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

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

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