So on LAL Musings I asked would you rather be Hot or Rich? Budgets are Sexy asked the original question, but he limited it to rich like Oprah but ugly or hot like supermodel and broke? And you cannot have plastic surgery or personal trainers. You are ugly period. No changing it. And you cannot go out and earn more money, you are limited to earning no more than $30k a year if that. I choose looks if it matter, because I figured I could land someone rich..and apparently I’m not alone!
But on a more interesting note, Trent from the Simple Dollar, recently financed a car purchase. What purchase? A brand new 2009 Prius. Nice ride.
But there were a lot of comments (150) over whether it was a good idea or bad one. I’m not really sure. I haven’t followed Trent’s blog in depth. I know that he typically calls for paying cash for cars, but wanted to keep his EF intact. That he thinks he’ll be replacing his second car in the next 1-2 years.
Would I do the same thing? Maybe. It really depends on our financial situation at the moment. Paying cash would be awesome. Or having enough cash in the bank to finance the car but not pay cash even better.
That being said, I think he’s catching a lot of heat, because people expect PF bloggers to be perfect. We’re not. I’m thinking I might be a bad PF blogger one day and have a car loan. Or something bad like that. Who knows? I certainly don’t, nor can I predict that nothing bad will ever happen. I can only try to be frugal, plan for purchases, and do my best at managing my finances.
What do you think Trent should have done and will you condemn him?
6 responses so far ↓
1 SP // Mar 23, 2009 at 6:53 pm
I didn’t comment, nor did I read his entire (pretty long) explanation.
At first glance, I think he paid a premium for the joy of owning a nice Prius, which is PERFECTLY FINE, even for a pf blogger… if he didn’t spend 7 paragraphs saying that he was “getting the most bang for his buck” by doing it.
It is possible (though unlikely) his math truly does work out and this is the best deal out there. It might not be the best deal, but it might be the best deal for him.
Honestly, a 4% loan (with tax deductible interest, currently) pretty much falls into the “don’t pay back quickly” category.
2 Abigail // Mar 23, 2009 at 6:56 pm
While I’m not an avid reader of The Simple Dollar, I think people need to calm down. PF bloggers aren’t perfect. If they are, I’m in big trouble. I’m disabled, and so I can’t always make the perfect decisions. I can only make the best choice of what options are available to me…. realistically.
And, frankly, Trent might have plenty of financial reasoning to back up his decision. Sometimes, when you run the numbers, a bad idea turns out to be a good one. He might have a plan for the money he’d otherwise have spent on a car. He might have reason to believe his or his wife’s income is not stable. Or he might just be cautious and decided some interest was worth feeling safe.
I really don’t care what choice people make, so long as they have obviously thought it through in a logical way. We all, at some time or another, have paid more for some completely illogical reason. Because feelings matter as much in personal finance as actual fact does.
3 dogatemyfinances // Mar 23, 2009 at 8:32 pm
No no, he catches heat because he preaches to everyone how they have to save for a car. Car fund for thee, but not for me.
He’s so frugal he counts his toilet paper squares and makes his own laundry detergent. THAT’S why it’s a big deal he financed a car he couldn’t pay for.
4 sarah // Mar 23, 2009 at 10:34 pm
Not sure why Trent is catching so much flak really. He had the money to pay for the car outright, but kept some of it back in case the truck failed before they saved up another car fund – he didnt want to raid the EF for a car, so he kept some car fund liquid & got a great loan. Who can blame him for that? Best case scenario the truck lasts long enough for them to save up all the cash needed for a replacement, and they can pre-pay the loan they have (or ride it out if interest rates on savings rise).
PF bloggers are not perfect, but I think he made a great choice. What he really would have gotten flamed for is getting 2 brand new cars on loans right now. That would not be so smart.
5 LivingAlmostLarge // Mar 24, 2009 at 12:11 pm
I had no idea Trent counted toilet paper squares or made his own laundry detergent. I thought he was catching flak because people can’t believe he’s buying anew car.
I don’t think it’s a bad idea, like I said, I won’t say anything because I could be in his boat in the next few years. Better not to point the finger before it’s turned around on you.
6 Amber // Mar 24, 2009 at 12:46 pm
I agree with dogatemyfinances. I remember the toilet paper post vividly. That was the day I removed The Simple Dollar from my feed reader.
On the other hand, I don’t think there’s anything wrong with taking a car loan. As long as you can easily afford the payments, it’s not a big deal.
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