Posted by: mrhubbard | April 18, 2008

Dear Larry, Ray and Adam

When I saw this, I couldn’t believe my eyes.

Three men I admire have turned around and done something that runs counter to all the advice that I have read in their books.

Let me be straight:  I have no problem with Hyundai’s cars. They may be great values.  They may be great deals.  This isn’t a car blog so frankly I don’t know.  And the ad campaign is a way to sell cars.  I’m fine with that.  Seeing through bogus advertising is what separates us from the animals.

But to have 3 pillars of the Personal Finance community helping buyers rationalize the purchase of a new car by saying they can invest the $2000 cash back in a Roth IRA…  It breaks my heart.  Take on $25,000 of debt so you can put $2000 in a savings account.  Sorry, you don’t have to be a CFP to realize that’s just stupid.

Buying a car is never, ever, an investment.  It depreciates rapidly and creates other expenses (gas, insurance).  It may be a necessity.  It may be a pleasure to drive. It may even be a reward to yourself.  There is nothing wrong with that.  We drive an Audi.  D- bought it after she had a great year at work,  good enough to pay cash.  But it’s never an investment.  At least be honest with yourself why you are buying a car.

These three sell outs financial writers just told you to buy an Item for $28,000.  One year later it will be worth $22,000.  All to get $2000 cash back.  What if a stock broker told you to buy a stock that pays 7% up front, then loses 20% in the first year, and 5% each year after that?  You would punch him in the mouth.  Or at least you should.

So Mr. Smith, Mr. Lucia, and Mr. Winget:  I hope the check was big.   Integrity shouldn’t come cheap.  Heck, maybe you even got a free car out of it.

Sincerely,

mr hubbard

What’s the big deal?  You can decide for yourself.

http://www.hyundaiusa.com/dollarsandsense/

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Responses

Hey Mr. Hubbard, Larry Winget here, one of the sellouts you are talking about in your blog. None of us are telling you to buy a car. We are only saying IF you are going to buy a car, use the money you get back wisely. And buying a car with zero percent financing is smarter than at 5 or 6 or whatever other percent financing you usually get. Another point is that you can buy a great car without it being one of the high end premium models - you don’t have to spend $50K for a great car. We are all actually promoting fiscal responsibility. We are not telling you to buy a car if you don’t need one. But if you do need one, be smart about it. By the way, the added expenses you mention such as insurance and gas, etc. — chances are you already have those anyway so it’s not like you are suddenly going to be hit with these as new expenses.

I rarely bother to defend my position and am not doing so now. I doubt the others bother defending their positions either. They probably won’t bother commenting - I almost didn’t myself. I only did because you attacked my integrity. My integrity is not for sale - never has been and never will be. But I never saw this as a sellout of my principles or my integrity and I still don’t. I am proud of the work and the point I made in the commercial from the back seat of that Hyundai. I will bet the others feel the same way though I won’t speak on their behalf.

I do know that many people have seen the commercials and responded favorably. Some have personally contacted me and used the advice given by either me or Ray or Adam.

Thanks for the mention in your blog. I always appreciate any mention of the book!

Larry Winget

By: Larry Winget on April 19, 2008
at 2:35 pm

By the way - paying cash for a car when you can get 0% financing is nothing to brag about. You could have invested that money and actually made money on your $50K cash purchase of the car.

You have to be careful when you talk about money, don’t you?

Again - all the best and thanks for plugging the book.

L

By: Larry Winget on April 20, 2008
at 8:43 am

I’m happy to plug your book. It’s a book I respect.

The Audi was purchased before 0% was around, or we would have been right there with you. What’s better than free money? :)

By: mrhubbard on April 20, 2008
at 10:56 pm

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