GMC and a Wife Hard to Please: A financial warning triggered by low interest rates

For a long time my wife and I have missed our old Jeep Grand Cherokee. She lost it in 2005 to an accident where the airbags went off during a wreck actually induced by the Lakota school system’s cut of busing during a levy fight. There were too many people on the road at Lakota East and my wife was driving our children to school. It was wet out and there was an accident. The Jeep held up wonderfully. Hardly any physical damage to the vehicle—but the airbags did deploy and that put the cost of repair well over the price of the Jeep’s worth. So it was totaled and wasn’t worth covering the extra cost to repair ourselves. We had the Jeep for a long time, and it was time to get a new car anyway. We picked up a Chrysler Town and Country which was perfect for us, and our large family. We drove it everywhere for the last ten years. We tend to buy vehicles and keep them for a long time. We don’t lease throwaway cars. We buy to keep, and we take care of them when we get them. So it’s a big deal in our family to make a car purchase. But its time again for my wife to have a new car and she is really, really, really picky. Let me emphasize, she is very hard to please. She has very specific tastes that are hard to satisfy. Her standards are extremely high. Picking out a car with her is very difficult.

I had been looking at buying a GMC Yukon Denali myself with the extended back and showed them to her, but she wasn’t going for it. They are just too big for her. She wanted a Jeep, but now that they are owned by Fiat she wants nothing to do with them. Additionally we loved our Town and Country but after Fiat acquired Chrysler that was the end of having any possibility of buying a Chrysler or Jeep. My wife may be an old country club girl, but she is probably more patriotic than I am when it comes down to it, and she doesn’t want to pay good money for foreign cars. Her very first car was a BMW. We had a Toyota Camry once, back when she was in college, but she resented having an Asian car, so since then it’s always been American cars—which I personally think are too expensive due to the labor unions and short-cuts that are often made to compete with foreign markets. I didn’t want to look at any General Motors cars because of the bailout in 2009, and Ford wasn’t making anything all that great in my opinion. They weren’t dynamic enough for us. So shopping for a car was hard for us. She didn’t want to look at any of the Mercedes products, which I tried to bring up—because she didn’t want to support German manufacturers over American even though I think they have the edge in engineering presently. But my attitude softened as I started looking into the new Yukons. On that car GMC was starting to build a good reputation again, and I was impressed.

My wife refused to drive a Yukon so we gave up on the discussion as we were at an impasse. What I didn’t know was that she started to consider the smaller versions of the Yukon on the GMC line and found that she loved the Terrain quite a lot. I was aghast because I thought the car was too small, but knowing she had done a lot of homework, and how hard she was to please, I gave it a shot—reluctantly. After all, we weren’t buying for me, it was for her. We went down to Fiehrer Motors at Bridgewater Falls to let her sell me on the merits of the GMC Terrain and I walked away rather impressed. The only drawback for me was that the Terrain wasn’t a Yukon, which wasn’t fair to the Terrain. After driving them around and looking at all the options it was clear why she liked the vehicle, it reminded us of our old Jeep, and it was made by an American company trying to give birth to itself once again—and the front end of it was smashing cool. Inside there was a lot of room and it’s technically quite a leap forward in engineering development. I was impressed with the 6 speed transmission that actually has the ability to go manual if needed, so she sold me on it and we bought one.

But this article is not about buying a new car or reviewing the GMC Terrain. It’s about a revelation I had while going through finance and signing all the paperwork. Buying a car is a very important part of the American economy, so I pay attention to aspects of it that measure the greater aspect of national GDP. I enjoyed greatly my experience at Fiehrer Motors as they have been in business for three generations now—which is very unusual. They used to be on Route 4 for a long time across from the Hamilton Plaza, by the old Richard’s Pizza place. But my wife and I would never shop for a car in that type of location because it’s too busy there to think right, plus the area is surrounded by impoverished has-been homes. Not a good way to usher in an expensive car buying experience. When we have bought cars in the past, it has been at Kings Automall. We like it over there for all the reasons that we prefer that Costco over the one in Tri-County. There are fewer slack-jawed losers over on Fields Ertle, and it does matter. People who have purchasing power don’t want to hang out with people whose life goals are to buy a pack of cigarettes and win $10 on a scratch-off lottery ticket so they can buy a case of beer. It matters even if it’s not politically correct. If the new Fiehrer dealership at Bridgewater wasn’t so nice, my wife would have never convinced me to go car shopping in the first place. So we were there buying the new Terrain, the sun was out on a nice 68 degree day after a bit of rain. There was some college football on the big screen behind me in the lounge area which I enjoyed watching as we went over all the contract details. It was clean, everyone seemed professional, and it was a good productive atmosphere that was conducive to the proper exchange of money and product. The finance guy was finalizing the details and I had positioned myself so I could see his computer screen just enough to read. That’s when I asked him if he was a drug addict.

I’m not going to give away a lot of personal details especially on a purchase that costs half of a small house. I’m grateful for good terms when I can get them. I’m not complaining on an individual basis. But what I saw was alarming to me. Keep in mind that I used to do what this finance guy was doing, so I had some experience on the matter. That was over twenty years ago, and back then I even helped paint on the front window of our dealership a giant sign designed to entice people to come in and buy a car—“4% on all cars and trucks.” I remembered back then that almost nobody had credit good enough to qualify for the 4% interest rate. They usually walked out of finance at somewhere around 6% to 7% if they had really good credit. Only people with “gold” credit were able to actually get what was on the window. So here I was watching the Sooners stomp all over the Golden Hurricanes, my wife had found a car she liked, and we were getting Chick-fil-A for my grandson’s birthday on a nice fall afternoon once we were finished with buying the car. It doesn’t get any better than that—except for the interest rate that I saw on the computer screen of my finance guy. It was less than what I painted on the window of the dealership I worked at decades ago. I thought he had made a serious mistake and was trying to hide a drug addiction.

But he wasn’t on drugs, and it was a legitimate interest rate. While my wife and everyone else was happy, I wasn’t. Something was dreadfully wrong about that. Things were not alright, that interest rate should have been much higher. As we signed the paperwork, I thought about the Fed’s decision to keep interest rates where they were, which are artificially low. Sure its good for the economy, it’s good for people to spend money, but it essentially means that any investments made in bonds or other long-term holdings are not increasing encouraging investors to continue dumping money into risky stocks further flaming a volatile market. This meant that the economy was in far worse shape than anybody was willing to acknowledge, including the most conspiratorial talk show hosts on AM radio. Banks were giving away money at a very low profit to them just to get people to buy products—and that artificial stimulus was a direct correlation to the true state of our economy that is dangerously perilous.

Look people, America is about to hit $19 trillion dollars in debt, wages are stagnant, inflation is unbelievably high, and there isn’t enough GDP to stave off complete economic collapse. There is really only this next presidential election to get it right where both the House, Senate, and the Executive Branch can increase GDP, pay down the debt so the United States doesn’t choke on foreign interest rates itself, and put the country back on course again where buying cars is a routine exercise, along with many other factors of a national economy. Failure to solve this problem means there is no future. Interest rates can’t be lowered any more than they are, and if that’s not getting people out to the stores to move products, then nothing will do it. That is not a good situation.

I’m proud of GMC for getting their act together and producing a nice series of cars, particularly the Terrain. I am impressed, and it deserves a look by anybody in the car market. I am proud of Fiehrer Motors for relocating into a really nice store in a really nice area—because I otherwise wouldn’t have went car shopping—so it’s a factor in national GDP—nearly as much as interest rate shopping—for me anyway. Without their decision to move off Dixie Highway, I wouldn’t have visited them and they wouldn’t have had the opportunity to sell me a new car. I’m proud of the Sooners for playing a fun college football game that sold lots of beer and fast food options to hundreds of thousands of viewers. And I was proud to spend $100 at Chick-fil-A on food that day. These are all wonderful things for our economy. But, the bank shouldn’t have to feel like they have to give away money. They need a chance to make a profit and while some people will say that banks make enough money, profit is what they need to stay in business. And they deserve to make money on their services. Based on that interest rate, it was clear to me that they weren’t making enough. For my situation, I won’t complain. But the fact that they felt compelled to offer it makes me worry about their future. Good things aren’t always good things.

Overall, it was a fun day, but many of the things I write about became quite evident to me. I don’t always like being right, even though I am most of the time. Unfortunately, not enough people listen in time to help themselves. That is frustrating to me. For that reason my wife and I did get the subscription to XM radio. No matter what happens, we’ll have a good life and we’ll enjoy it. However, I want many others to have a taste of the good life too-which is why I put so much time into trying to teach people—if only they’d listen.

Rich Hoffman


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