Atheist Scruples: the business agreement

Today’s question:

You’ve agreed verbally to a business deal when you get a much better offer. Do you back out of the deal?

Memo to self: email the auto dealer we spoke to yesterday and let him know we went with a different car on a different lot and I hope to hell it was a good choice — a 2012 Kia Forte we knew the price of versus a recently arrived 2010 (blue!) Ford Focus the lot hadn’t done its inspection on yet. We went with the Kia.

I’ve been really stupid with money in the past. Maybe nearly everyone who’s lived without a lot of it can say the same. That’s what a study from August 2013 was measuring and they might have been onto something.

“Previous accounts of poverty have blamed the poor for their personal failings, or an environment that is not conducive to success,” said Jiaying Zhao of the University of British Columbia, who led the study, conducted while she was a graduate student at Princeton University.

“We’re arguing that being poor can impair cognitive functioning, which hinders individuals’ ability to make good decisions and can cause further poverty,” she said.

The study had two parts. In the first, about 400 people at a New Jersey mall were randomly selected to take part in a number of standard cognitive and logic tests. The participants’ annual family income ranged from $20,000 to $160,000, with a median of $70,000.

Part of this was car related: repair work required between the prices of $150 or $1,500. The cheap work was an easy decision for everyone in this hypothetical scenario but apparently the more expensive it got, the worse the impoverished test takers did in choosing a good financial solution, effectively creating a drop of 13 IQ of points or the equivalent of losing one night’s sleep. One could probably suggest that someone strapped for cash has already had more than a few sleepless nights worrying and isn’t working with a full set of intelligence points most days, unlike someone with fewer cash flow woes.

I was awake at 3:10 this morning with this new car on my mind. I’m not broke, though. In fact, taking into account my bank accounts, my RRSPs and Tax Free Savings Account, I have nearly the value of the new used car right now, not counting the “cost for borrowing on the term of the loan.” If we need it, I can dip into it. I wouldn’t want to, but it’s there if we need it. That’s part of the point of investments, I’m sure. I’ll have to inquire on what kind of income tax payments I’d be looking at next year if I use any RRSPs, though. See what the pros suggest we do here.

Bringing this back to the question, we didn’t agree verbally to buy the Focus but the guy we were dealing with was nice and he will have some details for us about the car by Monday, he said. Looking through the paperwork from this other place, we have a 15 day window to return the Kia… But then we’d be considering an older car with more mileage and frankly, that seems like stupid squared.

Then we’ll just have to figure out what to do with other car. It has a computer glitch and a crack in the windshield and I’m tempted to just sell its set of snow tires to somebody and he can have the car for free…

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