How To Make Money With Lyft And Uber

Hey Cool Car Fans,

As The Cool Car Guy, I get contacted by people for every kind of make, model and type of vehicle.  I also end up using Lyft and Uber on a regular basis to get from one place to another.  Usually it is after I drop off a vehicle with a client and I need a ride back.  What I’ve discovered is how many people are putting a ridiculous amount of miles on the wrong vehicles for their “taxi business”.

THE ATTRACTION OF LYFT AND UBER

Let’s face it.  Millions of people need a way to earn additional money and turning a vehicle into a part-time or full-time taxi cab seems like a great idea.  The fact that you can download an app on your phone, call up a Lyft or Uber driver and catch a cheap ride from point A to point B for a minimal charge is pretty amazing.  These companies are earning billions off a service business with very little overhead since their drivers are using their own vehicles for the service.  However, it can be costly for a driver if they don’t know what they are doing.

For example, I recently grabbed a ride from an Uber driver in her 2014 Cadillac SRX.  As I usually do, I looked at the odometer on her vehicle and it was clipping away at over 49,000 miles.  I asked, “Did you lease this vehicle or purchase it?”  She said that she had done a one pay lease.  I said, “How many miles did you purchase?”  She said, “My lease is coming up and I purchased 30,000 miles, so I’m over my miles.”  I said, “By almost 20,000 miles and at $.25 a mile if you give it back, you’re looking at writing about a $5,000 check.  I would get out of this vehicle tomorrow if I were  you.”  She turned in her vehicle and wrote a check.

Some of you may be wondering why I didn’t help her to buy out her lease and the answer to that is that based on her buyout with GM, I knew that she would lose more than $5,000 buying the vehicle.  Fortunately, she had leased it and she had a guaranteed buyer which was General Motors, so she could give the vehicle back to them and write a check.  When they sell it at auction they will be losing more than the $5,000 she gave them for the additional depreciation.  Take that Suzy Orman and Dave Ramsey, who tell people that they should never lease a vehicle!  If she would have financed that vehicle she would have been in way worse shape trying to unload it with 49,000 miles.

HOW TO ACTUALLY DRIVE FOR UBER AND LYFT

I could tell you story after story like the one above because most of the people I know driving for Uber and Lyft are “clueless” about cars, trucks, depreciation, let alone running a taxi service.  I’m not trying to be mean, but many people just join these companies and start driving for money.  I’ve taken rides in expensive Lexus, a Porsche, Toyota Tundra’s, Expeditions, Yukons, the list goes on and on and I just shake my head most of the time.

So how do you actually run an Uber or Lyft taxi business?  First off, as some people are trying to do, you can’t copy the taxi cab companies.  They have a fleet of the same vehicles that they can use as parts when they are through putting a million miles on them.  The average Uber driver has one car that they are trying to make some money driving.  However, what you can do is very simple math.

For example, I have a guy who wants out of a 2007 Range Rover right now that has about 105,000 miles on it and they are good for at least another 50,000 to 100,000 miles, but they can be expensive to repair and maintain.  This vehicle sold new with a $76,535 MSRP and you can buy one used for $10,000 or less with 105,000 miles . That’s massive depreciation!  Let’s assume that you earn $.50 a mile on average driving for Lyft or Uber and your vehicle cost after taxes is about $10,000.  I think you can actually find vehicles for under $10,000 and this math works even better, but you need a decent vehicle that people want to ride in to keep your ratings high.

You can see if a vehicle qualifies at this link: UBER Requirements.

Let’s assume that you’re going to drive 50,000 miles at $.50 a mile on average for your taxi service.  That’s $25,000 that you will earn on a $10,000 vehicle, so you will NET $15,000 minus expenses, like fuel and maintenance.  Now, you have a 2007 Range Rover with 155,000 miles and you throw it on Craigslist or trade out of it and get another inexpensive ride that you can earn another $15,000 on.  A 2005 Range Rover HSE with about 155,000 is trading for about $3,500.  So, you should be able to recover most of your maintenance costs and some of your vehicle cost based on putting 50,000 more miles on a 2007 Range Rover.

You can do the same thing by buying a $10,000 Toyota Corolla, Nissan Versa, VW Jetta or Passat, etc.  If you can get 100,000 miles out of a vehicle at $.50 a mile that’s $50,000 minus the cost of the vehicle, interest, fuel, depreciation, etc.  This is a different model than I’m seeing that most people who I’m grabbing a ride from are using for their business.  I’m sure that there are other models that work as well, but this is an idea of how these Lyft and Uber business ventures can work for people who are looking to drive for these companies.

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Auto Consultant – John Boyd: The Cool Car Guy
John is an auto consultant who owns CoolCarGuy.com that is a licensed car dealership in Lone Tree, CO.  He can help you save time and money on any make or model, new or used, lease or purchase – nationwide! Call or email John about your next vehicle! jboyd@coolcarguy.com or Twitter @coolcarguy

 

Beware Of The Exotic Car Scams

Hey Cool Car Fans,

I had to write an article about this website that is sweeping the Internet selling people on how they can drive an exotic car, like an Aston Martin DB9,Vantage, Ferrari, or other exotic, for the cost of leasing a Range Rover or a luxury vehicle.  The ploy is that if you pay $300 to take their seminar or series of webinars that you will learn the amazing secrets of how to exploit the exotic car dealers.

I’ve had so many people who have sent me the link on Facebook about this system that I had to write an article about it.  The first part of the gimmick, which you can find by watching some of their free videos, is that there are dealerships that purchase exotic vehicles and they want to turn them in 60 to 90 days.  This is true since all dealerships that inventory vehicles want to turn their inventory quickly.  It’s just not a big deal.

They go on to explain that many of these dealers end up getting stuck with their exotic cars for a number of months and then their only option is to sell it at auction or to another dealer at a massive loss.  You can even use a CARFAX report to see how long the vehicle has been in the dealer’s inventory.

This may or may not be true depending on the dealership because many dealers have the money to pay cash for these types of vehicles.  If they own them outright they may be willing to sit on them much longer, until the right buyer comes along, who is willing to pay all the money for a specific vehicle.  It’s not as though exotic car companies have a massive production line like a Chrysler Town and Country is built on.  Hence the name exotic cars.  Exotic cars can take a long time to sell, just like a million dollar home is going to take longer to sell than a $250,000 home.  This should be common sense.

One year, I sold a DeLorean DMC-12 from the early 1980’s, which isn’t an exotic like a Lamborghini, but it’s still a limited production vehicle for sure.  I remember some of the guys I knew told me that I would never get what I was asking for it.  I had a number of calls from people who wanted me to drop the price on it without even coming to look at the vehicle.

It didn’t take that long though and a guy who owned an oil company and who was a huge John DeLorean fan showed up and paid the asking price.  Not everyone is desperate to move a unique vehicle that they know are limited production cars.  There is something in business called supply and demand and it is really important when it comes to cars.  No two used vehicles are ever the same, so if a dealer is deeply discounting a vehicle, it could be because it has serious issues.  It may also be that they just traded for the vehicle and they don’t want to keep it in their inventory and are blowing it out.  This isn’t usually the case though with exotics.

The main sales pitch of the exotic car webinar guys is that they are going to teach you how to buy exotic cars at a huge discount.  Apparently, the dealer would rather earn a little more money retailing the vehicle than have virtually zero risk wholesaling it to another dealer or selling it at auction.

Often times I will wholesale a vehicle to another dealer instead of selling it retail because I don’t want the potential “heat” of having a customer come back to me on a vehicle with little profit.  It’s not worth the brain damage.  This is part of the business that these guys are failing to realize.  They make it sound like this happens all the time and the dealers are desperate and it really doesn’t. Most dealers that trade in exotics know their market pretty well, certainly better than the average guy who buys one car every few months or years and thinks he’s an expert.

Their pitch gets even better though.  They have their customers believing that if they buy the exotic car for say $200,000 instead of $250,000 that they can drive it for a few months and flip it again for a profit or for what they paid for it to some sucker or another exotic car dealer.  Apparently vehicles only depreciate when they are sitting on a dealer’s lot and not when a student of a $300 webinar is driving them around and putting miles on them.  And don’t forget that most people trying to get one of these at the payment of a “Range Rover”.  They are going to still have to qualify for their financing.  Honestly, do you think a $200,000 vehicle is going to have the same payment as a $70,000 vehicle?  Did someone fail math class?  Do you think the dealers are going to be begging to buy your vehicle three months later because you are such an amazing negotiator?

My favorite part of the video I watched was when he told his viewers that they should always ask for a salesperson who has been around for a long time.  Because these guys want to make a sale and they are not afraid to discount the vehicle.  He even advises people to not ask for the “new guy”, which is comical.  Have you ever talked to a salty and seasoned car salesman who has been around the car business for way too long?  I get talk to them regularly and many of them are nuts.  I’ve been around this business for over 13 years and I’m pretty nuts.  They are often seasoned pro’s at selling with very little patience for people who want to waste their time.

Someone who has been selling cars at a dealership for five, ten or twenty years, everyday is more often than not like a salty old sea captain.  I know one guy who would have people in his office trying to grind him down on a car purchase and he would just tip his glasses down and say, “Get out!”.  He would literally escort them out of his office and slam the door.  That’s the type of guy they’re telling their students to go and negotiate with, which is hilarious.

If someone is going to pay cash they are probably going to want to keep the vehicle and not dump it after a few months.  Which is probably what these guys are actually doing themselves.  After all, if you can sell 2,000 webinar courses on how to buy exotic cars at $300 a pop and earn $600,000, well you can definitely afford to buy a $200,000 Aston Martin DB9 or some other exotic vehicle for your sales “pitch”.

This reminds me of the late night television gurus of the 1980’s that were selling suckers on how to buy real estate with no money down, if they purchased their material.  They would usually get someone who bought one or two homes to get on their show and tell them how great their system worked, so they could fill a room.  The fact was that most of the people taking the class probably never bought one house after they ponied up to the bar to pay their fees.  The same exact concept is happening here by telling people how to do something that sounds too good to be true, while earning a huge profit selling a scam.

I earn my living, buying, selling, trading and leasing vehicles for people and I’ve done it for the past thirteen years.  I only get paid if a sale of a vehicle is made and if I charge people a commission it’s for actually delivering a tangible product.  If it really worked as well as they are saying, why wouldn’t they just keep the idea to themselves and go make money flipping their exotic cars?  The simple answer is because they earn way more money selling their amazing system that nobody else knows how to do than they would just using their car buying system.  And if you were to question them on it they will claim that you just don’t know what you’re doing, you’re stupid and they’re a genius.  Yes they are – at selling the “sizzle”.  Like anything else, it’s buyer beware.  Now people can hopefully quit sending me the link to their website.

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Auto Consultant – John Boyd: The Cool Car Guy
John is an auto consultant who owns CoolCarGuy.com that is a licensed car dealership in Lone Tree, CO.  He can help you save time and money on any make or model, new or used, lease or purchase – nationwide! Call or email John about your next vehicle! jboyd@coolcarguy.com or Twitter @coolcarguy

 

The Future Looks Bright, But Expensive

Hey Cool Car Fans,

I was recently reading one of the car magazines that I subscribe to and came across an article about new technologies.  These included things like thin-film solar panels on the roof and new windshield displays, along with five other new whiz bang features

I grew up in the Star Wars and Star Trek era where I hoped as a kid to be driving a land speeder by now. However, I also spend a small fortune each year repairing and fixing used cars.  If you haven’t had to pay to put in a windshield into a Mercedes Benz S550 with rain sensing wipers then you might get excited about solar panels on the roof of a car.  If you have had to fork over $1,500 or more for a windshield than you get where I am going with this article.

THE COST OF NEW TECHNOLOGY

New and improved technology is fantastic, until it is out of warranty and it breaks down.  The labor costs alone on many vehicle repairs are getting obscene.  There are franchise dealers in Denver charging $165 to $200 an hour just for labor and these are not to repair your Ferrari, but your daily driver.  When you add in the cost of expensive parts, suddenly the cost of ownership outside of the manufacturer’s warranty can be crazy high.

One of the new technologies that were mentioned in the article were putting batteries in the body panels.  This sounds like a great idea conceptually and it will probably even work.  Do you want to be the sucker though that buys that vehicle and pay the bill to insure the vehicle?  Think about the added cost when someone runs a red light and plows into the side of the car.  The body shop wouldn’t just be replacing a door or a few panels, but battery packs inside a door and panels. If sellers think they are getting screwed by a bad CARFAX now after an accident is reported, just wait until this new technology hits the market.

How about shock absorbers that turn energy created from a pothole into more miles per gallon?  Let’s be honest because most of the cars on the road today ride like crap because nobody wants to spend the money to replace their vehicle’s existing shocks or struts.  It’s already an expensive repair unless you are a gear head or mechanic and you can do it yourself.  Now add the additional complexity that the engineers want to add for better fuel economy and most used vehicles will need new shocks like they need new tires.  Only the majority of drivers won’t have the extra money to replace them.

Google, Apple and other Silicon Valley companies are investing heavily into the automotive industry.  The big automotive manufacturers are starting to embrace the “geeks” in California and their highly profitable business models.  Let me forwarn you now that you had better grab your wallet and hold on tight!  You may find in the future that leasing a vehicle is the only option that actually makes financial sense.

If you are enamored with the brilliance of Silicon Valley, you apparently haven’t had your kids break their, made in China, iPhone yet out of warranty and have to replace it for $200 or $300?  Have you seen the upgrade Tesla offers on their batteries for the older roadster at $25,000 for 350 miles of juice?  Who is going to flip the bill if you own an autonomous car from Google when it breaks down?  These companies are run by billionaires who know how to earn a buck off of the masses. I see the word “sucker” when I read about sone of these new whiz bang technologies.

An air suspension ride on a Mercedes Benz or BMW is fantastic until it goes out and you have to buy new air bags.  I see first hand how many people have to get out of their expensive vehicles when repair bills start cleaning out their bank account.  If the cars of the future continue adding more expensive technology that can and will fail it will get far worse.  One of the things that made Luke Skywalker’s Land Speeder such a cool ride was the simplicity of it.  It might be time for the car manufacturers to remember the old marketing saying, “less is more”.

Which is one of the reasons why buying older vehicles or classic cars that someone can fix up is starting to make much more sense for many people.  If you’re not going to lease a new one to share in the risk of repairs with the leasing company or the manufacturer with a lower monthly payment, why not drive an older and much cooler car for a far less overall cost of ownership.

I am getting more requests from people to help them find older classic cars, even like a 1979 Mercedes Benz 450SL that you can pickup for under $15,000 most of the time in pretty good condition.  It’s like getting the movie star look on a Wal-Mart budget and people are starting to realize that these vehicles are not going to depreciate in five years like the newer vehicles are doing in a year.  It’s something to think about isn’t it?

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Auto Consultant – John Boyd: The Cool Car Guy
John is an auto consultant who owns CoolCarGuy.com that is a licensed car dealership in Lone Tree, CO.  He can help you save time and money on any make or model, new or used, lease or purchase – nationwide! Call or email John about your next vehicle! jboyd@coolcarguy.com or Twitter @coolcarguy

2006 Chevy Corvette Z06 – Consignment SOLD!

Hey Cool Car Fans,

I recently consigned a really cool yellow 2006 Z06 Corvette for a client and I decided to  feature it here on CoolCarGuy.com, even though it probably won’t last very long. . These are super cool cars that tend to hold their value extremely well based on supply and demand.  One of the great things about the corvette is that it’s an American icon as a motor vehicle.  There is no mistaking the Corvette when you spot one driving down the road and Chevrolet has been producing it for a very long time.

This particular vehicle has the 7.0l V8 that produces 505hp.  My client also had the following modifications done to the vehicle, but nothing that would affect the overall value of the car.  The wheels are the factory ZR1 rims with Nitto tires. Air Raid exhaust. Full cat back. It also has the carbon fiber ground effect parts (side skirts), but my client liked the way the vehicle looks better without them installed.  He’s including them with the vehicle to the new buyer, should they want them.

The miles are great on this one at just under 21,000 for a 2006.  It’s also the hard to find yellow with black stripes and it is in superb condition.

The Specifications

Year:2006
Make:Chevrolet
Model:Corvette
Trim:Z06
Mileage:21,000
Stock #:JB102671
VIN #:1G1YY25E765102671
Trans:6 Speed
Color:Yellow
Interior:Leather
Vehicle Type:Coupe
State:CO
Drive Train:RWD
Engine:7.0L V8 OHV 16V
  • Air Conditioning
  • Driver Airbag
  • Power Locks
  • Alloy Wheels
  • Driver Multi-Adjustable Power Seat
  • Power Mirrors
  • AM/FM
  • Extra Keys
  • Power Windows
  • Anti-Lock Brakes
  • Fog Lights
  • Rear Spoiler
  • Automatic Climate Control
  • Front Air Dam
  • Separate Driver/Front Passenger Climate Controls
  • Automatic Headlights
  • Heated Exterior Mirror
  • Side Airbags
  • Bluetooth
  • High Intensity Discharge Headlights
  • Splash Guards
  • Bucket Seats
  • Interval Wipers
  • Tachometer
  • CD
  • Keyless Entry
  • Tilt Wheel
  • CD Changer
  • Leather Steering Wheel
  • Tire Pressure Monitor
  • Cruise Control
  • Limited Slip Differential
  • Traction Control
  • Daytime Running Lights
  • Passenger Airbag
  • Vehicle Stability Control System

This is vehicle has a 6 speed manual transmission and is a blast to drive!  If you’re looking for a really cool and super fast American sports car the Chevy Corvette is probably the best value available for the horsepower and the overall value proposition.

I am expecting that it won’t last long on the market since so many owners keep their corvettes for a long time. Corvettes have been being built by Chevrolet for over 60 years and they have built close to 1.5 million Corvettes over six or seven generations.  The majority of them have been really good cars and a few have been pretty terrible.  The C-6 platform that was from 2004 to 2016 with the LS7 engine in 2006 was definitely a winner!

The Z06 came on the scene as a 2006 model in the third quarter of 2005 and is the lightest of all the Corvettes. The Z06 was equipped with the largest-displacement small-block ever produced, which was a new 7.0 L (427 cu in) engine codenamed the LS7.  The Z06 was the official pace car for both the Daytona 500 and the Indianapolis 500 in 2006.  Car and Driver magazine did a road test of this amazing vehicle and called it a “supercar” that helped fuel the desire for this bad boy…

“But by almost every performance standard, the Z06 is a supercar. A few days after our trip, we took a Z06 to GM’s Milford proving ground and tested it. It ripped to 60 mph in only 3.6 seconds, hit 100 in 7.9, and 150 in 17.5. That’s on par with or better than the performance of the $153,345 Ford GT (and good luck getting that price) and $180,785 Ferrari F430. Likewise, the brakes are terrific, bringing the Vette to a standstill from 70 mph in only 162 feet. And it pulled 0.98 g on the skidpad. Spending double the Z06’s price does not guarantee you’ll have a car that can beat it. ” – Car and Driver

Price: $34,900

Cool Car Guy RatingExtremely Cool

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Auto Consultant – John Boyd: The Cool Car Guy
John is an auto consultant who owns CoolCarGuy.com that is a licensed car dealership in Lone Tree, CO.  He can help you save time and money on any make or model, new or used, lease or purchase – nationwide! Call or email John about your next vehicle! jboyd@coolcarguy.com or Twitter @coolcarguy

Beware Of The Accuracy Of Car Websites And Reviews

Hey Cool Car Fans,

I decided to start 2017 off by writing an article about the plethora of car websites online with “information” about getting a deal on vehicles and online reviews.  There is a popular old saying, “there’s a sucker born every minute” and this is really true when it comes to what you read online.  Granted, I have an online blog here, so people could probably say the same thing about me, but the difference is that I am actually licensed to buy, sell, trade and lease vehicles for a living and I’ve been doing it for the past twelve years.

ONLINE REVIEWS

Let me start though by talking about online reviews.  What a joke most of this information has turned out to be.  I know of a dealership that rips people off constantly and they earn a ton of money selling cars.  They “inspect” their cars, advertise their cars as “inspected”, but most of their vehicles are rusted out from the East Coast and they don’t actually fix them.

They just advertise that they have a “90 point inspection” done on the vehicle, which is true, but they don’t pay to repair them.  In some cases, they don’t even do an oil change or they may only do an oil change on the vehicle.  When a person goes back to complain they tell them that they purchased the vehicle “as-is” and to have a nice day.

Some disgruntled people will go and write a bad review about them, but they don’t care.  The salespeople have their friends and family write reviews for them or they write them on their own under an alias.  Their good reviews outweigh their bad reviews, so they look like a great place to buy a car.  How is the online website like Google going to monitor that?  They can’t and do they really care?  Think about it.  The reality is that you could buy a car that is a piece of junk if you buy from that particular dealership based on their reviews.

On the flip side, you see people who are extremely unreasonable write negative reviews about repair shops or car dealerships that are really quality businesses.  I know of a repair shop in Denver that has been around for 40 years and they specialize in doing clutches at a pretty reasonable price.  They will even use upgraded materials like Kevlar that can last longer for only about $100 more than an OEM clutch.

Recently, I read a review online that blew my mind.  Some disgruntled guy wrote…

The quality was excellent–HOWEVER they tried to charge me sales tax on MY components which were brought in for reconditioning, which is labor only. This is NOT legal under Colorado State Law, and they IMMEDIATELY developed an attitude when informed of this fact. Will NOT use them again.

Really? This guy brought in his own parts for “reconditioning” and they charged him sales tax of 7.65%?  I bet his bill was about $200, so he had to pay about $15 in sales tax and he took the time to rate this shop one-star on a popular website.  He even said, “The quality was excellent”.

This guy failed to realize that most shops won’t even let him bring in his own parts.  The repair shops want to use their own parts, so it’s amazing this shop did that for him and then he pounds them online over sales tax?  Wow.  How many people won’t bother reading the actual review to realize that an unreasonable guy gave this long-term shop a one-star rating and they will miss out on using a really good shop for their service.  Once again, I take online reviews with a grain of salt because most of them are B.S.

CAR PRICING ONLINE

Let’s shift gears quickly and talk about one of my favorite things that you will see online today.  There are so many websites now telling people what they should be paying for a vehicle.  And most of the time it’s really comical.  I’m not going to mention the websites directly because I don’t need the heat from their lawyers, but you will know who they are.  The websites that tell you whether you are getting a fair market price or a value price or what the dealer price should be.

I ran an Internet company for three years before becoming The Cool Car Guy twelve years ago.  Guess how we made our money on the Internet?  We sold ads.  And the more visitors we would get to our site the more ads we could serve up and the more ads we served up the more money we made.  Do these sites actually sell cars?  No.  Do they really care if they tell you that you should be paying $25,000 for a $30,000 car?  No.  Why would they?  They have zero risk for giving you poor information.  It’s on the same level as fake news.

These websites often pull data from the dealer auctions for example or previous sales on their website, but that really means nothing.  Does their algorithm that they are using stop to say, “This vehicle had frame damage we need to adjust the price and notify our visitors.”  or “This vehicle was in two accidents and was priced less.” or “This vehicle has $5,000 in hail damage that wasn’t repaired.” or “This same vehicle is missing a front fender and the tires were bald and the sunroof was cracked and leaking water.”? Do their websites take any of this information into consideration?  No.  They can’t!  It’s simply taking an average of all recent sales data and telling the visitor that they should be paying $25,000 for that $30,000 vehicle because they have all the “data”.  It’s ridiculous because the data isn’t completely accurate.

It can’t be because sometimes a dealer will low-ball someone on a trade and the person will take their low-ball offer.  Now, they paid $16,000 for a vehicle that is running through the dealer auction for $22,000 that they can sell for $20,000 and earn $4,000.  Does this now mean that these vehicles that are retailing for $25,000 should be selling for $20,000?  This is the brain damage that these websites are creating in the marketplace because of mis-information and just spitting out “data”.  Ever watch Pawn Stars on television or some of the car shows where someone wants $10,000 for their vehicle and they offer them $5,000 and they take it?  It happens quite a bit nationally, but it’s not reality because some dummy gave away their vehicle.

You get to run around trying to buy a $30,000 for $25,000 and telling the local dealership or a private party, “Website so and so says I should be paying this, so that’s the most I am going to pay.”.  Does website “so and so” own that vehicle you want?  No.  Does website “so and so” actually sell cars or just advertise cars for sale?  How does website “so and so” get paid?  They sell advertisements or you have to pay a fee to list your vehicle on their website.

Are all cars that are the same make, model and year the same?  Ever been in a used car that looked like a family of rats lived in it or was a rust bucket compared to one that is car show worthy?  Are they worth the same?  Do these websites really care if the vehicle sells or if the visitors get the wrong pricing information?  No.  It’s not like you are buying the vehicle from them.  They have absolutely no skin in the game and there are zero regulations to make sure that their information is accurate.

What should you really do to get pricing for a vehicle?  See what the vehicle is really selling for online and if it fits your budget great.  If not,  you probably have to adjust your budget based on the actual condition of the used vehicle.  You are far better off going to NADA.com and KBB.com and pull the data with the options to see what the retail and wholesale value is for the vehicle.  This is what banks use to loan money on vehicles, so it’s much more real data.  If you are under retail and close to wholesale than you’re probably getting a good deal.  You should compare both book values though because sometimes even they miss it.  Some banks use Kelly Blue Book and some use NADA, so if you are financing the vehicle, find out which your lender is using.

In the end, a vehicle is worth what the owner is willing to pay.  A few years ago there was an article about a 1956 Mercedes-Benz 300SL Gullwing that was unrestored and it sold at auction for $400,000 more than a restored one brought.  What’s the website that the buyer could have gone to see if he got a good deal on that vehicle?  You can see details on this vehicle purchase at Gooding & Company’s website.

Obviously, the vehicle was worth what the buyer was willing to pay for it.  This is one of the reasons why I often enjoy selling historical or classic cars more than more modern vehicles to clients.  Most of the time the buyers and owners are much more reasonable about the vehicles they are looking to purchase and sell.

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Auto Consultant – John Boyd: The Cool Car Guy
John is an auto consultant who owns CoolCarGuy.com that is a licensed car dealership in Lone Tree, CO.  He can help you save time and money on any make or model, new or used, lease or purchase – nationwide! Call or email John about your next vehicle! jboyd@coolcarguy.com or Twitter @coolcarguy

 

Why I Am Excited About The Future Of Formula One Racing

Hey Cool Car Fans,

If you’ve ever watched F1 racing you know how cool these cars are and recently a Colorado billionaire, John Malone of Liberty Media purchased the rights to Formula One racing.  If you’ve never seen Formula One racing let me share with you from a cool website called Zeroto60times.com how fast these race cars are and you’ll see why I am excited about the future of this sport.  Especially, if we can get some more Formula One racing here in the United States.

“Formula 1 cars are some of the fastest and radically accelerating vehicles on Earth and are considered by many car enthusiasts to be the pinnacle of motorsports. Today’s F1 0-60 times are exponentially faster than predecessors of even a couple decades ago. Formula One race cars have been recorded to reach 0-60 as fast as 1.6 seconds, however the typical range for modern day F1 cars is between 2.1 to 2.7 seconds. The 2007 Honda RA107 f1 race car goes 0-100 mph in a blistering 4 seconds flat.  The 2015 Infiniti Red Bull RB11 Formula One race car jets 0 to 60 in only 1.7 seconds, and perhaps even more impressive can reach 190 mph in under 10 seconds.  Although top fuel dragsters hold the top spot for fastest accelerating race car class, the F1 race car boasts a range of superior performance stats. F1 0-60 times are extreme, however so are their ability to perform incredibly tight high speed maneuvers, decelerate and reach impressively high top speeds. Under hard braking or cornering a typically F1 car will pull 4g’s, which is over 4 times as much as a 2014 Corvette Stingray Z51 would do which produces a max of 1.03g in hard cornering. The power to weight ratio of F1 race cars would actually allow for better performance, however current traction technology limits the capability to improve these current stats. Most F1 cars weigh around 1,300 pounds with the driver and boast over 750 horsepower. In other words, the power-to-weight ratio of formula one race cars is credited for the spectacular acceleration.” – Zeroto60times.com

These cars are super cool, but the race series is not winning over new fans and that’s a problem for the future of the Formula One racing.  John Malone’s Liberty Media has agreed to buy the racing series in a deal that values it at $4.4 billion, plus debt that will take it up to $8 billion.  That’s big bucks for a racing venue, but this is Formula One racing, which is the Super Bowl of race car driving and a global audience.

Since the announcement was made back in September other news reports have said that they intend to put spending caps on race teams.  This is a great idea because Formula One has been dominated by Red Bull and Mercedes Benz.   This is because they can spend $400 million or more on putting together a racing team and other teams have been spent into ruin trying to compete, which has created an unfair advantage for smaller teams.  It’s not a big win for the fans when two teams can dominate the racing circuit with better technology and loads of cash, so it will be interesting to see how it all shakes out with the new owner.

I don’t expect that Formula One will be huge here in the United States, but we might get some Grand Prix races in some larger cities like New York and Los Angeles out of it.  I’m hopeful that in the coming year we’ll see some changes with the new ownership and that more of the races will be available to watch and follow because it’s a really cool sport.  I’m including a cool video that is under ten minutes that I found on Youtube to check out below.

I want to thank all of my clients for a great 2016 and I am looking forward to 2017 and what it has to bring.

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Auto Consultant – John Boyd: The Cool Car Guy

John is an auto consultant who owns CoolCarGuy.com that is a licensed car dealership in Lone Tree, CO.  He can help you save time and money on any make or model, new or used, lease or purchase – nationwide! Call or email John about your next vehicle! jboyd@coolcarguy.com or Twitter @coolcarguy

A Tale Of Two Classic Porsches

Hey Cool Car Fans,

I often get requests from clients to help them find a good deal on a specific classic car and I’ll usually start out by searching through the dealer auctions.   Recently, I was cruising through the auction and I spotted a couple of Porsche 356’s from the early 1960’s that I decided to showcase here and write an article about.

One of the reasons why I selected these two vehicles is because of the incredible disparity in price between the two vehicles.  I wanted to use this article to illustrate the fact that no two vehicles are ever the same, especially when it comes to classic cars.  Much like a piece of a artwork the beauty is in eye of the beholder and what has gone into the creation of the vehicle.  Many factors come into play from vehicle restoration, make, model, year, original miles, overall condition, who did the restoration, color, popularity, scarcity, etc.

First I spotted this 1962 Porsche 356B that was yellow and black with about 100,000 miles on the vehicle.   The description of the vehicle didn’t really say much about it though.  This vehicle was being priced around $72,000 with auction fees and shipping.  Here’s what they had to say about it, but let’s get some more research on this year and model as well.

The Listing: “WOW New 356B Original Rust free pans, new paint excellent interior Super 90 Spec Engine, Sport Exhaust, Carrera Tail panel & much more. Some details still awaiting completion but wanted to get these stunning pictures out there.

Porsche 356 History

“The 356 was created by Ferdinand “Ferry” Porsche (son of Ferdinand Porsche, founder of the German company), who founded the Austrian company with his sister, Louise. Like its cousin, the Volkswagen Beetle (which Ferdinand Porsche Sr. had designed), the 356 is a four-cylinder, air-cooled, rear-engine, rear-wheel drive car with unitized pan and body construction. The chassis was a completely new design as was the 356’s body which was designed by Porsche employee Erwin Komenda, while certain mechanical components including the engine case and some suspension components were based on and initially sourced from Volkswagen.” – Source: Wikipedia

One of the reasons why the 356 is popular is because it was originally created by the son of Ferdinand Porsche and it’s a cool body style.  In addition, it’s an extremely popular Porsche model and is claimed to be the world’s largest classic Porsche club of all the models.  They also are popular for rally and racing car events as well.  What about the 1962 though compared to the 1960?  Actually, there were not huge changes in these vehicles from 1960 to 1962 since the biggest changes to the 356 actually occurred in 1959.

“In late 1959 significant styling and technical refinements gave rise to the 356 B (a T5 body type). The mid-1962 356 B model was changed to the T6 body type (twin engine lid grilles, an external fuel filler in the right front wing/fender and a larger rear window in the coupé). The Porsche factory did not call attention to these quite visible changes with a different model designation.” – Wikipedia

The second vehicle I spotted was a 1960 Porsche 356B convertible, which I’ve put some photos in this article of as well.  This vehicle was a complete restoration with an asking price of around $189,000 with auction fees. The first 1962 Porsche that looked like a pretty sweet ride was being listed at around $72,000 and this one was being listed at around $189,000.  That’s a big spread in price.

Why the massive difference in price for a Porsche convertible compared to a coupe that was originally built within two years of the other one?  Let’s look at how this one was listed and described compared to the other one because this vehicle is a complete restoration and you can see the difference between the two vehicles.

The Listing: “1960 Porsche 356 B Super 90 Convertible Signal Red Tan Leather Interior 1600cc Super 904-Speed Vin/Serial: 87746 Full Restoration in 2014 500 Miles Since Restoration Rust Free Body Rebuilt Drivetrain Solex P114 Carburetors New Clutch New Brakes and Suspension 12-Volt System Leather Trimmed Seats Leather Trimmed Door Panels Leather Trimmed Dash Detailed Undercarriage New Seals and Weather Stripping Constant refinement has always been the watchword at Porsche but the new-for-1960 356B represented a marked leap forward in both mechanical and cosmetic features. Most notably the traditional dropped nose and slanting headlight covers gave way to a raised front bumper and fenders and more upright headlights. The T5 body style also introduced such new details as opening front quarter windows except on the Draus-bodied Roadster so named to appeal to the fast-growing American market. Famed photojournalist Jesse Alexander described the 356Bs new T5-series body as a rather drastic face lift that will come as a shock to Porsche owners all over the world but today it is symbolic of Porsche excellence. This superb Drauz-bodied 1960 Porsche 356B T5 Roadster is presented fresh from a three-year no-expense-spared nut-and-bolt restoration completed in 2014. After being stripped to bare metal the rust-free body was finished to high standards of fit and finish and expertly painted in Porsche Signal Red. In addition to all new seals weather stripping and exterior trim it features excellent glass chrome and canvas top Concours-standard detailing including the undercarriage and a crisp clean Tan interior with leather-trimmed seats door panels and dash pad square weave carpets and fully functioning controls and instrumentation. The restoration included rebuilding a Super 90 1600cc flat-4 engine with Solex P114 carburetors. The transmission was also rebuilt and a new clutch installed; the completed driveline now has approximately 400 miles of use. All steering linkage brake system and suspension components have been restored or replaced and the electrical system upgraded to 12 volts. This marvelous collector-grade 356B Roadster is offered with the Porsche Certificate of Authenticity.”

I think these two vehicles really illustrate why there can be such a difference in price for the same type of classic cars.  In the words of Donald Trump, the next time you contact me about a classic car you can see how the difference between cars can be “huge”.

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Auto Consultant – John Boyd: The Cool Car Guy
John is an auto consultant who owns CoolCarGuy.com that is a licensed car dealership in Lone Tree, CO.  He can help you save time and money on any make or model, new or used, lease or purchase – nationwide! Call or email John about your next vehicle! jboyd@coolcarguy.com or Twitter @coolcarguy

Who’s Building Your Car These Days?

Hey Cool Car Fans,

It is amazing how global the automotive industry has become over the years as we have watched prices of vehicles skyrocket.  Isn’t the idea that if you manufacturer something in another country you should be paying less?  We’ve seen that with calculators, computers and digital watches, but apparently not with cell phones and automobiles.

In some ways, the consumer has been hoodwinked into paying way more for less value than what people would expect to be paying for vehicles today that are being outsourced to other countries.  Many of the vehicles today are more expensive than what people used to pay for a house or what they can still pay for a house in some parts of the country.

Car loans have gone from three and four years to five and six year loans as common and even seven and eight year loans!  I have helped people do a five year lease on a used vehicle to get a lower payment, so that they can roll out early based on depreciation, which is still better than an eight year loan.

Let’s look at the new 2017 Chevy Bolt for example and who has been involved in creating this new vehicle.  According to Wikipedia the Chevy Bolt was created in conjunction with LG.

“The Chevrolet Bolt or Chevrolet Bolt EV is an all-electric subcompact car developed by Chevrolet in partnership with LG Corporation.[3] Production for the for model year 2017 began in November 2016.[4][5]

Isn’t LG known for making televisions, washers and dryers?  The Chevy Bolt though is an EV (electric vehicle), which other than the batteries may have a motor that could last 20 years like your electric dryer.  If you have read CoolCarGuy.com for any length of time you know that I believe the electric vehicle is the ultimate in planned obsolescence.

I love the awards many of these new technology electric vehicles get too.  I’m not sure that many of us have ever even heard of some of these awards, but they sound really good.

“The Chevrolet Bolt won several awards including the 2017 Motor Trend Car of the Year award, the 2017 AutoGuide.com Reader’s Choice Green Car of the Year, Green Car Reports Best Car To Buy 2017, Green Car Journal‘s 2017 Green Car of the Year, and was listed in Time Magazine Best 25 Inventions of the Year of 2016.[10]

Call me a skeptic, but when I sold windsurfers back in the mid 1980’s and computers back in the early 1990’s I remember the magazines giving awards to the companies that I was selling for numerous times because they were huge advertisers with the magazines.  Of course, I’m not saying this has happened here, but I take awards in the automotive industry with a grain of salt.

Getting back to who is building your car today though, if we read a little further about the Chevy Bolt we discover that not only is LG in South Korea involved in manufacturing the motor, battery and drive unit, but the former car company Daewoo was involved in the design of the vehicle.  The only thing that is Chevrolet about the Bolt is the brand name and that it is being assembled in Detroit, Michigan.

“The Bolt was designed by GM’s Korea studio (formerly Daewoo Korea), as B-segment size[28] on its own platform, and does not share elements with the GM Gamma platform cars Chevrolet Sonic/Spark/Opel Corsa.” – Wikipedia

I don’t know if this is a great vehicle or not since I haven’t driven one yet, but I find it fascinating that this vehicle has an MSRP of $37,495 for an all electric vehicle.  If you subtract a federal tax credit to encourage people to buy electric vehicles than the price drops to $29,995 for the MSRP.  The reasoning behind this vehicle is to avoid paying for gas and that most people are only driving about 40 miles a day, but you have to spend a ton in fuel to justify the cost.  It is still going to be a pretty good seller for Chevrolet I’m sure with the increased interest in electric vehicles and all of those award that it’s received – lol.

You could get a 2000 BMW Z3 similar to this one (I’m not selling this one, just showing an example) that I spotted through the Manheim dealer auction that gets great gas mileage and has about 77,000 miles for less than half the price of a 2017 Chevy Bolt.  I would take an older BMW hands down personally, but I recognize they are not in the same category.  My point is that there are some great used vehicles out there that you don’t have to spend $30,000 on with a tax credit to get a cool car.

I’m not trying to pick on the 2017 Chevy Bolt in this article, although it probably seems that way, but I am really just trying to make the point about who’s really making your vehicle.  The fact is that so many vehicles are being outsourced today by all of the manufacturers that you really have to do some research to find out who’s designing, manufacturing, assembling and building your vehicle before you plunk down your cash.

Maybe you don’t really care either?  After all, Chrysler Jeep is owned by Fiat, Mercedes Benz for a while owned Chrysler, so if you own an older Chrysler it could very well have some Mercedes Benz technology in it.  Ford owns Mazda and used to own Land Rover and Jaguar that are now owned by Tata Motors out of India.  Some of the Land Rovers were a disaster for repairs, while Ford owned them.  Nissan is owned by Renault and we’ve seen a number of changes in those vehicles over the years compared to when they were strictly Japanese and the old Datsun brand.

We’ve all seen the issue of recalls with airbags over the past year with a number of manufacturers.  Vehicles are costing more money, but are people really getting more bang for their buck?  I think it depends on the vehicle, even the vehicle within the same manufacturer. Which is why it’s important to do some homework before you purchase an expensive vehicle and know what you’re really getting.

It’s one of the reasons why many people contact me about getting older cool cars, like that BMW and customizing them with navigation, upgrading the interiors and modernizing them with newer technology.  They can often do this for far less than what they are going to pay for a new vehicle that at times feels more like they should have a “made in China” sticker on them.

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John Boyd

Auto Consultant – John Boyd: The Cool Car Guy
John is an auto consultant with his license at a car dealership in Denver, Colorado. He can help you save time and money on any make or model, new or used, lease or purchase – nationwide! Call or email John about your next vehicle! jboyd@coolcarguy.com or Twitter @coolcarguy

Should I Buy or Lease That Luxury SUV?

Hey Cool Car Fans,

I have clients from all walks of life and often times I’ll have clients contact me about buying or leasing a luxury SUV.  For example, Maserati is introducing a new SUV in 2017 called the Levante that will be available in both a diesel and a gas powered engine.

This is a super cool, high-powered SUV with up to 430hp in a twin-turbo V6 motor.  The Maserati website describes this vehicle as follows…

“The Levante is an SUV like no other, embodying the passion, the sophisticated engineering and exclusivity that have distinguished every vehicle engineered and crafted by Maserati in the heart of Italy since it was founded in 1914.”

This should be a popular SUV for a very specific market segment and it’s a super cool ride, but it also has some serious competition.  Jaguar has the F-Pace that they have rolled out, which is less money, but is smaller in size.  There is the tried and true Porsche Cayenne that is another high performance and well made vehicle.  The Jeep Grand Cherokee SRT-8 that has plenty of horsepower and Jeep has been making the SUV forever.  The always popular BMW X5 that is available in a number of configurations that has been around for a long time as well.  Meredes-Benz with their assortment of SUV and the Tesla Model X that is the new SUV from Tesla to name just a few of the options available from luxury car companies.

The problem though is when a manufacturer rolls out a new product, like Maserati and Jaguar are doing, do you really want to be the guinea pig and purchase the vehicle?  I wouldn’t recommend it.  I didn’t say I don’t like these vehicles.  I think they are really cool, just like many of the others I’ve mentioned in this category.  I would just suggest leasing a first release vehicle like the Maserati, the Jaguar or the Tesla and letting the leasing company share in the risk.  This is because we don’t know what the depreciation is going to look like over three or five years for a newly released vehicle.  It gets even more sketchy with the Tesla because many people want the electric vehicle for the tax incentives, but it’s hard to unload a used one without the appeal of a tax incentive.  If you lease it you can drop the keys, walk away, fix your costs and tell the leasing company the vehicle is theirs and to have a nice day.

The reality is that we can look at a three year old Infiniti QX80 and know what they are selling for today.  You can purchase or lease it and have a good idea about what it will be worth when you’re ready to unload it in the future.  We have no idea what to expect from a Maserati Levante or the Jaguar or the Tesla and how they will depreciate over the next three to five years.  We also don’t know how they are going to depreciate in relation to the competing vehicles that have a solid track record.

If you lease the vehicle, you’re allowing the leasing company to share in that risk with you and this is what many people don’t think about.  They only look at the monthly payment or that they don’t want to lease a vehicle compared to purchasing a vehicle because some financial guru, who knows nothing about cars, told them not to lease.  They are not looking at the overall risk and costs involved.
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John Boyd

Auto Consultant – John Boyd: The Cool Car Guy
John is an auto consultant with his license at a car dealership in Denver, Colorado. He can help you save time and money on any make or model, new or used, lease or purchase – nationwide! Call or email John about your next vehicle! jboyd@coolcarguy.com or Twitter @coolcarguy

How To Lower Your Car Payments

Hey Cool Car Fans,

Many times people will decide that they want to purchase a home, but their debt to income ratio is too high.  They may have a great job and the income and they have even saved for a down payment, but their car payments are preventing them from being able to purchase a home.

The first thing that we can do is refinance the person’s current vehicle and lease it back to them that can sometimes really lower their payments.  I recently had a client who was able to lower their payment on a 2012 Infiniti QX56 from over $800 a month down to $422 a month by leasing the vehicle, instead of continuing with her current payment structure.  Being able to lower her payments really helped her with cash flow based on her financial situation.

Many people have lifestyle changes and they don’t look at this as an option.  For example, if a person can lease a vehicle and have a lower payment than they have money available for qualifying for a home or funding an investment grade cash value life insurance policy.  This can be a great strategy that will allow someone to put money away that they can use for other funding options.

As a licensed life insurance agent in the State of Colorado I can show people how to leverage the benefits of dividend paying whole life insurance from a mutual life insurance company.  One of the tremendous benefits of these products is that a person can invest in a policy, have a death benefit and build cash value to borrow against in the future for opportunities like financing their own vehicles without credit and at really low interest rates.  There are huge benefits to this strategy that I won’t go into detail here, but it’s an example of how if you can lower your car payments you can have other financial opportunities available to you.

I’ve had a number of people who have refinanced their vehicles by either financing or leasing them to lower their payments, but another option is to trade out of the current vehicle and into another vehicle.  This is another strategy that many people don’t think about and they miss out on a way better financial opportunity.

400For example, many people are told by the television and radio “financial gurus” never to lease a vehicle, but what if you have an opportunity to buy a home at a great price?  Let’s hypothetically say that you have a $600 a month car payment that is holding you back from qualifying for a home, but you only need $200 more a month in cash flow and you would qualify for the purchase.  What if you could get out of it, lease something similar in a different brand and have a $400 a month payment for three years with miles that would work for you?  That’s $2,400 a year, which over three years is $7,200 in savings.  This is money you can use for other opportunities or save for the future.

Let’s assume that you are $4,000 upside down though to get out of your $600 a month payment?  That is still $3,200 in savings over three years with much better cash flow, when you subtract the $4,000 from the $7,200.  This is what many people don’t think about.  What if you are able to purchase a home for $10,000 less because of the market in your particular area and you can now do that because of your improved cash flow?   Suddenly, that $4,000 in negative equity on the vehicle that you rolled into a lease makes perfect financial sense because you immediately saved $10,000 on the home purchase.  Over three years, the home you purchased is probably going to appreciate in value as well.

“Typically in the U.S., property prices rise 3.5 percent per year, Humphries says, and since about the middle of 2013, they’ve gone up 6 to 8 percent a year.” – Source: USNews.com

“The median home value in the United States is $189,400. United States home values have gone up 5.5% over the past year and Zillow predicts they will rise 2.9% within the next year.” – Source: Zillow.com

This is just one example of how it can make sense to lower your payments using a lease, trading out of a vehicle and purchasing or leasing a different vehicle or even doing a refinance for better cash flow.  As I mentioned already, I also show people how to use this type of a strategy to put the additional savings into an investment grade cash value life insurance product that also goes on the asset side of a balance sheet.  This can allow a person to put money away over three to five years and begin building a stronger financial foundation for themselves.

The bottom line is that sometimes it can make more sense to finance or lease a vehicle and lower payments depending on a person’s unique financial situation.  Everyone’s situation is different and people have life changes, including divorce, health concerns, retirement, credit challenges or opportunities that they want to take advantage of, so I have found that there is rarely a one-size fits all solution.

It’s honestly never a cut and dry statement such as “you should never lease a vehicle” or “you should never refinance a vehicle” or “you should never buy whole life insurance” like so many of the “financial gurus” like to claim.  Sometimes it makes perfect sense.  I’ve seen many people really improve their financial situation by restructuring their automobiles and the way that they go about financing or leasing them.

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John Boyd

Auto Consultant – John Boyd: The Cool Car Guy

John is an auto consultant with his license at a car dealership in Denver, Colorado. He can help you save time and money on any make or model, new or used, lease or purchase – nationwide! Call or email John about your next vehicle! jboyd@coolcarguy.com or Twitter @coolcarguy

The Cool Car Guy.com