than they ordinarily would.

 

[tango29]

I hate the idea of buying a vehicle again, but hard to pass taking my tax money back from the Socialists and using it towards something for me. Probably take our van which if I'm lucky is worth about $1000, and pick up a new one. Van now has a driver side window which doesn't work, ABS light is flashing off and on, the suspension feels shot, it hops when turning and hitting a bump. ALso there is a nice dent to the lower frame from a boulder I didn't see as I was coming out of shopping center and trying to pull far enough over for a d-bag who needed the entire road to turn into the lot. Looking at a Town and County as my 1st choice a Honda is $4000 more with no discounts. Chrysler is offering $4000 in incentives plus the $3500 for our junk. Looking for a $30,000 van to be around $27,500 then take off discount and cash for junk. May even do the 0% if they will include that, and throw the cash in interest account.
F***ing Socialists are sucking me into their plans.