While I like to find ways to save and not waste money, I still enjoy nice things and try to find a good deal (when possible) on our bigger purchases. Transportation can be a major expense for some people and can get out of control if you have expensive taste. My approach to affording nice cars is unique compared to most.
I love cars. One of the reasons I enjoyed consulting was I got to drive a rental car on many of my trips. Even if the car wasn’t cool, I always liked the variety. As a result, I typically average 18 months with a car. All but four of my cars were used and three were leases. I only went new or leased when the price was too good to be true. In all of these cases, I’ve known the deal I negotiated was so good that, even with taxes, I’d be paying less than $3,500 per year to drive the cars. I tend to sell the leases rather than turning it in and have always sold for $1,000 or more than my remaining residual value on a zero down lease. My secret is to simply get a good deal on the lease, treat the car nice, and market it well when I’m ready to sell. I’m also never in a rush to sell, which has always worked out well for me–it only takes one buyer!
For the used cars I’ve purchased, I also seek out a good deal and am particular about seeking a car that has been babied with less than 40,000 miles. In most cases, by being patient and not focused on just one make/model, I’m able to get a car for several thousand less than what similar used cars are selling for at the dealership. I always pay in full as this makes it easier to negotiate. In most cases, I’m in a current model car that’s often still under the original warranty for less than one-half the original purchase price.
One of my favorite deals was a BMW Z4 convertible that I bought 3 years used from a guy who was moving overseas. I paid $16,500, drove it for 2 years with minimal maintenance, and sold for $13,500. Anyone who saw it thought it was new and the car was selling for $40,000 at the dealership. The second trick is to sell it while it still has low miles and/or there are any major repairs anticipated. You have to balance your love for the car with the cost of holding onto it.
It can be tricky, but if done right, you can drive $40,000+ cars for less than half of the price. My biggest word of caution is to watch out for older cars that could have maintenance issues. I always research the quality and repairs on sites like US News and World Reports and enthusiast forums to make sure I’m not buying a problematic car. I also pay attention to owner’s records, tire tread, whether it was garaged, etc. If you like nice cars like I do and think with your head rather than your heart, there are great deals to be had if you are patient and know the market.
Runner Up Story:
Newer model Corvette with 20,000 miles, bought for $23,500 from an elderly man. Needed two rear tires and a new fuel pump within 6 months. All in at $27,000 after repairs and taxes. Sold two years and 20,000 miles later for $23,000.