Tuesday, January 19, 2016


The automotive industry sold more cars in 2015 than ever before.

This is evident by the number of auto-related commercials on TV and in the newspapers and magazines.

But why I wondered—particularly at a time when so many are trying to cut back on expenses?

I think the answer, in large part, relates to very creative financing.

Loan terms extend out longer than the car will last, which can be a problem down the road (if you will pardon the expression!).

Interest rates have been exceptionally low for several years allowing low or no interest.

Very creative (and at times confusing) price point marketing (i.e., $143 per month) when you can't see or read all the fine print.

The fact that in most cases, cars are the only purchase where the sticker price has little to do with the actual price.

And finally, that technology allows consumers to know what the price should be plus or minus 50 bucks, thereby eliminating much of the haggle.

A funny and sad but true story. In 1960, when I turned 18, I bought a red Rambler American. Neither my father nor my mother had ever owned a car, or even possessed a driver's license. My father and I went to the new car dealership on Jerome Avenue in the Bronx, looked at the car in the showroom, bought in untested, and paid full sticker price, which was probably $1800. It took a week or more to get the loan processed in my father's name until I could pick it up. Fortunately, we took the life insurance protection and unfortunately he died 3 months later. Those were so much simpler times in all areas of life and living, and we were so much more naive and trusting than we are today.

Perhaps the funniest part of the story is I told my then girlfriend and now wife for more than 50 years that I had bought a "sports car!" I don't think she ever forgave me for that, but to me a red car was automatically a sports one. I have never owned a red car since.

Bye for Now,


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