Hammer Time: Land of the Nuts
How many of you would pay $400 a month for a Ford Ranger? How about $600 and change? Not you? I didn’t think so. But you would be surprised how many actually do. As a remarketing rep for Capital One, it was my job to deal with the failures—over 10,000 per year. Good people. Bad people. Mediocre people. It didn’t really matter in the end because none of them could make the sub-prime car payments. It’s a vicious cycle at the auctions. Retail cars are sold to wholesale buyers. These cars are then sold with cheap credit and inflated prices to an ever clueless public. Here’s today’s question: “What’s the alternative?”
It’s a tough question. First off, you have to deal with the fact that folks are simply going to do ‘what they want to do’ regardless of whether you or Dave Ramsey approve of it or not. You can shake your finger in self-righteous, sanctimonious anger at their ignorance but that’s a two way street. The beauty of this world is that you simply can’t know too much. Some smart alec always knows more than you. So with that in mind if you find someone in need of help, don’t just be the armchair lecturer. Teach them.
Even in the more extreme cases where the person may have impolite tendencies, you may really be helping their kids . . . or their parent . . . or that poor car . . . or the girlfriend. I find most folks become curious about their cars (and you) once they realize that a few moments of cursory inspection can keep them from spending hundreds of dollars at the dealership.
A second area I would consider is taxing the dangerous and irresponsible. Wait. Put the gun down. I’m NOT saying we need more taxes. Although we definitely should be spending less by electing tightwads! Just front-load the usual taxes for the irresponsible by making registrations expensive for them. Where would I draw that green line? At-fault accidents. If the car is totaled and they break the law, they pay an additional penalty based on the severity of the behavior. The more severe the crime, the greater the cost of registering their next ride.
Related to this is insurance. Better have it. Period. Without it the car should be impounded by the police or repossessed by the lien holder. No excuses. Unfortunately some states still allow the uninsured to penalize everyone else. In my world it would be the opposite way around.
Finally I would give a tax holiday for the keeper and eliminate bogus fees at the dealerships. If you keep a car for over 10 years AND 100k, congrats. You get to enjoy the fruits of good ownership. Proceed to the nearest Hawaiian cruise. Everyone else gets to suffer the car buying experience without having to endure a $149 documentation fee that really involves an actual cost of $20.
Would this solve the problem that comes from wasted assets and wasteful spending? Not at all. But it would make the costs of ignorance far more expensive for the worst offenders. In the end I believe banning should only take place in extreme circumstances. For everyone in between, you minimize bad behaviors by making it cost prohibitive.
More by Steven Lang
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This column blog used to be about semi interesting auction (Hammertime?) or used car stories. Seems lately it is either a reincarnation of "Which 5 brands would you keep" game or some class warfare diatribe. What does "Good people. Bad people. Mediocre people" mean exactly? Relative to their credit scores, or attitudes when faced with repossesions? I'm assuming if they were financed with Cap1, they were all generally in a lower credit score tier. This is more of the same bankster nonsense about how all sub prime these people are scammers and are bad people. And the banks and tthe banksters are angels of mercy. Please. I for one do not point the sanctimonious finger at anyone other than the banking oligarchs. Without knowing sales details, getting a Ranger to $600 a month is done by either loading it up with every conceivable option, and financing it with crappy rates, or more probably, rolling in the upside down value of the trade, financing the doc fees and sales taxes (as is all too common), and then doing it with crappy inteest rates. Now last time I checked, it was the Cap1's and Countrywides of this country that wrote these bullshit loans. Speaking of the former employer, I regularly see their cars at auction, 7,8,9 years old, repossesed. Now come on, what self respecting, upstanding, righteous financial institution writes a loan on a car this old? Same with HSBC, Infiniti/Nissan and the rest. I wouldn't crow too much about the ripoff #149 DOC fee, when the auctions take more for doing much less. Pay someone 8 bucks an hour to drive the car thru the lane and some bafoon yakkity yakking his stuttering nonsense into a microphone. That's worth more like 20 bucks not $250. The public isnt at all clueless about these fees and such. Most of these type of things have been publisized ad naseum. Same for the crap they try to load into a mortgage or property sales. But just try to pull a Clark Howard and insist they remove it. Table for one please? Trying to understand the point of this article it sounds like the author is promoting some sort of financial IQ test before buying a car. How bout houses? We should tried that one bout 5 years ag ago. How bout before having kids? I know some people who would get turned down. But I notice not much mention of decency tests for sub prime financial institutions like CAP1 and Countrywide, sub prime employers like Walmart, and others. What's in your wallet?
Countryboy, in the words of the late Frank Zappa, "May your shit come to life and kiss you!" Then again, I'm sure that would simply add mass to what's already in your head.