The Angel of Debt
September 11th, 2009Avenger of Suckers
I made an offer on a 2009 pickup. It amounts to about $500 above the money they’ve put into the truck. I know the cost of the truck and the delivery charge, and I know how much the holdback is, so I subtracted the holdback and added $500. It’s a good offer, for a year-old truck that tops out at 18 MPG. A truck nobody else wants. They should be willing to sell below their cost, given the age of the truck and the current market. That’s how life goes, when you’re in retail. You can’t make a profit on every deal. I know they have other costs, but that’s not my problem.
The dealer turned me down flat. They want $1200 more. Sure, if Mary Poppins and Frosty the Snowman decide to buy a truck so they can drive around the world with elves in the back, shoveling candy to the little girls and boys who go to bed on time and swear allegiance to Barack Obama. Other than that, they pretty much have to deal or sell it to another dealer at auction.
After I got their response, I decided there was no way I was going to contact these characters again. When you’re negotiating, and you make an offer, and the other side pretends to be utterly uninterested, you wait for them to crack. These guys have to get rid of this truck. I don’t have to buy one.
Today, after four days, they got back in touch. It was just an auto-response. But it proves my point. The only way to deal with a car salesman is to apply the screws and tighten them until he squeals. My offer was too generous; they probably think I’m a sucker. The only way to convince them otherwise is to let them sweat. I offered them more than I think the truck is worth, because I don’t think a Christian should hammer people ruthlessly in the marketplace. They should be satisfied with that.
I may respond tomorrow. I may respond Monday. Maybe I’ll get cold feet and kill the whole idea. I try to think of my money as God’s money. I don’t want a truck just for fun. I want to make sure I’m doing something intelligent. Maybe I was wrong to decide to buy. Time and prayer are always good ideas.
Anyway, it’s funny to watch them play the game.
I think my response will be, “Please consider my offer withdrawn.”
They want me to finance the truck, which will get me a thousand dollars in Ford money. They want to add that money to the price, plus over $200. I do not borrow money if I can avoid it. I don’t care if Ford likes it; I don’t care if they understand that I plan to pay it back in four months. It’s a scam, and anyway, I think borrowing is like daring the devil to wreck your plans. If I pay cash for a thing, I’m free and clear. If something bad happens later, I won’t have to worry about collection agents. I won’t have to take a job I hate, because bills for things I’ve already worn out and discarded will be coming to me over the next five years. And nobody can repossess what I bought. When you borrow, you give up choice. You put yourself in a position where you have to earn, regardless of how you do it. And working is less enjoyable, because you’re not anticipating buying good things with the money. You’ve already enjoyed the good things. All that’s left now is the drudgery of paying for them, and paying the people who charged you for the privilege of enjoying them before you really owned them. And if you choose to go bankrupt, the cost is your self-respect and your good name.
The Bible says it’s arrogant to say you will do this or that, in the future. You should say, “God willing, I will.” If you borrow, you’re saying, “I will continue to earn enough money to pay for all the junk I want to have right now.” Is that smart? I don’t think so. The Bible strongly discourages borrowing. It encourages lending, but it does so with the understanding that you can’t charge usury, and you may have to forgive the loans.
I just realized I’m wearing a T-shirt that says, “Borrowing is for the weak.” It’s from Northern Tool. I couldn’t resist buying it. It’s supposed to be funny, but it’s also one of the universe’s fundamental truths.
I wonder what a $200,000 house would cost, if we didn’t have the mortgage system. Probably $50,000. When people pay real money, as contrasted with pie-in-the-sky future money, they have to pay a lot less. Three things make things cost more than they should: insurance, borrowing, and government involvement.
A Harley dealer once told me some guy came in for a trade-in, threw him the keys to his old bike, told him which new bike he wanted, and said, “Make it $250 a month.” That was all he cared about. He opened the henhouse door and drove the fox in with a cattle prod. Over time, the bike probably cost him fifty grand. The picture would have been a lot different had he had to shovel out up front. MSRP would have been something like $18,000. He probably couldn’t afford it.
I don’t like borrowing. I don’t like borrowing. I don’t want to be a finance company’s slave. I don’t care if it looks smart on paper. When you look at the paper, isn’t it “walking by sight”? Aren’t we supposed to walk by faith?
I don’t care if everyone does it. Most people do lots of really stupid things. My errors are sufficiently abundant as it is.
On another subject, I have a question. What’s a reasonable amount of money for one person to spend on groceries, per week? I don’t really know. I have turned into a bargain-hunting maniac, frequenting Costco and subscribing to grocery-chain sale emails, and while I haven’t added up the cost of my food, I’ll bet it’s pretty low, because about 80% of my meals are cheap, simple, healthy stuff I eat just to stay alive. What should I be paying? Seems like I should be able to do very well on a hundred bucks a week, plus maybe twenty-five for treats, but I’m not sure.
The most expensive meat I eat regularly is fish, at around six bucks a pound. I like to buy prime beef for $12-$13, but that’s rare, and lately I’ve been finding it at Costco for seven-something. I buy whole pork loins for peanuts and cut them into chops and freeze them. I avoid prepared vegetables, like Birdseye and so on. I generally steam or nuke fresh produce. I eat boring oatmeal for breakfast. On the weekends, I like to treat myself to McMuffins and pizza and Chinese food and ice cream, but that adds up to about three meals.
I’m looking around the web, and other people claim they do great on a lot less than $125. Maybe I’m overestimating.
Anyway, the information would be appreciated.
September 11th, 2009 at 10:48 AM
I try to get by on $4-$5 per meal per person and allow $10 per week for sprending money on “treats” and other items. That works out to about $105 per week per person. This is in California, your cost does not seem out of line for one person.
September 11th, 2009 at 11:13 AM
I have a teenage son. Do you really wanna know?
Didn’t think so.
You might consider a good used truck – there are a LOT of people who bought a truck as a ‘second car’ when times were good. Sure, it won’t have all that heavy leaf blah-blah, but you’ll only need that once a year. Rent a truck in that case.
The upside to a good used “second” vehicle (I saw one recently that was three years old and had 12K miles on it) is that it was owned by people who worked more than they played and it’ll already have hitches and good tires on it. YMMV.
-C
September 11th, 2009 at 11:43 AM
I would make my response a drop of $50 down to $450 over the ‘nut’ you’ve calculated for them. Future rounds of contact would see a further drop of $50 per round.
As an alternative, I might make the response $501 over the ‘nut’. With the next round being $501.50 above the ‘nut’ (then $501.75. the $501.87, etc.).
If the loan works out to your advantage, do it – payingit off in a couple months. It is legal, and not immoral.
September 11th, 2009 at 11:51 AM
Between my wife, myself, and our little son, we spend about $100 a week at the grocery store. We also get a lot of game and fish from my wife’s family. Eating out regularly is horrifically expensive – we have been trying to keep that at a minimum. We prepare as many of our meals as possible and eat well by buying bulk, as you note. I haven’t started cutting my own steaks and chops, but I should.
September 11th, 2009 at 12:19 PM
Steve, my bio dad was a car salesman(among other things). He’s told me many times, never finance through the auto dealer or auto company. That’s where they make the most of their profit, that and the service dept. So if they want you to finance it-they should let you have it at the price YOU want-cause they are still making a load of money.
My mom finally had her cardio vert(heart shock) this morning. They only had to shock her once and she is back in normal rhythm. She’s feeling much better already.
September 11th, 2009 at 12:21 PM
Steve, let me introduce you to rule #1 of my financial religion:
#1. Never pay interest on credit card. Always pay in full.
In case you’re wondering, there’s only 2 rules.
#2. Avoid paying for parking if you can help it.
The last time I bought a car was back in 2005 for a Prius. Yes, I managed to pay in part with $1500 in credit card, but that’s mostly for cash back incentive. I paid that balance off the next week. The rest of the balance, I paid in full with a check.
September 11th, 2009 at 12:44 PM
For a man, who eats meat and actual real vegetables, and a few treats, $125.00 sounds ample but not really too much. Why not eat well? Taking decent care of yourself, especially if you want to use your energy to help others, is consistent with G-d’s intentions. I believe that anyhow.
Check online about oats and what they do to the villi in your gut lining. Not good. Oats cause problems for the human gut. You’d be better eating eggs or cottage cheese or fish and fruit.
September 11th, 2009 at 2:06 PM
Huh. Here I am eating the “heart-healthy” recommendation of oatmeal (3/4 cup before cooking). Oh well — I don’t eat oatmeal every day.
I’m staying with a friend now, so most of my purchases are food and toilet paper (and cat stuff, which I won’t count). I think I spend on the average $20-25.00 per week; when I was living on my own it went up maybe five or ten dollars. What kills the grocery bills are prepackaged stuff like frozen meals and deli food, and eating out. So except for a couple of bags of pre-cut frozen vegetables, I don’t buy that stuff. Of course, I’m also on a diet, and I don’t buy huge cuts of meat — but where I live now (Shenandoah Valley, Virginia) meat is much cheaper because I’m surrounded by Black Angus cattle and chicken factories. Even fish is cheaper or at least comparable to Florida prices, which astounds me. Wine, however, despite the fact that there are several local wineries, is about a dollar or two more expensive per bottle than Florida; probably something to do with taxes. But I haven’t been buying wine, since it’s high-calorie and more than I want to spend on right now. I also cut out desserts like ice cream and cookies from my diet, which cuts down on expenses.
September 11th, 2009 at 2:39 PM
I feed a family of 5 a lot of very nutritious food for $50 a week, but I’m guessing you’re not about to start clipping coupons and buying in bulk. We eat a lot of beans and rice, food from the garden, and meat (never more than 3 times a week) is almost always an ingredient, rather than the main course. I’m a good cook (In part thanks to you. You’re my pizza guru.), thankfully, so nobody notices when the meat isn’t the best cut.
Unfortunately, I have absolutely no advice for a single guy who doesn’t have children. What’s acceptable to you is terrifying to me. You pay $9/lb for meat and brag about what a good deal you got. I laugh every time I read about one of your Costco trips–in a good-natured way, of course. It’s just funny how different perspectives can be.
There’s no reason a single man shouldn’t spend more than a family each week on groceries. You don’t have any educations or braces to pay for and eating well is no sin. Of course, you can feed a lot of widow and orphans for the difference in those two budgets. Might be something to think about.
September 11th, 2009 at 2:56 PM
In general, light-duty trucks are still selling quite well. Even with gas prices through the roof, in 2008 the Ford F150 and the Chevy Silverado were #1 and #2 in numbers sold in the USA.
September 11th, 2009 at 3:01 PM
“In general, light-duty trucks are still selling quite well.”
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Selling relatively well isn’t “quite well.” Sales are abysmal, even if trucks are doing better than some cars. This is why I am getting $3500 in rebates, before financing. They don’t do that when sales are good. The rebates are much higher on F250s.
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From Autoblog.com: “When auto sales began to circle the drain in 2008, no single segment was hurt more than pickup trucks. Sales were cut in half in many instances, pummeling the domestics from Detroit more often than their foreign competition. Truck sales even dropped in Texas – easily the world’s largest market for all things with four wheels, a bed and a V8 engine. Some Texas dealers saw sales drop 30% or more in 2008 and 2009, but some signs point to a turning point for truck sales and perhaps even the auto industry as a whole.”
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The money I’m offering would be an acceptable deal in good times. In a recession, on a year-old reject, it’s a king’s ransom.
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“You pay $9/lb for meat and brag about what a good deal you got.”
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It’s between seven and eight dollars, and it’s a great deal. It’s 15% less than choice, and I’m getting prime.
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“Of course, you can feed a lot of widow and orphans for the difference in those two budgets.”
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Yes, and I could sell my shoes, go barefoot, and buy someone a happy meal. Even Oskar Schindler drew the line somewhere. I believe God arranges things so a good person can be good to others without living in the gutter. I don’t think God would be more pleased if I turned down the good things that are available to me and became an ascetic.
September 11th, 2009 at 6:02 PM
About the money for food, somewhere around $10 to $20 per person per day.
How much per pound would your fresh caught dolphin cost?
Just dockage for the boat drives the price up quite high, I would guess.
I have a rough idea of how much my venison cost’s, mail order prime beef is less expensive.
But it is my venison.
September 11th, 2009 at 7:27 PM
I used my credit card to by my 90 Cad deville. putting it on card ran up airmiles so my wife could visit her folks, paid it off when card came due. its ok to use the system, gas at Costco with their card gives 5% back so evens out for the year and costco fees.
bob
September 11th, 2009 at 7:28 PM
You rich people with jobs and income tickle me. Try this – a big bag of black beans at Publix – 1.79, a medium bag of brown rice, the same price, large onion – .75, bell pepper about a buck, small package of diced ham 2.99. Big bag of grits for breakfast – 2.99, lasts longer than a week. A little more than 10 bucks.
September 11th, 2009 at 7:43 PM
Using credit cards isn’t “borrowing” in the meaningful sense of the word, except for people who run a balance. I use cards, but I pay them off every month. Getting a five-figure loan with a nominal 36-month term is another story.
September 11th, 2009 at 11:24 PM
It sounds like you’re doing a good job of negociating the truck price. I’d just wait for them to come back to you. You made a fair offer and there is no shortage of trucks or dealers in Miami. In the mean time, start looking at other dealers.There is a terrific book on car buying called “Don’t Get Taken Every Time”. It was written by a former car salesman and is really a hoot to read. You learn a lot of the sneaky tricks they use. How about the idea that you should shop for a car near the end of the month? I heard that they are more willing to negociate to get the sale before the end of the month. Any truth to this?
September 12th, 2009 at 3:22 PM
I’d suggest you split the holdback with ’em, plus your $500.
In most cases, a “mini” commission for a salesman runs $100~$125, at most, and commission is (99% of time) never paid on the holdback amount. (except to fleet sales or sometimes pure internet sales reps.)
That’d be a fair deal for an ’09, allowing the dealer some breathing room (holdback is meant to keep the lights on, and is paid by the factory quarterly, so it’s “out of pocket” for the dealer until that following quarter).
Holdback on that truck ought to be about $1,100 or very close to that.
The dealer isn’t a nonprofit agency, and I assure you, $500 over pure cost is a fast way for a dealer to become unprofitable. The laborer is worthy of his hire, and believe me, from a decade in retail auto sales, it’s labor aplenty.
Just don’t pay a dime in addtional “dealer fees” though. Not. One. Dime.
Jim
Sunk New Dawn
Galveston, TX
September 12th, 2009 at 5:20 PM
I would agree, if we weren’t talking about an old truck that has failed to sell.
September 13th, 2009 at 8:52 AM
“an old truck that has failed to sell.”
I imagine they have their own opinion on that, or you’d own it by now. An old truck has more than 50 miles on the odo.
For truck people, it’s the utility not the date.
September 14th, 2009 at 8:30 AM
If I cared about their opinion, I’d be working for them. Their opinion is that I should pay far more than the truck is worth.
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“For truck people, it’s the utility not the date.”
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These aren’t truck people. These are retail people, and for retail people, the date matters. They can’t keep unpopular junk around forever.