Author Archive

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.
________________________________________________________________________

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

home-buyerHey 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.

There are some creative ways to lower a person’s car payments that can really help with their debt to income ratio and allow them to qualify for a home loan.  I have a good friend and client, who is a mortgage banker and he will routinely call me throughout the year and ask me to assist one of his clients to qualify for a mortgage by lowering their car payments.  There are a number of ways that we can do this to make it happen for people and allow them to take advantage of a home mortgage situation.

2012qx56The 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.

lifeinsurancepolicyAs 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.

________________________________________________________________________

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

2008 BMW M5 Sedan – Consignment

08bmw_m5-1Hey Cool Car Fans,

Recently, I listed a really cool 2008 BMW M5 sedan on consignment for a client and I decided to feature it here at CoolCarGuy.com and put some photos of it online.  I had to feature this vehicle because most car enthusiasts are familiar with this vehicle and it’s 500hp V10 power plant under the hood. This is a really cool vehicle and it’s pretty much stock from BMW other than the exhaust that he did an upgrade on.

The Exhaust

The exhaust was done at BDM Performance Exhaust and my client had them put Magna flows on and change out the tips to single oval shapes to match the contour the rear bumper, which gives is a slick look from the 08bmw_m5-9backend. 

Year: 2008
Make: BMW
Model: M5
Trim: Sedan
Mileage: 50,041
Stock #: JB8762Xc
VIN #: WBSNB93578CX08762
Trans: Automatic
Color: White
Interior: Leather
Vehicle Type: Sedan
State: CO
Drive Train: RWD
Engine: 5.0L V10 DOHC 40V

08bmw_m5-2The 2008 BMW M5 had an original base MSRP of $86,675 according to Edmunds.com and a 1/4 mile track time of 12.8 seconds at 115.1 mph and it took 4.5 seconds to get from 0 to 60 mph.  As I mentioned it has 500hop and 383 ft lb of torque.  This bad boy will get up and go, but the M5 doesn’t really feel like a fast car, which is the beauty of it.  It’s more of a sleeper where people believe it’s just another 5 series sedan, but it’s actually a monster on the highway.

The E60 M5 was the world’s first production sedan to feature a V10 gasoline engine.  At the time the M5 was released to the public it was the fastest 4-door production sedan in the world, which you would probably suspect it to be.  It had a five year run from 2005 to 2010.

If you’re looking for a fun pre-owned vehicle in this $30,000 price range this is a fantastic car to consider and I don’t expect it to last long.

08bmw_m5-5

 

2008 BMW M5 Sedan Vehicle Options
  • Air Conditioning
  • Electronic Parking Aid
  • Power Seats
  • Alarm System
  • Extra Keys
  • Power Trunk Lid
  • Alloy Wheels
  • Fog Lights
  • Power Windows
  • AM/FM
  • Front Air Dam
  • Rain Sensing Wipers
  • Anti-Lock Brakes
  • Front Power Lumbar Support
  • Rear Airbags
  • Automatic Climate Control
  • Front Power Memory Seat
  • Rear Defroster
  • Automatic Headlights
  • Front Side Airbag
  • Separate Driver/Front Passenger Climate Controls
  • Aux Audio Jack
  • Heated Exterior Mirror
  • Side Airbags
  • Back Up Sonar
  • Heated Seats
  • Side Head Curtain Airbag
  • Bluetooth
  • High Intensity Discharge Headlights
  • Steering Wheel Mounted Controls
  • Bucket Seats
  • Interval Wipers
  • Subwoofer
  • Cargo Area Tiedowns
  • Keyless Entry
  • Sun Roof
  • CD
  • Leather Seats
  • Tachometer
  • CD Changer
  • Leather Steering Wheel
  • Telematics System
  • Chrome Wheels
  • Limited Slip Differential
  • Telescopic Steering Column
  • Cruise Control
  • Locking Differential
  • Tilt Wheel
  • Daytime Running Lights
  • Navigation
  • Tinted Windows
  • Driver Airbag
  • Owners Manual
  • Tire Pressure Monitor
  • Driver Multi-Adjustable Power Seat
  • Passenger Airbag
  • Traction Control
  • Electrochromic Exterior Rearview Mirror
  • Passenger Multi-Adjustable Power Seat
  • Trip Computer
  • Electrochromic Interior Rearview Mirror
  • Power Locks
  • Trunk Anti-Trap Device
  • Electronic Brake Assistance
  • Power Mirrors
  • Vehicle Stability Control System

08bmw_m5-4If you are looking for a fast BMW with plenty of room for five people, amazing horsepower and speed look no further than this nice BMW M5 sedan.

Price: $31,000

Cool Car Guy RatingExtremely Cool

________________________________________________________________________

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

2015 Mercedes Benz GLK350 4Matic Used Vehicle Lease

Hey Cool Car Fans,

2015_GLK350.1Recently, I had a former client contact me about getting out of her 2013 Nissan Rogue lease and into a “luxury” vehicle this time around, but she wanted a low lease payment without having to put a great deal of money down.  I know that many people see the low lease payment offers on television and they believe the dealerships that they can lease an $35,000 to $50,000 vehicle for under $400 a month with nothing down.

However, what most people discover is that in the fine print of the advertisement the manufacturer wants more money down or have an annual mileage restriction of 10,000 miles or even 8,000 miles.  If you drive 15,000 miles a year for three years and you purchased an 8,000 mile lease than your vehicle will have a vehicle that is three years old with 45,000 miles and you told the leasing company that you were only going to drive 24,000 miles a year.  This happens all the time!

The salesperson tells the person not to worry about the miles because at the end of the lease they can buy it out, but what if the leasing company bet wrong on the residual and the residual is $26,500 and the vehicle is selling at auction for $24,000?  You get to buy it for $26,500 or $2,500 more than what the vehicle would actually trade for.  This is still better than being over your miles by 21,000 miles at $.25 a mile, if you give it back to the leasing company where they will cream you for $5,250 in additional depreciation, plus any additional damage the vehicle might have as well.  Which is why it’s important to purchase the right miles to begin with or get as close to where you think you’re going to drive as possible.

The Used Vehicle Lease Option

2015_GLK350.2Why do people buy used vehicles?  Because they want someone else to take all the initial depreciation on the vehicle when it drives off the showroom floor.  When you lease vehicle you are paying for the depreciation and the leasing company is setting a number on what they believe the vehicle is going to be worth, two, three, four or five years from now.  They are taking an educated guess and rolling the dice that the vehicle is going to be worth X if you put on X number of miles during the term of your lease.  As I just mentioned, many times the leasing company will be wrong and that’s a benefit for you!

What if my client had purchased the Nissan Rogue and after three years she wanted to get out of it?  In her case, she had backed into her husbands vehicle with her car and did about $500 in damage.  On top of that though, Nissan had bet wrong so the vehicle was worth about $2,000 less for trade value than the residual value was, so if she had financed it for five years and wanted out she would probably owe about the same as what her residual value was.  Now she could just give it back to the leasing company, cover the

A used vehicle lease transfers some of the risk of ownership of a used vehicle back onto the leasing company again and this is an awesome concept that you are probably not going to hear about from a franchise car dealership.  They are in business to do new vehicle leases because the manufacturer wants them leasing new cars and not leasing used cars.

You can now see the benefit of how a used vehicle lease is similar to purchasing a used vehicle. Much of the depreciation has already taken place, so you are able to transfer some of the risk of driving that used vehicle onto a leasing company.  If the vehicle gets hit with hail or in an accident, while you are driving it and you own it than you get stuck with the bad CARFAX report and I get those calls all the time from people trying to figure out what to do with their vehicle with the bad CARFAX.

A Lower Payment & A Lower Residual Value

2015_GLK350.3When you lease a used vehicle, like the pictures of this 2015 Mercedes Benz GLK350 AWD, that I ran lease numbers on for my client, a great amount of depreciation has already taken place.  For example, I ran a scenario with 12,000 miles a year instead of the 8,000 or 10,000 on a similar manufacturer’s lease with only $1,000 down, plus the first payment and 12,000 miles a year.  The numbers below are based on approved credit and you need a minimum of a 680 FICO to qualify for a used vehicle lease with most leasing companies.

This is a vehicle that I could purchase at the Dealer Auction for her with about 30,000 miles on a 2015, so it still has the remainder of the four year factory warranty from Mercedes Benz.  If she was to lease this vehicle using the estimate that I ran, which could be less depending on what I can purchase this vehicle for or one like it for through the auction it would be a very affordable lease.  It could be slightly more, but I’ve been doing this for 12 years and I’m pretty good at estimating, but I will drill down a specific vehicle for her if she decides to go in this direction.  I’m not sure why someone wouldn’t want to do this?  There is very little downside and it can be great for people in business.  Not everyone knows how to structure these leases properly though, so if someone tells you they know how to do used vehicle leases it doesn’t mean they will have the same results.

You can see the Base Payment, which is what dealers normally quote before sales tax is added to the lease payment.  Also be sure and look at the residual.  So if she were to decide to lease this really cool vehicle for 48 months she can buy it out at the end of the lease for $15,400, which is below wholesale based on sales at the Dealer Auction of 2011’s with about 78,000 miles like this should have at 12K a year.  Which is a case where if she were to put more miles on the vehicle than what she purchased she could find herself in a safe position based on the depreciation that already took place.  This is also a simple interest lease, which is another discussion all together.

 

Term Adjusted Cap Cost Residual Base Payment Sales Tax % Sales Tax Amount Total Payment
24 $30,445.00 $20,583.00 $467.05 7.85 $36.66 $503.71
30 $30,445.00 $19,521.00 $419.09 7.85 $32.90 $451.99
36 $30,445.00 $18,459.00 $386.73 7.85 $30.36 $417.09
42 $30,445.00 $16,929.00 $373.92 7.85 $29.35 $403.27
48 $30,445.00 $15,400.00 $363.87 7.85 $28.56 $392.43
54 $30,445.00 $14,132.00 $351.12 7.85 $27.56 $378.68
60 $30,445.00 $12,863.00 $340.67 7.85 $26.74 $367.41

This is a payment that many people can afford and put more money into their savings or an investment vehicle, a business venture, use for their household expenses, while still driving a late model Mercedes Benz.  How cool is that!  A person could be driving a 2015 Mercedes Benz AWD SUV for less than what they would pay to drive an American or Japanese Import. Which is why I’m The Cool Car Guy.

If you want to have me run some scenarios for your situation and have me assist you in finding a different vehicle just send me an email at the address below.
______________________________________________________________

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

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