I recently had my car appraised by Carvana. I have no intention of selling my car and buying something else, I was just curious what they perceived the value to be. Needless to say, their assigned value was way less than the car’s value to me on a daily basis.
When I say “value” that means much more than money. There’s a reason we hold on to that tattered sweater, an old pair of shoes or perhaps purchase a ratty old book from an antique store. Oftentimes we view something as being worth more than perhaps someone else would be willing to pay. This is called an emotional value.
Luxury brands are built on emotional value. Purchasing the Louis Vuitton purse elicits an emotional response of “I made it, I can afford this” or “I can’t wait to see people’s reaction to my new purse” or perhaps “I deserve this.” Maybe you do deserve it. Maybe you’ve worked really hard and you want to treat yourself, there’s nothing wrong with that.
The thing is, you most likely attach an emotional value to everything. My car is a great example. I drive a 2011 Ford Fusion Sport. It was the first new car I’d ever picked out and purchased on my own. When you’ve owned something for 13 years, you become attached to it. No matter how much the paint is chipping or the interior fades, you’re not willing to part with it. At one point I had considered selling it, I’m not sure I could bring myself to consider it again. The emotional attachment is too strong.
According to Carvana, my car is worth less than $3,000. Carvana is known for low balling the value while jacking up the price of the cars they’re selling. Regardless, the car is worth double if not triple that value to me. No matter how insane it makes me sound, no matter how crazy the thought may be, I wouldn’t be able to part with it unless someone offered me a substantial amount of money. This won’t happen of course, but that’s not the point.
There’s a reason people have trouble parting with an antique lying around their house with a value much higher than their grandma paid for it 100 years ago. It was grandmas! You can’t sell grandma’s old dresser! The emotional value is much higher than anything else you would be paid to part with it.
My wife was recently telling me a story about a pair of penny loafers she had as a child. She got them in 5th grade and had worn them for years. The leather was perfectly broken in but the soles of the shoes were worn down and needed to be replaced. Her parents thought they were doing her a favor by replacing the soles, allowing her to continue wearing them for years to come. The cobbler proceeded to replace the soles and give them a good cleaning, shining the leather to look like new. By doing so, this removed the “broken in feel” of the shoes. She never wore them again. The emotional value of them was now zero.
The key is identifying the emotional value of something upfront, prior to making the purchase. Revisiting the Louis Vuitton purse for a second, once you’ve made the purchase, how will you feel? Did you buy it outright or put it on a credit card? Will you feel guilty or fulfilled making the payments each month? If there’s any guilt swimming around in your brain, don’t plunk down the money or your card to make the purchase. Walk away, guilt free.
Too often we buy things that we think will make our life better. Sometimes we’re right. Buying a motorized wheelchair for someone who doesn’t already have one would definitely impact their life positively. This is very different from purchasing a pair of Gucci shoes. One is life changing while the other is life altering for a period of time. The wheelchair would provide years of happiness and functionality eliciting positive emotions from the owner. The shoes more than likely would not.
They say everything has a price. Maybe.
It’s also possible you’re underestimating the emotional tie you have to inanimate objects.
Now, stop eyeing my car.
It’s not for sale.
