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 Anything
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 eSurance 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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