Would You Buy General Motors?

Our government has shoveled billions of dollars into large corporations that have been deemed “too large to fail”. Among them are AIG insurance and General Motors. Both of these companies suffered from poor management decisions and both have gotten billions of taxpayer’s dollars and are asking for more billions to help insure their survival at a time when average Americans are asking where it will end. It seems that neither of these “giants” learned anything from the financial meltdown and economic disaster. The problems that caused the failures didn’t happen overnight and I suspect that the corporate management had their collective heads buried in the sand or were just hoping that the problems if ignored would go away. You can’t be at CEO level without knowing your company is losing money.

But, the question is; why buy General Motors? A question asked during a casual conversation, but one worth considering. Why would anyone buy General Motors? Their own auditors recently reported that it was unlikely that General Motors could continue as an entity. The company is wracked by debt, contracts and commitments won by the union over many years. The pension plan for GM workers is so generous that a large part of every car sold has to go to the retirement plan. General Motors is facing and will probably go into bankruptcy.

Poor quality, too many models, too many combinations available to the customer and too much competition from foreign manufacturers contributed to the problems at all three American auto makers. Some of us are old enough to remember when there were less of all these things. A long time ago (this sounds like a lead in to a George Lucas film) there were basically two models to choose from. You could count on this year’s deluxe model being next year’s standard model. Every two years, the auto manufacturers would retool and bring out new models.

Go back in history or to an antique car show and look at the models available half a century ago. For instance, the 1949 and 1950 models shared the same basic body design with different tail light and grill treatments. The same thing is apparent with the ’51 and ’52 model years. The first year that this pattern didn’t repeat was in 1957. Think about the ’57 Chevy, Ford and Chrysler models. All were different from the preceding years and would be different from 1958 models when all three manufacturers started making larger “boat-like” cars. Remember, back in the 70′s when we could count on the paint peeling off the cars in three years. Sometimes a new car would seem to spend more time in the dealer’s service shop than our driveway.

In recent years, quality and dependability from our big three manufacturers has improved, but there are too many models, and too many different combinations of the same vehicle. It might be a good idea to adopt a business model used by a more successful competitor or at least scale back to a sustainable level. The management style at the big (?) three doesn’t appear to be changing.

Is GM too big to fail? In this economic mess, someone’s got to fail and declare bankruptcy. GM is the most likely candidate. Bankruptcy is not necessarily a bad thing. It would give them some breathing room from creditors, and may allow a restructuring of the contracts with the unions while the company is restructured in a manner that might allow it to make quality cars and trucks in a manner that is competitive with foreign manufacturers. GM could be broken up into smaller, autonomous business units.

A bankruptcy might have a ripple effect on a lot of suppliers and vendors, but if GM is not selling vehicles, there is going to be some down stream suffering but General Motors is not the only customer for most auto suppliers and other auto makers will have to pick up the slack in the short term.

Back to the original question, why buy GM. I don’t believe that GM will go away. It might get broken up and some divisions might be sold off, but I believe that GM will still be here. However, the opportunity for shareholders to get anything will be remote. Everyone will loose something, but the stock is almost worthless now. The uncertain future of General Motors as it is today makes it a poor investment choice. But then, I’m not a financial advisor. I could be way off on my assessment of the situation with General Motors and Chrysler. The vast amount of taxpayer money used to bailout companies that are still paying bonuses of more than I’ll earn in a lifetime might also make me less than sympathetic.

If you are interested in investing in one of the auto makers, get the best advice you can and be prepared to stay in the market for a long time. When the economy recovers, any investment in companies that have received bailout money should have a good return as consumer confidence increases and time dulls the anger over the causes of the recession and the bailout of these large companies.

As I stated earlier, I’m not a financial planner, but I know what I like and it might be possible to parlay a small investment into a larger investment with enough luck and patience.

Twelve Car Insurance Money Saving Tips For Much Cheaper Premiums

It can be quite a daunting experience trying to purchase car insurance, and with the myriad of products and sales channels available today, it is often difficult to know where to start the process. It can be even more complicated when you start to look to reduce your premiums without sacrificing either your levels of cover or increasing your risk.

As most motor insurance is basically rated by your birth date and age, and your postcode or zip code, short of moving property or growing older, it often appears that reducing your vehicle insurance premiums is an impossible task.

This is not necessarily so! Whichever method or distribution outlet you use to purchase car insurance, if you consider these twelve money saving tips, implementation of any one will virtually guarantee a reduction to your premiums at both onset of a policy or at renewal. By simply making changes to any one of these premium rating factors that go to make up the quotes you are given, will result in an alternative quote which should be to your favour.

The money saving tips explained

Before we start remember – Don’t automatically renew your policy with the same company. It is virtually guaranteed that you could get like for like cover cheaper with another insurance company if you shop around and compare covers and prices from different providers.

1. Investigate on the Internet – Visit different suppliers

If you were getting paid at least £150 or $200 for two hours work, you should be pleased. That is the minimum you should look to save on your annual premiums by spending a couple of hours shopping around for quotes on the Internet.

Visit a car insurance supermarket comparison site. If the premiums are too expensive but you like the cover offered by a particular insurance company then, visit the supplier direct and cut out the expense of the middleman.

The large motor insurance comparison sites you see advertised all the time on television will send you off to the suppliers site themselves to complete ‘the deal’, so its best to close down the application, clear the cookies from your browsers memory to ensure that you are not charged their commission inclusive rates, and visit the insurance company direct.

Additionally you should visit a specialist auto insurance scheme provider. These were once only available on the High Street but are now springing up everywhere online. No matter what your particular individual needs, be it lady driver cover or perhaps classic car cover, specialist car insurance providers by their very nature usually offer cheaper quotes as they benefit from the economies of scale allowed by group buying of cover.

2. Do your research

Who is offering deals on television at the moment? Everybody who seeks motor insurance is an individual with a different car and individual cover needs dependent upon their circumstances. Write down what you think your exact cover needs are and think about where you might find providers for your individual needs. For example, if are you a senior citizen, you should search on the Internet for specialist car insurance schemes for over fifties.

3. Go for a no frills policy

If you are not worried about quality of cover and only require basic road risks, go for one of the many policies now being offered by insurance supermarkets as ‘value car insurance’. These policies usually only offer the very basics of cover required under the Road Traffic Act, however may be very suitable for low mileage, cheap cars and younger drivers.

4. Only get cover for what you need

Why pay for car breakdown insurance or other sometimes hidden extras such as the cost of including a replacement vehicle should you have an accident, when you already have AA breakdown cover and another car sitting on the driveway at home that you could use. Check your existing policy cover details carefully and exclude all unnecessary or duplicate covers.

5. Take on the risk yourself

With Car Insurance you have two basic options for taking more of the risk on yourself. These being, one by choosing how much cover you require in the first place, that is, either comprehensive or third party, perhaps with the fire and theft options included. Secondly you are given the option on most systems to choose how much of the cost of damages of an accident you are prepared to take on board yourself, before you call on the insurance company to make a claim. This is known as the voluntary excess and is the amount that will always be deducted first from any amount you claim. If the cost of repairs of an accident are not much more than the voluntary excess amount you have chosen then it would be prudent to pay for the repair costs yourself, rather than lose your no claims bonus.

6. Reduce the cars risk with improved car and location security

If you park your car off road or garage it at night you will receive further discounts. If you own a classic car which does not have them fitted as standard, fitting security devices, for example car alarms, immobilizers and GPS trackers to your car will substantially reduce your premium

7. Improve your driving or change your lifestyle

If you need to make a claim because of the way you drive, or if you have more than one SP30 for speeding, your premiums are going to be heavily loaded at renewal. You can reduce your insurance costs therefore by improving the way you use your car or changing your lifestyle.

8. Cut down on your Car’s Usage

By thinking about how you use your car and reducing unnecessary journeys you will be cutting down on your cars usage and by implication the risk you present to an underwriter. Check how many miles you run up each year and make sure that this is what you are paying for! Do not make a false mileage declaration in an attempt to save money because in the event of a claim, your mileage and MOT if applicable will be noted by a claims assessor. If there is significant difference between the declared mileage and the actual amount you have driven, you risk having the claim refused or seriously reduced in value.

9. Pay the full premium amount upfront

Most UK insurance companies charge additional costs for handling monthly direct debit payments. There is often a five to ten percent effective discount if you pay immediately online or over the phone by debit card.

10. Investigate Specialist insurance and Car Insurance Schemes

Investigate insurance specialists that target specific groups of people of car type, for example performance motor insurance or cover for young drivers. These schemes offer with unique policy options and cover modified for the particular specialist driver group. They are often far cheaper than standardised covers offered by comparison sites as they have group bulk buying economies of scale regarding underwriting and claims and a known risk pool of similar types of people and car.

11. Join a Car club

Many car owners clubs and specialist marques clubs have special affinity group rates for specialist car insurance schemes. The cost of getting membership of these clubs can often be less than the five to ten percent savings you can make on your premiums by joining such a scheme.

12. Take an Advanced Driving Course

You can save a further large percentage with most online insurance companies if you have taken an advanced driving skills course or ADC. The courses are run nationally and the cost of the course is outweighed by the annual savings you will make on your insurance premiums. The savings are greater for young drivers and this is one of the few positive actions that a young driver can make to reduce his or her annual vehicle insurance costs.

And Finally – Haggle!

And here’s an extra tip which we often find works when all else fails. Complete a quote on the Internet for the policy you desire with the company you like. Do not complete the quote beyond the screen where the premium prices are displayed, merely save the quote reference number. Quotes are usually legally binding for thirty days.

Leave it a while then pick up the phone and call the insurance company. Tell them that you’ve had problems completing the quote online. They will ask you the quote reference number and then have all you details in front of them. When they tell you the quote amount (which you should know already), tell them that you’ve got a quote that is, say a hundred cheaper at so and so company, and ask if that’s the best they can do. Just by haggling you will be surprised just how much you could save on your car insurance costs!