I first have to give a shout-out to my fellow blogger ‘adamelijah’ for his outstanding blogpost on Irresponsibility destroys freedom. It’s a good read, very enlightening.

I read several articles yesterday on the impending auto loan crisis and shook my head in disappointment over some of the examples the writers used of people who couldn’t pay their auto loan payments because of the soaring gas prices and other excuses.

Case 1:

Driving a sporty car was nice, but with high gas prices and inflation pinching at his pocketbook, Jorge Valdes decided last October to get rid of his white BMW 525i sedan when the $700-a-month lease payments became too much to bear.

Valdes turned to LeaseTrader.com, an online service that allows one car-lease owner to transfer it to another before it expires. He passed on the remaining 16 months of his 36-month lease to another driver, allowing him to lease a new, cheaper car and lower his monthly car payments.

“With gas and insurance I was paying over $1,000 a month to drive a vehicle and it didn’t make any sense,” said the 27-year-old firefighter who lives in Miami.

“The economy was one of my main reasons for getting rid of the lease,” he continued. “Gas prices are going through the roof and the economy isn’t getting any better; everyone hopes it will, but I don’t see it getting any better any time soon. There’s nothing out there that’s going to pick us up.”

Case 2:

For two years, Carole Beausoleil, 58, of Southbridge has been trying to get rid of a black pickup, a 2003 Chevy Silverado the family bought in 2004. Beausoleil says the family was pressured by the dealer into costly add-ons the members quickly regretted, such as LoJack and an extended warranty. These services added thousands to the $21,900 sticker price and pushed up the monthly car bill to $465.

Beausoleil fell behind on payments in 2006 and debated allowing the lender to repossess the car. She reconsidered because she didn’t want to ruin her credit and her husband needed the vehicle for work. Instead, they tried to downsize to a less expensive, more fuel-efficient model. But they have been unable to because they owe $13,000, and lenders told Beausoleil the truck’s value has shrunk to $10,000.

“We got swindled and overpriced. It was a mistake, and now it’s too late,” Beausoleil said.

Beausoleil, who is trying to pay off other debts, including overdue credit card, gas, and electric bills, says she plans to use the anticipated federal tax rebate this spring to help make up the $3,000 difference so the family can finally get rid of the truck.

Case 3:

When lenders sent a tow truck to repossess his silver 2001 Lincoln LS last month, Myles Chilcot eagerly handed over the keys.

Last year, Chilcot, 21, bought the $15,000 car - a sweet ride with tinted windows and custom chrome rims, and a loan with $370 monthly payments that he could not afford on his $12 hourly wage at Home Depot. By the fall, facing mounting credit-card debt, student loans, and rent, he stopped paying the car bills.

“I ran around smiling for 20 minutes when they took the car away,” Chilcot said. “It was a relief.”

…….Chilcot, who recently had his car repossessed, had initially intended to purchase an $8,000 Nissan Altima, but he couldn’t get a loan to cover the vehicle because it had too many miles. He knew he had bad credit, so when a loan offer was approved instead for the $15,000 Lincoln, Chilcot seized on what he thought was a good deal - even though it came with a 18-percent interest rate.

Since his car was taken away, Chilcot has started walking to work at his new job - as a car salesman at a dealership in Plymouth.

When asked whether he tries to caution people against buying a car they can’t afford based on his recent experience, Chilcot chuckled: “Not really. You become pretty shameless pretty quick when the paycheck comes.”

I sincerely feel sad for all the three individuals mentioned above. Facing repossession is a very difficult situation to be in because you will not only lose your car but also your credit will go in the tank, prohibiting you to take any other future loans and credit cards.

Starting with Case 1: A 27 year old firefighter rented a brand new BMW 525i sedan for a 36 months, $700 dollar per month deal. A 2007 BMW 525i Sedan is priced at $43,500, and I bet he thought that it was a better deal if he just leased this luxury car for three years paying a total of $25,200. Hey, $25,200 is much less than $43,500! Plus, after three years who wouldn’t get tired of their new car?

Unfortunately, the $25,200 would go to waste since he leased it. He wouldn’t get one penny back for it. Anyways, we know he wasn’t able to afford the high lease payment which got even worse when gas prices started rising. A BMW has poor gas mileage, which adds to the problem. Insurance would be high for anybody because it’s a lexury vehicle that is being leased.

However, this was his response: “The economy was one of my main reasons for getting rid of the lease,” he continued. “Gas prices are going through the roof and the economy isn’t getting any better…. There’s nothing out there that’s going to pick us up.” Blame gas prices, blame the economy, and heck, even blame the government (Pres. Bush) for not “picking him up.” Blame anybody but himself. I think this example speaks for itself.

Case 2: A much more reasonable example, sounds like a normal American story. A family goes to buy a Chevy Silverado, and the dealer being a good seller and capitalist, convinces them to add expensive amenities to their brand new car. After all, you’re getting a loan and it’s not like you have to pay the entire amount right now. Just small monthly payments which increased to $465 per month after the additions. I personally do not believe that the extra items contributed a lot to the monthly payments. I bet they didn’t have good credit to begin with, hence getting this high monthly payment.

However, this was their response: “We got swindled and overpriced. It was a mistake, and now it’s too late“. Come on, isn’t swindled a strong word? Blame the dealer, anybody but yourself.

Case 3: This is a story of a 21 year old guy who jumped the gun. He found a $8000 Nissan Altima he liked but couldn’t get a loan for it. So instead he jumped to a car he could get a loan for but couldn’t afford: a $15,000 Lincoln LS with monthly payments of $370 at an 18 percent interest rate. The rest is history.

His response was interesting though: When asked whether he tries to caution people against buying a car they can’t afford based on his recent experience, Chilcot chuckled: “Not really. You become pretty shameless pretty quick when the paycheck comes.”

Only if he had looked at his paycheck before he bought the car…