Reports From the Nursery (Part Nine)
By Alexis, In Her Own Words
For someone who’s only been on earth for a year or so —and who is daily losing the memories of her pre-birth tenure in heaven— sometimes I surprise myself with what still occasionally pops to the surface of my mind.
For instance, I was innocently studying how my toes work (and taste), when I heard Mom say to Dad “Are we sure we need a new car?”
Boing! Just like that, my mind flashed on more than six million conversations (to be exact, 6,723,614 conversations; I just didn’t want to brag about it) between people in heaven who had bought or sold what Mom called a “car.” Some of them used other words —“horseless carriage,” “flivver,” “Stanley Steamer,” “Edsel”— but they all had one thing in common.
And that was a fictional character named David Harum. Every “car” ever bought or sold? The spirit of David Harum shines brightly.
David Harum is the title of a novel that was first published in 1898. Few folks today know the title— or for that matter, anything else about it. But you could make a pretty good case for crediting it (or blaming it) for much of the state of business and commerce in today’s world.
The fictionalized story of retired banker, businessman and (most relevantly) part-time horse trader David Harum centers around his own crafty re-write of the Golden Rule. As defined by author Edward Noyes Westcott, Harum’s core philosophy is fairly straightforward:
“Do unto the other feller the way he'd like to do unto you, an' do it first.”
If that sounds familiar, it’s because that’s often the world you step into during any exchange of your money for somebody else’s goods or services. There’s even an impressive sounding term for it in Latin: caveat emptor, or "Let the buyer beware.”
Such blatant cynicism was considered morally shocking at the turn of the 19th Century; in theory if not in actual practice, the original Golden Rule was still officially touted as the basis for ethical commerce in those days of yore.
Today, The Golden Rule is considered quaint, if not downright naive; we all think we’ve become savvy to the ways of the world, and we expect a seller to try putting one over on us. As a result, we may well be tempted to do it ourselves, first.
Back in its day, by flying so mischievously in the face of conventional morality of that time, Harum’s New Golden Rule was considered deliciously outrageous. This propelled the book to being a (posthumous) best-seller for author Westcott (rather, his heirs) and later spawning a Broadway play (also posthumous) that in 1929 was the basis for a movie starring humorist Will Rogers (you guessed it: posthumous again. As is still the case, most writers must die to hope for any success). None of them seemed so happy about that fact when I questioned them in heaven.
Back when Westcott was writing David Harum, automobiles were still a number of years away. But the practice known as “horse trading” was decidedly alive, arguably well, and generally acknowledged to be as fraught with peril as juggling straight-razors (blindfolded) or handling venomous vipers. It was considered so disreputable that the term “horse trading” became a synonym for all manner of nefarious deal-making— for instance, in politics or diplomacy. The system meshed nicely when horseless carriages hit the marketplace.
In the modern world, most folks may have forgotten David Harum— but his philosophy arguably has never been more widespread or faithfully followed. Nowhere is this more evident than in the Wild West of modern commerce known as “buying a car.”
And since that’s precisely what Mom and Dad are thinking about doing, it behooves me to give some advice. This will not be easy —by my estimate, I’m at minimum four months away from being able to say a coherent, actual word— but I sense that it is urgent that I try.
Now, I’m no expert in buying a car; far from it. But my grandpa is, because his hobby (and his passion, I think) has long focused in acquiring all manner of fast, or luxurious, or fast and luxurious cars. In
First of all, and more important than you might think, is what not to take to your car shopping: that is to say, leave your emotions at home. This goes for all car shopping, but particularly for new car purchases.
People being people, it’s too easy to fall prey to love-at-first sight (or first-smell, since canny car dealers can buy new-car scent wholesale in handy, 2-quart aerosol cans). You can end up fixating on a specific car that you simply must have… and forget that they make the same car in bustling factories— thousands of “your” beloved vehicles daily shipped to different dealerships in different locations. Love is charming, but here you can afford to be a little promiscuous with your infatuations.
The point: You can never deal successfully if you’re not ready to walk away, at any point in the negotiations.
Then there’s the central question of money. With cars, it’s usually a question of lease or buy outright.
Buying a vehicle with a conventional car loan is straightforward. You borrow money from a bank, a credit union, or other lending institution like Bank of Mom or Dad. You then spend the next few years paying it back, with interest, and make these monthly payments for some number of years. That is unless the dollars came from the bank of Mom or Dad which it is dubious as to how many payments you make…if you make any at all. By the end of the loan—with principal and interest paid off— the car is all yours.
With a lease, you essentially buy the use of a car for a set period; you’ll also make a monthly payment, but that amount is often less than the monthly cost of loan-financing a new vehicle. At the end of the lease term, you give the car back and move on with your life.
The major advantages to leasing include: (a) You drive the car during its most trouble-free years, as well as one typically covered by the manufacturer’s new-car warranty. (b) You can drive a higher-priced, better-equipped vehicle than you might otherwise be able to afford. (c) There’s no haggling or hassle when you part ways, no worries about trade-in value or self-selling it.
On the other hand, sadly, leasing usually costs you more than an equivalent loan. After all, you’re paying for the car during the time when it depreciates most rapidly. If you lease one car after another, monthly payments can go on for an eternity (or seem like it). With a lease, you’re stuck with a maximum number of miles to use; any additional mileage, you pay an excess mileage fee. There’s the risk of an excess wear-and-tear penalty if you incur damage, and if you want an early release from a car, you no longer want… suffice it to say the buy-out can be staggering. Lease contracts specify a limited number of miles. If you go over that limit, you’ll have to pay an excess mileage penalty. That can range from a few cents to as much as 50 cents, soon to be more, for every additional mile. So, understand how much you intend to drive, and don’t expect a credit for unused miles. Only penalties apply here.
And of course, at the end of a lease you own only the sweet memories. It’s unlikely you’ll be selling those to anybody, or even getting a good trade-in on them.
If you’re considering an electric car, the math skews somewhat. That’s because you, as an individual lessor, might qualify for a tax credit (currently, $7,500) —but only if you lease rather than buy. Leases can qualify for the full $7,500 federal tax credit without meeting any of the restrictive federal requirements that purchasers must comply with on where an electric car was made, how much it costs, or a buyer’s income level.
Moreover, if an EV manufacturer suddenly drops the price of a new EV—as Ford did not so long ago overnight on its F150 Lightning electric pickup, by several thousand dollars— you won’t be the one taking the hit if your leased vehicle is suddenly worth far less than it was the day before. And because you lease it for only a few years, you’re less likely to get stuck with a car you own that has outdated battery technology, an outmoded charging standard, and a whole lamentable list of other rapidly evolving car-science issues.
Grandpa says leasing can work great in certain circumstances and can be better than buying a car, new or used. I think those two words “certain circumstances” are pretty important though and you might want to run what you are thinking by him or Uncle David before you sign on any dotted lines.
And a quick word with using the dealer both to arrange your financing and negotiate the price. Again, some caution is warranted here.
With price, you’ve likely noticed the figure they advertise, if only because that number is displayed in the same type size that newspapers employed to announce the end of World War II.
But there’s a catch. (isn’t there always?) If you opt to finance with them, sure— they’ll give you the price advertised in those big, bold letters. However, you’ll usually pay more if you want to use your own bank, credit union or other financing option. Essentially, finance through the dealership and agree to whatever rates and terms they set up for you, or the advertised price is not necessarily the price you’ll get.
In the best spirit of David Harum, car dealers often advertise prices that aren’t even available to most customers. You see, the advertised price includes every available rebate, such as a “first responder rebate,” “recent graduate rebate,” “applicable manufacturer rebates.” Then, when you show up to buy the car, they tell you that you don’t qualify for the “advertised” price.
What can you do? Well, since you took my advice and left your emotions at home, you can… leave. Walk out. You’ll find the same new car elsewhere, and you don’t have to put up with car salesman nonsense.
Finally, if only to illustrate one other all-too-common sales technique you will no doubt encounter, one of the first questions they’ll ask is, “how much do you want to pay per month?”
Now’s your chance to use David Harum’s New Golden Rule and do it to them, first.
If you tell them $350 sounds good to you, you can be confident they’ll do mathematical gymnastics to make sure that you pay $350. If you used any other reasonable-sounding number, surprise! By some miracle, that is the monthly number they’ll quote you. The financing managers perform this magic by tweaking the loan amount and the APR until it works out that you’re paying either the exact amount —or more— than what you said you could afford. This practice is called packing payments, and its standard practice at most dealerships.
So instead, perhaps you low-ball them first, and say that $300 is an affordable monthly payment for you. Then, when they bring out those calculations, change your monthly number— I like the idea of lowering it, but you can go higher if you’re feeling a tad devious. And if you feel exceptionally devious, keep at it if it feels entertaining.
After a few times, it might dawn on them that this isn’t your first rodeo; then the real, and hopefully more respectful, negotiations can begin. If not —if you feel disrespected, bullied or hassled in any way— walk away, with your head held high.
Who knows? You might just beat Mr. Harum at his own game.
— end —
(EDITOR’S NOTE: Alexis and her musings will return to these pages in future editions. But not right now: hey, it’s dinnertime.)
