Scrooge Strategy

Part 5 of the car debacle

27 comments — written on January 31st, 2007

Part 1 of this story
Part 2
Part 3
Part 4

A few minutes after I called my friend at the Credit Union National Association to help out (see Part 3), I got this email from John’s friend. The writing is spectacular. Also, jesus! Can you believe this?

“First of all, many of those people who commented have very good things to say, I especially like the car dealership finance manager. Pretty balanced opinion. Bad news though. Once again I do not know the details.

John went to the dealership and they got him to buy a more expensive car, with an APR that’s “a couple pts lower” but no real difference. He needed me to drive him back to [hometown] I guess that’s where the car was located. When he came out with a key and got into a loaded 2004 BMW 325i, I about shit myself. Casually (this is the only way I could do it without losing my cool) I asked for the details. How much, how long, why, what drugs have you been taking? His rational was “If I am going to get a car it might as well be one I like”. I rephrased in my mind “You mean if you are going to get suckered into a deal, you feel less stupid if you are driving a pimpmobile”.

It seems like the perfect out, for a spineless idiot. Save face with the dealership guys who make your penis feel small AND get to drive a nicer car. Might as well since you can’t undo the first screwup. There is no real admittance of a mistake, no real will to bite the bullet. (I say this because I am quite frankly pissed)

To be honest I am really frustrated, mad, and feel kind of dumb. I went though the figures with him, I showed him that he would be paying interest for the first 8 months of this year because of his shitty %. We talked about how something more affordable was really in his best interests and how it was bullshit that he got suckered into that deal. I kept him totally up to date with your web blog and everything. He strung me along like he agreed.

It could be that I had no place in becoming so invested in my friend’s problem. This is all I know. Some people refuse to be helped. Whether that is because looking inside themselves, figuring out what’s wrong, and owning up to their mistakes is too hard, I can’t say.

You said you were going to look into something for John, please don’t bother, you would be wasting your time.”

Wow.

[Update]: The story continues as we speak. I’ll post Part 6 (the final one?) tomorrow morning.

27 comments

Leave your own

  1. 1
    January 31, 2007

    Reza

    I’m impressed with your level of restraint. I’m pretty sure I would have socked my friend in the gut and the salesman in the nuts. I think my eyes are bleeding.

  2. 2
    January 31, 2007

    Scott Williams

    Some people just can’t learn until they’ve been hit over the head with a bat.

  3. 3
    January 31, 2007

    Mike

    Bravo. John’s initial foolishness was trumped by John’s ultimate stupidity. These past few posts are like meth for my drama loving eyes. Thanks for sharing.

    On a side note, I think the “iwillteachyoutoberich reader” has a crush on “John”. If any of my friends did something that stupid, I would just call him a dumbass and be done with it.

  4. 4
    January 31, 2007

    Joshua Keezer

    Where is the punch line?

    I’m flabbergasted. It is like he got onto a plane that is going to crash. Instead of trying to see if he could land the plane taking as much damage as he could, he instead put the plane into a dive because it would be a better way to go.

  5. 5
    January 31, 2007

    Enrique

    Ramit:

    I guess, we all learned a great lesson. I can not help anyone who doesn’t want help. He wanted a 2004 BMW. I won’t even ask about the series.
    Let’s go back to find ways on becoming rich and let the pretenders about having money continue pretending.
    This is a great lesson for me.

  6. 6
    January 31, 2007

    Greg

    I have a friend who is paying like $700/mo for 6 years for a Yaris. So I guess at least this guy did get a “nice car”- though I dont know what kind of deal he got.

  7. 7
    January 31, 2007

    John (but not that John)

    Wow. This guy truly does have a lot of learning to do.
    On another note, the 325i reminded me of a great story that happened over New Year’s I think the readers would like:
    Two of my old college friends–call them Friend 1 and Friend 2– who share a house with another friend near DC ($2200/mo rent, but that’s another story) both recently bought BMW’s. Well, over New Year’s, we were visiting some other friends–Friend 3 and Friend 4. Friend 4 says to me, “Can you believe Friend 1 and Friend 2 both got new BMW’s? I’m so jealous! Aren’t you?” I calmly looked over at her and said, “Nope. Personally, I’m happy driving my Camry and maxing out my Roth IRA.” I smiled to myself and thought of this website. Of course, I could tell by the look in her eyes that she just didn’t get it.

  8. 8
    January 31, 2007

    Carlin

    While he’s at it, he might as well treat himself to a nice vacation to help him relax since he’s been through so much these past couple days. What? No money because he just bought a BMW? That’s what credit cards are for! It’s free money day folks, the banks aren’t going to want their loans paid back…

  9. 9
    January 31, 2007

    Brittany

    Its like the old saying… you can lead a horse to water, but you can’t make it drink.

  10. 10
    January 31, 2007

    Ervin

    No offense, but this person is (behaving like) a moron. Stop wasting your time with him!

    I wonder what kind of friendship you two have, since you seem much smarter than he is.

  11. 11
    February 1, 2007

    Michael

    Ok, it’s obvious: “John” is a financial moron! At this point, I don’t not believe he was lied to in anyway by the dealership. He either got the facts wrong, or just doesn’t want to admit what a colossal mistake he made and is trying to make them out to be the bad guy. Caveat Emptor. He’s an idiot and deserves what he gets!!! Fooled him once, shame on them… now he’s to blame.

  12. 12
    February 1, 2007

    RT Wolf

    This is going to sound unduly harsh:

    I have stopped being friends with people who weren’t aligned with my life goals or values. My life goals and purpose is important to me–more important than temporary friends. I’ve ended up finding friends who are indeed aligned with my life goals and I love the support they give me and I give them. It’s worked out very well for me. My advice:

    Let him go about his life his own way, and go your own. You’re not paying for his car and you’re not living his life.

    Personally, I kinda wanna commend the salespeople for their amazing ability. I think it’s wrong, yea, but you should be able to respect and admire your enemy.

  13. 13
    February 1, 2007

    Mark

    Very interesting story. I am pretty sure John will be cursing himself in about 6 months. As I am reading this story, I find it very similar to alot of the ridiculous interest rates being requested and fulfilled on prosper.com (People to People Lending).

  14. 14
    February 1, 2007

    Chas Grundy

    This popped up in my Gmail headlines this morning. Interesting.

    Can I return a vehicle after I purchased it?

  15. 15
    February 1, 2007

    Sheridan

    Okay, I’m just going to do some math for a second. The original loan was for 20k at 17% (gasp) for six years. That means he was looking at a monthly payment of about $445 / mo, which comes to $32,040 total.

    Doing a quick search on Edmunds.com tells me that a 2004 BMW 325i should be about 28k – 30k. Based on the dealer’s track record (17%????) I am using 30k. 30k at 15% (”a couple of points less) for 72 months means a payment amount of about $635 / mo with a total of $45,720.

    Now here is the kicker: According to the FTC the average price of a new car sold in the United States is $28,400. To make matters worse, 40% of buyers in today’s market are upside down on their old car when they buy a new car… so they are rolling existing debt into the loan.

    My point is, even though the average buyer isn’t paying anything like 15% (or 17% gasp!) APR, automotive sales is one of the sexiest ways in which Americans are getting farther and farther into debt.

  16. 16
    February 1, 2007

    eR0CK

    Great comment by Sheridan.

    Jennifer stole my thunder, but it’s totally true. You can lead a horse to water, but it’s up to him to drink.

    Some people are just plain stupid.

    This poor guy John is stuck on stupid and only Chapter 11 will get him to “see the light”

  17. 17
    February 1, 2007

    adam

    To repeat comment #5, you can’t help someone who doesn’t want to OR is not willing to help themselves. It seems like his only concern is saving face and not $$$$. This person sounds extremely thick, good luck getting through to him. Hopefully he will realize the mistake he is making.

  18. 18
    February 1, 2007

    Shasta MacNasty

    And the lesson in all this? Take public transportation.

  19. 19
    February 1, 2007

    Kimber

    To be fair, I don’t recall “John” actually asking his friend for help. Sure, he was complaining but we all know that’s not the same thing.

    Unless someone asks for help, I don’t offer help (not enough hours in the day). I listen (which is usually what the complainer is wanting).

  20. 20
    February 1, 2007

    Adam

    Wow, I don’t even know where to begin. First, I’d like to thank John for all the entertainment he’s bought me over the last few days. What I don’t understand is how he didn’t come prepared. It’s such a big investment!

    I’m a 22-year-old college student (Finance major) with a job lined up and I bought a new car around last thanksgiving. I did a few weeks of research to know exactly what I wanted (Most car dealerships have online inventories so you can choose the exact car) and then figured out exactly what it was worth. I’ve been saving for it for a while now, got it for $1100 under invoice, paid a little over half down and the rest financed at about 8%. AND I’M 22! I have a credit card, but only to build credit. I would have walked out if the finance guy had said more than 10%.

    I loved the idea from yesterday of just leaving the car on the lot. What this guy is doing is sacrificing his financial future (the years when responsible saving and spending mean the most in the long-term) for a BMW. Sounds like the guys at the dealership know a sucker when they see one.

    At least the rest of us are getting some entertainment.

  21. 21
    February 1, 2007

    J

    Um . . wow . . .

    It’s kinda like this, huh?

    “If you had a life-threatening illness, would you take your medication? “Of course,” you might say. Not the average patient, though: Even when facing death, a surprisingly high percentage of patients don’t take the medication prescribed to save their lives.”

    Doctors can’t really say or so much to get their patients to take life saving medicine and friends can’t stop friends from shooting themselves in the foot . . . or shooting themselves in the foot with a bigger gun after shooting themselves in the foot the first time.

  22. 22
    February 1, 2007

    J

    Wait . . . is this friend somehow romantically or biologically linked to John?

    ….. OR Were they John’s cosigner? Did John have a cosigner? Why did the cosigner agree to this? If he didn’t have or need a cosigner, does that mean he’s making a ton of money and that we are debating the minutia of how he spends a small percentage of it?

  23. 23
    February 1, 2007

    MyNameIsMatt

    Having tried to convince some money wisdom on friends of mine, I know the futility in it. Still, you always want to help, but sometimes you really do need to draw the line, and let your friends live the lives they lead. Hopefully, if John sticks with this car, the monthly payments will squeeze him enough that he just can’t resist and will get a better loan.

    I think this leads to two conclusions from me. 1) The sad state of education in financial matters. These cases aren’t limited to this guy. 2) It shows a general confusion and fear that I think most people have with dealing with money, and it’s again sad that it’s in the financial interest of the financial industry as a whole (creditors, banks, financial professionals like investment brokers, etc.) to take people for a ride. Stuff like this really makes me made on multiple levels.

  24. 24
    February 1, 2007

    knuffel

    It’s hard to watch people hurt themselves while they make mistakes and repeat their own mistakes.

    They probably send their personal message: “Please hurt me, I like it so much.”

  25. 25
    February 2, 2007

    Ibis

    Wow, this “John” sounds awfully a lot like the last dude I dump- who’s extent of financial budgeting was “If I am going to spend the money to buy something, I will buy the best there is.”

    Lord, why are some people born so clueless?

  26. 26
    February 5, 2007

    Maxine

    I second comment #12.

    Everyone makes mistakes. I had a friend get into a really bad real-estate deal. It was so bad, my 1st response when she called to tell me she bought a house was “is there a cooling off period? Tell me there’s a cooling off period… Email me your contract right now!” We laugh about it now.. sort of.

    But some people seem to just constantly do dumb things to themselves. You warn them and they appear to listen but still go ahead and shoot themselves in the foot. Quite often, it’s the same foot in the same way every single time.

    As much as you may want to remain emotionally-detached and not judge, you still want to bang your head against the wall just watching them live their lives. THESE people you should reconsider spending too much time with because that constant level of frustration is not worth it and the alternative is to train yourself not to care about their plight.

  27. 27
    August 31, 2007

    Mack

    I made alot of money in the past selling cars, and eventually became a “closer” and then manager. I am quite sure that people commenting here would be tough to sell, but remember that for every one of you, there are ten others, easily separated from their money. But it is not enough to blame it all on the lack of financial literacy, (though i agree this is a huge issue) when many of the people I sold to were smart, money conscious people. It’s the process, guys. It’s designed to wear you down, tire you out, then make the kill. And it works. I no longer do this for a living, for me, i couldn’t justify the rewards with what I knew we were doing to people. Anyway, i stumbled across this site, and bookmarked it!

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