Should American taxpayers bail out the automobile industry? Automakers headquartered in the U.S. have failed to make products consumers wanted to buy, whether due to a lack of quality, lack of targeting, or a lack of convincing marketing. Democrats in the Congress want to extend $25 billion of the $700 billion bailout bill to reach the “Big Three” automakers (General Motors, Chrysler, and Ford) while the current administration believes the $25 billion should come from a different program.

I receive several emails from public relation firms every day but generally ignore them unless they’re absolutely relevant. Today, I received an email from GM’s public relations firm to explain what would happen if GM were allowed to fail. The email also pointed to a website produced by GM to dispell myths about the company.

I have no doubt that allowing these three huge companies to fail could do more damage to our already suffering economy. If the government decides to extend $25 billion to the auto industry, I hope it is tied to results that show the companies are listening to consumers rather than the oil industry. The Big Three need to shed their reputation, deserved or not, of producing gas-guzzling, unreliable, and unsafe vehicles in comparison to some “foreign” automakers.

Do these companies deserve a $25 billion bailout?

Photo credit: brianc

When I graduated college almost ten years ago and was moving out of the dorms on campus, my father picked me up in his graduation gift to me, a “new” (to me) 1988 Toyota Celica. From this point on, it was my responsibility to care for and maintain the car, but I didn’t really know what that entails.

I found out several months later while I was driving on Interstate 95 in Delaware. Without much warning—or without any warning that I recognized at the time—I heard a loud bang! from under the hood and the car no longer accelerated as I depressed the pedal. I pulled over to the side of the road to keep my broken-down Celica out of the way of traffic and walked to the nearest motorist assistance phone on the highway. This was a few years before I would own a cellular phone, so I had no choice but to risk myself with a leisurely walk alongside the breakdown lane of a major highway.

Well, apparently, cars require not only an oil change once in a while, but the occasional addition of oil to keep the engine lubricated. This knowledge is familiar to most people, I think, but perhaps not to a kid who is taking care of his own car for the first time. From this point on, I don’t know how many people reminded me that you should Check Your Oil Whenever You Get Gasoline and Have Your Oil Changed After Driving 3,000 Miles.

So that’s what I did. I discovered a few things after having the motor replaced in the Celica. First, the rebuilt engine that was installed burned through oil very quickly. I had to add more oil every few weeks just to keep the dip stick reading at “full” and the frequency of oil changes was about once a month.

I had the Celica for at most two years. When I needed a more reliable car in late 1999 or early 2000, I traded it in for a lightly-used 1997 Honda Civic and the accompanying monthly car payment. With this car, I did not need to add new oil so frequently. I also noticed that it took a longer time before the oil blackened so I figured this car might be able to last more than 3,000 miles without changing the oil. The Civic operated fine when waiting 5,000 to 8,000 miles between oil changes.

A number of circumstances led to the need for a car disappearing, and I gave the Civic to a friend of the family for her son’s use while in high school. Eventually, I received the car back but it wasn’t as reliable as it had once been. It wasn’t long before I sold the car and purchased a new 2004 Honda Civic. This car’s oil held up even better. According to the owner’s manual, the oil in the 2004 Honda Civic should be changed every 10,000 miles or one year, whichever comes first. Even four years and almost 90,000 miles later, the oil does not seem to ever get dirty, so I find myself stretching even that to 15,000 miles while still feeling comfortable that I won’t be damaging the car. The other part of my reasoning is to save money on maintenance costs, but I don’t want to find myself penny wise, pound foolish and spending more money to fix major damage.

Maybe the 3,000 mile guideline is only appropriate for older cars, but I’ve talked to many people with newer cars who agree that this is mostly a myth perpetuated by the industry.

According to Honda Owner Link, a personalized record-keeping and maintenance website available to Honda owners, this is better advice for oil changes:

There is absolutely no benefit in changing your oil more frequently than recommended in your owner’s manual. This will only increase your cost of ownership, and create an unnecessary burden upon the environment by increasing the amount of disposed oil.

Do not exceed the recommended maintenance interval. Oil eventually deteriorates and loses its ability to protect your engine, due to heat, friction, and exposure to exhaust components. Engine oil contains special additives to enhance the oil’s performance, and these additives are also broken down or consumed with distance and time. Engine damage can occur if the proper maintenance schedule is not followed.

The 2004 Honda Civic Owner’s Manual explicitly instructs owners to have the car’s engine oil changed every 10,000 miles, and I should force myself to stay on this schedule, particularly as I approach 100,000 miles.

If you own a car, how often do you change your oil?

I recently explained my history of having no money and as promised, will now come clean with the mistakes I’m still making:

I’m driving the wrong car

I’ve never owned a car long enough to get it inspected. The first Jeep Cherokee was a lease, and I foolishly let them talk me into not converting the lease into a purchase. Then I couldn’t afford the new Jeep Cherokee, so I took it back and they gave me a Dodge Neon with a loan amount equal to the price of the Neon plus about $6,000. Then I crashed the Neon. That was actually okay, but only because I had Gap Insurance. Always get Gap Insurance, friends. It literally saved me from being homeless.

Years later I got a Scion xB. That thing was delicious, but I grew ever more jealous of my wife’s Prius, so I traded up and got one of my own. Sometimes I wish I hadn’t done that, because I now have a $595 monthly car payment. I know it doesn’t equal out, but it sure feels good to fill the tank only once every two weeks. I’m taking care of the Prius the way I forgot to with the Scion, and I fully intend to drive it until it won’t drive anymore. I think it’s due for inspection sometime this summer.

I love shiny electronics, and they love me

Like most geeks, I have a rapport with computers that is difficult to establish with other humans, and I tend to hoard sources of entertainment. Gadgets are an expensive hobby. It never seems that way to read about them, because the journalists get them for free. I have to remind myself of that. As an Interaction Designer, I’m always looking for a more elegant solution, for more ways to automate my life, and I can rationalize any purchase by telling myself that exposure to these things will help me in my career.

That’s how I managed to “buy” an iPhone. But as you’ve guessed, I put it on a credit card. Nearly everything I own that is worth something was put on a credit card. But I’m committed to stopping that. As of this writing, I have just over $7,000 in credit card debt, which I expect to have paid off within the next 16 months.

So, I have to keep telling myself that I don’t literally need an Apple TV, or a 1 Terabyte external hard drive. When I force myself to think about it, there’s nothing in the entertainment compartment of my lifestyle that is actually broken. It’s just not perfectly elegant, and for right now, because other things are broken, that’ll have to do.

I don’t sell enough of my stuff

When I upgraded my iBook to a new MacBook last May (see previous problem with shiny electronics), only about $1,000 of the purchase went on a credit card, ‘cause I managed to sell the iBook on eBay for about $600. I’ve got a boatload of unused electronics that I could be selling, but it seems like such an effort to even bother writing descriptions for them. If you have any advice for doing this more easily, I’m happy to hear it.

The interest rates are too high

On both our cars and the house, our interest rates are higher than they could be. At the time, of course, it was the best we could do. I should mention at this point that my wife’s credit history is slightly worse than mine, and until we started making mortgage payments, my FICO score was on the positive end of “Fair”. Naturally, the FICO isn’t the only thing that creditors look at, but mine has increased roughly 70 points in the last year. One of these days, I should really look into refinancing at least one of the cars.

It’s somewhat painful to admit mistakes, especially when they’re ongoing and not likely to change anytime soon. But if you don’t acknowledge there’s a problem, the likelihood of it being fixed goes down to zero. So, it’s a start.