Decorah public opinion. (Decorah, Winneshiek County [Iowa]) 1895-1928, 1916-04-26
BUICK co. OPPOSE CREDIT SALES
PLAN.
General Sales Manager Asserts no
Greater Calamity Could Over
take Automobile Business,


There is a serious menace to the
whole automobile industry and
grave danger to the automobile deal
er in too great & spread of the in
stallment plan feature in buying mo-
tor cars. l can see no necessity for
such selling plan in these times of
prosperous business, and feel that
the introduction and encouragement
of the scheme is perhaps due to over
anxiety on the part of certain manu-
facturers to market their this years
output.
1t is my opinion that no greater
calamity can ultimately overtake the
automobile business, including the
manufacturer, the dealer and the in
dividual buyer than for the leading
factories to adopt deferred pay
ment sales plan, and / cannot be-
lieve that the leading manufacturers
are really giving serious considera-
ton to such plan.
The installment plan of buying is
fundamently wrong, regardless of the
article involved. This is especially
true as applied to automobiles. The
automobile business was started on
a cash basis. 1t is the only big bust
ness that has ever been operated on
a cash principle, and in my judgment
the cash basis is one of the biggest
reasons why the automobile indus
TRY has grown so wonderfully fast
Cash sales have made possible the
rapid building up OF big reserves of
Icapital. Plenty of liquid capital has
made possible rapid expansion, i'm
Iprovements in manufacturing meth
Iods, and quantity production. Guam
Itity production has made it possible
for motor car makers 10 market
constantly improved product at con-
Istantly lowering price.
The automobile is one OF the few
things in everyday use which has not
advanced rapidly in price in the last
few years. And all these favorable
conditions connected with the mar
keting of automobiles can be traced
in very large measure, to the fact
that automobiles have been sold for
cash.
And now all this is threatened By
1.-THE introduction of the installment
Iplan of buying. The present scram-
BILE On the part of these hastily or
IganiZed trust companies" and GER
tain manufacturers to force automo-
Ibiles into the hands of everybody who
has few dollars-regardless of the
fact that the time part of the con-
tract is likely to work a severe hard
ship upon the purchaser and his fam
lily-is the worst thing that has hap
Ipened in my entire business expert
ence. If persisted in / believe many
purchasers will impose an obligation
upon themselves which they will find
hard to meet.
l am well aware that automobiles
are now and have been for some years
sold on time under certain restricted
conditions. In many cases / believe
such transactions come within well
} accepted terms of sound business
. practice, especially where a dealer
sells an automobile to a worthy Gus
toner, and where arrangements can
be made to finance the loan at home.
In such cases there is no risk for the
dealer, and the purchasers inter
ests are cared for and guarded in a
manner that is entirely different than
is the case when the paper is sold to
} and held by an outside trust COM
, pany."
But in this connection | desire 70
say just as emphatically as / can
that If man cannot afford to own an
automobile he ought not to nave one
until he can afford it. | mean that
absolutely Just because man has a
few dollars saved it would lie unwise
in my opinion, for him to put up all
: his savings as part payment for car.
; Because he can make the initial de-
post is no assurance that he can,
-, without working a hardship upon
| himself and perhaps his family, get
e enough money together to meet notes
I for $500 or $1,000 more-nOtes which
for anything else but an automobile
would look enormous to him.
: Such sales are a detriment to the
= manu- iactuIer, the dealer, and tha
4 purchaser. They are a detriment to
the manufacturer because they in
troduce artificial element into an in.
! dustry that is basically sound and
y healthy. They injure the dealer be-
o cause they are strong possibilities
. that cars thus sold will come back
: to him as second hand machines
y thus forcing him to make other sales
It in order to get his money. The eff.
y feet of this kind of business on the
q dealer is serious, and / do not believe
those dealers who have gone into il
} or who are thinking about going in
o to it, realize the grave dangers ahead
Dealers should remember that whe,
these outside companies take over
these notes, such notes carry the
!" dealers endorsements. This create!
serious situation for the dealer, be
4 cause it means that the more bushes!
20 of this kind the dealer does, the deep
= er he is in debt. Moreover, the deal
a er's home credit may be affected
)t Having his endorsement on a larg,
amount of outside paper. held b!
-, these outside concerns, is certain t
% lessen his ability to obtain Legitimate
er credit at his local banks. And fin
lie ally, this sort of business is a detri
ID ment to the purchaser of a motor ca