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Posted by Keith in Washington on Thursday, February 19, 2009 at 13:05:33 :
In Reply to: Not necessarily... posted by Marty on Thursday, February 19, 2009 at 01:27:06 :
Marty:
All is fine in a strong economy. From the auto manufacturer point of view. They lost a lot of money on returned leased vehicles as they could not sell them. Yes they basically financed the cost that you did not see. They lost they lost the money that you did not.
The auto manufactures leveraged themselves to keep sales artifically high. No they have to pay. The auto companies do well, as I understand, on making money on the cars and trucks that they make. Where they got into trouble was on the leases, low cost financing and etc. They ended up spending too much money on leases and financing and lost the money they made on the vehicle sale. If they had just sold the vehicle and not leveraged themselves so badly they would not be in this mess.
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