Why did the Govt bail out AutoMakers when they put people in debt?
auto dealerships put people deeper in debt. they lowball trades and tack that amount onto yet another loan. plus they add in warranties just so they can make a commision from that too.
a majority of americans wouldnt be tight with money if car payments werent so high.
- Anonymous1 decade agoFavorite Answer
People put themselves in dept. If they are paying on their current car then common sense tells them if they trade that car in and the dealer pays off the loan then they owe the dealership for the loan they paid off and pay for their new car. Dealers should not be held responsible for bad decisions of the buyer.
I am against the bail out Auto Makers deserve to go bankrupt if they trash their business. They too should reap what they sow. I drive a 18 year old pickup because car prices and payments are so high but I also am against the very high salaries the auto workers make and the unions demanding unreasonable benefits for their members. Get rid of the union and make the workers live off $18.00 to $20.00 an hour instead of twice that. Just refuse to buy cars that are high priced.
I heard of one instance where an auto maker I forget which one developed a car they were going to sell for about $8,000.00 new but at cars shows they asked people what they would pay for that care everyone said they would pay $16,000 to $20,000 so guess how much they sold the car for? They split the difference and sold it for $18,000 when they thought $8,000.00 would be good.
The buyer should say they would only pay $5,000 for a new design because they should know that question is to see how much more they can sell it for. that way if everyone said $5,000 the automaker would sell it for the original $8,000.
I also blame the sales people because they refuse to give the buyer the best deal because it cuts into their profit.
I bought only one new pickup in 1980 but I was turned down by three salesmen telling me they had nothing in the price range I wanted and the monthly payments I could afford. Then finally I talked to their top selling salesman and he sat down with me and listened to my needs and cvame up with a brand new pickup within my budget and the other three salesmen asked me why I bought from him and not them and I just told tham they refused to work with me and they said they cannot make any money selling the cheper cars and trucks but I reminded them I heard them complaining the man who got my business gave me what I wanted and you all wondered why he sells more cars and makes the big bucks you you three don't. I told them that selling 10 of the cheapset cars would yeild them more money than one high priced car.
- 1 decade ago
You see, people need to gain common sense of what they can and can't afford. The reason we're in this mess is due to the lack of people reading the fine print. The people in debt due to trading a car in for a low price and buying some fancy car (that they can't afford) have brought this on themselves.
You can't blame the automakers, they're just making their product and selling it. If someone wants to buy it, well, it's up to the buyer, not the automaker to buy the car.
Finally, we needed to bail out the automakers, GM, Ford and Chrysler having untold amounts of employees (god knows how many)
VERY IMPORTANT : So really, by not bailing them out, you would put several hundred thousand people in debt
no job = no cash flow + no cash = can't pay taxes = debt to both people and government
I understand your reasoning, but people could have avoided their money problems with cars.
Chris S has the right idea. People just need to manage their money, it applies to all things, houses, vacations, cars, recreation, business. People need to know their limits.
- EllaLv 71 decade ago
For one thing, there are thousands of people employed through car manufacturing plants.
So if the plants didn't receive the money, more people would be out of work and our unemployment rate would have soared.
But as far as car payments go, people have to buy within their means.
But most want brand new, tricked out vehicle with all the options built in from the manufacturing plant.
What car dealers don't want the consumer to know is that if you purchase a new car, get it as basic as possible.
Then have all your other options installed after market.
That would save the consumer on average $3-7 thousand dollars on a purchase.
And yes, that includes stereos, leather seats, moon roofs, etc.
In order to stimulate the economy people have to spend their money, not be frugal with it.
- 1 decade ago
Auto dealerships put people in debt? There is a new one! No, people buying cars place theirselves in debt People not doing their homework prior to buying a car, place theirselves in debt.
Auto makers employ a large percentage of Americans directly in their plants and indirectly when they purchase parts from other companies.Allowing them to go out of business would have caused the economy to spiral. The Automakers need to manage theirselves better and more efficiently. That is the root of the problem, not people that don't understand how to manage their money on a simple car purchase.
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- 1 decade ago
Automakers don't put people in debt unless the people allow it. No one is forced to buy that new car that I know of. There are plenty of used ones out there for the taking. If you sign the papers, you are taking on the debt of your own free will.
- GoslingLv 51 decade ago
The same reason they bailed out the banks, because you see it was the bad home loans that they made that made Americans go into debt they could not afford. And those who signed up for adjustable rates should have thought twice. Auto makers employee over 3 million people world wide, got less money then the banks and the banks only employee around 100,000 tops, and now they giving out bonuses? When you get the right question to ask, I'll be back this one was a DUH.