Living Car Free - Job Threatened? Buy a new car anyway!

Here's an article on MSNBC on how the car companies are trying to get the population back to spending beyond their means as corporate America slashes tens of thousands of jobs. The automakers are now providing an insurance system where if you lose your job, they will make the payments for one year.

I'll be honest and say if your job is threatened in any way, the LAST thing you should do is buy a new car. There's much more than just monthly payments in a new vehicle that make it a dangerous purchase in a time of high unemployment and massive layoffs. How are you going to pay for full coverage insurance on a brand new car with no job? Where are you going to get the money for gas, tolls, parking and tickets? You must be kidding me!

Here's what to do. There are going to be tens of thousands of more jobs headed for the chopping block in the next six monthgs. At my job, we are going through another round of layoffs and there's just no end in sight. There is no WAY you would see me go out and buy a new car in this economy. We need to bunker down, hold our expensive to a minimal, save a lot more and get ready for the worse. In a deep recession, you don't buy a new car, just the opposite, you go car free.

http://www.msnbc.msn.com/id/29970641

I have to admit this time I agree. However I mentioned the same logic in a car forum if it would have been face to face someone would have shot me.

Hyundai has upped the offer and will suspend the payments for six months and if you still can’t afford it they will take the car back.

Here's what to do. There are going to be tens of thousands of more jobs headed for the chopping block in the next six monthgs. At my job, we are going through another round of layoffs and there's just no end in sight. There is no WAY you would see me go out and buy a new car in this economy. We need to bunker down, hold our expensive to a minimal, save a lot more and get ready for the worse. In a deep recession, you don't buy a new car, just the opposite, you go car free.But come on, wouldn't you advocate going car-free even in a booming economy?

And really, bunkering down is the worst thing we can do for the economy, collectively, although it may be the best thing we can do for ourselves, individually.

Here's what to do. There are going to be tens of thousands of more jobs headed for the chopping block in the next six monthgs. At my job, we are going through another round of layoffs and there's just no end in sight. There is no WAY you would see me go out and buy a new car in this economy. We need to bunker down, hold our expensive to a minimal, save a lot more and get ready for the worse. In a deep recession, you don't buy a new car, just the opposite, you go car free.

So it's YOUR fault the economy hasn't recovered!:innocent:

Actually I agree with your assessment and actions. I basically refuse to watch the news because of the garbage that is presented as fact(s). We got ourselves, colloquially speaking, into this mess over a period of 30+ years and it is not going to go away overnight.

Aaron:)

Wife says we need another car. She's got a thing for warranties. I don't see the economy getting better any time soon. I ride my bike to keep miles off the car, and for lots of other reasons. Still, I'm stuck: Gonna get another car. Watch and see.

Buddy just got a Mercedes so he could get better mileage. Then, his wife took the Mercedes leaving him to drive around in the SUV. How she hauls all those kids around in a little Mercedes, I'll never know.

We're driven by more than what our common sense reveals.

Why would you hunker down when there are so many opportunities abound from the rest of the country hunkering down?

Fear will get you nowhere.

Wife says we need another car. She's got a thing for warranties. I don't see the economy getting better any time soon. I ride my bike to keep miles off the car, and for lots of other reasons. Still, I'm stuck: Gonna get another car. Watch and see.

Buddy just got a Mercedes so he could get better mileage. Then, his wife took the Mercedes leaving him to drive around in the SUV. How she hauls all those kids around in a little Mercedes, I'll never know.

We're driven by more than what our common sense reveals.
Other than the reasons stated above, there are a couple of other reasons why I'd be reluctant to buy a car right now.

First of all, car technology is undergoing a sort of "sea change". I suspect that in 5 years the type of car you'd opt for will be significantly different than what you would have considered 5 years ago. You might find yourself attracted to something like a hybrid SUV or a Prius only to find out it's "old technology" (I have always tended to keep cars about 15 years if possible.)

Secondly, I'd be a little concerned about which companies are going to be around in 5 years. If my tranny goes out down the road, would I be able to get parts? This concern may be overblown... but it's there.

Thirdly, as a society I think we are undergoing a change in what we view as "wanting" and "needing". Your wife's perception of need right now may seem like opulence in 2-3 years [particularly in light of reasons stated in other posts here.]

On the other hand, there are some good deals on cars right now... if you really needed it.

The more I think about this, the more I feel I need a new bike...

The automakers are now providing an insurance system where if you lose your job, they will make the payments for one year.

I'm guessing that they don't dip into their pockets at all, except temporarily. Rather than making your payment, I suspect that they "make" the payment and then charge you for it, adding that to the loan.


Hyundai has upped the offer and will suspend the payments for six months and if you still can’t afford it they will take the car back.

Hyundai has put a nice new term on repossessing your car. ;)

Why would you hunker down when there are so many opportunities abound from the rest of the country hunkering down?

Fear will get you nowhere.

I think Warren buffet said something about investing like "Be brave when others are afraid and be afraid when others are brave."

Of course WB lost more than 30 % of his money last year. :D

30% is not bad at all considering how far the dow tanked. when the market opens back up he'll have made far more than that back.

But come on, wouldn't you advocate going car-free even in a booming economy?



Alright, you got me. :lol:

I guess it's never a good idea to buy a new car in a booming or down economy but that's just me. I still believe these insurance programs are just as dangerous in this economy as those no interest mortgages.

I wonder if this insurance policy only stops monthly payments but your loan does not actually decrease? Like those no interest mortgages, the borrower is actually accumlating negative equity.

So it's YOUR fault the economy hasn't recovered!:innocent:



NO. My savings bonds are helping the economy by bailing banks while providing huge bonuses to AIG executives!

I wonder if this insurance policy only stops monthly payments but your loan does not actually decrease? Like those no interest mortgages, the borrower is actually accumlating negative equity.

yes the loan actually decreases. The real power of these policies is that it allows you to return the car if you lose your job regardless of the negative equity. Ie. I bought a car a year ago for 20k. I now owe 16k and the car is now worth 12k, I don't pay the 4k difference I'd normally have to come up with. I just hand the keys back and my payments stop. Nobody who currently doesn't have a job can get this coverage. It's for people who have jobs.

I have to admit this time I agree. However I mentioned the same logic in a car forum if it would have been face to face someone would have shot me.

Hyundai has upped the offer and will suspend the payments for six months and if you still can’t afford it they will take the car back.


Actually you would probably told to "grow up" and drive a car like a "real" man/woman. Anything else is something "losers" would do.


So it's YOUR fault the economy hasn't recovered!:innocent:

Actually I agree with your assessment and actions. I basically refuse to watch the news because of the garbage that is presented as fact(s). We got ourselves, colloquially speaking, into this mess over a period of 30+ years and it is not going to go away overnight.

Aaron:)


+1. And I would like to add it was always "someone else" when it comes to blame.


Other than the reasons stated above, there are a couple of other reasons why I'd be reluctant to buy a car right now.

First of all, car technology is undergoing a sort of "sea change". I suspect that in 5 years the type of car you'd opt for will be significantly different than what you would have considered 5 years ago. You might find yourself attracted to something like a hybrid SUV or a Prius only to find out it's "old technology" (I have always tended to keep cars about 15 years if possible.)

Secondly, I'd be a little concerned about which companies are going to be around in 5 years. If my tranny goes out down the road, would I be able to get parts? This concern may be overblown... but it's there.

Thirdly, as a society I think we are undergoing a change in what we view as "wanting" and "needing". Your wife's perception of need right now may seem like opulence in 2-3 years [particularly in light of reasons stated in other posts here.]

On the other hand, there are some good deals on cars right now... if you really needed it.

The more I think about this, the more I feel I need a new bike...

It does take time for change to happen in a positive way. Social pressures (like car ownership and use) and supporting the old or new technologies through getting parts with ease or even addressing emergencies both personal or community-wide has to either evaporate or go through some sort of modification before cyclists and others can claim their proper position on the road.

As for all emergencies, I use folding bikes exclusively for that. These little bikes were originally designed for wartime. I apply the basic design principles of this bike type to anything man or nature can throw at me.

And really, bunkering down is the worst thing we can do for the economy, collectively, although it may be the best thing we can do for ourselves, individually.

Saving our money doesn't do anything that's un-solveable by intelligent action on the part of the government and/or banks.

Part of what happens when you put your money in a bank (or pay back a loan) is that the bank normally loans the money you gave them to somebody else.

What happens when you put your money under your mattress, or the bank puts their money in a vault instead of loaning it out?

Well, it's kind of like the money doesn't exist! Which means that the government can print more money to make up for the money that is being withheld from circulation, and inflation still won't occur.

If rapid inflation threatens to occur later due to increased confidence, the government can start paying back its loans and use interest rates to encourage banks to pay back their loans.

I'm sure there's fine print saying that I can't get a one-year $700/month loan, right :)?

all i got to say is that we live in an affluent society when just about everyone can have a motor vehicle regardless of circumstances. even if you don't work and live off the dole you have a roof over your head, indoor plumbing, and running water, and don't go to bed hungry, that's more than what half the world can say about their lives.

all i got to say is that we live in an affluent society when just about everyone can have a motor vehicle regardless of circumstances. even if you don't work and live off the dole you have a roof over your head, indoor plumbing, and running water, and don't go to bed hungry, that's more than what half the world can say about their lives.

Indeed. But the problem is that most don't see this as a blessing. They see it as a right, as some sort of entitlement. A lot of people simply don't need some of things they have (ie. a car, cable, expensive furnishings), but they WANT it. The problem is that people confuse need with want in an effort to LOOK affluent. Even if these people have these things, it doesn't mean they can afford them and they tend to fall flat on their faces, or live paycheck to paycheck in order to provide this "affluency" to their families. They over look what matters, what's a blessing, because they can. Because they're given the opportunity.
-Gene-

all i got to say is that we live in an affluent society when just about everyone can have a motor vehicle regardless of circumstances. even if you don't work and live off the dole you have a roof over your head, indoor plumbing, and running water, and don't go to bed hungry, that's more than what half the world can say about their lives.


Yup:thumb:


I saw a .pdf a while back that showed what constituted poverty level in the US and it was obscene, in many cases it meant one bathroom for four people, ONLY one car( and one over 5 years old at that:eek:;)) a single television and less than 700sf per person in the house.:innocent: I can't find the link at the moment, but when I do I will post it. Interesting reading.

Aaron:)

Here in Canada, OneBigMedia, aka Canwest/Global has started running TV ads telling me how great the car companies are for society, and encouraging me to "visit my local auto dealer...to support a bright future on the road ahead." Now these are not purchased ads for specific car companies or models, but a campaign by the media company to promote spending on more car culture.

It is sad that the only solutions being put forward for our broken way of life, is more of the same.

A lot of people's jobs are threatened and they just don't know it. At a Fortune 500 company, basically nobody under Senior Management really knows what's going on (performance-wise) until the company addresses the Street at Quarter end.

But, this deal GM is currently doing certainly would give me good peace of mind if I was in the market for a new car......

[QUOTE=cerewa;8683967]
Part of what happens when you put your money in a bank (or pay back a loan) is that the bank normally loans the money you gave them to somebody else.

That's what used to happen, sortof. Actually they would typically lend out $10 for every dollar they held, either cash or note. More recently, they had been lending $30, $50 or $x for every dollar they had ever even been remotely associated with.

It's a casino economy, and people know what happens in casinos, don't they?

Yup:thumb: I saw a .pdf a while back that showed what constituted poverty level in the US and it was obscene, in many cases it meant one bathroom for four people, ONLY one car( and one over 5 years old at that:eek:;)) a single television and less than 700sf per person in the house.:innocent:

So that's it. I'm poor! :roflmao2: So much for the benefits of a college education and 30 years of experience.

That's what used to happen, sortof. Actually they would typically lend out $10 for every dollar they held, either cash or note. More recently, they had been lending $30, $50 or $x for every dollar they had ever even been remotely associated with.

You're generally right, of course.

I suppose that's one of the ways that the economy kept growing. It's not just that there was more tangible economic activity, but there were a lot of big numbers being written on pieces of paper, numbers which may or may not have represented tangible or useful economic activity.

that showed what constituted poverty level in the US and it was obscene, in many cases it meant one bathroom for four people, ONLY one car( and one over 5 years old at that) a single television and less than 700sf per person in the house

If only the picture of real "suffering" in the world were so nice as one bathroom, one car, one TV, and 2800 square feet of living space for every four people. That would sure be an improvement!

You're generally right, of course.

I suppose that's one of the ways that the economy kept growing. It's not just that there was more tangible economic activity, but there were a lot of big numbers being written on pieces of paper, numbers which may or may not have represented tangible or useful economic activity.

I remember Econ 101 in college. The prof tried to explain 1000 times how banks create the money supply. I still don't think any of the students understood it. Maybe it never really made any sense?

from what i learned in college the way it worked was the banks would lend say 10-20 percent of the money they were holding in people's bank accounts because they knew that the customers would never come all at once and withdraw all the money in their accounts. this is what is known as the reserve fund it was the percentage of money lying in the banks at the end of the day and it was safe to lend this money to others thus causing money expansion in the economy. at least that's the way it is suppose to work, who knows anymore in this crazy economy .

Actually, I'm pretty sure banks are allowed to loan out five times as much money as they have on hand. It may be more now, but I know it's more than the amount they have on hand.

Seems to me they just make it up as they go along, and when in doubt, add a couple of zeros. Then when it all goes horribly wrong, the taxpayer pays them billions upon billions, which disappear into the same thin air from which they created the original money.

You're generally right, of course.

I suppose that's one of the ways that the economy kept growing. It's not just that there was more tangible economic activity, but there were a lot of big numbers being written on pieces of paper, numbers which may or may not have represented tangible or useful economic activity.
In some forms of loan there is expectation that future productive activity would create enough wealth to repay the loan. Like when you loan me money to buy a bike and I use it on my paper route, I can generate some surplus wealth to repay the loan. So you aren't creating money, you're creating the opportunity for me engage in productive activity. On the other hand, (No one armed economists allowed) if the loan is for a fad bike I can resell the bike later for more than I paid and pay you back or not. I'm not sure how loaning into a bubble creates money. Loaning against future productive activity makes sense loaning against expected future home price rises I can't get a grip on. But people seem to forget that when common gnumbskulls were warning of a bubble in housing prices Alan Greenspan assured everyone that it wasn't a bubble. If you're a banker are you going to listen to Alan Greenspan or some one who doesn't even own a car and is too dumb to even be in debt? Same thing now, I've been hearing the economic experts on the radio saying its a great time to buy a car. Why should anyone listen to economic advice from a car free debt free person especially when it comes to taking out a loan to buy a car?

I remember Econ 101 in college. The prof tried to explain 1000 times how banks create the money supply. I still don't think any of the students understood it. Maybe it never really made any sense?

The claim that "banks create the money supply" more or less makes sense.

The concept of money and the concept of an "IOU" are not too different. Banks can create IOU's out of thin air - promises to make a specified payment at some time in the future are easy to make! Following up on the promise may or may not be easy.

See the wikipedia "money" article, specifically the "Credit Money" section:
http://en.wikipedia.org/wiki/Money#Credit_money

The claim that "banks create the money supply" more or less makes sense.

The concept of money and the concept of an "IOU" are not too different. Banks can create IOU's out of thin air - promises to make a specified payment at some time in the future are easy to make! Following up on the promise may or may not be easy.

See the wikipedia "money" article, specifically the "Credit Money" section:
http://en.wikipedia.org/wiki/Money#Credit_money

I know it's true that banks create new money by loaning old money. I have never been able to fully understand this concept, even though some great economic minds have tried to explain it to me.

I think that part of the interest that the bank makes on a loan is this new money. I know the amount varies, and it's one of the economic indicators that economists and business people study. Also I think the Fed is able to control this figure to some extent.

Maybe somebody will post a good explanation, but I doubt if I'll understand it. :o

I also think that the Fed just "created" a trillion dollars by buying that much in Treasury Bonds?