[DOF_power]

Auto sales may be worst in 16 years.
GM sales plunge 45% while Ford's and Toyota's October sales also tumble as industry braces for the lowest number of sales since 1992


NEW YORK (CNNMoney.com) -- The nation's top automakers all reported another month of sharply lower sales Monday, kicking off a series of October reports that are expected to show the worst industrywide auto sales in 16 years.

General Motors (GM, Fortune 500) reported that its U.S. sales plunged 45% in the month, worse than the forecast of a 41% drop from industry sales tracker Edmunds.com. Unlike some of its rivals, its sales even fell from what were weak levels in September.

GM pointed to the crisis in credit markets, which it said made it much more difficult for buyers to get the loans they wanted to buy cars.

"We are obviously disappointed in our results, which reflect a difficult comparison with a strong year-ago October performance," said Mark LaNeve, the GM vice president in charge of sales in North America.

"More importantly, it also reflects an unprecedented credit crunch that is dramatically impacting the entire U.S. economy," he added.

Ford (F, Fortune 500) sales were down 30% from a year earlier, including the company's Volvo unit in the sales total.

While that was a bit better than the 35% drop forecast by sales tracker Edmunds.com, it marked the 11th straight month that Ford's sales fell from year-earlier levels.

Sales were also up slightly from September, which was the weakest month for the company since January 1982.

Toyota Motor, which is now the No. 2 automaker in terms of U.S. sales, posted a 23% decline from year-earlier levels. That was far worse than the 16% drop forecast by Edmunds. This was the tenth time in the past eleven months that sales fell from a year ago.

Although gasoline prices eased during the month, tight credit and plunging consumer confidence kept potential buyers out of dealer showrooms. The declining sales were felt across all categories of autos at all three companies.

GM reported that sales of light trucks, which includes pickups and sports utility vehicles (SUVs), plunged 51%, while car sales tumbled 34% compared to a year ago.

Ford posted a year-over-year decline in sales for virtually every model it offers. The only two exceptions were the Lincoln Town Car and the Ford Flex, a newly-introduced crossover vehicle.

For its core Ford, Lincoln and Mercury brands, sales of SUVs plummeted 54% from a year ago and crossover sales were off 39%. Sales of trucks and vans declined 19% while sales of cars fell 27% from a year earlier.

Toyota reported similar trends, with sales of light truck models falling more than 33% from year-earlier levels. Sales of cars dropped 16%.

Sales tracker Edmunds.com is forecasting that total U.S. auto sales will be down 29%. The remaining automakers will report their results later Monday.

Experts are worried that the weak sales and tight credit could cause the U.S. automakers to run out of cash as soon as 2009. While Ford has more cash on hand that its U.S. rivals, it is forecast to report a much larger third quarter loss than it did year ago when it releases results Friday.

Chrysler LLC is expected to post a 38% drop at its three brands. Asian automakers are expected to join Toyota in posting much lower sales as well: Edmunds.com is predicting drops of 17% for Honda Motor (HMC) and 29% for Nissan (NSANY) from year-earlier levels.

Chrysler has reportedly held talks with GM as well as with the Nissan-Renault alliance about a possible merger with one of those automakers. But those talks are reportedly on hold. There has been talk that GM is seeking a loan from the Treasury Department in order to help finance a deal for Chrysler.

[DOF_power]

Horrific October Car Sales Plunge Industry to Post-WW II Low - Auto Observer


There were almost no words on Monday to describe how abysmal U.S. auto sales were in the woe-begotten month of October.

Bled by battered consumer confidence, by more-expensive and harder-to-obtain loans, by financial-market disasters and Election Day anxieties, October sales limped in at only about 852,000 vehicles nationwide, a 32-percent plunge from a year ago.

"This level of sales is not sustainable for anyone in the industry," said Michael DiGiovanni, head of global market analysis for General Motors. "It doesn't matter how deep their pockets are. Everyone is pulling in their reins to one degree or another, but everyone is affected by this."

GM's sales slumped by a horrific 45 percent, the worst showing among the Big Six automakers selling in the United States. Chrysler's declined by 35 percent, Nissan's by 33 percent, Ford's by 29 percent, Honda's by 25 percent and Toyota's by 23 percent.

The industry total comprised its lowest sales volume for any month since 1992. And adjusting for population growth - that is, on a per capita basis - October auto sales were the industry's worst since World War II.

Record Sluggishness

Similarly, the annual pace of sales in October was an abjectly dismal 10.5 million to 10.6 million vehicles on a seasonally adjusted basis, a rate more than two million vehicles below the 12.8-million rate in a rotten September. It was the worst monthly sales rate, GM said, in 26 years.

This basket of terrible numbers put some flesh on the rationale for the now-likely GM-Chrysler combination and is sure to get the attention of a newly elected president and Congress as the U.S. government sits on the struggling automakers' demands for federal loan assistance to bring about a merger.

More immediately, October's reports were so bad that industry executives and analysts were left grasping for superlatives to describe its awful dimensions.

"I'm always very optimistic by nature," said Mark LaNeve, GM's North American vice president of sales, "but in my 27 years I never saw a month like this." Sales levels were those of a "severe, severe recession," he said. "In September, the consumer was hanging in there with us, but by the time we got to October, he was done and finished."

LaNeve noted that Americans spent only about 2.8 percent of their income on vehicles in October, the lowest percentage since the federal government began keeping records in the Sixties. A level about 4 percent, he said, is typical.

No Words to Describe

Chrysler Vice Chairman Jim Press remarked that October "may have been a month that showed how low the industry can go," what he called "the toughest month we've seen."

Jim Farley, Ford's executive vice president of sales and marketing, called October results "a sobering number," while even the company's press release described "an economic gauntlet the likes of which haven't been seen in more than two decades."

With an industry "hovering at [a sales rate of] 11 million vehicles," said George Pipas, Ford's head of U.S. sales analysis, "there are no hot vehicles and no hot segments."

Even Hyundai, which had been experiencing a relatively strong 2008 in U.S. sales, was wracked for a 31-percent sales decline in October. "We are experiencing one of the most challenging times in recent automotive history," said Dave Zuchowski, Hyundai Motor America's vice president of national sales.

Such was the tenor of October reports that a merely dour assessment of the industry came off as sort of timid. "This is the toughest economy we've seen in a long time, especially within the automotive industry," said Mark Barnes, chief operating officer of Volkswagen of America. Of course, VW's sales were sparkling by contrast with those of the Big Three: down only about 8 percent for October and behind just 0.6 percent for the year to date.

A Perfect Storm

All the big players, meanwhile, faced an epochal mix of dreadful negatives that swept all but the most determined American consumer out of the vehicle-purchase picture last month.

First and foremost was an absolute deflation of consumer confidence. "Wall Street now is finally being fully felt on Main Street," DiGiovanni said, in the form of the huge paper losses of investment wealth from markets around the globe, collapsing consumer confidence, rising unemployment rates, and widespread uncertainty about the future.

LaNeve said that the industry "really has been contracting since Hurricane Katrina" about three years ago, which badly nicked economic activity in the South and slowed the overall U.S. economy. Earlier this year, he said, consumers reacted to the spike in gasoline prices and hesitated to buy new vehicles. "But the impact of the credit and confidence crisis is much more severe than the impact of the gas-price issue."

Credit restrictions - in the form of tougher terms for auto loans and qualification of many fewer consumers for those loans - were another huge factor. "The decline in consumer spending and shrinking credit markets feed off each other in a downward spiral," said GM's DiGiovanni.

The intensifying election campaign didn't help matters, either, because of how media coverage heightens public anxiety. And Chrysler and GM added another dollop of uncertainty with their merger talk.

"That's probably a distraction" to consumers, Chrysler's Press said. And Chrysler has had to do more hand-holding with anxious dealers to "assure them that we'll be in business next month and next quarter and next year."

More Clouds Ahead

For their unanimity about how bad October was, however, industry players and observers couldn't agree whether the market had seen its worst - though they were all hoping so.

"What was most frightening" about October, said DiGiovanni, "is that a week ago we didn't see this big a decline coming." Typically, he noted, retail sales are stronger at the end of each month than the beginning, accounting for as much as 60 percent of monthly sales. "But," he said, "we never got that pickup in the last 10 days. It never materialized."

So, DiGiovanni and others are worried that November might not be any better and that sales could limp along at close to October's trough for a few months yet.

But others see a thinning of the clouds.

"We are encouraged by the prospects for November," said Hyundai's Zuchowski. "With the financial markets beginning to stabilize and the election behind us, we believe consumer confidence will be bolstered and prospects who have been on the sidelines during this period of uncertainty will re-emerge into the market to help fuel the economic engine."

Press said that October "may have been the high-water mark" for bad news. "The period ahead is not laced with optimism," he said, "but I don't think it's going to continue to deteriorate. I think we've gone through the worst of the storm and came out on the lawn and found that our place is intact."

Still, at best, the industry now is hoping for a 2009 that isn't materially worse than 2008 will turn out to be, and talk of any meaningful recovery generally extends to 2010 at the earliest.

By then, perhaps only starting with a GM-Chrysler merger, the U.S. auto industry likely will have been dramatically reshaped.

General Motors: Shooting Itself in the Foot

GM sold only 171,000 vehicles in October, down 45 percent compared with a year ago.

The company said that its results were compared with "a strong year-ago" October, and executives noted that even as recently as September, it posted relatively robust results.

To try to generate some new momentum, GM moved up the start of its holiday-seasonal Red Tag Event a few weeks, to tomorrow. "We're barely behind Costco, where I saw Christmas decorations up already three weeks ago," LaNeve said.

But while fighting tremendous headwinds in October along with the rest of the industry, GM had only itself to blame for part of its problems. That's because its captive finance arm, GMAC, announced a dramatic tightening of its credit standards last month, leading to widespread consumer perceptions that they couldn't get a loan at a GM dealer. And a few weeks earlier, GMAC had announced big cuts in leasing.

"Half of our year-over-year loss was due to leasing and credit issues," said LaNeve, meaning that GM's sales loss in October otherwise would have been more in line with the rest of the industry. From its virtual elimination of GMAC leasing last month alone, he said, GM lost as many as 60,000 sales.

GM recently launched a new national advertising campaign to reassure Americans that GM dealers could obtain a loan for a creditworthy buyer from one of hundreds of other financial institutions.

LaNeve blamed a decline in consumer confidence on "the credit freeze," but many other industry and executives have suggested that would-be buyers are staying out of showrooms because of the nation's economic shocks rather than out of some fear that they won't be able to get a loan.

Another factor that hurt GM is a relative lack of interest in its pickup trucks because both Ford and Chrysler are introducing new versions of their competitive models.

Ford: Increases Retail Share, Company Says

Calling the current sales environment "an economic gauntlet, the likes of which haven't been seen in more than two decades," Ford reported October sales of 129,121 Ford, Lincoln and Mercury vehicles, down 29.2 percent from 182,434 vehicles sold in October 2007.

On the plus side, Ford said its retail market share was the best in two years. Ford's chief sales analyst George Pipas predicted, when final industry sales are tallied, the automaker's retail share would be 13.5 percent or as high as 14 percent. Ford's retail share has been running at 11 to 12 percent and hasn't seen the mid 13 percent range since late summer 2006.

About 28 percent of Ford's total vehicle sales went to fleets, roughly the same as a year ago. It was the third straight month of a lower fleet mix than GM and Chrysler, Ford executives claimed.

Yet only one Ford, Lincoln, Mercury or Volvo vehicle showed a sales rise, that being the Lincoln Town Car. And the 140.3-percent sales hike likely was due to a fleet order.

Ford Division sales dropped 27.9 percent, pushing sales down 17.5 percent for the calendar year to date. Ford SUV sales were the main culprit with sales down 51.4 percent in October and down 41 percent for the year.

Ford just launched the 2009 Ford F-150, with the national ad campaign breaking during Sunday's football games. F-Series sales in total, which included a mix of 2008 and 2009 models, were down 16.3 percent in October; they're off 26 percent for the year. Of the 43,324 F-Series trucks Ford sold in Octber, 3,000 were the 2009 model.

The usual bright spot, the Ford Focus, had its first down month in October, with sales off 18.2 percent. Still, the small car's sales are up 20.5 percent for the year. Ford said despite October's decline, the Focus gained share in the small car segment.

Similarly, the Ford Fusion, which had only a tiny 3.3 percent drop in sales for the month, gained market share in the midsize car segment. The Fusion got a boost from Consumer Reports that praised it for having the best reliability in the midsize class, ahead of Toyota Camry. Ford introduces the redesigned 2010 Fusion, including a hybrid version, during next week's press days for the Los Angeles auto show.

Ford analysts have been predicting this year will be the first year since crossovers were invented in the mid-1990s that the segment will experience a decline in sales. That decline has already begun, taking Ford's crossovers with it. Ford Edge sales, which had a record month last October, were hit with a nearly 58-percent drop.

Still, Ford execs say the Ford Escape and Mercury Mariner gained share in their category. Likewise for the Ford Flex and Lincoln MKS in the midsize luxury crossover segment.

Ford sold only 2,017 units of the new Flex - only the Taurus X had fewer sells of Ford's crossovers. Still, Ford's chief marketing exec Jim Farley said about 55 percent of Flex buyers are new customers to Ford and transaction prices for the Flex are higher than the automaker expected.

At Mercury, sales plummeted 47.4 percent in October, pushing them 27.3 percent lower for the year.

Sales of Lincoln branded vehicles dropped 27.7 percent in October,
Volvo reported a mere 3,717 vehicles sold in October, a 52.1 percent drop from a year ago.

[DOF_power]

Chrysler: Looking for Traction

Chrysler sold more than 94,000 vehicles in October, down 35 percent compared with a year ago. And despite the fact that they may soon be part of the larger company, Chrysler was happy to leave the bottom rung of October sales performance to GM.

"Our retail share of sales was better than last month and almost as good as last October even though we're doing less leasing than other manufacturers, and the [sales loss] from segment shifts have been more dramatic for us than others," said Steven Landry, Chrysler's executive vice president of sales and marketing.

Chrysler executives emphasized early consumer enthusiasm for the new version of its staple Ram pickup truck. "The sell-down of the old version" is going well, Press said, "and we're getting some real good tailwind" behind the new Ram.

Notably, on Monday Chrysler also celebrated the 25th anniversary of the debut of its Minivan 25th - small.JPGminivans, which the company began producing in 1983 in its Windsor, Ontario, assembly plant. More than 12 million have been sold since then. Chrysler introduced the fifth generation of the vehicles last summer, and they hold onto a 40-percent share of an overall segment that is shrinking - but not as much as the market in general.

The company also announced the launch of a new incentive program featuring rich cash offers and low-percentage-rate loans, which Chrysler is calling Rev Up America. "We've got a half-billion dollars of incentive money in the marketplace," Press said.

Michael Berube, senior manager of Chrysler brand marketing, said that "getting out there with good values, on reasonably and affordably priced vehicles," will be the key to Chrysler's ability to hang on during this slump. "The market will come back a bit," he said, "when confidence picks up."

In the meantime, Berube said, Chrysler marketing is emphasizing "lower-funnel" activities such as online advertising.

Toyota: Also Taking It on the Chin

The world may want to emulate Toyota's cars, but probably not the Japanese juggernaut's recent sales results. Like everyone else, Toyota Motor Sales USA Inc. gutted through a withering October, with overall sales down 25.9 percent versus last year - this despite a wide-ranging 0-percent financing offer on many vehicles in the Toyota lineup.

Equally upsetting to the bottom line: Toyota's premium Lexus division recorded a grinding 37.6-percent drop compared with last October. What's more, Lexus' trucks actually performed better than its cars.

Only two Toyota-nameplate vehicles posted sales increases in October: Corolla, at 2.2 percent and the Sequoia fullsize SUV, whose 16.3-percent jump likely can be partially attributed to an incentive factor.

And the recent plunge in gasoline prices hasn't seemed to stem the demand for hybrids, which remain some of Toyota's best-selling models. In October, Toyota said it sold 16,310 hybrids; rival General Motors Corp. bragged October saw the company surpass 10,000 hybrids sold - for the entire year.

Year-to-date, Toyota has moved 216,760 hybrids, with the Prius leading the pack, selling 11,804 units in October. The total nonetheless represents a 13.6-percent drop, and Prius remains off by 5.6 percent for the year.

Camry Hybrid accounted for almost one in 10 Camry sales in October, or 2,792 of the total 30,556 Camrys sold. Camry was down 12.8 percent for the month, however, and 3.6 percent year-to-date.

And although the Yaris subcompact dropped 13.3 percent in October, year-to-date sales are outstripping 2007 by a still-heady 25.9 percent, one of the better performances in any market segment.

The Toyota sales chart saw some stunning plunges in October. The Scion line - possibly overexposed victim of the industry's ongoing credit crunch - took an absolute beating: the xD was off 12.9 percent, the xB plunged 42.9 percent and the tC coupe was down 51.7 percent. Scion may have been siphoned by Toyota's own 0-percent financing deal which covered 11 different models - but no Scions.

The Avalon large car was down by a blistering 44.7 percent in October and is down 37.9 percent for the year.

Toyota's trucks continue to be a black eye, with an ugly 65.4-percent October drop for the Tundra fullsize pickup underscoring Toyota's tenuous position in the plunging segment. Apart from the low-volume Lexus SC, the Tundra was the worst-performing model in the entire Toyota lineup in October.

In other notable truck results, the FJ Cruiser cruised to a scalding 61.7-percent downfall in October and the 4Runner was off by 52.4 percent. Total Toyota SUV sales dropped by 31.6 percent in October, while total truck sales were off by 36.5 percent; year-to-date performances dropped by 23 percent and 20.1 percent, respectively.

And executive collars have to be getting a little tight over at the Lexus unit, where October car sales plunged 40.2 percent and year-to-date car sales are off by 21.7 percent. October's results included a frightful 51-percent fallout for the LS flagship (which also is off 40 percent for the year) and a 47.7-percent drop for the midsize GS, not to mention a 28.4-percent drop for the entry-level IS, although for the year the IS is holding its own with an overall 5.4-percent decrease.

Honda: Record Fit and Strong TL, But Worst Month Since Jan. 2005

American Honda sold 85,864 Honda and Acura brand vehicles in October, a 25.2-percent decline from a year ago. It marked American Honda's worst month for sales since January 2005.

For the year, Honda is doing better with only a 3.6 percent drop in sales to 1,266,447 vehicles sold.

Honda Division sold 75,756 vehicles, down 28.4 percent from the year earlier. The Honda Fit set a new October sales record with 6,478 sold, a 28.1-percent increase in the second month of availability for the redesigned 2009 model. For the year, Fit sales are up a whopping 51.4 percent.

The Acura Division had sales of 10,108, a 24.5-percent decrease. The redesigned 2009 Acura TL is off to a strong start as well, with sales up 22.2 percent in October, its first full month of availability in its new guise. That helped Acura car sales push 2-percent ahead of a year ago. Still, the TL has ground to make up with sales for the year off nearly 18 percent.

But only the Fit and TL were on the plus side for the month. Honda's bread-and-butter Accord and Civic saw significant sales declines again this month. Accord sales were down 38.4 percent in October, pushing calendar-year-to-date sales into negative territory - off .3 percent. Civic sales were down 24.8 percent in October but remain 8.7 percent ahead for the year.

Acura RDX sales were down nearly 68 percent with only 647 sold, the worst sales month for the crossover ever

Mazda: Mazda5 Record

Mazda North American Operations posted October sales of 16,442, down 25.9 percent from a year ago.

Bucking the sales trend with a record sales month was the Mazda5 multi-activity vehicle. With sales of 1,921, volume was up nearly four times over 2007. On a year-to-date basis, the Mazda5 is up 51.8 percent.

Mazda6 sales were off 3.5 percent but the redesigned 2009 Mazda6 just began arriving in dealerships last month.

The once-hot Mazda3 has chilled, with sales off 25.3 percent in October. CX-7 and CX9 crossover sales also have slowed, with sales of more than 40 percent each for the month.

In the "why bother" category, Mazda sold a scant 418 Tributes and only 92 B-Series trucks.

Mazda is doing better than the industry in general with year-to-date sales down 7.5 percent.

Mitsubishi: Better than September

Mitsubishi, always skimpy on details, put the best face it could on its October sales, comparing them in their press release more with September than with October a year ago.

In fact, Mitsubishi's October sales were down 19 percent from a year ago. But Galant sales were up 64 percent from October 2007 and the Lancer Evolution was up more than 800 percent from a year ago. No numbers were provided.

From September to October, Galant, Outlander, Endeavor, Lancer Evolution and Raider sales improved.

Subaru: Still Ahead for the Year

Subaru of America had sales of 12,917 vehicles in October, a 14-percent decline from a year ago. Still, Subaru remains ahead 2 percent at 156,706 vehicles sold for a year that likely will see industry sales fall by double digits.

Forester sales soared 28 percent and Impreza sales were flat, a positive in a down market. Subaru's other models were down double digits; worst was Tribeca with sales off 60 percent.

"Despite the weakness in the market caused by credit concerns, depreciating home values and the corresponding reduction in consumer confidence, Subaru continues to outperform the industry," said Tom Doll, executive vice president for Subaru of America, Inc.

Tim Colbeck, Subaru's vice president of sales, noted October marked some good news for the Japanese maker: The Forester was named the Motor Trend Sport-Utility of the Year.

Audi: Bucks the Trend

Audi bucked the plunging sales trend by being the only automaker AutoObserver reports on that had higher sales this October than last.

Audi sold 7,443 vehicles, up 0.3 percent from a year ago. When the dust settles, Audi obviously gained market share. For the year to date, Audi sales are off a tad - 3.5 percent.

The redesigned 2009 Audi A4, which went on sale in late September, drove Audi sales, The A8 and R8 saw higher sales and the A5 posted its third consecutive record month for sales.

BMW Group: Mini Buoys Group, BMW Shows Signs of Life

The BMW Group, including the BMW and Mini brands, performed fairly well in the dismal month of October. The group sold 25,475 BMW and Mini vehicles, for only a 5-percent drop from a year ago. Sales are off about that much for the year so far as well.

Mini sales buoyed the group with sales up 56.4 percent in the month; for the year, Mini is up 30.2 percent. "We are looking at Mini's continued sales success as a barometer of changing consumer habits," said Jim McDowell, Mini USA vice president. "The frenzy of a couple of months ago of dumping large vehicles has abated, but our persistent and ongoing demand seems to be saying small is the new big."

On the BMW side, sales were down but nearly as much as the industry in total. They were down 13.9 percent for the month, putting the year 10-percent lower. BMW Car sales were off 15.1 percent; SUV sales dropped by 8.2 percent

"October sales show there is still life in the market, but it will take some hard work to achieve results," said Jim O'Donnell, president of BMW of North America, LLC.

O'Donnell said attractive financing rates and four year/50,000 miles free maintenance program have helped keep sales reasonably strong. "We believe these are major reasons why the year-to-date sales continue to track better than the overall premium market."

Daimler: Mercedes Sales Weakning; smart Still Strong

Daimler reported sales of Mercedes-Benz combined with smart car sales totaled 17,322 vehicles in October, a nearly 25-percent decline from a year ago.

Mercedes-Benz had sales of 14,996, down a hefty 34.3 percent from a year ago. For the year so far, Mercedes sales are off only 5.3 percent from last year's record.

Sales of the smart fortwo, which began in the U.S. only in January, totaled 2,236 in October, bringing total sales to 20,392 so far.

Volkswagen: New Models Buoy Sales

Volkswagen of America sold 15,889 vehicles in October, a 7.9-percent decrease from the year-ago October.

"This is the toughest economy we've seen in a long time especially within the automotive industry." said Mark Barnes, Volkswagen's chief operating officer.

Volkswagen's October performance was buoyed by new product offerings. "Our Tiguan, Jetta SportWagen, and TDI's continued to sell well for the month of October, which demonstrates the strength of our new products," said Barnes.

The Tiguan pitched in 1,856 sales for the month, the Jetta SportWagen with 1,267 sales, the Routan with 789 sales and the CC with 659 sales.

But Volkswagen's bread-and-butter Jett sales, in total, slipped 6.6 percent for the smallest drop. Passat sales plummeted 55.3 percent, the Touareg 37.6 percent and the rest of the line were down hefty double digits.

For the year-to-date, Volkswagen sales are holding fairly steady in a down industry market, slipping only 0.6 percent behind 2007 sales through October.

[Bob Tanner]

There's a positive side to all this doom and gloom.

People aren't spending money they don't have on automobiles they don't necessarily need. Over-extension of credit is one of the major reasons the US is in the economic shape it's currently in.

It'll be a bitter pill for the country to swallow in the short term, but, in the long term, the population might get their financial house in order, and NOT having an [unnecessary] car payment (which happens in over 90% of all new car purchases and 100% of all leases) will be part of this process. If this happens, we'll be better for it in the long run.

I look at the story you report with mixed emotions.

[oncea3fan]

exactly , everyone living above thier means. if you can't afford it don't buy it.
I am 40 yo and have yet to purchase a brand new vehical, simply because I haven't had the extra income to spare on a new vehical. I dealed with used vehical all my life. but actually things are looking up and I hope to make my first new vehical purchase early next year.

[Bob Tanner]

Originally Posted by oncea3fan

exactly , everyone living above thier means. if you can't afford it don't buy it.
I am 40 yo and have yet to purchase a brand new vehical, simply because I haven't had the extra income to spare on a new vehical. I dealed with used vehical all my life. but actually things are looking up and I hope to make my first new vehical purchase early next year.

Good for you. We are in sync on this subject. I'd love to be able to say I've always had this mentality but, in truth, it took some really stupid mistakes we made, to get us to see the light. Now, however, we believe that:

• The borrower is slave to the lender

• If we can't pay for it, we can't afford it

I bought one new car, in the '60's. When I realized that I lost 10% of the car's value the second the wheels hit the street I swore I'd
N-E-V-E-R do that again. To date, I haven't. I always look for a low mileage car about a year or so old, and still in warranty. It works for us.

[bob101]

Anyone suprised?

We built a world economy on selling stuff to people that they couldn't afford to the point people were buying Big Macs on credit cards at 21% interest and paying the minimum each month. How long do you think we could keep selling people new $30k-$45k new cars, many of which when they were driven off the lot were already upside down on the loan by nearly the value of the car to begin with.

[Bassdogs]

Wow! I think we may have the next treasury sec or US budget director right here on the forum. Seriously, this concept of not buying if you can't afford it, is what we need to get this economy pointed in the right direction. We have had an economy based on "being sold stuff we don't need, at prices we can't afford. In many sectors of our economy, if it was cheap, it didn't sell. High prices for cars, homes, vacations, TV's, clothes, and even the water we drink; is what many, maybe even most, used to measure someone's worth in this society. How may of us "need" a new Ford or Chevy this year? Maybe if we push the auto industry back to the same level status as the companies who make our appliances, our economy would have a much firmer foundation.

I have also been buying cars coming off 2 year low milage leases for up to 40% less than the new cost. In many ways, the auto companies created their own nightmare when they introduced factory leases. Tens of millions of these vehicles hit the market each year and are snapped up by the public instead of a new vehicle.

Nascar will still race, even if Ford, Chevy, Dodge, and ???? all pull out. Some on here have called for moving back to the old school. This may be just what is needed to start the revolution.

[Bob Tanner]

Originally Posted by bob101

Anyone suprised?

We built a world economy on selling stuff to people that they couldn't afford to the point people were buying Big Macs on credit cards at 21% interest and paying the minimum each month. How long do you think we could keep selling people new $30k-$45k new cars, many of which when they were driven off the lot were already upside down on the loan by nearly the value of the car to begin with.

People buying things they don't need, with money they don't have, to impress people they don't especially like.

bob, I knew we could agree on something.

[vicc]

I have never bought a brand new car, neither has my spouse. We did end up purchasing a fairly new car in early 07 and it was maybe 4 months old if that, so the car already dropped in price but it was still without our budget and lucky for us esp. now still it gets decent MPG as he drives a ****load back/forth to work each day.

Tons of people overspend and live beyond their means, I however am now one of them.

[bob101]

If you ever pay cash for a car and have any willpower at all you'll never finance another.

I bought a beater a long time ago and drove it forever while saving money. Ever since then I've paid cash for every vehicle and I go thru them pretty often because of mileage.

On a related note the big 3 need to make a car someone wants to buy. They sell trucks 2:1 comapred to cars....make cars people want. May I even suggest (gasp) a full size car, I mean look how popular cars and SUV's are because we sell butt beater cars....

Of course congress is about to pony up to the plate and give them a handout. Too bad. I almost wish one would go under so that 2 could stay in business and become profitable.

GM got $50 Billion just last month and today announced in 3 months they'll be out of cash to make payroll and continue operations.

[Curves24]

Question:
When Chrysler was helped by the government in the past, was the economy bad or were they just having internal trouble?
Also what year(s) did that happen?

I have a truck I bought used last year and I got a great deal on it. I only had to finance half as I had half down. Since February it has lost at least $7000 in value, and truth be told I can't give it away. Sucks!

[bob101]

Originally Posted by Curves24

Question:
When Chrysler was helped by the government in the past, was the economy bad or were they just having internal trouble?
Also what year(s) did that happen?

I have a truck I bought used last year and I got a great deal on it. I only had to finance half as I had half down. Since February it has lost at least $7000 in value, and truth be told I can't give it away. Sucks!

It was just coming out of the crapper of the Carter years. When mortgage rates were around 18%, double digit unemployment etc...

Of course they came out with the "K" car immediately and started turning a profit, went on with the mini-van and turned that into a big thing.

Anyone believe one of the big 3 is on the verge of doing that now?

Oh yeah GM is on the verge of releasing the Volt electric car that has to charged at home...just in time for new "let's bankrupt the coal industry" and the rise in electric rates that will entail....

I'll tell you right now I don't think any of the big 3 have anywhere near Iacocca as a CEO to turn it around. He had his faults but he came on and went head to head with the unions, made cuts, hired engineers to make cars that would sell.

Also there's a big difference in today and then. The US Treasury GUARANTEED the loan to Chrylser, they did not loan taxpayer money. Small difference but a significant one. The big 3 want a loan now straight out of the treasury.

[Curves24]

Awe snap! I am just happy to be in the presence of someone else who caught the "bankrupting the coal industry" comment.
Thanks for the info, I could have googled it but it is way more fun to learn from real people

[Racer Duck]

Originally Posted by Curves24

Awe snap! I am just happy to be in the presence of someone else who caught the "bankrupting the coal industry" comment.
Thanks for the info, I could have googled it but it is way more fun to learn from real people

the surprising thing about the coal industry comment is Ohio voted for they guy who wants to eliminate their jobs! not often you see folks fall on the sword for the rest of us