Columns
Guest Opinion: Enthusiasts and Financing
By TCL Reader Four Speed Fox
Nov 28, 2005, 13:30

I've been inspired to write this by a couple of other posts which have popped up lately. This is not a post about specific financing; it's a discussion about the metaphysics, if you will, of automotive finance, which is why I didn't post in M&I. Close you eyes and imagine for a moment.

First, imagine that you are going to live forever. You're like a Highlander without the nasty head-chopping-off business. How would you live your life? Well, chances are you would work hard, since you have an eternity to enjoy yourself. While you were working hard, you would save every penny and invest it the best you could, because everybody's heard the story of what one of the original shares of Ford would be worth today, or what investing a hundred dollars in 1900 would do for you now, and so on. Since you will be around to see the fruits of all your hard work and investment, you'd work and invest as much as you could. Borrow money? That's an idea for an idiot, because you can save for whatever you need.

Now, imagine that you have just been shown, beyond the shadow of a doubt, that the world as you know it will cease to exist in thirty days, and you are the only person who knows it. What would you do? Cash out your investments, ask out all the girls you've been scared to talk to, spend time living your dreams (think Tim McGraw music here, "skyyyyyyyydyyyyyvinnnnnn.... Rocky Mountain claaaaaaaaaaahhhmmmbiiiiinnnnn") and, probably, figure out a way to drive a neat car, right? Assuming you have no dependents who will be affected, would you still make that payment to your 401(k) this month? Would you go ahead and make that stock purchase, or would you log into your eTrade account and click "sell" until your fingers are sore? Would you keep going to work?

Okay. You can stop imagining. Where do you realistically fit into the above scenarios? From a mathetmatical perspective, you are far closer to the second. What does this mean to your decisions?

Let's say you are twenty-five years old. You can borrow money and buy/lease an STi/330i/Corvette/Aston Vanquish over five years, starting today, or you can save your money and pay cash for it in about 54 months. Your parents, your self-appointed investment advisor friends, and the Car Lounge will tell you to do the latter, right? It's the responsible thing to do.

There's only one problem. Next time you are on the freeway, look around you. Look at the cars, at the people in them, at the faces on the people. All those sad, frazzled, stressed-out middle-aged faces, in all those crappy cars and SUVs, those people were all once young people with hopes and dreams, just like you. How did they get that way? How did they become part of the faceless, Made-In-China suit-wearing, beige Camcord or green Explorer-driving horde?

They didn't wake up and decide to be that way, you know. They made their habits and then their habits made them. It always seemed like a better, safer, more responsible decision to defer happiness to the next day, to choose the default route, to not do anything to upset their spouses, families, neighbors, co-workers. And time went on, and the decision every year to pay cash for that used Accord became easier every time, and the nagging from the wife and kids for a bigger house in the better suburb became harder and harder to avoid.

And... poof. You are forty years old and you are that sallow face next to you on the freeway, who will spend the next twenty-five years dreaming about a retirement that may be stolen from them by crooked accountants, union stupidity, or government fiat. It happened while you weren't looking.

I was just out on the road and I saw a kid washing his temp-tagged STi. Ironic, since I've been posting about STi lease deals. And I don't know how he paid for it. Maybe he is a self-made real-estate flipping millionaire. Maybe it was a gift from his parents. But by the attention this twenty-something fellow was devoting to getting that last bit of dirt out of his floormats, I'd suspect he's a hopes-and-dreams fellow, making a decision his mother, father, and the Car Lounge wouldn't approve of, doing "something he can't afford."

Twenty years from now, his net worth will be some percentage lower than his sallow-faced neighbor's, but he'll be the guy you want to know. Maybe he'll be the guy who loves his kids and shares his enthusiasms with them, rather than resenting them for being the reason he can't spend any money on himself. Maybe he'll be the guy who looks at the picture of his twentysomething self with his STi and smiles. Maybe he'll be the guy who still fires up an Impreza and runs it around a track while his co-workers queue like lemmings at the pro shop every Saturday morning. Maybe that car will change his life. Maybe that's something you can't see in any calculation of interest, or residual, or opportunity cost.

Maybe that's life.

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