Will Consumers Buy Cars from Bankrupt Auto Companies?
By Susie Madrak Tuesday Dec 16, 2008 2:00pmThis USA Today/Gallup poll is just plain dumb. By using vague wording, they push the idea that consumers will buy cars from bankrupt auto companies - but that's misleading.
Jack Nerad, market analyst for car-shopping site KBB.com, says concerns about warranties and parts still would dissuade buyers. "People will say they will consider a lot of things, but when it gets right down to actually putting their money on the line … it narrows pretty significantly."
The cars themselves aren't even the problem. What will happen is, if the automakers go bankrupt and don't pay their outstanding bills, the manufacturers of OEM and after-market parts will go under, too.
And who's going to buy a car that you can't fix?
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And in these troubled times, it behooves all of us to stick to what we do best.
Where would they get spare parts from?
Some guy near a dark alley, with a strange looking raincoat, snickering to himself?
Oh sorry, I was just looking in the mirror.
Google "Studebaker Lark parts".
would have to do a hell of a lot to get me to buy.
And parts availability or not, who can fix one of those new cars yourself? Who can afford in this economy to pay to have them fixed after having shelled out (or borrowed) tens of thousands to buy one? Warranties don't cover everything and they don't last forever.
Cars are the biggest waste of money......
But at a discounted rate with the assumption the car wouldn't last five years or 100,000 miles. Can't see how that would help GM or Ford. Of course, if they really went belly up, the auctioneers would do pretty well at the dealerships. :(
It's not that consumers wouldn't buy cars from troubled manufacturers, it is the economically troubled consumer that wants/needs car/truck that they can't afford.
The service side shouldn't have problems repairing them unless they have proprietary parts that can't interface with commonly used diagnostics, electronics or mechanical devices.
And what of the consumer that can afford a new vehicle that won't because of future job and money woes?
I'm ALL OVER IT if they go bankrupt!
look, its like this - its soooo easy for a car to be technically considered a "total loss" these days. back in the day, a "totalled" car was just that. destroyed. engine ruined, body shot to shit. these days with auto insurers charging full market markup for every dented fender and buggy windshield wiper, its pretty easy for a perfectly functional car to be deemed a "total loss".
so - I buy some awesome Dodge truck hot off the press for about 1/3 of what its worth because Dodge goes bankrupt... then some asshole bumps into my bumper, and ruins the bumper...
I can write it off as a "total loss" - cash the settlement - then buy the "totalled" truck from the auto insurer reseller - and bada bing bada boom, I got my awesome Dodge truck back in my driveway - that I already bought at 1/3 its cost - PLUS I got another couple thousand bucks in my pocket - PLUS I get free massages for the next 6 months! (because the term "medical injuries sustained during a collision resulting in a total loss" still carries a lot of weight with the medical side of things)
lol, hell ya I hope the auto industry goes bankrupt, and hell ya I plan on buying a new auto for dirt cheap if/when they do!
I had basically the same damn plan for getting into a nice house for dirt cheap too, before Congress gave all those bankers all that damn money...
Have you ever considered a career in politics?
I'd do better as a "lieutentant" or "handler". someone like Rove. or Stephanopoulos. did I spell that right?
I'm not one to rock the boat. but I'm definitely one to get eager and excited about some surfin' when I see the waves approaching the boat. =)
*checks wallet*
Try this scenario:
You buy the awesome Dodge truck for a song, and then 1 year later, the engine malfunctions. You take it in and the guy runs the diagnostics, and it turns out it's the ECU (electronic control unit) for the engine. The ECU is basically a PCB circuit board, like the mother board in your computer, but the supplier who made it went bankrupt with Chrysler.
So now you have a 4000 pound piece of sculpture that can't run without the brain that controls the engine, and the people who made the brain using surface mount technology (suffice to say your soldering gun won't cut it) are out of business.
If the parts suppliers go down with the automakers, others will step in to fill the void. It's called free enterprise and if you think the Chinese can't reverse engineer our technology, you haven't been paying attention. At worst, there will be a time lag between unavailability and renewed availability. I'd say in most cases that would be less than a month.
There are a number of brands already out there. Not cheap to buy or tune, but they exist.
The other thing is that there WILL be suppliers out there to fill a market if it exists and can be profitable.
If people buy a lot of Fords just before bankruptcy and discover after 5 years that the water pumps commonly die, there will be an opportunity for a supplier to build &sell replacement water pumps.
if it is watered down, if it is insulting to the intelligence, if it is for mass consumption then it can only be THE USA today.
and, to answer your question, i would not buy a car from a bankrupt auto manufacturer.
What Detroit ought to do is leave their cars in bad neighborhoods, where they will be stripped down and reassembled in chop shops into something more sellable faster than you can say Zbigniew Brzezinski.
Good idea.
I want a Ford South Tucson with the awesome sound system.
Well, I suppose it all depends. If the price is right and you've got some extra savings, it might be worth it.
As for parts, there's always after market parts. Even if parts manufacturers suddenly cease production, one can get used parts.
Sure, the whole affair could become a hassle, I know. That's why I think if the price is right, it might be worth it.
I've purchased a number of used vehicles in my life (actually, only once have I ever bought a "new" car from the dealer), which typically have less warranty life (if any warranty at all) when I buy it, at which point I am inundated with junkmail offering to sell me an "Extended Warranty" from a third-party ot connected to the car's maker. So the lack of warranty on a car if you get it cheap enough isn't as big a concern as so many make it out to be.
The possibility of GM not outlasting my warranty isn't why I wouldn't buy a new American car. It's the lousy gas mileage. Anything under 40mpg is unacceptable today.
"Some 45+ MPG Cars you might not know."
Except, I wouldn't buy an American car for all of these reasons; warranty, quality, fuel consumption, innovative features, design. All of which are currently the equivelant of Bush's abilities as a world leader. I heard about the Chevy Volt what, 5-6 years ago? Now "Chevy" nukes the prospect of buying one almost instantly but where the fuck is it already? It only goes 40 miles before it needs a recharge? WTF is that? If GM wants to survive, they should bring back (and sell) the EV1. What a bunch of total fuck-ups!
your site Mugsy? If it is, credit to you for an honest appraisal of the various evs that have been available.
According to Suzie Ormond, and yes I do listen to her sometimes, buying a new car is a waste of money. It depreciates so much when you drive it off the lot. This is especially true if it is a high end car.
Okay, having said that, I know I wouldn't be interested in a car whose maker was bankrupt. Buying a car is enough of a gamble as it is.
Plus, new cars are sitting on the lots and no one is buying them anyway, because of financial woes.
I didn't think I would ever agree with Suzie.
Cars are a HUGE waste of money for something just to get you from here to there AND one of the worst things humans have done to the planet.
From the consumption of materials to make them, the extraction of and wars for energy, the pollution and carbon they produce, to the paving of land for roads and parking lots, cars are terrible for our planet.
Ba Humbug
Perhaps the Southern Senators from Nissan, Toyota, etc. should listen to spokespersons from the companies those Senators represent:
Big 3 woes don’t give Japan’s automakers joy
I just purchased my 3rd bicycle, capable of doing a grocery run or traveling into the next state in less than two days.
Done!
That's the question nobody seems able to answer...
Cuz if the Big Three goes down, their suppliers won't last a month, and inside 6 mos, you won't be able to find a spare part outside a chop shop...
My Great Depression surviving mother used to tell me that during the worst of times that it wasn't a matter of not seeing candy in a grocery store, it was the 5 cents to buy the candy that was the problem.
if you need a new timing belt or clutch, you might be pretty screwed.
but if all you need is a new bumper or the doo-hickey inside your door to make the electric window roller roll the window down again - you can get spare parts at a junkyard or Schucks pretty easy. that stuff's pretty much cookie cutter or one-size-fits all.
and that was kind of my point earlier. most the parts you'd need to buy, are a one size fits all part. your bumper or fender gets dinged up, its pretty easy to go get a spare one from an older model or even a different model.
auto makers, auto shops, auto insurers and auto parts suppliers have been screwing us blind for years by charging us full price for a replacement "2005 Dodge Stratus wheel rim" made hot off the press last Thursday... when we could have been using recycled parts a long, long time ago.
wow, I sounded crooked about 5 posts up. now I sound downright "green". ;)
Are you willing to bet tens of thousands of dollars that you'll consistently be able to find the one part that broke in a junkyard?
Cars are increasingly becoming computers on wheels, and although they're seriously ruggedized computers, too much time in a junk yard would be a gamble.
Tue, 12/16/2008 - 14:36 — woody
Cuz if the Big Three goes down, their suppliers won't last a month, and inside 6 mos, you won't be able to find a spare part outside a chop shop...
Does it come with applesauce?
With government protection they'll be no recourse, they'll just say, "Chop Sueme."
What drove the final stake into the hearts of American auto makers? Was it the god awful high gas prices we recently experienced or was it the financial melt down that so many homeowners are feeling? Perhaps it was a combination of both.
Think Naomi Klein.
The Bosses had been desperate for generations to destroy the biggest industrial union in the country, the UAW, and drive American wages down.
The financial catastrophe provided the cover they needed.
It's really that simple. It could have happened anytime but just as the shock of the 9/11 attacks was needed to propel the PATRIOT ACT, etc, into law, they needed a 'shock' upon which to "capitalize." It was always just a matter of time...
POP
Not enough ads with lots of superfluous skimpy bikini models.
Google "Studebaker Lark parts".
Well, if we're going to answer the question honestly..
I won't even consider a Big 3 car if they declare bankruptcy, break the unions, and/or won't honor pension obligations. As it is now, I already have a gas guzzling Ford with next to no resale value but if I could afford anything else, that sucker would be gone in a heartbeat.
I think the average American would buy from a bankrupted company as long as they understood the difference between a Chapter 11 bankruptcy and a Chapter 13, felt like they were doing something patriotic, environmentally sound if Detroit can go green, AND get a bargain.
The only problem is, could they get a loan to cover the cost of the car, and can they keep their jobs?
"Can they keep their jobs" has become a viral concern. Can I get a bailout please, and one small fry?
I would be hesitant to buy a car that was built by people who just lost their union, took a pay cut and lost their pension and benefits.
Hence my follow-up about getting credit and job retention.
But the average American is like vultures. When they go to an estate sale, they don't even care to find out if someone died, was arrested, or was evicted, if it means they can get a bargain.
And the question was, "Will Consumers Buy Cars from Bankrupt Auto Companies?" not would it be right. And even if they felt it weren't we have an amazing capacity to rationalize.
Imperatively speaking, Kant can't.
...if they'll take my bouncy check!
The 1st year that the 1st Baby-boomers become eligible for retirement, suddenly, we have a fake credit crisis that robs them of their retirement.
You know what this sounds like to me.
All that money that the Baby-boomers have been dropping into their 401ks was spent years ago by greedy Wall Street criminals.
... just the logical consummation of the baby boomers cumulative history of bad decisions.
Wall Street types definitely raid pension funds, and/or underfund them.
..just greed and opportunity. Thanks to deregulation, both were available in spades.
PS - the crisis isn't fake, our standard of living just took a huge hit.
And that's regardless of one's generational labeling.
Well, let's see. In order to buy from a bankrupt company that already is going to take your taxdollars, unless you have cash, you'll have to borrow from the bank that got your tax dollars, but isn't giving out loans anymore. So, how is anyone going to buy a car?
That's where I got my auto loan three weeks ago.
And no, I didn't buy an ugly/crappy American car. I bought a Prenis.
; - )
For a second there I thought you said you bought a Penis.
It must be time for sleep.
I used to drive a Ford Explorer until 2 years ago, when it was totalled after a big tree branch broke off the tree during a big ice storm and landed on my car.
I looked at Ford vehicles for my new car, but I was concerned about Ford's financial situation.....what would happen if they went bankrupt and I couldn't get parts? That was 2 years ago.
So I bought a Honda.
are used on a regular basis by disreputable body shops to do repairs on all vehicles, even new ones. These parts are everywhere and are cheap versions of the real parts. My wife's Chrysler was hit and run in the fall, and the body shop tried to talk me into putting these parts on to "save money". I didn't.
of body components but a lot of after market components are built by the same OEM suppliers and are no worse than a part purchased from the dealer. Usually they're a lot cheaper too.
By Sharon Silke Carty, USA TODAY
http://www.usatoday.com/community/tags/report...
Does anyone have a link to the Gallop questions or logistical application as it relates to said respondents ?
But the USA TODAY/Gallup Poll says otherwise. The survey of 1,008 adults Friday to Sunday found that 82% would at least consider a Detroit-brand vehicle. Of those, 67% would do so even if the company were in bankruptcy court. Other highlights:
•30% said they would consider only U.S. brands vs. 15% who'd look only at foreign makes.
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Public opinion can be influenced by public relations and the political media. Additionally, mass media utilizes a wide variety of advertising techniques to get their message out and change the minds of people. A continuously used technique is propaganda.
The tide of public opinion becomes more and more crucial during political elections, most importantly elections determining the national executive.
According to that poll, 30% are not very intelligent shoppers? US brands? What's a US brand? What is the real percentage of vehicles made 100% in the USA? I'd wager 0%.
It's interesting that they note, "consider a Detroit-brand vehicle".?
It's the same tired cliche they've been using on the media to shop USA and save jobs. Well, doesn't matter what company you buy from, their American content is all basically the same.
Thank you for you opinion and time.
JC Whitney.
I have a paradox. I want US auto manufacturers to make it because of they go under there will be a ripple effect in the economy, but I wouldn't buy one of their cars even if they were cheap.
Is anything even fully American made anymore?
Our kids?
People weren't buying from these companies when their finances were good.
A few years back, I considered breaking my 30+ year tradition of not buying an American car. So, I researched what Detroit had to offer. I'd had an Acura CL and Infinity G20 previously, and knew that mid-level cars with luxury features are not in great supply from Detroit. Add to that, the fact that I haven't driven an automatic car since 1975.
I eventually decided upon a used Honda Accord coupe. It has a 5 speed, but also heated leather seats, and a bunch of other amenities an American car would have charged me extra for. My Accord is an '03 and had 29K miles. Detroit couldn't offer me anything close for the price, features and reliability.
I don't know that GM or Chrysler have the capacity to fix their woes without further draining the economy. Ford may survive if they apply principles used with their European division here.
I've found myself being ever so slightly more reticent to buy anything I think might be made by a company on shaky ground these days. Who wants to buy anything that comes with a warranty if there's any possibility the company won't be around to honour it in five months?
Just bought a new laptop - my previous one being nearly eight years old and on its very last gasp - and got a pretty good deal on it, being as it's so close to Christmas and sales are way down and shops are making deals, and the kids who were making the 'managerial' decisions are a bunch of spotty teenaged World of Warcraft players who were awed by this 53-year-old grey-haired woman who just happens to be a level 48 Night Elf Druid who can chatter with the best of 'em about tanking and grinding and twinking and dungeon runs and raids and Horde v. Alliance and drop percentages and... umm... oh dear... I'm starting to dweeb even myself out here, nevermind. Suffice it to say that being able to nerd-speak is more likely to get you a better deal on a laptop.
But it's a Compaq. Which was bought out by HP. Which is a company with an excellent reputation. Which I happened to read a passing vicious rumour somewhere might possibly be on shaky grounds financially. Which gave me pause when about to fork out quite a bit more dosh than makes me comfortable at the end of the month. Only by the WoW-dweebs dropping the price 15% and sweetening the pot with extra goodies like a free printer/scanner/copier, USB hub with cables, a pair of decent speakers, optical mouse, backup keyboard, surge protector power strip, super webcam, and a nicer carrier bag did they seal the deal. Oh, with a cash rebate as well.
It's a nice machine. It's probably all going to be just fine. Hewlett Packard isn't going to go bankrupt, Compaq will surely be around a while longer. No worries.
I hope.
If things get worse and all indications are that things will get much much worse as we sink into a long deep recession ( they used to call these depressions )almost no ones going to by any cars from anyone so most all of the car companies will go bankrupt. For the few that can still afford a car they will get to choose from one bankrupt car company or some other bankrupt car company. Just wait until the Alt A and ARM loans start to reset over the next few years on people who are already beginning to default on their almost no interest loans. This so called good paper was bundled in to derivatives that will make the sub prime mess look tiny. Where are we going to get trillions to bail out that situation? What happens when the retail and service sector jobs tank with massive layoffs over the next six months. What will happen when the bubble pops on the most massive ponzi scheme ever? Its called the Federal Budget It will make Bernie Madoff's $50 billion fraud look like peanuts. It looks like Printer Ben is going to crank up the press even and attempt to inflate his banker boys and corporate pals out of their big doo doo heap. We will still be smelling them as we use wheel barrows to haul enough worthless cash to shop at Walmart And we are worried if we will buy a car from a bankrupt car company or not? Are we going to bail car companies so they can make lots of better more efficient cars for no one. When about 25 or 30 percent of us have no job and the lucky ones who still do earn dollars worth so little who is going to be buying an $187,995 PT Cruiser even if it runs on peanuts and a dozen hamsters.
I'm 70. Over the years, I've never bought an American-made car because I've always thought they were overpriced garbage, even back when I bought my first car in 1956. I've owned German, British, Italian and French cars. Some were good, some were just OK, none was as bad as US made. I currently drive a 7-year old Mercedes (the compact A-model which is unavailable in the US) and when it goes (it's a 170 diesel, so it may outlive me) I'll buy my first Japanese car, most likely.
Anyone foolish enough to own Detroit Iron needs to get fluent in Spanish so they can start communicating with Cubans to learn how to keep their gas-guzzling shitboxes running. Plenty of 50's models still going in Havana, even despite a 50-year trade embargo.
I won't buy for fear of buying a car that replacement parts won't be available for. I won't buy Big Three because they are uninspired built to the lowest common denominator. Designed by committee and approved by accountants and lawyers, Big Three designs lack anything that would inspire many Americans whose hard earned money is even harder to come by to buy these generic, McDonaldized vehicles. The bailout cannot reverse decades of inattention to design with an eye only to profit margins and liability issues. Detroit is not the place of innovation and risk it once was and has instead gone for the safe and worn route. The bailout being too little too late is like trying to steer a barge through an obstacle course.
I remember a Baltimore dealer who was advertising new Yugo's for $3999.99.
http://jalopnik.com/5102534/massive-secret-mu...
Does anyone know, if the big three have identical labor contracts?
Company executives have denied they consider bankruptcy an option. They have noted that buying a car is a long-term commitment, and buyers will be put off if the manufacturer is bankrupt or considering bankruptcy.The survey polled 1063 randomly selected adults during the three weeks ending on Dec. 14. The results had a margin of error of plus or minus three percentage points.
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mercy
Used Cars
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