Why I'm Buying a Used Foreign Car

Mon, 08 Jun 2009 18:56:21 +0000 – For my entire adult life I've been a dyed-in-the-wool "Buy American!" consumer. Not just a participant, but also a preacher, sermonizing friends and family over the years about the importance of buying from American companies.

It's not always easy. Buying sneakers is a multi-store excursion to find the "made in the USA" tag. I can only find some Converse and some New Balance sneakers that have it (let me know if you find others).

I got the "Buy American!" bug when I bought my first car in 1980. That was back when the Japanese imports were hurting American companies with their sporty little numbers that ran 200,000 to 300,000 miles when American cars would get you 100,000, and the imports were cheaper, too. I felt it was my patriotic duty to pay more for American cars to keep the money at home. Call it that "take one for the team" mentality.

People would criticize me by bringing up the thousands extra I was spending on each American vehicle to pay for pensions and health insurance of autoworkers. I'm a small businessman - my own family's health insurance costs me $1,000 a month and I've never been able to save money for my own retirement. "So why pay for theirs?" my foreign car-buying friends would ask. "I'm glad to pay it," was my reply. Supporting the American companies seemed like the right thing to do.

I was lucky enough to marry a girl who felt the same way. Combined, my wife and I have 55 years of buying American cars: A Maverick, a Pinto, an Apollo, a Fiero, a Monte Carlo, a Grand Prix, a Cavalier, a Malibu, a Grand Am, a Pontiac 6000, a Saturn, two Mustangs, a Cadillac, an Expedition, an Explorer, a Trailblazer and a few others we are having trouble remembering.

I was upset with the car companies when they came to Congress looking for money. I already paid more for each American car I bought than I could have paid for an import. "Now they are going to take more money against my will," I thought?

Since the car companies came to Congress on the heels of the banks getting money, I couldn't help but wonder if they really needed money, or if they lined up because they saw a weak-minded government that was handing out money like candy.

Ford provided the answer when they admitted at the hearings they didn't actually need the money, and ended up not taking any. At first I was upset with Ford, but now I realize why they wanted the money: Ford has to compete with two other car companies that are no longer playing under capitalist rules.

How is Ford supposed to compete for profits and operate with bank loans when Chrysler and GM can dip into the taxpayer's pocket when they need capital? I certainly couldn't keep up with my competitors if they could do that.

GMAC, the financial company cum bank, took $6 Billion in taxpayer money. Did they act smartly with it? No. They immediately started giving 60-month zero interest loans. Zero interest? That's a lousy use of my tax dollars, right there. George Will called it "sub-prime car loans." How is Ford supposed to compete using its own money when GM can finance cars for free with taxpayer money?

I ask now as I asked last November - is the Department of Justice Anti-trust Unit asleep?There are some very anti-capitalist and unfair practices taking place, and the DOJ is silent. Why?

I, like many Americans, asked that the car companies file for bankruptcy instead of being bailed out. "But they are too big to fail!" yelled the government, who gave GM $20 billion. Less than six months later, GM filed for bankruptcy anyway. "Too big to fail" is now exposed as a lie, and it cost us $20 billion to prove it.

Back to me and my decision to buy a used foreign car. This year the lease was up on our Chevy. After 39 months the buyout was more than $22,000. This was between $7,000 and $10,000 more than the value of the car, which we priced not only on Kelley Blue Book but also at dealer lots and online.

The economy is beating up my family like everyone else, so we decided for the first time in a decade we wouldn't buy new. Since GMAC just took a bailout, I figured they would want to make a deal. I offered to pay off my lease and buy the car for market value.

"No chance," they said. They wanted the full $22,000 and wouldn't take a penny less. I argued, "But leased cars that get turned in are auctioned. GMAC is going to get less at auction than I'm offering." GMAC's answer will shock you as it shocked me: "We know we will lose money at auction. But we want to make you buy a new car, so we won't sell you the used car for less than $22,000. We know you won't pay it - for that kind of money you'll buy the new car."

I was furious. They took my tax dollars as a bailout and are continuing policies where they intentionally lose money?

I figured a way out of it (so I thought). A friend owns the local Chevy dealer. I went to him and asked him to bid on my car for me at auction. I would then buy it from him at a profit, and still pay much less than $22,000. "Can't do it," my Chevy dealing friend said to me. "GM tracks the title. If I buy it and sell it to you for less than $22,000, they charge me the difference." Wow.

Realize where we are now: For being a life-long loyal customer, GM will sell my leased car to anyone in the whole world at a discounted price, except for me. For me they'll charge a premium. They'll lose money at auction rather than sell it to me. I guess GMAC can afford to do that when they are shoveling around taxpayer money they didn't earn.

Then my friend the Chevy dealer told me his sad story. He had gotten a letter: After decades of Chevy loyalty, GM was terminating his dealership. I had to wonder if my friend's tax dollars were used to buy the stationary and stamp GM used to send him that letter.

We discussed GM's plan: To have just a few dealers, so we the customers would be less likely to shop around from dealer to dealer, because the distance between dealers would be so great. Less competition means higher prices. Again, is the Anti-trust Unit sitting around smoking dope or something? How can such anti-competition policies be so explicit without a peep from the Department of Justice?

It gets worse for my friend. Dealerships also make money from warranty work. GM will not allow the local dealers they are terminating to keep doing warranty work. Can you imagine the waiting times that will occur when there is only one Chevy dealer for 25 or more miles? I imagine it will look like those long government lines I wait in for hours to get my car inspected. Again - is the DOJ Anti-trust Unit really unconcerned?

Here's the final analysis: After years of paying extra for cars that were less reliable than imports, after years of funding pension and health benefits for autoworkers when I couldn't fund my own, the American car companies have had the government raid my wallet for a bailout. They used that money carelessly by giving no interest loans, and jacked up the price of my own personal car, to the exclusion of everyone else.

They have run my friend and neighbor out of his dealership, turning him into a used car salesman. The purpose of that is to reduce competition to make me pay more for a car. I'll have to drive across the county to buy it and wait on line for repairs when it breaks.

Do GM, Presidents Bush and Obama as well as Congress think I'm going to reward their bad behavior? Patriotism is a two-way street. Do they really think I'm still the sucker I was when I supported the American car industry for so many years? To hell with them all. I won't even help them retain resale values of American cars by purchasing a used one.

I'm buying a used foreign car from my friend, the former Chevy dealer, who GM forced into the used car business.

Read more Tommy De Senoat www.JustifiedRight.com