Updated on 08.28.14

Hyundai’s “Dollars and Sense” Ads

Trent Hamm

My Take

Recently, Hyundai has begun airing car ads for their “Dollars and Sense” campaign, in which they’re offering a “cash back” promotion on new purchased Hyundais. To get across the idea that buying a brand new Hyundai is a financially sound decision, the commercials feature various personal finance and investment writers offering suggestions on how to use that “cash back” in a financially sound way. Here’s my favorite of the series, featuring an almost-creepy appearance by Larry Winget, the author of You’re Broke Because You Want To Be (which I reviewed and reasonably liked a while back):

Other ads in the series feature Ray Lucia (author of Buckets of Money) and Adam Smith (author of The Money Game).

Let’s look at the ads a bit more carefully.

Is this a good deal?

First of all, never, ever make your car buying decisions based on an ad for a new car. If you’re going to invest your money in buying a car, focus on late model used ones and use Consumer Reports and other car journals to research and find the most reliable and fuel-efficient car for your needs – and do the same if you must buy new for some reason. A late model used car with high reliability numbers and good gas mileage is the single best deal out there for car buyers.

Car commercials, for the most part, try to sell you on things that largely don’t matter – small sales up front (like 5% off), exterior appearance, and so on. Don’t base your automotive purchases on them – instead, go do some real research.

Is their advice any good?

Winget, Smith, and Lucia do provide good advice in the commercials. It does make sense to put your money in a highly diversified index fund or to pay off high-interest credit card debt – both are indeed good moves.

The problem with the commercial isn’t the use of the money – it’s the source of the money. They’re talking about using money that’s coming to you in the form of a rebate on an item that’s overpriced to begin with. You’ll lose more in depreciation of the value of the car the minute you drive it off the lot than you’ll gain back in the rebate from the sale.

In other words, their advice is great if we’re talking about $3,000 free and clear, but that cash is tied up in the value of the car you just bought – and you’ll lose more than that the second you drive it off the lot. A better option is to buy a cheaper car and then use the $3,000 you actually did save to pay off credit card debts and such.

Are these writers “selling out”?

The advice actually coming out of their mouths is good advice – the problem is in the context of all of it. By appearing in the ad, they do appear to be implicitly approving of the purchase (which isn’t a good financial choice for most people).

Given my condemnation of the ads, you’d likely expect me to say that these writers are “selling out,” or betraying the trust that their readers have placed in them. For the most part, I don’t feel that way, because if one of those writers had said no to the advertisement, Hyundai would have simply found another writer. By saying yes, they at least get their paycheck and a bit more attention to their books and public persona.

So, obviously, in the context of a car commercial, these guys are more interested in selling themselves to you than in providing an overall positive financial image. But by doing this ad, Larry Winget might just have been able to get a few more people to read You’re Broke Because You Want To Be, which does contain some excellent “tough love” style advice. If that book helps one of those new readers turn their life around, that’s overall a good thing, is it not?

Would I appear in such an ad if the opportunity presented itself?

Honestly, I think it would depend on the car. For instance, if I were asked to appear in an ad for a car I would ordinarily recommend – one with good gas mileage, high safety ratings, and high reliability, I’d probably be fine with it because the people interested in such a car likely have some financial sense anyway. Alternately, I wouldn’t appear in an ad for a Hummer – but then the average Hummer buyer isn’t exactly going to be swayed by a guy writing a site called The Simple Dollar.

As a final note, since this post mentions Hyundai, I have to include one of my favorite comedy clips of all time – Stephen Colbert’s “I’m Singin’ in Korean” music video.

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  1. Tori says:

    I was just going to ask you your take on these ads! I find them somewhat curious, and also wonder why you haven’t been asked to appear in them.

  2. Frugal Dad says:

    Man, Winget popping up from the backseat was a little creepy! I agree with you, Trent, that the advice is good, but the context is way off. Notice Winget says, “Take the money you’ll save…” Who said anything about saving? You are spending twenty-grand to get back $2k. Where I come from that’s called fuzzy math.

    Better advice? Buy a good used car for cash and put what would have been car payments in a savings account, or use it to pay down your credit card debt. And Trent, don’t feel bad, a local car lot wouldn’t use me to feature a ’73 Pinto if I paid them!

  3. Evan says:

    “By saying yes, they at least get their paycheck and a bit more attention to their books and public persona.”

    I’m sorry, but to me that seems to be the definition of ‘selling out’. Not selling out would have been to say “You know what, I wouldn’t advise people to buy a new car if they are trying to save money, so I’m not going to appear in your commercial. Thanks anyway.” Just my opinion.

  4. Michael says:

    “Someone else will do it if I don’t” is an excuse people use to do wrong, and to not do right.

  5. Toby says:

    What about all the people who won’t read their books, but will be swayed by the advice of an “expert” into purchasing beyond their means? Does X people reading their books make up for Y people who don’t and shouldn’t be purchasing? That’s not to say they wouldn’t purchase anyway, but I would think with a less renowned expert, there would be fewer. I don’t think it’s possible to say it will be for the overall good. It might come out even, it might come out less.

  6. L says:

    I have the same overall take on the ads. $3000 isn’t being given to you, you are paying at least that much extra for a product you may not need.

    However, I would be cautious in making blanket statements about what is the “single best deal” for car buyers. I have had many experiences in which buying new (and specifically buying a new Hyundai) has been a far better deal than buying used.

    If you don’t do a good job negotiating and think that the $3000 is them doing you a huge favor, then you are correct. But if you do your research and can negotiate a price that is below invoice (which I have done several times) then buying new is by far the best way to go if you plan to keep it for awhile.

  7. jacl says:

    Now if the car was selling for $2,000 and you were getting back $2,000, few people wouldn’t take the deal. But, since the car is selling for much much more, you really should look at the overall cost of buying the car. It’s a car-buying decision you make, not “saving money”. I agree with you on that.

  8. Dave says:

    If you’re shopping for new cars, the Hyundai might already be the cheaper car. But to justify spending $20,000 to save $3,000 I’ll agree is quite stupid.

  9. Jeff says:

    Even with your take on it, I don’t think I can get past my disappointment in seeing them in the commercials. While it may garner them publicity or a few more readers, I feel like the offset is the financially weak (simple meaning they can’t tell themselves “no”) using this advice to justify wasting money on a new car.

  10. ann says:

    I agree–“someone else would do it if I didn’t” is just a way to rationalize something you know you shouldn’t do.

    I also didn’t think the clip at the end was very funny. Sorry. But I’m sure it brought you joy to find an excuse to post it.

    I agree with your financial advice in this post. It’s the old “spend to save” fallacy.

  11. Jon says:

    They are selling out for sure. Each author is endorsing an overpriced, highly depreciating item for the sake of a little publicity that “might” make people pick up their book and read good advice about NOT making those overpriced purchases.

  12. jtimberman says:

    “invest your money in buying a car …”

    Poor choice of words there Trent. Investments go UP in value. Brand new and late model cars *always* go down.

    “… item that’s overpriced to begin with”

    Overpriced, and in the case of a $2000 rebate, will lose that value in the first year of ownership, if not more.

    I don’t know what model and specs of the Santa Fe they’re advertising in the Winget ad, but I looked at Edmunds.com for a 2008 (brand new) and a 2007 (slightly used) on a “GLS”. A good deal from a dealer on the 2008 would be invoice, which is $21,578. A good deal on a 2007 would be to buy from a private party, which is $17,600. That’s a $4000 difference, for one model year. So what if you got $2000 back in a “rebate”? You lost another $2000 just driving it off the lot! Not to mention that getting invoice pricing AND a $2000 rebate are going to be pretty rare, if not impossible at most dealers – especially the “no haggle” ones, so then you’re looking at MSRP for the ’08 which is $22,450.

    I maintain that the best thing to do when buying a car is to buy experienced vehicles that you pay cash for, from a private party, and buy in the 5000-10,000 range. You can get a LOT of car for $10,000 if you have some patience. “But used cars are so unreliable!” BS. I’ve had two used cars in the last year that didn’t require a lick of repair that cost more than $100. Besides, the money you save by not having a car payment will cover the normal maintenance, and a lot of the repairs.

    As for authors and finance people selling out, I know that my favorite author and personal finance expert, Dave Ramsey, will never sell out. He tells people to sell cars EVERY SINGLE DAY on his show, and to avoid brand new cars. He’s not interested in becoming a hypocrite.

  13. MS says:

    I have to admit I haven’t read anything by these authors. My biggest problem would be if the messages in their books is not consistent with buying a new car. If someone like Dave Ramsey did the commercial, I would lose a lot of respect for him.

  14. eieio says:

    In concluding that these writers haven’t actually sold out, you say “if one of those writers had said no to the advertisement, Hyundai would have simply found another writer. By saying yes, they at least get their paycheck and a bit more attention to their books and public persona.” — all of which seems to me to be a DEFINITION of selling out. They are valuing “what’s in it for them” (pay, exposure) over the consequences to others (misleading the car buying public). To me, if you make your living and develop your reputation by giving sound financial advice, and then trade in that integrity by giving lousy financial advice in exchange for some private benefit, you’ve sold out. (You’ve also, potentially, damaged that reputation for giving sound financial advice, but that’s another story.)

  15. Laura G says:

    So does this mean you’d be more likely to do the ad if it was for, or for a company that offers, “Certified pre-owned” cars?

  16. Trent Hamm Trent says:

    “Poor choice of words there Trent. Investments go UP in value. Brand new and late model cars *always* go down.”

    Aha, you’re wrong here. Cars ARE an investment because they provide transportation. Without them, most employment opportunities would vanish, as would opportunities for getting food ad reasonable prices (without the cost of growing them yourself). That makes a car a very solid investment. The question really is which car is the best investment?

  17. Trent Hamm Trent says:

    I’m curious – let’s say, hypothetically, Dave Ramsey did a commercial for the Honda Insight, which gets 60-66 miles per gallon, and said that due to current high gas prices, buying a Honda Insight and replacing an “average” mileage vehicle can end up saving the average American family money. Would this cause you to lose respect for Ramsey?

    If it wouldn’t, then you’ve put much of this into a gray area.

    Me personally, I would do the ad I describe above for the Insight.

  18. Matt says:

    I wouldn’t pick apart Trent’s words if I were you, people. Trent makes some extremely logical points. Unless you’re riding around in a public transportation bus (I commend you, because I sure couldn’t!), then a car is an investment. And just as replacing normal light bulbs with CFCs, a fuel efficient car will save you money (as long as the premium of the car for fuel effiency doesn’t exceed the savings of fuel/reliability/etc.).
    But most people who will be swayed by a commercial aren’t exactly the type who have read these financial books, as Trent mentioned. But outside of used vehicles, these authors endorsing the sale aren’t really doing wrong — sure, they are putting more emphasis on saving than spending, but you have to keep in mind WHAT they are comparing the saving to…. in this case, it’s the exactly same care with the $3K rebate. If you were to buy a $23K Hyundai a month ago, and your neighbor bought the exact same care for $20K today, it would be hard to argue that your neighbor now has $3K more than you. Yes, this car is probably worth $16-17K once you drive it off the lot, but you’re comparing apples to apples in this case. Once you start comparing this deal to a used vehicle, it’s apples and oranges.
    To the average person, a used car is not an option… the fresh car smell, owning something new, not worrying about what the last owner did with it, having a slightly better warranty, etc… these are all things that factor into a new car’s price as well.
    Trent, you’re right on. People in the market for a new car are looking for the best deal, and in this sense these authors aren’t selling out.

  19. MN Scout says:

    I question why they are buying a new car when they have credit card debt. If they can’t keep current on their bills, then they should never be considering a new car. And they should only be considering a used if they don’t have a car and need to get to work and can’t use public transportation. Then I would agree with Trent and consider the used car to be an investment.

  20. MN Scout says:

    Clarifying what I said… I agree with Trent. I think the whole basis for the add is ridiculous. The rebate should not be a selling point.

  21. Rick says:

    I think the authors sold out- even if they are giving some good advise it is coupled the advise to buy the new car which is likely bad advice for many people vs. getting an older more affordable used car.

    Trent, would you feel right about knowingly giving any bad advice to get the opportunity to give some good advice as well? Is it worth the risk your reputation to do so?

    I can’t imagine Dave Ramsey doing a new car commercial, he frequently advises callers to his radio show to sell their new(er) cars and get a cheaper, older used car. To be consistent with that message he would have to make statements on how a person shouldn’t go into debt to buy a car and that they have no business even thinking about buying a new car if they have ANY other debts. How else could he maintain his integrity?

    -Rick Francis

  22. Jay says:

    Well, have to admit I was disappointed in Larry Wingate. He always seemed to be telling people on his show to trade in their [silly] cars even if they’re upside down in payments. Oh well.
    We must get minimum 5-10 car ads an hour on cable TV around here (SF Bay Area) so I would hope most have become immune to all the hype.
    Thanks for the analysis!

  23. All of this reminds me of the flack that Susie Orman got when she did a GMC commercial. Susie’s actions were probably even worse because she was endorsing huge trucks and SUVs. Hyundais are at least reasonably reliable and fuel efficient.

  24. Cheryl says:

    I’ll stick to the bus.

  25. Trent Hamm Trent says:

    “Trent, would you feel right about knowingly giving any bad advice to get the opportunity to give some good advice as well? Is it worth the risk your reputation to do so?”

    I think part of the problem is that personal finance isn’t an absolute. I disagree with Dave on the absolutism of selling your new car and buying an old used one. For instance, if you have a brand-new Honda Insight, you shouldn’t sell it for a used pickup truck if you’re driving much at all.

    So, yes, I’d do an ad for an Insight. The people who would buy a new car would save significant money by buying that car over another one.

    That problem is what creates the conflict. There are some out there that preach that buying new is always justifiable because of the extra years you get out of the car, etc. If those people appeared in such a commercial, I’d have a hard time knocking them – I’d think they did the right thing because the ad matches their values.

    So then you’ve gotta ask who the audience here is. Who’s paying attention to this ad? People that would buy a new car, that’s who. And if that’s your audience, I can at least see the logic in what they’re doing, even if I wouldn’t do it myself.

  26. Jeff says:

    If Dave Ramsey did one?!?! Yes, yes, yes I would lose respect.

  27. Jon says:


    “So then you’ve gotta ask who the audience here is. Who’s paying attention to this ad? People that would buy a new car, that’s who. And if that’s your audience, I can at least see the logic in what they’re doing, even if I wouldn’t do it myself.”

    But that’s not what advertising is geared toward. Companies don’t have any trouble selling products to people who already have made the decision to buy the product. Marketing is geared more towards making people think they NEED what is being advertised.
    In the instance of this commercial, my opinion is that they are trying to pull people over from buying used to buying new under the guise of saving money. A marketing tactic that is condoned in the commercial by “respectable” personal finance writers. It must be a good deal if they are endorsing it, right?

  28. Christopher says:

    I think it would be impossible for Ramsey to do this spot without being completely hypocritical. He says probably once a week that you shouldn’t buy a new car unless you have a million dollars in the bank. Even if he believed that a new Insight was a good deal, though, I can’t see him agreeing to the ad unless he mentioned you should only pay cash for it, which Honda would almost certainly not agree to.

    As you mention, though, Ramsey’s belief on finances are almost (and in some cases actually) theological. Someone less black and white about finances would have more room to consider a new car ad.

  29. Matt says:

    If this ad were aimed at used car pholks, they wouldn’t make any headway. Someone willing to buy a used car is generally frugal or knowledgeable with their money. They would already know that the same used Hyundai from a year or two ago would be around $12K, while even a rebate-driven new Hyundair is $20K. It’s pretty clear the ad is aimed at enticing people that are looking to buy a new car… probably away from Honda and Toyota, whose prices have oddly increased quite a bit.

  30. !wanda says:

    Trent, Honda isn’t selling the Insight anymore. You’ve used that car as an example at least twice already.

  31. Bromb says:

    I do love colbert…

  32. Frugal Dad says:

    I think the original argument has been lost in the banter about whether or not a new car is something financial “gurus” should be endorsing. The real issue for me is that they are pushing a product because of a rebate offer.

    Now, if you have to buy product A or product B, and product A offers a rebate and all else is equal, obviously it makes sense to buy product A. However, if there are other, cheaper alternatives out there then both A and B could represent more costly buys, regardless of the rebate amount. The same argument applies to cell phones, computers and other products which typically offer a rebate. Financing any of these products just to cash out a rebate is like refinancing a house (at a much higher rate than most HELOCs) just to spend the cash (on a larger scale, of course). And I doubt many would endorse that idea.

  33. Harm says:

    What I think is weird is the guy advising
    us to “Get an INSURED CD”….at the lowest
    rates in a while. Apart from advising the
    purchase of a new car, buying a CD isn’t exactly
    the best course….better than taking your
    new car on a 2 week vacation right away, I

  34. DB says:

    Doing something just because if you didn’t, you know someone else would, should NEVER be the reason for doing something. Do it because it’s right, or don’t do it because it’s wrong. In situations such as this, where there is no legal right or wrong, each person must decide for him/her self, or course, what is right and what is wrong.

  35. Steve says:

    Given that a) the Insight is no longer being made as above, and b) Prius owners seem reluctant to sell them for about 4-5 years, or there’s some other factor that means you can’t buy a “late model used” Prius for much less than a new one: I would really like to see a calculation comparing a brand new Prius and/or Civic hybrid to a late-model, used, relatively gas-efficient vehicle such as a regular 2005 civic.

  36. Maureen says:

    I grew up on the WWII motto – Use It Up; Wear It Out; Make It Do; Do Without –

    I bought a new 2001 Subaru Outback after the 2002 models came out and they wanted last years models off the lot- discount 1. I got my original quote thru Sam’s club -discount 2. Then on the lot I bargained for (and got) the upgraded “LL Bean” edition at no extra cost- discount 3. I paid off the 5 year note in 4 years -discount 4.
    I do the basic maintenance myself and plan on keeping it at least 5-7 more years. Subaru’s have an excellent reputation for durability.
    It’s practical (a station wagon) and the gas mileage is good (23-25mpg). It can tow a small trailer and I like the on demand 4 wheel drive, it has helped me out more than a few times. For me this new car was an excellent deal. But I plan to “Wear it out” not roll over into another new car just because I can.

    On a lighter note-
    I love the “Singing in Korean” video. LOL

  37. Annie says:

    I’m so glad you addressed this. I was waiting for someone to. Every time I see these ads, I end up screaming at my TV. Things like, “Should you be buying a brand new car when you have credit card debt?”

    And I do think the financial authors featured are selling out a bit. Maybe they think that people who have actually read their books will know better ?

  38. Ryan says:

    All I know is that I hate the guy who says, “Which one of us is a Rhodes scholar?” That commercials airs every 10 minutes, and he drives me nuts.

  39. Jo says:

    “if one of those writers had said no to the advertisement, Hyundai would have simply found another writer.” – As Michael (#4) pointed out, that sounds like a self-serving rationalisation to do something you think is dodgy. Initially, this didn’t appear to be a good argument that these writers aren’t selling out.

    Let’s change the question these authors probably asked themselves from “Should I be the financial advisor in this ad?” to “Should this ad have financial advisors in it?”

    Because if ALL financial advice authors had declined to appear, Hyundai would have made a different ad with NO financial advice at all. Is that actually a better outcome? All ads are designed to lead people to the decision to part with their money. It’s surely a lesser evil to do that using some practical advice on how to be smart with the rebate than to do it by implying that you’ll get all the girls if you buy their car.

    Once you reach that conclusion, the “Why not me, then?” decision of the authors in the ad makes more sense.

  40. Trent Hamm Trent says:

    Well, there are some financial advisors who would consider it all right to be in such an ad – it would be in line with their advice. The theory for buying a new car would be that you maximize the lifespan by buying new, thus giving you a longer period with which to save for a replacement, and for some models, there’s a compelling case there.

  41. "Mo" Money says:

    Since a car is a depreciating asset, I think it is a sellout for these financial guru’s to have participated in the ads.

  42. jtimberman says:

    “I’m curious – let’s say, hypothetically, Dave Ramsey did a commercial for the Honda Insight, which gets 60-66 miles per gallon”

    Heh. Except I know he wouldn’t. I’ve heard him tell several callers that gas prices and gas mileage are not a reason to buy (or sell) a car.

    Your hypothetical situation isn’t feasible, and frankly, is quite ridiculous.

    As for cars as an investment, again, poor choice of words. Except under rare circumstances, transportation is a living expense. Or do you consider house utilities, food and clothing an investment as well?

  43. “I’m curious – let’s say, hypothetically, Dave Ramsey did a commercial for the Honda Insight, which gets 60-66 miles per gallon”

    Some Dave-isms for you, from his Financial Peace University “Dumping Debt” episode:
    “Unless you are a multi-millionaire and a new car is the equivalent of a Happy Meal purchase…”
    “Each week, take a one hundred dollar bill and let it fly out of the window to get the effect” [of new car depreciation]
    “Some of the WORST car accidents happen on the showroom floor!”
    “Instead, do what the average millionaire does and buy one to two year USED cars, cash.”
    I don’t think we’ll be seeing Dave Ramsey in any new car commercials in this lifetime!

  44. Eden says:

    I don’t care for the ads. It’s not like the finance dudes in them are doing something EVIL, but I think it leans toward the hypocritical side of the scale. I don’t think anyone believes that a new car is a better financial deal than a 1-2 year old used car (selected with care of course).

    Also, buying an insured CD is just lame!

  45. gr8whyte says:

    On the sell-out : It’s OK for the writers to do the ads as long as they are behaving consistently with the financial doctrines they preach. If they’ve never preached against buying new cars, they can do the ad. However, if they did preach against buying new or had bemoaned some facet of it like the steep depreciation suffered once driven off the lot, they would be hypocrites if they did the ads. I do not agree with Trent’s reasoning — if they don’t do the ads, others will, and if they do, they may get to sell more of their books — because they’re putting their own selfish financial gain ahead of their readers’ best interests (for the writers who’ve preached against buying new). Do what I say, not what I do? Sheer bloody hypocrisy.

    On the buy-to-save concept : Buying a k$20 car for k$17 did not save you k$3; you’ve simply paid k$17 for the car. What’s important is the actual price you’d paid for the car and not the “savings” received because the actual price is what’s leaving your pocket. If you’re willing to pay k$17 for it, then buy it; if you’re not, then don’t, but don’t buy it to “save” k$3.

  46. Trent Hamm Trent says:

    “I do not agree with Trent’s reasoning — if they don’t do the ads, others will, and if they do, they may get to sell more of their books — because they’re putting their own selfish financial gain ahead of their readers’ best interests (for the writers who’ve preached against buying new). Do what I say, not what I do? Sheer bloody hypocrisy.”

    What if they believed that buying the car was the right thing to do?

  47. gr8whyte says:

    @ Trent (comment #45)

    No offense meant but your believe-it’s-the-right-thing-to-do question gives me the same uneasy feeling as your trust-among-family-members answer to that parent on hiding money so the student loan application looks better. Many blog readers including me sensed something was wrong with your answer and said so. A lawyer showed up at the end of that thread and said hiding money was illegal. We could use input from lawyers on this issue.

    “I believe it was the right thing to do” is a commonly-used BS line to cover up wrongdoing. A crook would believe, given all his rotten choices, that robbing a bank would be the right thing to do. The writers can believe it or force themselves to believe it all they want. What counts is will the public believe it? Some may fall for it; most won’t.

    If they’ve repeatedly rationalized in previous writings why it’s financially better not to buy new (drive-off-lot depreciation, etc.), they will have an impossible time explaining why buying new is better now with the economy in recession and jobs on the line, especially if they have to support their buying-new-is-better claim with numbers, and they just happen to make lots of money by doing the ad. I take it they haven’t yet worked out the numbers on how buying new is better now; you’d have pointed it out to me already if they had. It’s hypocrisy, plain and simple.

    I’m sure Angelo Mozilo of Countrywide Mortgage believed he was doing the right thing as well in dumping his shares and allegedly making 100s of millions while Countrywide was going down in flames. I believe the sale’s under investigation. The regulators are not buying it; neither is the public — haven’t read a single blog comment favoring Mozilo’s sale.

  48. !wanda says:

    “What if they believed that buying the car was the right thing to do?”
    The right thing- for who? As this blog has discussed endlessly, buying a new car is not the right choice for most people. There are situations where it would make sense, but the default for people in a tight financial situation ought to be late-model used. In this ad, these advisors aren’t selling nuance and discussion; they’re selling new cars. Is that right?
    Most of my good friends don’t own TVs (because we spend too much time on the Internet), so it sort of takes me by surprise when people I respect refer to current TV shows and ads.

  49. K says:

    @jtimberman – Food, shelter, and clothing are not usually investments because they are necessities, although often homes do appreciate in value. Transportation is not a necessity. When you buy a car, you are making a choice to spend a certain amount of money for something you value more than that money, namely freedom to get to work more conveniently and run errands more easily. Would you be willing to keep your $15k and go without a car? If so, then great. If not, then that car is an investment for you. Deciding to invest more (in a new car rather than used) is likely to buy you more returns (longer life, warranty, etc).

    @Eden – there are many people who think that buying a new car is the best financial deal, but many other people only look at the upfront cost.

    @wanda – just because you don’t own a TV doesn’t mean you have to disrespect those who do. There is nothing evil about television.

  50. Jeremy says:

    “I don’t think anyone believes that a new car is a better financial deal than a 1-2 year old used car”

    well, you’d be wrong… There are lots of ignorant/naieve people out there who are easily swayed by marketing of every sort, unfortunately non of them will be reading this blog…

  51. Trent Hamm Trent says:

    @gr8whyte: You’re seriously comparing Larry Winget in a Hyundai commercial to Mozillo plundering Countrywide?

    Look, they made the choice to appear in that commercial in the hopes to sell more books. Is it a choice I would have made? No. But I *can* understand why they chose to do so – there are a lot of reasons – some financial advisors even advocate buying new cars.

    The only thing that comes out of Winget’s mouth in that commercial is that you should use found money to pay off credit card debt, and that’s something I agree with. Do I think he should have been in the ad? Probably not. But he’s making a value call there, and I can understand his choice in making it.

    Most of personal finance IS a series of value calls. There are very few absolutes – the reason that there can be near-infinite discourse about personal finance is because it’s based on values. Buying late model used over new is something I feel strongly about, but it is a value call – I’m underemphasizing some values of buying new in making that call. Because it is such a value call, and because there are personal finance writers out there who advise people to buy new, I have a hard time accusing them of selling out.

    The only time you’d see me going down such a road is when a writer is encouraging people to do something that’s flagrantly wrong – something that violates basic tenets of personal finance, like payday loans.

  52. Char says:

    I am going to weigh in even though this has been beaten to death. When I saw these ads they made me sick, and my first thought was SELL OUT. This can be justified to death but the reality is, people who can easily afford a 20K car and who truly have the money to afford this vehicle do not need financial gurus telling them what car to buy, they will have done the research and purchased a vehicle based on what vehicle suits them best. The problem I have with these ads vs an ad that says you will be loved by all the hot chicks because you drive it is that it gives people on the edge the justification they are looking for. Financially weak people are always looking for an excuse to do what they really want to do (spend money) rather that what is right. The only people swayed by this advertisement will be the financially weak. I should know I was financially weak for 15 years. There was no justification for these authors to do these ads. I have driven used cars since I stopped being financially weak (another 15 years) and have had great luck. We have never paid more than 4K and our average yearly repair bills (including oil changes) are less than $800. We have a great mechanic and we are still running a 1992 Geo Prism(paid $1500 10 years ago, 1998 Hyundai (paid under $800) and a 2002 Ford Taurus. Nothing fancy all of these cars cost us under $2500 (we only paid $4000 for a van that I totaled last summer) but all run great for us and we travel a fair amount. Just so it’s understood we drive the Prism and the Taurus and the teens drive the Hyundai. People who are in credit card debt or other debt should not drive a new car PERIOD.

  53. jtimberman says:

    @K #49 “Transportation is not a necessity.”

    Yes, it is. Unless you have a telecommute job, or work within walking or biking distance of where you live, you will have to pay transportation costs. MOST people do not live within walking/biking distance of where they work! Look at all the traffic between suburbia and downtown areas in every single large metro area in the United States for proof of that.

    Even people who use public transit have to pay something for transportation. I know, I’m one of them. I paid $100 for my monthly bus pass yesterday.

    You have no argument that transportation is not a necessity. It is VERY rare in our society that people choose to live close to where they work. Because guess what? In most cases, if you work downtown, in order to live downtown, you’re cost of living will increase because the real estate costs more.

  54. Jon says:

    Please tell me that the personal finance authors in the commercials don’t honestly think that most people will take the “cash back” as actually cash. I can imagine that that almost all will use it to knock down the total price of the car. In this case, they will have no actual money to invest anywhere or pay off any debts. If in fact they are actually taking the cash back as a check back to them to pay off debts or invest, then the net result is taking out a loan to pay off other debts or to invest in. Depending on your interest rates or return on investments this is just plain silly. That’s why, to me, there isn’t even a question about these commercials. It is a sell out plain and simple in order to sell more books.

  55. Michelle says:

    I actually liked the ads, I think it is good to educate people about financial advisers and different options for your money. The people who these ads are aimed at wouldnt know if these people were selling out or not, because they dont know much about finances to begin with. They are people looking to buy a new car and would never have thought of putting money into a secured CD. Most of my friends that buy new cars dont even know what that is, never mind thinking they should put money there. I think anything that gets the people interested in what good alternatives there could be for their money is a good thing. Again, anyone who recognizes this as a sell out wouldnt listen to the ad anyways, its the people who actually dont know that would benefit the most

  56. Croc says:

    Singing in Korean = classic

    Also, isn’t this fundamentally an issue of the “if I spend more, then I save more” paradox?

  57. MS says:


    My big concern is the disconnect between the author’s writings and the intent of the commercial. I threw Dave Ramsey out as an example because he advises against buying new cars for all but the wealthiest people, and describes rebates as a return of some of the money that was overpaid. That’s an unambiguous stand against what Hyundai is trying to persuade the viewer to do.
    On the other hand, if Joe Schmoe had a finance book encouraging everyone to live for the moment, buy new cars and worry about the future later, I wouldn’t fault him for appearing in the commercial (but I wouldn recommend his advice to anyone either..)

  58. Special Ed says:

    I just bought a “new” car two weeks ago…a 1997 model :)

    The “financial gurus” in these ads should be ashamed of themselves.

  59. Lenore says:

    As a member of Generation X, I fondly subscribe to the obsession with “selling out” that helped fuel the Alternative Music movement. By my definition, these financial authors are sell-outs of the worst kind. They’re promoting something they wouldn’t normally and which they know to be a bad move for most of their readers just to make a fast buck, right? Sure, it may be financially savvy for THEM to appear in these commercials and get free publicity, but how can we trust advisors who change their tune for the highest bidder? Objectivity is a virtue and much like virginity. Once you lose it, you never get it back.

  60. gr8whyte says:

    @ Trent (comment #51)

    Disclosure : I’ve never seen, heard or heard of, the Hyundai ads featuring personal finance writers, or have had them described to me by another, nor have I ever read any of their writings. All I know so far about them is what I’ve read on this thread.

    I’m going to answer your concerns paragraph by paragraph respectively.

    1. Yes, I’m comparing “Larry Winget in a Hyundai commercial” (having never seen it) to Mozillo plundering Countrywide (nor this either but I’ve read about it) in the sense that if I see management in the small company I work for (for example) cashing in their stocks while telling employees to hang on to theirs, I would call the event an Enron. Mozilo built Countrywide. He should be rewarded for his efforts (though I seriously disagree with many of their loan offerings) but not this way — selling stock when you know the company’s going down is wrong. Legally, could he have done it? I really don’t know but guess that he must have thought he had enough of a legal leg to stand to dump shares then. Should he have done it? Absolutely not and this is where personal integrity comes in. Writers who’d previously preached against buying new should have the personal integrity to decline doing the ad. What I fear you’re doing here is picking up on the MAGNITUDE of the items compared while completely ignoring the PERSONAL INTEGRITY issue. Both the writers doing the ads and Mozila’s sale were wrong; both actions might very well be legal but unconscionable.

    2. Yes, various people including financial advisors suggest buying new; I’ve no problem with this. In fact, my comment #45 said “It’s OK for the writers to do the ads as long as they are behaving consistently with the financial doctrines they preach. If they’ve never preached against buying new cars, they can do the ad.” and my last 3 vehicles were bought new so I understand the reasons for buying new. You’re trying to turn this into a “choice” issue which is utter nonsense. The real issue is PERSONAL INTEGRITY which you seem to be evading. Here’s another example: I used to work at a small high-tech company many years ago (long since out of business) and there was very little paperwork; I was never asked to sign a non-disclosure agreement (nda). After I left that company, it was expected of me not to reveal proprietary information (pi3.14…) to our then or potential competitors. If a competitor offered me a job based on my revealing pi, should I have done it? What if my family was starving; should I do it then? I was luckily never faced with this dilemma but I know that I would never have done or will do it and expect my family to back me up no matter what happens. Legally, had I revealed pi, there was probably nothing the company could have done to me but we all know it wouldn’t have been the right thing to do. It is not a choice issue; it’s a mixture of personal integrity and loyalty which is very hard to describe. If you don’t see this, I can’t help you to see this anymore.

    3. On “choice” and “value call”, see paragraphs 2 and 4 respectively. “Found money” is nonsense as it applies to the k$3 “saved” from buying a new k$20 car for k$17. The k$3 is NOT found money in the sense that saving 30 cents off a $1 can of peaches when it goes on sale for 70 cents isn’t either. I’ve never heard of any personal finance writer/blogger telling grocery-sale shoppers to send all the “saved” money to pay off their credit cards. What counts is the ACTUAL money leaving your pocket — the k$17 for the car and the 70 cents for the peaches. What if the car had been sticker-priced at k$25 and the can of peaches at $2? Should you now send the k$8 “saved” on the car and the $1.30 “saved” on the peaches towards your credit card debt? Yippee — even more found money! It’s voodoo money, not found money.

    4. I heartily agree with “Most of personal finance IS a series of value calls. There are very few absolutes…” but this isn’t about the variability of personal finance advice — it’s about the INCONSISTENT SUDDEN CHANGE from previous writings. In particular, advice they’ve been giving their readers BEFORE they got wind of the ad deal and that’s why several commenters cried “SELL-OUT” — it was the INCONSISTENT SUDDEN CHANGE. “Value call” is nonsense. Sure, I understand their “value call” — they get to make lots of money by doing the ad. I do not expect nor want you to accuse writers who HAVE previously advised people to buy new of selling out — please read my comment #45 “It’s OK for the writers to do the ads as long as they are behaving consistently with the financial doctrines they preach. If they’ve never preached against buying new cars, they can do the ad.”. You’ve either not read my comment #45 very clearly or are deliberately confusing the issue. I make a very clear distinction between writers who HAVE and HAVE NOT previously advised to buy new; those who have — go ahead and do the ad, those who have not shouldn’t — it reeks of conflict of interest. How can I possibly make this any clearer?

    5. I agree that payday lending is vicious and absolutely unconscionable but again, you’re focusing on MAGNITUDE instead of PERSONAL INTEGRITY; see paragraph 1.

    Trent, we don’t know each other but your words really scare me sometimes.

  61. gr8whyte says:

    Whoops! The “(pi3.14…)” came out wrong in my comment #60. It was suppose to be “pi-left_arrowhead-right_arrowhead-3.14..” where left_arrowhead is the symbol above the comma key, and right_arrowhead is the symbol above the period key (whatever the bloody things are called), but the blog sofrware must have stripped out both arrowheads. It was supposed to mean “proprietary information and not equal to pi=3.14…”.

  62. Michael says:

    Good post, gr8whyte. I think Trent defends this to keep similar options open to himself and to not look hypocritical for running TSD ads that contradict his message.

  63. Eric says:

    Every personal finance advisor I can think of with books for sale in the store is guilty of hypocrisy to a degree.

    I cannot help but put in my two cents regarding used vs new cars: the difference is small if the far more important advice of choosing a moderate priced, high MPG reliable car, and then keeping the car until it rots is followed. Advice #2 is related to the above, and is never to buy the first year of a model’s multi-year production run. Advice #3 is to perform the simple maintenance yourself: Filters, drain and replace fluid changes, sparkplugs, and belt checks.

    ’96 Subaru bought new
    ’04 Toyota Prius bought new
    Next new car around 2015.

  64. stanviz says:

    The ad was simply to state, if you are looking for a new car…face it some people won’t “settle” for used….look for a car that’s a better value than something else. You can go for a snazzy Honda Accord or you can spend $2000 less on a comparably equipped Sonata AND get $3000 more back in rebate. This is $5000 you can keep invested now, not wait several years to re-coup as resale value.

    This is aimed at the people the car industry has convinced that they should spend at least 26K on a car because that’s avg and you don’t want to considered “below avg” by your neighbors.

    It is also aimed at people who tend to want blow the money they saved on a purchase, rather than investing it.

    Actually the pitch went beyond the commercial. On the Hyundai website the three gurus sat down and went more indepth on various financial topics. The site is down now since the promotion is officially over. But that was a nice touch. It is a timely ad since our economy is so scary and record number of Americans are in debt.

  65. stanviz says:

    Found this quote from another blog….

    Larry Winget Says:
    April 11th, 2008 at 1:09 pm

    Well at least people are seeing the commercials! None of us are suggesting that you immediately run out and buy a Hyundai or any other car. I know I am not. My point in doing the commercial is that IF you need a car at least buy one that has cash back and zero percent financing. And it is a reminder that a good car doesn’t always come with a high price tag. All of the “gurus” agreed on those points. By the way – it was a pleasure hanging with the others. Good guys.

    All the best – good blog!

    Larry Winget

  66. Eric says:

    All this investment advice applies how to people who finance their car ?

  67. Eric says:

    As for Mr. Winget — his excuse is akin to saying “at least buy the car that has 20% off.”

  68. K says:

    @jtimberman – “It is VERY rare in our society that people choose to live close to where they work.”

    Interesting choice of words… Please read my comment again. Food and shelter are necessities because you will die without them. You will not die without transportation. It is something you choose to spend money for to make your life more convenient (i.e. an investment).

    INVEST: (1) to put money to use, by purchase or expenditure, in something offering potential profitable returns, as interest, income, or appreciation in value. (2) to use money, as in accumulating something

  69. Dan says:

    I would even take this a step further and recommend against buying any brand-new car, mainly because of the horrific depreciation that occurs in the first one to three years. Also, while the current Hyundai may be a good and reliable car, their resale value is fairly poor as compared to the current crop of good Japanese cars. Hyundai earned the poor resale problem by selling junk not less than 10 or so years ago. How about shopping for a good used three year old Camry?

    Thanks for the excellent article.


  70. Jeff Lehman says:

    Give me a break Larry Winget, if you aren’t telling people to go buy new Hyundais then why are you doing an ad for, um, Hyundai? I read 30 personal finance books while prepping to write my upcoming book, The Frugal Millionaires. It seems that nearly every author has a hidden (or not so hidden) agenda. Few people just give back without trying to use their books to sell something else. Shame on them! When I see Larry telling people that they should buy a NEW Hyundai and use the rebate to pay off bills (which, um, is their money anyway!), well that is just plain stupid. And it’s a total sell out. Larry, please tell us you donated the appearance fee to a charity for financial literacy or something like that. That “might” restore some faith in what you say, because you do have some great ideas. The 70 everyday millionaires who anonymously contributed to my book would say to buy a three year old used car with some warranty left for half price. Take the saved money and put $2-3K towards paying off something. Taking the rest and dollar cost averaging or buying straight into an index fund would make 1000% more sense than any “buy a new car because Larry says so” strategy. The nanosecond a “financial guru” starts selling new cars is the day that they become a “supposed financial guru” and lose ALL credibility, with smart people anyway. New book idea for Larry “You’re an idiot if you listen to my financial advice, now how about buying a new Hyundai!”

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