I almost bought a Bentley Continental. Let me share how I almost wasted six figures on a car I didn’t need.
After going down to City Hall to get my reconveyance letter (proof of ownership) for a property I paid off in 2015, I decided to pop into the Range Rover dealer several blocks away for fun.
The Range Rover Sport is currently #1 on my list of mid-life crisis cars to buy. It looks good. Performs well in the snow. Feels luxurious. Sits up high and is probably safer than my Honda Fit in an accident.
My only hesitation is that it costs about $95,000 out the door for a Supercharged version with 21″ rims like in the picture above. That’s a crap load of money for a machine that takes you from point A to point B just as well as a $10,000 vehicle. So I kept looking to see if there were cheaper options.
Hello Bentley Continental GT!
What I didn’t realize was the Range Rover dealer was recently commandeered by the exotic car dealer next door. Tesla Motors bought the exotic car dealer space, and as a result, Range Rover and the exotic car dealership merged spaces.
My mouth started salivating as I looked at the various Lamborghini Huracans, Rolls Royces, and Bentley Continental GTs littered across the show room. Of course I hopped into one of the Huracans to see how it felt to sit behind a $250,000 automobile.
Ouch, my knees and back! To my surprise, sitting in a Lambo felt like I was stuck in a coffin. The windshield was half the height of my Honda Fit, and I felt like the road would burn my ass sitting so low. Lambos look great, but I decided to pass. I don’t like feeling claustrophobic.
Then I got into a beautiful 2016 Bentley Continental GT with only 1,100 miles. The car still smelled brand new. The seats were wide, with gorgeous diamond patterned leather. There was real mahogany wood all around the dashboard. I felt like I was sitting in a first class seat where I could drive for hours and not feel sore. I wanted it!
As fate would have it, the asking price of $179,900 was similar to the amount of principal I needed to pay down ($181,000) in order to qualify for my latest mortgage refinance. I immediately started thinking about not paying down my mortgage since I still have one year left of the fixed 2.625% rate on my 5 year ARM. Rationalization #1.
Then of course, I shared with you how I made a phone call to whip the SF property assessor’s office in shape by having them record the correct square footage of my house. The recording is worth at least $160,000 in my mind, so why not have a little fun with the new wealth? Rationalization #2.
Cash flow isn’t currently a problem either, so what’s wrong with leasing this sweet automobile? I could drive around like a BOSS and big wig everybody who comes my way like that one woman who told me, “YOU HAVE NO IDEA! NONE!” Rationalization #3.
Then I started thinking how easy it would be to maintain the Bentley since it still had two years left on its three warranty as a 2016 that was put into service in July 2015. If the Bentley was off warranty, I could buy a one-year warranty for $4,200 according to the salesman. What a nice $8,400 savings by not having to buy a warranty for two years! Rationalization #4.
Then the salesman said I wouldn’t have to put any money down if I wanted to lease the vehicle. He said they were running a special where I could lease the car for only $1,999 a month or thereabouts. Given the Bentley would obviously be an 80% business expense, that would mean after deductions, the actual cost would only be about $1,520 based on a 30% effective tax rate. What a bargain! Rationalization #5.
But what really got me excited was seeing the original price tag. The Bentley sold for $253,000 just the year prior. I was getting $70,000 off a car that only had 1,100 miles. What a steal at $179,000. It was almost like I was making money if I bought the car. Who doesn’t love getting a great deal? Rationalization #6.
Stepping Away From The Baby Sitter
Luckily, I had to go to a 6:30pm travel tech meetup at Lyft HQ in the Mission, which turned out to be a disaster because Lyft was arrogant enough to create an artificial line like an exclusive night club to get in.
After standing in line for 30 minutes in the cold, many people were turned away because they didn’t get on a second confirmation e-mail list. No wonder techies get a bad wrap. Too much arrogance and homogeneity of people who don’t seem to care about their local communities.
If I had stayed longer at the Bentley dealer, I just might have pulled the trigger. Thank goodness the salesman didn’t say I could just charge the car with my credit card, otherwise, that would be rationalization #7!
I told the salesman to e-mail me the exact lease cost figures for the Bentley we discussed. But after he saw me drive away in a Honda Fit, I’m not so sure he’ll follow through.
Oh SNAP! He did. For a 36 month term lease, it would only cost me only $3,488 drive off and $1,911/month + tax with a limit of 7,500 miles a year for a car that originally cost $253,000. All I have to do is sell 25 severance negotiation books a month and I can afford it! Rationalization #7.
When I got home and excitedly told my wife about my desire to buy a Bentley, she slapped me silly. “Uhh, that car is obnoxious and ridiculous. You don’t want that do you?”
“Well, yes, I wouldn’t mind rolling in one. The ladies would love me!” I jokingly said. “But yeah, the price is kinda crazy.” I thought for a moment and continued, “So how about the Range Rover Sport for $95,000 out the door? Doesn’t that sound much better than $195,000 out the door?!”
“Actually, it does! Go with the Range Rover Sport,” she agreed. But then she said, “Wait a minute. Is this a trick? Was showing me pictures of the Bentley and telling me how much you wanted to get one your way of getting me to feel better about buying a Range Rover?!”
“No! But now that you put it this way… WOW! The Range Rover Sport doesn’t seem expensive at all. We’d be saving $100,000! Sweet! I’m so looking forward to turning 40.”
Always remember to anchor high during a negotiation!
We Can Rationalize Any Purchase, Be Careful
I love cars. But perhaps more than anything, I love enjoying a car and NOT having to pay for one. I can easily spend an hour inhaling new car smell like a crack addict. My daydreaming skills are excellent. I don’t mind talking to salespeople because they tell me stories about what type of people buy such and such car, how they buy it, and all sorts of interesting insights I can write about on Financial Samurai.
What I realized from my Bentley experience is that when I’m at a Bentley dealer, I want to buy a Bentley Continental GT. When I’m at a Honda dealer, I want to buy a Fit. When I’m at a fine watch shop, I want to buy a Patek Philippe. When I’m at an old coin collection shop, I want to buy some silver pieces from ancient Rome. And when I’m happily relaxing in my hot tub at home, I have NO DESIRE TO BUY ANYTHING! OK, maybe just an oversized floating rubber ducky.
If you don’t want to spend money, don’t put yourself in a position to spend money. Not spending money requires willpower because credit cards and the internet makes buying things easy. Click, click, clickety click baby!
The price of a car is one thing. Then there’s maintenance, tickets, accidents, and auto insurance. I checked AllState online, and comprehensive auto insurance for a $180,000 vehicle is about $2,000 a year with my driving record. Not bad, since I’m paying about $800 a year for a $20,000 vehicle. Doh. I’m rationalizing again.
Perhaps the biggest realization from this post is that comparing yourself to others is the main reason why people spend way more than they should. I’ve now got a Porsche GT3, Nissan GT-R, Maserati GranTurismo, and Lamborghini Aventador rolling past my house every day due to the rich friends of a Chinese mega-millionaire who bought their 23 year old daughter a $2.25M house with cash.
I started thinking to myself, why shouldn’t I also drive a nice car like them, especially since I earned it. Why should these spoiled art student kids who haven’t contributed jack shit to society have all the fun? Due to comparing, my personal values went out of kilter.
I’m actually annoyed that so much obnoxious wealth is now in my face all the time. To help me deal with this annoyance, maybe I’ll interview them for a new post on Financial Samurai and ask how they earned their money to make them face their ostentation.
Getting away from homogeneous rich people was one of the reasons I moved from an expensive neighborhood to my current neighborhood in 2014. Maybe I’ll have to find another low key neighborhood to buy property once again.
And for those wondering what I plan to do with my savings now. The answer is obvious. I’m going to use the money to pay down a mortgage early like a responsible adult! A fancier car will have to wait because I already have one in Rhino.
Building wealth is all about living below your means. Financial freedom is worth it!
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The Safest Cars and SUVS To Survive A Crash
JEFFREY D says
I searched on Google ‘negotiating a new bentley’ and your blog Sam, ranked well so I laughingly read your article. It almost swayed me! But, I am serious about being stupid and selfish!
I am actually going to figure out the best way to be stupid and selfish, take a professional approach if you will.
The first thing to consider is how much free spending cash / wasted depreciation can I afford, after I take care of all the responsible / money making / saving crap in my life. In order to justify the tremendous depreciation of this fabulous car I figured I need to make a lot of money and time it perfectly with my priorities. I happen to make a lot of money and have for many years – luck I guess.
I am 57 and have gladly done nothing but the right things in life, helped build companies, helped my family, employees, partners, people in need, etc. Now I feel glad to buy a new Bentley GTC for $302K loaded the way I like it. It’s stupid. It’s selfish. It’s the worst business decision I have ever made. I probably will be looked at by most like a pompous ass who inherited wealth.
I’m still buying one because of all the good things that I know will be experienced during ownership. See I know how damn great I will feel driving this car and how much of my personal tastes were executed with this car. It truly represents my standard of doing everything I do in my life.
I may inspire some people to achieve excellence in their own lives, that would be good. And good advice told to me is ‘don’t let your better judgement prevent fulfilling a crazy dream based on stupidity and selfishness for at least one time in your life!’
Financial Samurai says
Hilarious you found this post!
Check out: The Net Worth Rule For Car Buying since you are 57 years old. Definetely don’t buy one new!
great article. A car is an emotional thing. To me it does nothing. My net worth is north of 10M and I own 1 car, 10 years old, Audi A6 worth maybe 8-10k.
A friend of mine just started an ortho fellowship, his net worth is ZERo. He just bought himself a brand new BMW 635i. More than 80k.
Both situations are a bit nonsensical but reflective of priorities.
Smart Money MD says
This is an unfortunate but common practice I see in many doctors. We have negative net worth, but due to the demanding nature of even getting to become a doctor causes us to make poor financial decisions.
Btw, are you the same age as your Ortho friend? How did you amass a 10M net worth?
This is one of my favorite posts that I keep rereading. Like you, I love cars and frequently go to lux dealerships with a like-minded friend or two every now and then to scratch that car itch. I run through a myriad of rationalizations but then leave after a test drive and conversation with the salesman. They don’t try to sell me too hard considering I’m 25, but even when they do I get a perverse thrill from simply walking away.
As you have said before, there is nothing better than that new car smell….especially if it is free!
First time commenter. I’ve been a reader for about 2 years now. More so this year than prior. But regardless, I’ve thought a little about the theme of some of your more poignant posts, this one included, and thought that you could do something a little more “quirky” with your money, but still buy the sports car you want.
Donate it to your community anonymously. Sounds crazy/stupid, but it could work. You speak at length about stealth wealth and its value. So to avoid violating your own rule, buy the car, donate it, set up rules to take it out, and give the giddy folks in the neighborhood a chance to drive it (ideally few strings attached). You can sign yourself up and drive it when its your turn.
Owning such a car outright would understandably ruin your values. But if you allow folks less privileged than yourself the opportunity to drive a car even you yourself desire immensely, then you obviate the need to feel ashamed or guilty. You’ll have made every little boys dream come true as well as your own. Give it some thought, I’ll leave you to figuring out the details.
But I look forward to seeing the Facebook story.
Financial Samurai says
Sounds complicated! But thanks for the suggestion. I’m trying to simplify life actually and have been thinking of selling my condo recently. I also don’t plan to get a new car until my lease is over for my Honda Fit in Sept 2017. It’s the right thing to do…. keep things simple with one car. But we shall see!
What’s your story? Sounds like you’ve got some good ideas.
Who feels ashamed or guilty owning a nice car? A car out of the reach for many. Your post must be the most idiotic ever to grace web pages. My values are that others drive what they can afford and leave the best for the rest. And watch them pee their money away to validate themselves continuously through an organized religion or daily pour a liquid poison down their throats guaranteed to give them cancer and an early death. But not before saying “Hi” with high blood pressure and diabetes. And the stuff is highly addictive–when you start it’s got you. A better spend is a nice car, a really nice car, meant for those with discerning and exquisite tastes. A car that announces you have arrived. Cars that separate us from them.
I definitely rationalize buying a 2006 lexus is or bmw 3-series because i am really into cars. But then again I’m only 19
Financial Samurai says
If you make 10X the value of the 2006 lexus or BMW 3 series a year in income, then go for it! If not, don’t blow up your finances so early on.
Great post, rationalizing is financially deadly and I needed this reminder!
Just a point on the rich kids with cars. I’m a car enthusiast so meet many of these rich chinese kids in lamborghinis etc. Trust me when I say, they don’t care what you think. A lot of comments here make people sound really insecure which is a shame. I used to think like this also but getting to know them I realised the truth is far from what we think.
Try to look at from their point of view. You see them and feel they are rubbing it in your face but honestly, they just enjoy buying nice things that they can afford. It’s the only way they have ever lived so it doesn’t even feel that special to them. It’s the same way ppl from 3rd world countries would look at you and I. We see a normal house, normal car, new clothes a phone and a laptop. It’s normal to us. To someone in a village they see a camera phone worth more than a years salary for them being waved about like its worthless. It’s all just perspective. We look obnoxiously rich to countries much poorer to us and chinese rich kids look obnoxiously rich to us.
Ignoring whether they worked for it or not (they specialise in generational wealth which is a cultural thing worth understanding), we can’t honestly say we earned our great economic opportunities. The truth is we were lucky to be born in these countries more than anything. Just like chinese were lucky to be born during a time of great economic growth. Just like half of Africa was unlucky to be born into poverty.
It’s all perspective so don’t be jealous or angry. We’re already really lucky!
Financial Samurai says
Good POV. If only they’d take off their modified after market exhaust pipes that wake up babies in the middle of the night because they don’t have to go to work the next day. Then all would be good!
Very good perspective. Everyone can learn from your insight.
ZJ Thorne says
I don’t own a car, and thus my danger zone is shoes. A good, sturdy pair that a professional woman in a major city can walk in is hard to find and worth some expense. However, there’s a new woman at work with similar, but more expensive fashion tastes to me. I keep having to tell myself to not look up the Italian Leather Handmade shoes. Too much beauty.
Financial Samurai says
Do they have red heels? Are Manolo’s and Christian Louboutins still fashionable? So long as you contain the shoes to the size of your closet…. Might be good!
Just buy that RRS already. Once you are 70 year old I doubt you get the same enjoyment from driving something fun. Can’t spend your entire life piling money..
Tony K says
I’ve got a thing for cars myself but only drive a Honda Accord I bought for $25k, but I do spoil my wife spending $75k on an SUV recently. Fortunately, I make a great living and roughly follow your 10% rule. I commute into NYC from NJ everyday and can’t justify buying more vehicle for myself considering I only drive one mile to and from the train station DURING during the week. On the weekend the family piles into my wife’s SUV.
However, like you, I’ve been getting closer and closer to my breaking point! I can afford it, why the hell not?!
Financial Samurai says
Why the hell not indeed? My reason is because I only have a one car indoor garage. I feel stupid parking the second car on the street or in my driveway.
Smart Money MD says
Sam, in your experience do most of the homes in your area that have garages that are actually large enough to fit an SUV without having difficulty opening the vehicle’s doors and able to store a box or two? Seems like space is a commodity.
NYC marketer says
Is it possible for you to walk/bike to the station? I also live in jersey commute to nyc everyday, but walk or bike to the station. I have a car, which only moves from one side of the street to the other. The only reason why we keep it is for emergencies.
NYC marketer says
Sam, could you write an article about excessive (read expensive) engagement rings and weddings?
I got my fiancée a modest ring but notice that there are lots of guys willing to go into huge debt for ring bling.
Financial Samurai says
Sure, you got it. I’ve written this post for you: The NEW Rule For Engagement Ring Buying . You can send it to your friends. But better yet, send it to their fiances and girlfriends so that they are on the hook and screwed!
Sam, I’ve said this before. If you want to buy cars and not get killed on depreciation (like that $70k the Bentley lost in ONE year, or what the RR Sport would lose if you bought it – check used prices, its hilarious), you’ve gotta buy used classics.
Go for an old Porsche or Jag or Ferrari…you can drive in style, and none of that new money look at my GT-R style…real style! And you’ll be sitting on an appreciating asset. You don’t have to go THAT expensive or extreme, either. There are plenty of high end cars from the early 2000s that are still as luxurious and fast as ever that are at the bottom of their depreciation curves making it a great time to buy. E39 M5 (the last true M5 per most enthusiasts and starting to appreciate), E46 M3, 993 Porsches (missed the boat on that one – but there’s a bit of a Porsche bubble right now, so probably best to avoid for now), etc.
Lots of amazing cars that ooze style but don’t shout out for attention either that you could make money on. Do some research, you’ll find something if you really are interested in something a bit more exciting than Rhino – and you wouldn’t have to put down much more money if you don’t want to (but remember, maintenance will still be expensive unless you do a lot of wrenching yourself).
Dr.J @ MedSchool Financial says
There’s nothing like that new car smell, until you see the MSRP. I find that I rationalize certain expenditures under the guise of productivity. Its never anything big, but like buying a coffee for the sake of getting stuff done that day. However, this can still apply to a big purchase, like a super car or suv. For example, say someone ended up trading in for the range rover, rationalizing under the guise of productivity, it would go something along the lines of “well i’m investing for the good of the cause because now no matter where you are rain, snow, or just off road for some reason you have substantially decreased the chances of missing any important business meetings or flights”.
Sam I think you should get a luxury car especially since it seems like you’re really into cars. I had a beat up hand me down toyota tercel when I got my license and drove it for many years. I cherished it kept it clean and neat and was happy at that time. Then I upgraded to a Honda Accord. Several years later I now have an Infiniti. The point is if you can afford it a car is not just going from point A to point B….you gotta go back to point A and you may have several other “points” to goto later. Why not spend your valuable time in a car made with quality materials, has a quality ride, that boosts you’re self worth and confidence and makes you feel like you’ve earned a tangible item.
I know many may not agree but if you can safely afford it, DO IT!
Smart Money MD says
Are you able to lease the Bentley for only 6 months? Would be interesting splurge purchase, business expense (imagine using it to drive for Uber!), and something to write about. I agree that the best way to avoid spending is to keep yourself away from opportunities to buy. I see that Range Rover in your future! ;-)
Mike Adams says
I’ve thought of that too. Maybe a two month lease – nice fancy sportscar – a couple of tickets then back to the functional low cost beast !
Sam, can you write a post about how to save or make more money for folks with kids? Would love to learn more on that… :)
Todd Guthrie says
I’ve always loved your articles about cars because they lay out so clearly just how ridiculous of an expense those things can be. Easily the unnecessary expense for the typical American family.
A couple years ago my very first car (a ’99 Accord with about 200K miles) finally crapped out and needed a new one. I happened to have read about your 1/10th rule around that time, and it helped me to feel a lot better about buying another gently used, high-mileage car for my family (’07 Camry with 120K). Why do people spend so a large fraction of their income on what is essentially just an extension of and/or boost to their ego?
Today, that Camry is still our ‘family car’, and I’m still thankful for the money I saved because I didn’t go for a new car, or a second car (living in San Francisco, it’s pretty easy to have only one car for the whole family), or something fancy and ostentatious.
When there are so many problems in the world, why create more problems for yourself by buying more car than you’ll ever really need?