Case Studies
PROPAGATING DEBT: SHOULD CHRISTIANS ENCOURAGE PEOPLE TO BUY BMWS?
by Neal Kunde
"How do Chrisitans in the homebuilding/large remodeling and new car industries, as well as real estate agents and bankers, deal with the issue of encouraging people to go deeply into debt? It seems that charity, church, missions, and real family needs are sometimes subordinated to paying off a large debt on a fancier car or home."
— J.P., Janesville, WI
Métier asked two Marketplace Mentors what they thought:
June Schmidt, at the time this article was written, was a vice-president of the Columbia National Bank in Chicago and director of its Six Corners branch. She was responsible for business development, and saw a lot of applications for loans as a result.
Métier: In your position, you see people taking on a lot of debt. Is it wrong for someone in sales or in lending to encourage people to take on debt when it may not be the best thing for them?
JS: Our formulas and debt ratios are very important. If their debt ratio is too high, we are unable to give them a loan. That’s our way of telling them they’re probably already in trouble. Of course, the bank doesn’t want to take a bad risk. But in the end, it does benefit the applicants. On the commercial side, where people want to start a new business, some ideas are not well thought out and people take some real risks with a large loan. In these cases, I sometimes try to talk about the risks involved and the wisdom of pursuing whatever it is they want to do. So I have had opportunities to discourage a bad debt.
But even in these cases, you have to be careful of regulations. If someone asks for a loan request, you have to process it or you can be sued. You can’t turn them down automatically. Regulators would slap you silly. So we really can’t discourage people from spending money they are technically qualified to borrow. The regulations are fairly clear.
Métier: Does our credit system encourage materialism?
JS: The flaw that I see today is in home equity loans. Banks are very quick to tell people to take home equities, sometimes whether or not they even need the credit. And these loans are sold as a line of credit to use in an emergency. Or if you want to buy that car. As a result, people are creating easy-access $10,000 to $100,000 lines of credit.#
Don Flow is the owner of a large chain of car dealerships in North Carolina. He sells everything from Chevrolets and Fords to BMW’s and Acuras. He deals with people in just about every market segment.
Métier: You see people spending a lot of money on cars. Aren’t a lot of those cars luxury items?
DF: In a fallen world, we all make choices that are not consistent with how creation was meant to be. For instance, the natural expression of being created in God’s image is that we are attracted to beauty. The beauty we create in this world, including cars, is an expression of our imaging of God.
However, because of the fall, exercising stewardship sometimes means choosing between functionality and beauty. This is the conflict we deal with as we live out our faith. Each Christian needs to live with this tension in submission to the Holy Spirit.
How do I sell luxury items to people? Just as Jesus took the nature of a servant, car sales is an issue of service. To begin with, what is best for the customer? We first have to listen to what he or she needs in the area of safety, reliability and comfort. That sometimes means considering a more expensive car. But the primary motivation for the Christian sales person is one of caring for the customer.
Additionally, unless asceticism is to be a normative lifestyle, we will always be choosing some degree of luxury in our lives. But what if the customer would be better off financially purchasing a less expensive car, or nothing at all? Again, the primary commitment must be to put their "interests above our own" (Philippians 2). Frankly, we encourage our people to state their concerns to the customer. In every situation, they need to tell the truth and not overly appeal to the emotional impulse. And of course, a Christian cannot communicate that buying a luxury good makes the buyer a better person.
On the other hand, every customer is a responsible moral agent. Christians need to be careful about taking that role on themselves. We can come across as being pharisaic in our approach. Once I stated some concerns to a young woman who was buying an expensive sports car. I thought she shouldn’t buy it. But she blew up at me. She talked about it being a free world, and said I was discriminating against her. So we need to state our concerns in the context of the customer making an informed choice.
Métier: So the scriptural concept of servanthood is the foundation of your sales strategy?
DF: Sales is a good place for people who see themselves as called to service. The Christian sales person just has to move from seeing the customer as a transaction to seeing the customer as someone made in the image of God.
Métier: In what other way does Scripture connect with day-to-day car sales?
DF: The writer of Proverbs talks a lot about honesty. And I’m always impressed with how the Gospel’s talk about Jesus coming full of truth and grace. We need to do that with our customers. We need to tell customers what the product will do and what it won’t do. Truthfulness becomes the basis of our interaction.#MP
In The Lions Den, Marketplace Métier, Fall 1993, page 5
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