News Is Government Backing of Auto Warranties a Solution or a Problem?

[Wellesley]

http://news.yahoo.com/s/ap/20090330/ap_on_go_pr_wh/obama_autos

Obama took the extraordinary step of announcing the government will back new car warranties issued by both GM and Chrysler, an attempt to reassure consumers their U.S.-made purchases will be protected even if the companies don't survive.

Is this a good or bad thing? Will this solve the U.S. economic problems, or make them worse? Anything is fair game...

 

[mgb_phys]

It sounds like a reasonable attempt to stop a complete halt to buying maker X if consumers think they are going to go bust.
Although your sale contract is presumably with the dealer - are the government going to underwrite dealers? The dealer network is one thing that could really do with fixing. The closed shop of licensed dealers, no competition in a area and no direct sales sounds ridiculous in a capitalist country.


On the other hand when the last British volume car maker (Rover) closed, government depts were queuing up to buy the cars from the receivers as company/fleet cars. the models hadn't changed in years (one of the reasons they closed) so there were lots of parts available and if you owned enough you could canabilise them for parts - especially if you paid 50% of the sticker price.

 

[chemisttree]

Leno thinks http://www.youtube.com/watch?v=u1U90yqgIN8&feature=player_embedded"

 

[Wellesley]

It sounds like a reasonable attempt to stop a complete halt to buying maker X if consumers think they are going to go bust.
Although your sale contract is presumably with the dealer - are the government going to underwrite dealers? The dealer network is one thing that could really do with fixing. The closed shop of licensed dealers, no competition in a area and no direct sales sounds ridiculous in a capitalist country.


On the other hand when the last British volume car maker (Rover) closed, government depts were queuing up to buy the cars from the receivers as company/fleet cars. the models hadn't changed in years (one of the reasons they closed) so there were lots of parts available and if you owned enough you could canabilise them for parts - especially if you paid 50% of the sticker price.

Ah, but if the government underwrites the dealers, will the process of buying cars still be Capitalistic, or will citizens be dealing with just branches of the government?

Leno thinks http://www.youtube.com/watch?v=u1U90yqgIN8&feature=player_embedded"

Nice! I haven't seen that one before.

 

[LowlyPion]

 

[projektMayhem]

Though I understand why he did this, I can't help but think it won't work. People haven't been buying GM/Chrysler cars for a while - hence why they got into dire straits in the first place. The government backing the warranty isn't going to change the fact that people don't want to buy the vehicles.

 

[mgb_phys]

People haven't been buying GM/Chrysler cars for a while - ...isn't going to change the fact that people don't want to buy the vehicles.

Has anyone considered introducing gasoline rationing?
You have to buy a minimum amount and any you don't use you have to pay to dispose of. So people driving small economical foreign cars will be forced to either drive constantly or go out and buy SUVs. As an extra bonus Prius drivers will be bankrupted.

 

[Phrak]

Has anyone considered introducing gasoline rationing?
You have to buy a minimum amount and any you don't use you have to pay to dispose of. So people driving small economical foreign cars will be forced to either drive constantly or go out and buy SUVs. As an extra bonus Prius drivers will be bankrupted.

Now you're talking. And butter stamps. There are people not eating their fair share of butter.

 

[Dr.D]

All new car warranties are going to include the phrase, "Good enough for government work."