GM Doesn't have enough cash to make it through a few months

[h0tSX]

just to add in out of nowhere. The points about resale are quite valid. They are so afraid of losing market share within certain sectors (suv, minivan etc.) that they do the focus group car that has too many different directions and no single person to direct the design in a single particular direction. That fact is likely why the japanese are doing so much better at this, as they still use compiled data regarding what people want to see in the next car they build, but they also have a head engineer who can put their foot down if things start to stray too far from the original plot.

[Type R]

The whole depreciation thing is mostly caused by pre-paid financing (0% financing etc). People don't seem to understand that borrowing can't be free, and that money has to come from somewhere. When u pay $25k for your new car and get 0% financing for 60 months, the lending company giving you "0%" is actually being paid by the manufacturer out of the price you pay for the car, and the lending company pays whatever predetermined interest rate on what they borrow against the major banks.

So say on $25k, they pay 5% on 60 months, thats just over 3300 in interest that has to be paid. (remember we haven't factored in taxes yet, so that number will be way higher). That comes from the manufacturer so the consumer feels like they got a smoken deal on the interest rate. Well take same car, been driven 5km, and now johnny consumer wants to sell it. Well he gets to subtract that 3300+ from what he paid because stevey consumer can just buy new instead of his. He also doesn't get the taxes back that he paid, and theres 5km less on the warranty, so he has to take that into account. This is why all cars depreciate so hard and fast.

Hes the other situation. Manufacturers (all of them) are getting desperate for sales, so they hike up rebates on new cars and incentives. Well now, johnny consumer who is trying to sell his 3 month old car (that didn't have said incentives when he bought them) has to compete with those incentives too, which devalues his cars.

Dodge was giving away up to 15k on 08 rams over the xmas season. How do you think the 07 owners were feeling about their purchases at that point.

Also take fleet sales into account. Budget, Tilden, Enterprise etc all rent out Toyota's, Fords, etc to the public. They pay fleet pricing on a specific type of vehicle, buy them by the thousands, and use them for exactly 1 year. After that year is up, they turn around and sell them as used to the public. What happens when the market is saturated with a specific type of product? Price drops, and depreciates the vehicles further. This is the main reason why the Pontiac Vibe has a higher resale value (i checked this too) over its sister the Toyota Matrix, because toyota fleets out the Matrix, and Pontiac doesn't with the Vibe. Same goes for Toyota Corollas, and soon the Camrys as well. GM finally figured it out and is pulling out of the rental game, which is also why Toyota was able to gain so much marketshare in the last few years.

[Elevorett]

Originally Posted by Type R

The whole depreciation thing is mostly caused by pre-paid financing (0% financing etc). People don't seem to understand that borrowing can't be free, and that money has to come from somewhere. When u pay $25k for your new car and get 0% financing for 60 months, the lending company giving you "0%" is actually being paid by the manufacturer out of the price you pay for the car, and the lending company pays whatever predetermined interest rate on what they borrow against the major banks.

So say on $25k, they pay 5% on 60 months, thats just over 3300 in interest that has to be paid. (remember we haven't factored in taxes yet, so that number will be way higher). That comes from the manufacturer so the consumer feels like they got a smoken deal on the interest rate. Well take same car, been driven 5km, and now johnny consumer wants to sell it. Well he gets to subtract that 3300+ from what he paid because stevey consumer can just buy new instead of his. He also doesn't get the taxes back that he paid, and theres 5km less on the warranty, so he has to take that into account. This is why all cars depreciate so hard and fast.

Hes the other situation. Manufacturers (all of them) are getting desperate for sales, so they hike up rebates on new cars and incentives. Well now, johnny consumer who is trying to sell his 3 month old car (that didn't have said incentives when he bought them) has to compete with those incentives too, which devalues his cars.

Dodge was giving away up to 15k on 08 rams over the xmas season. How do you think the 07 owners were feeling about their purchases at that point.

Also take fleet sales into account. Budget, Tilden, Enterprise etc all rent out Toyota's, Fords, etc to the public. They pay fleet pricing on a specific type of vehicle, buy them by the thousands, and use them for exactly 1 year. After that year is up, they turn around and sell them as used to the public. What happens when the market is saturated with a specific type of product? Price drops, and depreciates the vehicles further. This is the main reason why the Pontiac Vibe has a higher resale value (i checked this too) over its sister the Toyota Matrix, because toyota fleets out the Matrix, and Pontiac doesn't with the Vibe. Same goes for Toyota Corollas, and soon the Camrys as well. GM finally figured it out and is pulling out of the rental game, which is also why Toyota was able to gain so much marketshare in the last few years.

since you took the time to write all that, i thought i'd take the time to say good post.

Originally Posted by Type R

Also take fleet sales into account. Budget, Tilden, Enterprise etc all rent out Toyota's, Fords, etc to the public. They pay fleet pricing on a specific type of vehicle, buy them by the thousands, and use them for exactly 1 year. After that year is up, they turn around and sell them as used to the public. What happens when the market is saturated with a specific type of product? Price drops, and depreciates the vehicles further. This is the main reason why the Pontiac Vibe has a higher resale value (i checked this too) over its sister the Toyota Matrix, because toyota fleets out the Matrix, and Pontiac doesn't with the Vibe. Same goes for Toyota Corollas, and soon the Camrys as well. GM finally figured it out and is pulling out of the rental game, which is also why Toyota was able to gain so much marketshare in the last few years.

I'm not so sure this is a super positive point. Yes the ideas of car flooding the market can lower their value, especially when they are sold at the cheap by rental companies, but at the same time, companies like Toyota are indeed selling thousands of cars to rental companies, which they might not have sold before. Also, having those thousands of cars being driven by people, and people seeing those cars driven, may just very well turn around and buy one. There are also a large group of people who will only buy new cars, irregardless of the depreciation on it. They want a new car, they plan on keeping it for 10 years or more, and they want to know the history of it.

Anyways, just saying it's not as black and white as you stated.

[Fleemer]

don't forget all the used cars comming in from japan!

jim patterson + icbc have been cracking down on it

[projectcivic]

Originally Posted by Fleemer

don't forget all the used cars comming in from japan!

jim patterson + icbc have been cracking down on it

Thats nothing new, they have been trying to crack down on that well before this crisis hit

Ford reported huge 4th quarter losses today, and still plans to not ask for a bailout:
http://money.cnn.com/2009/01/29/news...ex.htm?cnn=yes

[sixthgear]

Originally Posted by dustinb

Ford reported huge 4th quarter losses today, and still plans to not ask for a bailout:
http://money.cnn.com/2009/01/29/news...ex.htm?cnn=yes

They have faced hard times in the past, they will pull through. They are in better shape that the other 2.

[!LittleDragon]

Originally Posted by projectcivic

Thats nothing new, they have been trying to crack down on that well before this crisis hit

Just wondering, is there some kinda premium now for RHD cars? My car is from the US and when renewing my insurance this year, I was asked if my steering wheel was on the other side because it wasn't a Canadian car.

[Elevorett]

Originally Posted by !LittleDragon

Just wondering, is there some kinda premium now for RHD cars? My car is from the US and when renewing my insurance this year, I was asked if my steering wheel was on the other side because it wasn't a Canadian car.

In short, yes there can be a premium.
ICBC is asking all brokers to provide whether or not cars are RHD because they want official numbers. Not only that, but ICBC has "proven" that RHD cars are more likely to be in a collision and therefor can justify raising the rates on these risks. Hope that helps.

[projectcivic]

Originally Posted by !LittleDragon

Just wondering, is there some kinda premium now for RHD cars? My car is from the US and when renewing my insurance this year, I was asked if my steering wheel was on the other side because it wasn't a Canadian car.

As someone mentioned above, I am sure there is but I don't know 100%, I don't ever deal with insurance things of that nature. I just remember the head of ICBC inspections came into my work about 2 years ago when it was really popular for JDM cars to be imported here and he talked to us about why they are tightening down on JDM import inspections. Too many shops were passing what he refered to as "not road worthy" vehicles, and vehicles without the proper modifacations to be licensed on the roads here.

Wow, I never saw this one coming. Union is worried that GM will pull out of Canada:
http://www.cbc.ca/money/story/2009/0...vescanada.html

Sort of makes sense, since GM rejected the bailout money Canad was going to give it. I always figured they'd stay here, and someone would just buy up the brand and still produce cars... this would be a lot of dealerships closed.

[Fleemer]

oh well, that what you get for buying dsm

[h0tSX]

Originally Posted by Elevorett

In short, yes there can be a premium.
ICBC is asking all brokers to provide whether or not cars are RHD because they want official numbers. Not only that, but ICBC has "proven" that RHD cars are more likely to be in a collision and therefor can justify raising the rates on these risks. Hope that helps.

to the ridiculous degree that someone with full discount gets charged 220 bucks a month for a 93 WRX Wagon for regular coverage.

yet skylines remain around 100-120 bucks.

[Elevorett]

Originally Posted by h0tSX

to the ridiculous degree that someone with full discount gets charged 220 bucks a month for a 93 WRX Wagon for regular coverage.

yet skylines remain around 100-120 bucks.

I don't really know what you're stating there. I think either your payment of 220 a month is exagerated, or you're getting ripped off by your insurance company.

This is what I quoted from my system. I made a few assumptions but they were STILL on the more expensive side.

1993 Subaru Impreza Wagon
Driving to/from work under 15km's nobody driving with less than 10 yr experience.
2 million liability, collision, comp, driving in Victoria (Van is twice as expensive)
FULL DISCOUNT at 43% -20

Comes to a grand total of 745 a year, 62.05 a month... So where is 220 coming from? oh and if your car is a RHD, you're only paying 100 a month.

[GregM]

As it stands my insurance for my 07 GTI is 1800 a year. 25% discount, im 22.


For me to insure my beetle it was going to be 800 a year, and its RHD

Not huge news, but GM is cutting 10,000 jobs:
http://www.cbc.ca/money/story/2009/0...itecollar.html

GM and Chrysler are cutting 50,000 jobs. GM says they now need 30 billion if they want to get through March:
http://www.cbc.ca/canada/story/2009/...arbailout.html

Chrysler also asking for a couple of billion. This shit's ridiculous. GM is saying Saturn will be completely phased out by 2011, and is looking for buyers for Saab, Hummer, and Pontiac.

[Fleemer]

Originally Posted by dustinb

GM and Chrysler are cutting 50,000 jobs. GM says they now need 30 billion if they want to get through March:
http://www.cbc.ca/canada/story/2009/...arbailout.html

Chrysler also asking for a couple of billion. This shit's ridiculous. GM is saying Saturn will be completely phased out by 2011, and is looking for buyers for Saab, Hummer, and Pontiac.

Sounds like a good ol' firessale to me!

Join me 50,000 people in being unemployed! Having not nearly enough money to eat or for transportation, living off credit as you go to school and wait out the fragfest

weeeeeeee

i am soooo in debt :P

omg i need a job -_-

lol

[AJL]

plenty of places have help wanted signs out...

[Fleemer]

I have one, but I work part time. and it pays half as much as my old job so things are really tight :P

This is an interesting move. The execs at SAAB are filing for reorganization in Sweden so they can become an independent company of GM.

http://edition.cnn.com/2009/BUSINESS...ion/index.html

[Great68]

Originally Posted by AJL

plenty of places have help wanted signs out...

If you want to work for minimum wage.

It's pretty hard to live any sort of a decent life on minimum wage in this city.

[Enraged]

i love when people complain about being broke or not having a job, but refuse to work for minimum wage...

its not that hard to live in victoria making minimum wage, you just have to adjust your lifestyle to fit (like living with a few roomates, not going out 4 nights a week, etc)...

[projectcivic]

^^^ bingo. I have found most places in Victoria are willing to hire you at $10/hr anyways and if you live within your means its do-able.