A low slung car … sleek …. speeding down an empty highway .. young attractive women. This is what sells cars and their massive price tags. The chemicals in our brain. The unconscious linking of imagery to strong emotions.
Advertisements are designed to encourage us not only to buy but to seek our identity and fulfillment through what we buy. It makes us believe that we can express our individuality through the things we own. It promises that these “things” can substitute for the connection and fulfillment that we long for and need.
No matter what the ad promises, possessions cannot deliver the emotional impact that we see depicted. The sheer act of owning a Mercedes Benz or a Bentley will not magically make someone wealthy or financial secure if they were not already. Things can give temporary enjoyment but it can’t deliver the exact emotional needs that we are all looking for. No matter how much we love them, they will never love us back.
Even if we’re aware about how an ad works on us, its influence is cumulative, often subtle and primarily unconscious. Our unconscious mind is processing the messages and will influence our decisions without our awareness.
A car is an ultimate American symbol of success but for me it has been a love affair. I can still remember drawing pictures of antique cars in elementary school while other girls were focusing on clothes. Despite my love for cars, the act of buying a car falls into two different categories in my mind: 1) A piece of equipment that can provide enjoyment or 2) a very expensive hobby. I’m aware of the influence that car ads have on me and have to stay vigilant to protect myself from the risk of spending too much.
1937 Horch Sports Cabriolet
Cars are beautiful and sexy as anyone who have attended concept car shows or the Concours D’Elegance at Pebble Beach, CA can attest. You can easily lose your heart, wallet and a chunk of your retirement savings to a car. It’s very hard to think clearly when you walk on to a car lot. Car companies spend millions of dollars to make us visualize their products as gorgeous.
To keep a car purchase from becoming a destructive force on your savings, do your planning before you buy a car. Here are some steps to help with keeping only the right emotions.
- What is your dream car? Write it down. List out why it’s your dream car. Do it in details. The more details the better. This process will help you figure out what YOUR preference really is versus what you were sold by commercials and by other people’s expectations.
For example, my dream cars were a Jaguar and a Ford Mustang convertible. I knew exactly which Jaguar convertible I wanted and for day to day usage, it was completely unrealistic. What I liked about the Jaguar were the lines and designs. It had to do with the actual art of the car and not the “prestige” of Jaguar. I actually don’t care for the new Jaguars. The car is an older model and requires extremely high maintenance. I would need to store spare parts galore to keep it running. That left me with the Ford Mustang. I’ve wanted one since high school. When I listed out all the details about what I wanted from the Mustang, it was came down to speed, convertible, and nostalgia. It was a decision influenced by ads.
- How are you going to use this piece of equipment? Is it for commuting? General driving within the city? Do you drive a lot of children? Do you take weekend road trips? Are you going to do a lot of long distance driving? Do you go off road? Do you transport furniture? How much trunk space do you need? Be very clear with how you plan to use the car so that you can figure out what you need to make it fun and comfortable.
- How much can you afford? Determine exactly how much you can afford to pay either in cash or in the lowest monthly payment that makes sense with your income. Remember that the car will be worth about 20% less the second you drive it away from the dealership. Think of it as a walker, wheelchair or a wrench. It is simply a piece of equipment. Set a budget of how much you’re willing to spend.
- What do you want from the car? Is it speed? Do you just want a convertible so you can enjoy the great weather? Do you want comfortable seats? Do you want solid build for safety? This is where you get to use #1 and figure out what you want to retain for pleasure.
- Research multiple cars on the internet. Use what your list and enjoy researching the internet for the car that you really want for the right reasons. Have a good time. Make it a fun journey. Pin down a list of the cars that meet the criteria you have.
- Test driving. Here’s the super fun part. Set aside time (several weekends) to try out all the cars on your list as well as the cars that you always dreamed about. You would be surprised to find out that all these “dream” cars such as a Ferrari or a Lamborghini are not all they’re cracked up to be. I found that I don’t like how either drive. The speed is not that useful when you’re living in a suburb. Bentleys drive well but frankly I’d still rather spend the money on restoring an old Jaguar.
When I researched for my current car, I went had a great time going through the process above. I decided on a Ford Mustang convertible. It was the first thing that I test drove. That was the most disappointing experience with a car that I ever had. The reality did not match the fantasy at all. The car felt cheap. The drive was uncomfortable. It was a bad experience from the second that I closed the door and felt like I was going to shatter the entire car. The decision not to buy was immediate but I suffered through the test drive just to make sure.
With the Mustang out of the running, I would have been at a loss without my “wanted” checklist. I had determined that I wanted a convertible. Since I just knew the features that I wanted such as good looks (yes, I am shallow), a full size backseat (for my 75 lbs dog) and a large trunk (for weekend trip luggage), we spent the next two months test driving every single convertible on the market. Because our needs were so clearly identified, we found only one car that had everything we wanted, a Chrysler Sebring.
During our shopping process and after we decided on the Chrysler, we had to fight expectations and pressures from friends, clients and car salesmen nonstop. It was amazing how many people had strong opinions about what we should buy. Just because I work in finance, I was pressured to buy an expensive car. One friend even told me that I would not be taken seriously unless I drove a Mercedes Benz. Her own husband had pressured her to spend $55,000 in loans to buy a used Mercedes Benz. She now was passing the peer pressure along to me.
This is where my checklist comes in handy again. I didn’t care what other people thought about my car. What was important to me is already written down on the list. It kept me focused.
Bugatti
Our budget was $25,000 but the new Chrysler was $32,000 for a low end model. We decided to look at a used one year car but they were all about $29,000-30,000 and had about 30,000 miles on them. People loved driving this convertible.
Because we took about six months to shop for the car, we had plenty of time to research and to plan for the most optimum time.
With a bit of due diligence and after contacting multiple dealers, we lucked into a deal of $22,000 including tax for a brand new top of the line Chrysler convertible with all the bells and whistles.
At the end of the day, we had a car that provided everything we wanted at the price that we can afford. My Samoyed and I had a blast for years in that car. I never missed the privilege of paying an additional $45,000 for a car that I didn’t want.
What is your relationship with your car? Is it a true relationship that you chose or was it something that was chosen for you. Another friend of mine bought a Mercedez Benz convertible. She rarely ever used it because it was so inconvenient. They can’t take it grocery shopping because the trunk is too small and they don’t want to risk food spilling in the car. They can’t take it for weekend trips because there’s not enough room for luggage. They can’t take friends because the back seat is too small to be comfortable. They were fighting over who can use their old car because it works for their needs. This MBZ is a six figure piece of equipment that sits in their garage unused. In fact, they are now selling it at a loss after two years of non enjoyment because they are having a baby and they need to have the second car be useful.
A car is a necessary piece of equipment for some parts of the country. In California, it’s very difficult to get around without a car. You can do it but the trade off is a lot of time waiting at bus stops. It is something that we take for granted in buying. Car dealerships provide attractive deals to draw you in and get you to buy more than you need. Many people buy cars that they don’t really like and for a much higher price just because of zero percent financing.
Don’t get me wrong, if you can afford to spend $100,000 cash on a car, then go for it. A local Orange County business owner loved Jaguars so much that he bought a warehouse twice the size he needed. He ran his manufacturing business on one side and the other half was used to store antique Jaguars and the parts to restore them. In fact, he had two full time mechanics working for him. This indulgence gave him and his friends great joys for many years.
Set your personal limits when it comes to cars. You will buy many cars during your long life. If you can control how much you spend per car, the savings can be in the hundreds of thousands of dollars. If you buy a car for $25,000 instead of $50,000, that’s $25,000 that can be invested for the rest of your life. In fact, the longer you stretch out a car usage, the more you have for your retirement. I typically divide the total cost of a car by the number of years that I plan to use it. It takes the emotions away when I am deciding, is it worth it to me to pay $5,000 this year to use this piece of metal or am I willing to pay $20,000 a year just to sit in the car.
© 2010 MoneyandRisk.com all rights reserved
