The Bridgeport evening farmer., 1916-12-16
.PERFECTINC new
Time PAYMENT /
MOTOR SYSTEMS
Four Hundred Million Au
tos Sold Last Year on
Credit Basis.

Perfection of a sound credit system
IN the automobile business is the lat
est important development in the in
dustry. It means that the maximum
purchasing power of the American
people has been increased from L.,
10000 cars a year to some 100000
and probably more.
An official of Guaranty Securities
Corporation, the largest banking in
stitution in the world specializing in
automobile .time-payments has just
given some interesting facts about the
status of credit in the trade.
"Four hundred million dollars
worth Of motor vehicles were sold on
credit last year." he said. This
seems like a large volume of time
compared with future possibilities
For as the automobile takes on more
nearly a merchandise character, it is
naturally subject to the same condi-
tons Of sale as any other merchan-
dise-either for cash or for credit.
:. When the production of automo-
biles was limited to few thousand a
year, the excess demand was far
greater than the supply. With three
purchasers for every car, it was but
logical that those who carried the
cash In their hands, should secure
the cars. Formerly people bought
automobiles chiefly for the distinc-
ton which came with ownership. To-
day, when you buy car, you buy it
for transportation. And you are JUS
titled in demanding some use of that
transportation while you pay for it
provided you are entitled to credit.
MOT So very long ago.. before the
credit situation had been properly
worked out and most people bought
for cash, hundreds of cars were sold
to persons who never should have
been allowed to buy them. The de-
sire for cars amounted in some quar-
tiers to a mania. People mortgaged
their homes, pawned their Jewels,
begged. borrowed and even. store IN
order to raise the cash with which
to buy cars. Dealers accepted this
cash without question. Many COM
munities suffered as a result Of this
reckless car buying.
I'm cases where sales were made
on credit, the arrangement was either
too slack, or too complicated. The
dealer is not a banker. He is not
supposed to be able to carry notes on
his capital. Even if his capital is
large, IL Is pOOI OuSluSSS LOT HIN TO
burden 1T with other peoples notes.
One of the peculiarities of the auto
mobile trade is the amount of money
dealer needs for financing even a
small business. To make money
nowadays on the slim margin of prof.
1t allowed him, he must keep his as
sets liquid, and devote his time to ac-
tual selling. Under the old hap
hazard times payment method tn e
dealer frequently became SO involv-
ed with collections and other finan-
cial complications that he was unable
to pay adequate attention to the pro-
ductive side of his job.
very often there arose cofnpeti-
ton among dealers in the matter of
credit terms For instance, suppose
you had wanted to buy a car on
time. You might have gone to a
dealer and been allowed four months
in which to pay. You could have
then gone to another dealer and been
offered the same time allowance. And
you could hav said, you'll have to
do better than that. I can get four
months from Blank And in order