I get great satisfaction from reading personal finance stories from personal finance columnists. One columnist I usually like is Terri Cullen, who writes the Fiscally Fit column at the Wall Street Journal. Recently, her husband was offered a chance to buy his dream car, a like-new Chevrolet Corvette, for a too-good-to-be-true-but-is price.
Gerry and I never make big purchases unless we both agree, but this time I felt the decision to buy the car should be Gerry’s alone. This is a car he’s talked about for as long as I’ve known him — for years I’ve watched him gaze longingly at other Corvettes on the road. The car’s price tag had always stopped us from buying one — late-model Corvettes in good condition cost in the low $40,000s. “Too expensive for a car,” Gerry would say, mostly to convince himself. And now he had the opportunity to buy one, practically new, at half the price.
Terri and Gerry (seriously) discussed the pros and cons of taking advantage of what would likely be the best deal they would ever see on a material dream. They included their son in the discussions as well, not for his input, but to teach that major financial decisions are not made on a whim. When the dream-fulfilling option involves going into debt and comes at a time when there are other priorities, these discussions are even more important.
Whether or not Gerry purchased the car, their son, Gerald, has learned a valuable lesson about making decisions about money and setting priorities. As I realize the Wall Street Journal may not always be available for free, I will go ahead and say the Cullens decided not to purchase the car, despite the great deal due to their friend’s estate sale. Going into debt for a toy (admittedly a very nice toy) did not outweigh the necessary expenses like house repair.
Somewhat like the Cullens, I’m sticking with my Civic for the foreseeable future. I’m closing in on 80,000 miles, which isn’t too bad after purchasing the car in June 2004 and living with long commutes to work and to my girlfriend. I don’t have a “dream car,” though I have no experience driving sports cars. I could go test driving one weekend, but I don’t want to develop a taste for expensive cars.
Debt vs. the Dream Car [Wall Street Journal]
Image credit: Smenzel
Updated October 31, 2007 and originally published October 25, 2007.
{ 12 comments… read them below or add one }
Sounds like they made a wise decision. If they were quite well off and it wouldn’t mean debt or taking away significantly from retirement/college funding, then this would be a great deal.
But a great deal is only great if you need it and can afford it (or if you want it and are just that amazingly rich). This is also true of “great” prices on coats, tvs, and other things that we could buy but don’t need and can’t really afford.
But HOW he got the great deal is what we readers want to know!
I hear that Corvettes can fetch a hefty sum used. I would have bought it and resold it. :)
Oh. Now that I actually read the article, I wish I hadn’t asked. Sad. :(
They had to consider this? Unless they planned to flip it, going into debt for a toy car is stupid.
It’s only a good deal if your buying something you need to buy or plan to make into a business…otherwise it’s a waste.
Yeah, it certainly didn’t make sense to buy an unnecessary automobile that’d force them into debt. One thing they could do is rent a similar bad boy for a weekend excursion somewhere.
Although, if they were getting such a sweet deal, I wonder if they could have eBay’d it and made a few bucks?
That was a stupid move.. They should’ve flipped it!
I have longed for a Corvette for the longest time as well.. And I have done some research on this and you can easily get a 2000 model for low $20k’s.. And since these kinds of toy cars are hardly used, the mileage tends to be very low and they tend to be very well maintained..
On a personal note, that’s exactly what I plan on getting once I figure out a way of buying it using purely passive income. Cars are liabilities in my books and I have a strict policy not to spend any of my day job’s money on liabilities.
Buying it, driving it for six months, and then selling it for more than he paid, would have been a wise decision. He would get the “happy” factor of enjoying his dream car, albeit for a short while. And he would come out financially ahead in the end – which is good in and of itself.
Bad call on not buying. Used Vettes can command great money if they’re clean, and marketed even fairly well.
If this was your dream car (or house, or whatever), would you be willing to flip it? People don’t buy their dream just to sell it right away. Leroy, you have a better plan than a pure flip, but there’s the chance that after six months, you’ve learned to live with your choice, and you just may not give it up.
For Gerry, based on the article, this car wasn’t just an object to flip and make some money on, this was a dream. When you achieve your dream, you don’t sell it for a profit.
I don’t dream of cars, but I won’t judge the merits of the dream. I’ve never driven a Corvette, so I have no basis of knowledge.
That has to be part of the plan from the beginning – to drive for a bit and sell. Otherwise it’s not a particularly good financial decision. It just takes a bit of discipline is all.
I’ve had ridiculously fast cars before ( and man, do I ever miss my last one at times ). But when it makes sense to sell, then you do it. Family and financial stability have to come first… if he couldn’t make this commitment ( which it seems he couldn’t), then he shouldn’t buy. Looks like he made the right call *for him*.
my dream car is a car that is paid off, has low mileage, and is dependable.
That, and a kickass old school soft top Bronco.
Only 80,000 miles? It’s just broken in! My 1993 Civic Del Sol has 220,000 miles (a one way trip to the moon is 240,000 miles and I think I may shoot for a round trip). I don’t think I have a dream car but I’m seriously in love with the mini cooper. I loved my car when I bought it and hated it every month I made a payment. I fell in love again the day I payed it off.