Major GM restructuring underway


#185

Remember the Subaru Brat?


#186

Yeah! I talked about it in the other thread. It was one of the original Chicken Tax evaders. Came over with rear-facing seats in the bed. Now it’s a passenger car and isn’t subject to the tariff.

So in other words, you’re probably quite well off and can easily afford it. That’s great, and there’s nothing wrong with wasting money on things you can afford. But financially, you’re taking a bath even though you can absorb the losses.


#187

When I was in college a lot of people dropped out of the computer science program and went into accounting or business because they couldn’t handle the Math in the Computer Science Program.

Buying a car every 3-4 years because you want to and can afford it is one thing. There are a couple single engineers who work for me who do that. Love their new cars.

But saying you buy a new car every 3-4 years because of finance reasons is just plain WRONG. Either you have no idea how to calculate this out or you keep buying vehicles that are extremely unreliable.


#188

@old_mopar_guy It’s nice to trade for a new car every few years if you can afford it but most folks don’t have the money to do so.


#189

And if they do they don’t want to waste it.

I had a 1984 Dodge Rampage for 26 years and maybe had 1500.00 in repairs. The Kia Optima I had for 10 years 2000.00 ( part of that was timing belt service ) in repairs.


#190

Some of us do, but think it’s financially foolish.

It’s not how much you make, but how much you spend.


#191

You are right. When I worked for my last employer before retirement, they owned and operated a regional chain of 20+ shops, and while they usually kept me far away from any customer contact, I was always surprised by the stories the store managers would tell me of customers not having cash or sufficient credit to handle the cost of a repair. Then the managers would start lobbying me with different schemes to help these folks. I would usually reply “I’ll bet most of them have a big screen TV”. Proper budgeting would go far to solve these issues, but financial education in this country stinks.


#192

I am going to take that statement as wrong thinking. Large screen television covers a lot of ground . That might be the only entertainment the children have . Thanks to movie rental places people can at least watch movies at home with out putting their household budget in cardiac arrest paying for theater admission and 10 dollar popcorn.

Yes , some people do not have a clue how to budget but there are many who just do not have surplus funds so please do not make blanket statements.


#193

Me chiming in. I do the same thing for our first car. I get 50K/70K warranty for at least four years and tend to trade before the drive train warranty expires. Yeah cost of potential repairs is one thing, but when you are 700 miles from home, dependability is as big a factor. I spent enough time in cars with 200, 300, 400 plus thousand miles, and don’t care to put myself through that in my declining years.

What some may call wasting money is simply a buying decision. You have to consider trade in value on a four year old car versus a ten year old car, also. I’ve done it all and trading every four years can be relatively painless compared to paying the full price after ten years. Then there is the peace of mind knowing your wife is out on the open road with a car that has a 5% chance of breaking down instead of a 30% chance-and it’s cold outside and dark at night. You can always find a cheaper way to do something. A $1000 car is cheaper than a $50,000 car, and a scooter is cheaper yet. So just because something is more expensive doesn’t mean it’s wasting money.

As far as German engineers go, I don’t know much about BMW even though my son has one. I just cautioned him though if he needs a battery or service done, to take it to the dealer. Someone here a while back talked about the complicated procedure for changing a battery. Not something a DIY would do in his garage like normal cars.


#194

I might have to have a repair now and then from now to 300k miles, but most repairs I’ve had to make on any vehicle I’ve owned in the past 30 years weren’t sudden problems. They crept up over weeks/months to the point of needing to be addressed. I wouldn’t hesitate to drive my wife’s07 Lexus with over 200k miles to California and back.


#195

Companies practice Life Cycle Costing. In addition they want their vehicles to look decent.

When cars were mostly Detroit Iron, most companies traded every 2 years since unreliability lowers employee productivity. When Japanese cars became company cars the cycle was lengthened to 4 years. Many leases are that long as well. Companies go for appearance.

For a private owner, however, the complete life cycle cost need to be addressed.

So, today’s cars are quite good for 5 years and major large repairs after that are infrequent. Since the depreciation in about 50% during the first 3-4 years, it is utterly foolish to trade at that interval and let the next owner enjoy inexpensive and reliable ownership.

So, the message I have for OP is:

  1. Track the total ownership cost from year one and include depreciation, fuel, insurance, maintenance and repairs.

2.Plot this amount and you find that the curve of cost per year keeps GOING DOWN for quite some time, then levels off and starts rising.

  1. At that point the major repairs start impacting and the curve starts rising. For typical Japanese cars that point might be at year 8 or 9 if you drive a lot and at year 15 to 18 if you don’t drive much. For my wife’s 1994 Nissan Sentra that point was reached at year 18!!! and at that point the body also had rust on it. The car was sold for $750 to a student who may still be driving it.

I did a workshop for farmers as to what the best replacement cycle would be for their equipment. Many were surprised that repairs are nearly always less than depreciation.

Advice to my wife’s friends as to when to trade:

  1. If the car becomes so unreliable as interfere with their jobs
  2. The car needs many small repairs and becomes a nuisance to own.
  3. The car has deteriorated to the point of becoming unsafe.
  4. The car won’t pass the annual government inspection
  5. The car is so unsightly with rust and dints (uneconomical to fix) that it becomes a subject of ridicule.
  6. The car needs a major repair exceeding the value of the vehicle.

#196

Some years ago I asked our fleet manager why he traded cars every year. He said “I just like the feel of a new car”. What’s wrong with that? I replaced my 14 year old snow blower that ran fine. Why? Ever try to find a snow blower in mid January when the one you have has seized? Only four left in the Minneapolis/St. Paul area. One sold on time, one waiting for parts, one too small, and I bought the fourth one considering myself lucky to find one. I like to avoid emergencies rather than respond to them but I understand all about life cycle costing. Besides what would all those engineer types do looking for big bargains on used stuff to save money if we didn’t sell our equipment before it was junk?

Heh heh heh, same thing with air conditioners, furnaces, dish washers, etc. You can save a lot of aggravation by upgrading a little early. Ever lose a furnace in Minnesota in December? The second night can get pretty cold. Yeah, experience is a nasty teacher of reality.


#197

At the point I don’t trust the reliability of a car is when I replace it. My criteria has become more stringent as I age. Situations I was willing to handle when young become unsafe risks in my “advancing” years. So I’ve had cars that went 14 and 20 years but traded my previous car at 7 years while it had some value, due to too many major issues.


#198

GM needs to be careful. They’re giving up markets… They gave up the hybrid to the Prius and compact and midsize cars to Toyota p, Honda and others.
Instead of making a better product, they seem content to move to a different pond where they can be the biggest fish. That’s fine for now, but when Toyota and others start making hybrid trucks that get the mileage of sedans, they’ll be no where to go.
Another bailout then.


#199

I don’t think GM was ever interested in hybrids. They had a series of mild hybrids for a while, then came out with the Volt, a more mainstream high voltage unit. The mild hybrids were not really successful, but IMO GM didn’t want to pay the royalty for using the high voltage hybrids. Toyota tried to get away with not paying the royalty, and were forced to in court. By that time, they had cornered the market and could afford the royalty payments. I think GM decided to put all their effort into electric cars rather than play catch-up in hybrids. The Bolt is a well executed, if expensive, electric compact, but puts them at the lead in small electric cars. Toyota makes only a few, and then only so that they can sell any vehicles in California. GM builds the only electric vehicle under $40,000 MSRP that lets the owner go a week or two before charging. Tesla says they have one, but are only building the ones That cost over $50,000 now.


#200

It has been 5 years since Toyota offered an electric vehicle in the states, they have moved on to fuel cell cars. The Toyota Mirai is only $58,000.


#201

GM and the rest of Detroit are marketing themselves out of the market

72 + month notes with Zero down on over priced models are scams to push short term sales/profits up to meet pie in the sky projections with no concern for when the bubble will burst or who will suffers as long as the bonus checks clear.

So many people have recognized the growing catastrophe for years but no one wants to own the coming catastrophe so they pretend they don’t see it coming.


#202

I’m wondering how much of the rapidly inflated price of cars is due to mandated safety features, complex infotainment systems, and/or other cost categories.


#203

Pretty sure most Americans could never afford a new car.

As for car prices, if you compare the same size/options car, new cars are about the same cost as those 30 years ago, once adjusted for inflation.


#204

I haven’t looked at the figures for a while but I’m not sure using the folks that live within DC is a good sample of the nation. Or using the folks that actually live inside any of the large cities. Usually these are the poorer people and the ones with more money live outside the city. But sure, a car is a major purchase and can put a dent in the budget no matter how much money you have.