Sunday, 22 February 2009

The hidden victims of the financial crisis

Remember what it was like to buy a car 20 years ago? Unless your family was filthy rich, and your parents unbelievably indulgent, the average 18 year old drove a fifth-hand car that cost perhaps $3,000. Many owned cars that cost half that. They were clapped out, rattling, smelly, rusty, unreliable hulks, but they served to get one from A to B - most of the time.

Fast forward to now, and see what "extreme capitalism" has done. We now have 18 year old monkey-spankers driving around in not-so-old BMWs; and an M3 to boot (if the sticker on the side is to be believed).

How does a guy with more bum-fluff than common sense end up driving a car of this calibre?

Easy finance, that's how.

When we were buying our first cars, many of us relied on the Bank of Mum. That is, we took out a loan from our parents, and they demanded strict terms. A large deposit had to be provided. They had the final say on whether your chosen transportation option was acceptable or not. The keys could be reclaimed if the Bank was unhappy with your behaviour on the roads. Money was not forthcoming without the borrower having a job, and a demonstrated commitment to that job and paying off the loan. Being rude to the Bank, back chatting, being impolite or disrespectful, was a great way to court foreclosure on one's loan.

Until the Great American Housing Bubble finally burst (along with the Great UK Bubble), the kids of today didn't have to put up with the grief of dealing with the Bank of Mum. That's because the likes of GE Capital, along with its myriad front groups, were more than happy to stuff the largest possible loan down the gullets of our unsuspecting yoof. French farmers producing Foie Gras are accused of being cruel to geese when they overfeed them, but that is nothing when compared to how car dealers have been cramming unaffordable loans into the wallets of bogans and boy racers.

When I go past the car yards along Parramatta Road, I used to often see Master Bumfluff being shown a selection of $25,000 - $34,000 cars - such as a brace of WRXs - by a smiling car salesman, who had no qualms about arranging a 105% loan for M. Bumfluff, knowing that they would be lucky to make six months worth or payments at best. And some wonder why on average we owe so much.

I don't know if I am imagining things, but I seem to be seeing a lot more "flash" cars with P plates being offered for sale these days.


I hope they enjoy the sorts of transport options that we had in the good old days.


1735099 said...

Bimmers are over-rated. Four years ago, to celebrate my retirement, I hired a BMW Z3 for the weekend. The thing was a heap - no performance to speak of, poor weather sealing, and it handled like a bucket of porridge.
The Mazda MX5 is quicker, corners on rails, drivable in all weather, and is built better. The badge is the only thing the BMW has going for it, and probably the only reason that they're favored by bogans.
And there's nothing wrong with Lada Nivas, providing you dismantle after purchase, and patiently put it back together without having any bits left over. They were assembled with care factor zero.

kae said...

I was lucky. My brother had two minis, one he did up with dad, and old PMG one, which he drove. The other was a Mini Traveller, which he did up on his own and he let me drive. I loved that car. It was great, I paid to run it, rego and insurance and it was his car. I drove his mini for a few years, until I bought my own new car in 1981. I'd travelled to Perth and hired a car there, a new Ford Laser. I liked it so much (less like driving a truck than the mini was), that I decided when I got home to buy a car.
I visited car yards, test drove a few cars, decided what I wanted. A Daihatsu Charade hatch for $8k. I'd been working for Telecom for over a year and phoned the Credit Union from the dealership to ask them if I could get a loan. On the spot they saw no problem and all I had to do was visit them and buy five shares for $10 (now only one share I think), and I was in! They lent me $8K total, and that's how I got my first new car.
I've bought three more since, none with finance per se.
Bank of Mum has helped with the last two!

Kaboom said...

Jayzus, BOAB!

First of all you attempt to identify an E36 318i with the badges ripped off as an M3, and next you desecrate the Lada Niva!

I'll have you know that my dear departed Niva was a ball-tearer of a car, once I re-wired the fucking thing........

bikeonaboy said...

An M3, I knew it was not - but the little snot-faced owner had planted small M3 badges on the trim behind the front wheels.

This bandicoot-rootre was a try hard in a big way.

kae said...

Kaboom, was the rewire before or after the fire?