Yet here we have people who are concerned that precious metals prices are going to go through the roof, even in the midst of all this massive leveraged debt. It doesn't work that way. Deflation is going to win sooner or later, and prices of everything including PMs will be brought down with it.
"The social aspirants now face losing their luxury vehicles and possibly their homes to repay massive debts to car financing giant BMW Finance." You can't "lose" something you "own". These people never owned a BMW, so these people never lost one. If they owned their home they wouldn't lose that either.
Reminds me when I bought my car 4 years ago. Was a cheapie. My idea was to pay cash and see what discount I could get because Cash is king right!. Well after we agreed on a price their finance department called me to try and change my mind ie take finance. This was before the GFC hit. The finance dept said they'll do me a favour and provide finance at 11% I laughed at them and they could'nt understand why I wanted to pay cash. I felt vindicated when the GFC hit. What I learn from that was that CASH is no longer king and is not encouraged when you can continue to fleece the public by selling them debt they don't need. Will we experience deflation I am not sure but at least I know my assets belong to me and not some finance house/bank same goes for PM's I may lose because spot comes down but it belongs to me and I can choose what I want to exchange it for.
I had something similar happen to me bout 6 years ago. I bought a car, told the dealer I'd bring in a bank check the next morning, he insisted that I speak to their finance department. At the time I couldn't work out why they didn't want my check, told them to shove their high interest loan up their arse. I worked out later on that they would have made much more money out of me if I had signed up for finance, makes me sad to think how many people fall for their sales pitch
There's an 'independent' servo/garage near me that gets all sorts of fancy cars in for servicing. The owner says they come to him because he's cheaper...He says they don't have the spare money anymore and are scrimping to the bone. He's always trying to tell the owners that bald tyres and flogged out batteries aren't in their best interests. Cars are so ...so..'ephemeral' and people are so emotional about them. Gonzalo Lira tells the tale of his uncle in Agentina in the hyperinflation of '73 whom swapped his rusted POS FIAT 147 for an apartment. 4 years later the FIAT would've been on the scrapheap...but the apartment is still there today and worth at least half a million dolars! http://gonzalolira.blogspot.com/2010/08/hyperinflation-part-ii-what-it-will.html
One of the guys at work has been on the lookout for a first car for his daughter. He said last week he came across a retired couple whom were downsizing and selling their '92 Excel for something like $2.5K... it had barely 100,000kms on it! ...they'd had it from new
You most certainly can lose your home even if you own it. If you have a $190k loan owing and the car pays only $90k back then you can bet your bottom dollar they'll sell your house to get their money back.
It may be only anecdotal but I've only met BMW owners who would suit my father's definition of 'two bob millionaires'. (and no offence to BMW aficionados here). I'm not surprised that they're notching up the bankruptcies. I've had two Excels and they only lasted 150k before they started to cost more and more in 'little things'. Now I have a duel fuel big car which costs not much to run and a brake light costs $1.80 not $5.60. (painful to park though!).
I knew a guy that bought a boat and bargined them down even more saying he would use their finance instead of a bank (the salespeople make a commission off loans). He then paid the loan off with the cash he had before he bought the boat within about 3 weeks and came out a few thousand dollars ahead than when he tried to bargain them down offering cash. When a salesperson cant make another commission taking cash, debt may be a better option.
If the car loan was secured against the house, they don't own the house. If it's not they can't sell the house on you.
http://www.sheriff.nsw.gov.au/lawlink/local_courts/ll_localcourts.nsf/pages/SHO_civil#3 A creditor can collect their debts via the court system. Your liability does not end with the secured or mortgaged assets. Just try not paying your rates etc. See what they can seize from you, if you dare.
I know a guy who was officially bankrupted in a fight over a payment for a car's stereo. Not the car itself, just the aftermarket stereo. Obviously he's not too bright, but it shows they can take something more valuable than your possessions, they can ruin your credit rating.
Ahh..I love it. Keep it coming. I read with great amusement recently about all the luxury McMansions being sold at firesale prices on the Gold Coast. Ray White have started a marine division so they can sell up their all their luxury boats as well. C
I stand corrected. So does that mean small business owner has the right to claim and sell goods for unpaid invoices? No wonder we're living in an age of ever growing debt, when lenders can sell their funds to people that can't afford them, without reasonable security and still be able to seize other assets. Then again, if you owned your house a car payment shouldn't be a problem. But if you didn't how would the car finance company get the title off the bank anyway?
It's all in Intelligencer's link. Once a civil court finds you at fault, the finance company doesn't have to do anything anymore. The courts, via the Sherrif, can force your Bank and Employer to hand over payments, title to property and if need be, take your freedom (i.e. throw your sorry arse in jail if they want to). And you also have to pay them for their time while they doing this (court costs, Sherrif's levy, locksmith's expenses etc "A Writ for Levy of Property is a Court Order that directs the Sheriff, to seize and sell the Debtor's goods, chattels (personal assets) and real property (land & house if the debt is over $10,000)."
The story is quite misleading as it assumes just because you buy a BMW you would have to get into debt. I think debt is applicable to all cars for that matter as it depends on the buyer as there are some people who use a car loan for a hyundai and if they loose their jobs the outcome would still be the same. So as in all purchases, going into debt is all about the buyer and not the item.
Thanks, that gives me a bit more insight of how it works. I never really understood how it worked when someone that seemed to be doing ok "lost everything". One bad car loan and the snowball cleans out the rest I guess. Having said that I don't know anyone that has been taken to court for not making loan payments and I know a few that have maxed out on car, credit card, house payments and personal loans.
