You can’t see it, but in that clump of trees there’s a tiny park with the kind of playground equipment kids outgrow by the time they’re ten.
After a fairly cold winter here in the northwest the temperature soared to a scorching 60 this weekend and when I went to collect my youngest daughter – almost ten - from the park there, I wound up pushing her on the swings. Of course she’s big enough that she doesn’t need me to push her, but she wanted me to anyway.
And so I pushed her and it was really relaxing – it always is. The peacefulness of that little park could be a metaphor for the quiet, tree-lined suburban lifestyle that we enjoy. But despite living next to that park for more than ten years, the following strange thought creeps into my head nearly every time I’m there:
“God, I hope I don’t lose my job, and I hope we never lose the house, because I would hate for us all to have to move away from this place.”
In theory I shouldn’t worry. Since I graduated from college 20-some years ago, I’ve never been laid off and I’ve been at my current job for more than ten years - I even got a raise last month. My wife has worked part time from home for the same company for ten years also, plus she seems to be able to pickup freelance writing and PR work fairly easily, even in these tough economic times. We bought our house ten years ago so the payment is reasonable. Our cars are paid off and we have no credit card debt.
And yet – I realize that none of that matters and I can NEVER quite relax because the thought of economic peril is always there at the edge of my consciousness. Unlike my parents' generation it seems like the middle class these days exists in a constant state of realizing how tenuous their financial situation is. These days, middle-aged folks get laid off to lower personnel costs, jobs get outsourced, and unless you work for the government or a union, you have no pension plan and probably no company contribution to any sort of retirement.
And that brings me to the car. In theory, I’m exactly the kind of guy who should buy a car now: stable income, good credit, no consumer debt and a 15-year old car with 180,000 miles on it, and a history of buying cars new. And yet for years I haven’t wanted to buy a car because of the uncertainty of whether my job will disappear. We fritter away hundreds of dollars a month on all manner of unnecessary things from Diet Coke to movies, but the thought of entering into any type of long term financial commitment seems to be a non-starter.
And thus it's no wonder that car companies are in such deep trouble. A lot of their regular, more impulsive customers who used to buy a new car before they'd even paid off the last one can't get financed anymore. And if my case is any indication, those who CAN and SHOULD be buying cars can't bring themselves to pull the trigger on it.
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Comments
And so, even though it goes against the normal functioning of capitalism (but so do bail outs), it seems to me that American corporations could give the economy a big shot-in-the-arm by simply vowing not to lay anyone off for 12 months, even if they lose a bit of money. Or at least, those companies that have no intention of laying off workers should tell them that because there are probably a ton of people out there who are worrying unnecessarily, and if they just had the uncertainty lifted they would start buying again.
I've asked myself what it would take for me to go buy a new car and actually I'd probably do it if my employer just told me emphatically that I'd have my job for at least another year.
(The tranny died in my 1998 blazer but I'm enjoying my 2001 izuzu rodeo. So what if I can't have my dream truck? Honestly, I wish I could commute on bicycles like I did in Philly and say screw cars like I did for years. I live in rural Maine now.)
Many employers can't risk guaranteeing jobs, but I'm guessing most medium to large sized companies, although they may not be making tons of money, are not on the brink of insolvency.
And at the very least, there are surely SOME companies out there that know for a fact they won't be cutting jobs in the next year. Even if those companies told their employees that it would help repair the psychological malaise that is contributing to our slow economy.
1) When I bought my last car, it was new, mid-sized and Japanese (even though I knew when I bought it that I was going to work for Ford Motors Corp). And, it had an under $20K sticker--I paid much less. That's all the car I needed even though I could technically afforded twice that much car. I didn't need any more car.
2) I worked for Ford as a consultant in Certified Pre-Owned which is an outstanding option for many if not most consumers.
3) You're not alone. Good credit people have pulled themselves off the market (that's how they got good credit) Medium credit people are having a harder time getting financed--they need more down payment. Bad credit people are still out there trying to get financed with even less success than beforer, but they keep on trying.
No wonder the industry sucks (and it's been getting more and more like this for the last 3 years).
True, in many ways it seems like our prosperity - more disposable income with 2 wage earners - did us in. But also, it seems like that is the end game with capitalism. When profit is the goal, all things eventually get put into service toward that end.
And financial prosperity is one of the side-effects of the capitalist machine when it really picks up speed. And when families have more disposable income they demand creature comforts, including cars with electric everything, A/C, nice stereos, etc. So my mom's '72 Datsun 510 tin can just doesn't cut the mustard anymore.
Sure, changing societal values contributed, but ultimately I think capitalism and greed are the driving forces behind the changes you note in your post.
Good points. I'm like you in that I buy functional cars rather than getting sucked into buying the over-the-top expensive stuff.
I finally sold off my 15-year old Honda Accord with 180k miles and just bought a used car ('06 Hyundai Sonata 'with 20K miles - drives great and only cost $9,400).
I think the car companies have lost my wife an I as new car buyers simply because new cars have become too expensive to be worthwhile for us. I'll leave the new cars to the rich people and the college grads who are willing to go into debt up to their eyeballs.
Buying a new car is just a horrible investment. You are right- people who watch their money carefully, never buy new cars.
I do have extended towing coverage with my AAA membership though. When you own a fleet of used cars you do have to be prepared for eventualities.
My new Honda worked out fine since we had it for so long, but yeah - going forward I can't see going through 5 and 6 years of car payments again.
What is attractive about new cars is that usually you're not going to get a lemon, but with used cars you just don't know. It also depends on the person. More than most people I hate, Hate, HATE having car problems. Arggghhh. I just want to get in my car every day for ten years and have it run without any surprises. I'm fine with regular maintenance, and things that I can hear or feel coming (brakes, clutch), but I don't want to break down unexpectedly.
With the used car I just bought I did a carfax and all that, but what made me comfortable with this used car was that it had very low miles, is still under warranty and the couple selling it seemed very trustworthy.