The Random Comic Strip

The Random Comic Strip

Words to live by...

"How beautiful it is to do nothing, and to rest afterward."

[Spanish Proverb]

Ius luxuriae publice datum est

(The right to looseness has been officially given)

"Everyone carries a part of society on his shoulders," wrote Ludwig von Mises, "no one is relieved of his share of responsibility by others. And no one can find a safe way for himself if society is sweeping towards destruction. Therefore everyone, in his own interest, must thrust himself vigorously into the intellectual battle."

Apparently, the crossword puzzle that disappeared from the blog, came back.

Thursday, May 26, 2011

The power of a two letter word

As I sit here on the sofa I am watching an ad for a credit check company, a thought occurred to me. It had little to do with what they are selling but a lot to do with the scene portrayed. In the ad was a young man who appeared to be around 25 years of age. He is sitting at a desk at a car dealership talking with a salesman. Implied is that the young man has decided on the car he wants to buy and the price has been agreed upon. All that needs to be done is to apply for the loan needed to actually purchase the car.

That is what struck me about the ad. A loan is important today in car purchases. It has been for many years. I haven't had a car loan for quite some time now. I think the last one was for my 1986 Mitsubishi Mirage. The car outlived the loan by a little over 2 years. At that point, it tried to smash its way through the middle of a Buick LeSabre one drizzly night in Jacksonville, FL and failed. Miserably. I loved that car. And I believe, deep in its crankcase, it loved me too. I digress.

I have lost touch with the average American who must use a car loan to purchase a car. When I bought that Mirage, I was still paying on the loan for my previous vehicle; an `82 Datsun King Cab diesel pickup. The trade-in allowance paid off that loan and paid a part of the $11,000 price of the Mirage.

To get back to the ad... the young man appears nervous, anxious, about his ability to get the loan needed. I realized that something was wrong with this picture. The salesman has full control at this point, the buyer is at the mercy of the salesman and the car dealer. This is not something I ever want to return to. There is power in having enough money in the bank to pay for a new car. You can put the salesman entirely on the defensive. Everything and anything can be used as a "deal breaker." Color, accessories, options, can be demanded. The sale is never out of the buyer's control.

There is no reason why one ever has to lose that upper hand even if they must qualify for a loan in order to complete the purchase. All one has to realize is that the power to say "yes" or "no" is in one's hands. Somehow, most of us cede that power to the salesman. We lust after these purchases. As the purchase nears completion, we become more and more worried that it won't happen. The salesman knows this, uses it, plays us like a fisherman reeling in his catch.

I was not immune to this either. Until I managed to set aside enough money to purchase a new car outright. Of course, the sales people who deal with me try very hard to sell me more than I want. They want to put me off guard, reduce me to that nervous, anxious, little twit I once was in those situations. Homey don't play dat no more. And it isn't just the fact that I no longer need a loan to make a purchase of this size. It is that I have developed the ability to say "no" and the discipline to not try to buy more than I can afford or need.

It is exhilarating! The first time you walk away from a deal, the feeling of power and control is heady and intoxicating.


The Jules said...

Reminds me of when we bought our car. Paying with cash, I prepared my tough, "I wanna discount for being awesome and inscrutable" face whilst my wife went out a test drive.

This was a little dented when she returned, parked up with a big grin and gave me and the salesman a big double thumbs up sign.

Douglas4517 said...

You do know that the car dealers would rather you finance rather than pay
cash, don't you? And shame on you for even bringing your wife into such a
sordid situation. :)


Steven Scott said...

Best thing - go to your credit union (, get your pre-approved 2.5% loan check, do all of your price and feature negotiation as if you're not trading in...then discuss trade-in...then finally pull out your check when they get you in the loan office.

I mean, if you have to finance. And, yeah, trading in kills you on your car value - but the way I figured it on my last purchase, out of the value they undercut me on the car value, I got 75% of it back in the amount of sales taxes I didn't have to pay - so at least the money was going to a private enterprise and not the state. The last $500 was worth it, I'd pay somebody $500 outright to handle selling a car for me.

Another plus for me in my last experience was I wasn't heading down to the local Government Motors or Nissan dealer...I was buying the second-cheapest car on the lot at an exotic dealership. They treat you better...yakuza'd up and everything.

Douglas4517 said...

True, Steven, going in with a pre-approved loan is like having that cash
available. It also provides that sense of empowerment. And I do prefer
credit unions to banks. Actually, I almost prefer loan sharks to banks but I
often cannot tell the difference between the two.

And buying a premium car (even the cheapest of them) is a much better
experience than any other new car purchase.