Long term Brian buys a car

2012-Toyota-Prius-v3I drive a lot for work. And by a lot, I generally mean around 40,000 miles per year.  I’m in sales, and my territory is Southern New England, so its my job to be where the customers are on a regular basis.

Thankfully, I get a decent amount of reimbursement from my company for all my mileage.  We get a fixed amount per month, and then a variable amount based on factors like local gas prices.  Thus, since I’m reimbursed a semi-variable amount per month, I have a direct financial interest in keeping my car costs as low as I possibly can (then again, don’t we all?).  In fact, by simply driving 2 used, cash purchased, fuel efficient cars, our reimbursement will pay for both of my families cars, insurance, gas, maintenance….everything….and we still come out a few hundred dollars ahead each month.  (How’s that for awesome?)

My last car was fantastic.  It was a 2004 Toyota Carolla, which I purchased used in 2007 for $14,000.  At the time, the car only had 15,000 miles on it and was in great shape.  My Carolla got great mileage for a non-hybrid.  I could regularly get between 33-38 MPG depending on the time of year (cars are more efficient in the summer time).  Fast forward to 2014, and it turns out the odometer on the car maxed out at 299,999.

When I bought my car, I had no kids.   Now I have 2, with number 3 coming in a few short months.  Thus, I needed to get more of a family car, but I really wanted a hybrid.  Hence, we ended up purchasing a used (of course) 2012 Prius V.  The car is in good shape, and only had 62,000 miles on it, and the backseat it big enough for 3 car seats (did I mention I now get 45+ MPG?).  Many thanks to its previous owner who has taken the bulk of its depreciation in the first 2 years of its life (about $13,000 worth in 2 year…..yikes)

Now, the fact that I bought a car isn’t all that interesting.  However, the sales process was quite funny.  It went something like this:

Long Term Brian: “I’m interested in the car.  I’ve got a trade in and I can pay $15,000 in cash.  Do we have a deal?”

Dealer: “Why would you want to pay cash?  Don’t you want to finance it so you can build your credit?”

Yup, thats right.  I offered cash, the wanted me to finance.  They were trying to help me ‘build my credit’.  Ummm…no thanks.

LTB:  “No, my credit is great.  I’m interested in the lowest price possible to trade up.  Don’t you want my cash?”

Dealer: “You need to think about your future.  Hang on to your money, lets do the finance.”

You can’t make this stuff up.  I’m trying to make it easy, he’s trying to make it complicated.  I knew something was up, so I sniffed further.

LTB: “I was assuming this would be an easy negotiation as I have cash.  Is there a reason you want me to finance?”

Dealer:  “Well….we get a $250 fee for every referral we send out to a lender.”

Aaaaaaaaaand there you have it.  They get paid more when you get put into debt.  That the society we live in.

I ended up financing the car.  Why the hell would I do that?  I ended up getting a lower total purchase price on the car because the dealer wanted me to finance so badly.

If your snickering to yourself at my tactics, I completely understand.  I hate debt, and would never go into debt to purchase a car.  The loan will be paid off in full before the first payment is due.

So, today in the mail I get 2 ‘payment books’ from the lender to make it easy to send them money.  Its got the amounts and the address and everything built into the check.  I immediately had two thoughts when I saw this:securedownload

1) Do people really actually still write checks and drop them in the mail?  Isn’t it 100X easier (and cheaper) to just automatically link it to your checking account?

2) Holy crap thats a lot of payments!  It would take like $40 in stamps to just mail them all!

The whole experience was kind of funny in retrospect. It was a great reinforcing lesson to why I’m doing the right thing by keeping a chunk of money in cash when its time to make a major purchase.    Monthly payments of all kinds are like vampires on your income.  You need to find them and kill them.

Your future self with thank you.


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