Wednesday, July 30, 2008

The crap is hitting the fan fast and quietly

Jim,

I just received a phone call from a buddy of mine who drives a 2007 Z06 Corvette. I drive a 2007 Z51 Corvette and the difference is simply that I own mine, having paid cash. He paid around $75K for his with a current $55K outstanding loan on it which is costing him $1100 per month as he claims. He wants out now since business is slowing at his landscaping company and he feels that trading it towards a new pickup truck/plow truck will at least allow the debt to be reduced by the work from the truck (assuming he has any customers who are able to pay for his services down the road).

He told me that the dealer which we both go to, which is a fairly new dealer within the past 6 years with a very nice showroom and state of the art service center cannot do any deals with him at this point. The dealer is being taken over by GM along with 150 other regional dealers, three of which are the only other Chevy dealers in this area. This is very quiet but he knows the owner who spilled the beans to him. He was told that if we want any warrantee work done, get it done within a few weeks or there may not be a dealer in the area who can handle any future warrantee issues! In fact several other Ford dealers, VW dealers and Mitsubishi dealers are also going out. This dealer of ours owns a Mitsubishi dealership too and he said that Mitsubishi is falling apart at the seams. He also advised my buddy to sell his Z06 Vette for whatever he can get for it and NOW; the prices of Vettes are dropping by $2-3K per month on trade in value. He said to take what he can to pay off his loan and just eat it since he feels that the car might be worth $15 to $20K less in a few months!

Is this the depressed ranting of a man losing all, or is this reality? If it is reality, then today's massive stock market jump on the Merrill/oil news is just lunacy. The crap is hitting the fan fast and quietly.

CIGA Bruce

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