You're Getting Hosed
Nick is losing a company car and a gas card. He needs to buy a vehicle. The car has to be less than five years old and worth more than $18,000. Dave thinks his company is being unreasonable at Nick's current salary.
QUESTION: Nick in Birmingham is calling because his company is making some changes. Nick is losing a company car and a gas card. He needs to buy a vehicle, and his company will provide $290 a month and about 20 cents per mile. The car has to be less than five years old and worth more than $18,000. Dave thinks his company is being unreasonable at Nick’s current salary.
ANSWER: I don’t want this to sound demeaning, but mathematically, it’s going to. Why in the crap would anybody go $20,000 in debt to keep a $50,000 job? I’d tell them to bite my butt. That’s what I’d tell them to do. You can’t do that instantly.
The reason I said this was a large company is because it sounds very dogmatic, and it sounds very precise, and it sounds like it has everything to do with taking care of them and not you. Those were my hints.
Here’s the deal. What they are requesting—that you get your own car and in turn they furnish you a car allowance—is not an evil request. And that you get a nice car since you’re out there calling on customers—a reasonably nice car—is not an evil request. My guess is you’re also on the road. You’re a road warrior, so you’re putting 50,000 miles a year on a car. Whatever you drive, you are destroying. I would submit to you that if you owned your own business and the net profits on your business were $52,000 a year and you were doing this same thing, you would want a reasonably nice car to make calls on your customers, but I think I would choose—making $50,000 a year—to destroy something less expensive than $18,000. I think I could do the job—meaning have the reliability, reasonable comfort, and reasonable credibility—with a cheaper car. I don’t want you driving up in a $500, 15-year-old Toyota—I agree with that from a comfort, reliability and credibility standpoint—but their request of you is untenable.
I think I’m going to have to sit down with my supervisor and start having a discussion. I don’t mind you going and buying a car. I don’t want you to go into debt to do it. I would submit to you that an $8,000 Taurus in really good shape with low miles is about what I’d want to destroy or something along those lines. Whatever you drive, you’re destroying its value with the miles you put on it. From a resale standpoint, it’s going to be a piece of crap. You can take care of it. You can get miles out of a car. I know that. I don’t have a problem driving a 200,000-mile car. That’s not the point. The point is with the miles you put on it, the money you’re putting into it is going to go away. That’s what I mean. You’re hosed. You’re totally hosed.
If I were in your shoes, I’d sit down with my supervisor and say, “I really like this company, and I’d really like to stay, but I’m not going to get hosed. I’m willing to get a car. I’m not willing to get an $18,000 car, and I’m not willing to go into debt to get it. I will get a nice car and meet the obligation of credibility, reliability and reasonable comfort in order to do this job. I will do that. I cannot meet these other guidelines.” If you can get them to acquiesce, and you go to an $8,000 car, and you can scratch together the cash, that sounds like a good compromise.
Here’s the mythology that’s out there. “Oh, I’ve got a $290 car allowance!” Not when they fire you in the next reorganization. And you’ve still got the car payment, by the way, or when they go Chapter 11 and they don’t pay anybody anything. You’ve still got the car payments. People buy cars based on their car allowance. That’s the mythology that runs through people’s minds, and that’s shortsighted as well. I think you scratch together and pay cash or almost pay cash. I wouldn’t do except for paying cash. You’ve still got to get a concession from your supervisor to make that happen. Dude, if you’re making $250,000 a year with these guys, then they want to require a $20,000 car I can stomach that a little more even though I don’t think it’s smart to destroy a $20,000 car.
I’m in that business. That’s the second part of the conversation. I’m immediately looking for a job. I don’t think you can get hosed to this level and come out. Let me put it to you this way. Let’s pretend you were unemployed and someone came up and said, “Hey, if you’ll go $20,000 in debt and go buy a car, I’ll give you a job making $50,000.” You’d say, “I’m going to keep looking.” That’s really the scenario you’re in. You start every morning unemployed and make the decision again to stay there. I think they’ve got to rethink this because they’re hosing their people, but some companies aren’t smart enough to think about stuff. They just hose. But maybe you can work it out and stay there. If you can’t, dude, go look for a job. Don’t sign up for $20,000 in debt. I’m not just saying that because I hate debt, but because you’re getting hosed.