Choosing a car at dealership. Thoughtful grey hair man in formalwear leaning at the car and looking away
Financial advice guru David Chilton, author of The Wealthy Barber books and the newest dragon on CBC’s Dragons’ Den, concedes his stylish and impressive white 1972 Mercedes (possibly the 280 SEL but he’s not certain) was the dumbest purchase of his life.
Chilton, a finance grad, was only a couple of years out of university in the early 1980s when he snapped up a client’s 10-year-old, mint-condition ride for around $5,500.
It was his first car.
“It’s funny because I’m not a car guy, number one, and I’m not a ‘stuff’ guy, as people know, (but) I loved that car,” Chilton says.
“I loved the look of it and even today when I see one of the early 1970s Mercedes, I love them,” he says. “It appeals to my eye. Everything about them was so cool: the size, everything. … That being said, it was a wacky thing to do. Very un-Wealthy Barber-like.”
With model numbers confusing to even Mercedes aficionados, the late ’60s and early ’70s Mercedes were defined by stately luxury: a car for ambassadors and industrialists. On an episode of Jerry Seinfeld’s web show Comedians in Cars Getting Coffee, the comic shows off the 280’s pumped-up, near-identical sister, the very collectible 300 SEL 6.3, to comedy icon Bob Einstein (Super Dave). The 300 was a landmark car not just for its Bundestag vibe but its powerful V-8 engine and was characterized by Seinfeld as “a gentleman’s supercar.”
For Chilton, the appeal wasn’t mechanical. With its voluptuous lines and imposing grille, the Mercedes was a work of art as well as a conversation-starter.
“I have to admit (I loved) the reaction I got everywhere I went; people would come out and look at the car,” he says. And a decade out, it was relatively affordable.
“It’s not like I was careless with my money then and then I grew into being the Wealthy Barber. I was already quite good with my money,” Chilton explains.
“I’ve always lived a very low-key life that way,” he says, “so this car was truly a one-off because I loved the appearance so much. I wasn’t trying to make a statement, it was nothing like that. I loved that car.”
A fan of older movies, Chilton thinks his tastes may have been influenced by his cinematic sensibilities.
But nothing can ruin a beautiful relationship like money.
Or a call from the Mercedes dealership.
It only took six months for Chilton to come crashing back to earth — via his trunk.
“The worst thing was trying to keep it up,” he groans, admitting the gas mileage alone was “troubling.”
“My trunk lining went and so I had a little leak in the trunk; nothing significant but I thought ‘I better get on that, I don’t want any mould.’ So I took it in to the Mercedes dealership.”
Chilton says he remembers where he was and what he was doing when the phone rang.
“Two days later he calls me back and says it’s $600 and some dollars. And this was 30 years ago. And I said, ‘$600? You’ve got to be kidding me!’ And I just shook my head and I honestly made the decision right away to sell it because of that. I knew it was going to be an ongoing problem.”
Because the car had been kept in top shape by the former owner (a distinguished ex-CEO of a well-known Canadian company) he was in a tough position. He worried that cheaper, non-Mercedes parts could affect its resale value.
Chilton paid for the repairs, then turned around and sold the car just a few weeks later at a slight loss. He admits his mistake was falling in love with something he knew nothing about.
“I probably shouldn’t buy a really nice car because I don’t know anything about cars and so, frankly, they could have told me anything and I would have gone ‘all right,’ ” he concedes.
“Someone asked if my car was six cylinder or eight cylinder and I said it’s four-door. I’m clueless.”
Chilton has since gone on to purchase cheap cars and beaters until years after his success with The Wealthy Barber — before moving on to nicer rides.
Even now the entrepreneur and venture capitalist says he holds on to his cars and credits a strong relationship with a local dealer for looking after his needs.
“The current car (Range Rover Sport) that I have right now has got, I think, 160,000 km on it and I’ll keep driving it for quite some time … I drive a lot, too: 50,000 to 60,000 kilometres a year. I’ve had cars go well past the 200,000 km mark.”
Behind the wheel Chilton admits he’s had some challenges, including his first driver’s licence road exam.
“Oh my gosh. I had to be the quickest fail ever,” he says. “I pulled out of the driving test centre on Belmont Ave. in Kitchener, I turned right into the crosswalk and there was somebody almost through the other side so I just went through it — but you’re not allowed to go through a crosswalk. I was three seconds out of there and the guy says, ‘Turn around, turn around,’ nothing else.”
Many years later, Chilton also backed into a pole and put a dent in his car while picking his son up from his driver’s ed class. His son urged him to immediately re-register.
Those hiccups aside, the automatic Dragon (he’s embarrassed to admit he’s never driven standard) does enjoy his time behind the wheel, travelling frequently on speaking engagements and back and forth to the airport from his country home.
“I love driving. I love the solitude. I like thinking in the car, I don’t even listen to music most of the time in the car — I just think while I drive.”
And as one of Canada’s best-known financial advisers, Chilton, who has long preached the maxim of living within one’s means — decrying personal debt levels and poor savings rates — says there’s no blanket answer to the age-old question if it makes more financial sense to buy new or used . . . or lease.
“I think basically you want to drive home, as corny and as basic as it sounds, but you have to buy whatever you do in the context of affordability. And I think what’s happened is so many Canadians in the last 10 years are taking on debt. And it’s not that they can’t service the debt — the default rates are low — but they squeeze out their savings. And this pattern I see over and over again.”
Low returns and an aging population mean savings are more important than ever, Chilton emphasizes.
“It’s not just the purchase price of the car. It’s the ongoing maintenance, the gas, it’s everything else. Cars are an expensive part of our life.”
Perhaps a lesson learned early.