How To Buy An Expensive Car For Cheap? | A Complete Financial Guide

Here’s exactly how to buy an expensive car for cheap + tips to avoid losing money when financing a car. Over the past 4 years, I have traded up from a 1995 M3 (My first car) to a 2014 Audi S5 for the cost of a monthly payment – VERY small down payments…IF ANY. I typically switch cars 1-2 times a year and break down my process for not losing money on depreciation, or the loan itself.

So how do you buy an expensive car for cheap and what i’m talking about expensive i mean the higher-end mercedes lexuses the audi’s that you see it usually really wealthy people or businessmen driving on the streets well over the past four years i’ve been switching cars a lot sometimes once or even twice a year so i decided to put together this video to show you

The whole financial aspect of it so that you can get a great deal as well and drive higher-end cars for a cheaper price so first things first you got to look at is if you’re paying cash for the car or if you’re gonna be financing on the financing side obviously you’re gonna have to look at your credit and here’s the guideline of applying for cars whenever it comes

To credit so if your credit scores above a 650 you’re most likely gonna get approved for every single type of loan out there as long as you don’t have any bad credit history with that credit and on top of that if you have above the 650 you’re probably gonna get an interest rate of blower than 10% now on the flip side of that if you have a credit score below 650

You’re probably gonna have a higher interest rate know whatever you apply for a car loan creditors are gonna be looking at your income your debt and your credit score now when it comes to your income in debt think about it like this think about how much monthly income you have and then subtract all your total monthly payments to see what income is available to

Be spent now the income that you’re gonna be calculating is gonna be gross so let’s use the example of the person that makes $4,000 a month working in a bank if you have a $4,000 a month income and let’s say your mortgage or maybe your rent payment is only 1,500 bucks – all your other expenses like your phone internet cable gas and just general living expenses we

Can average that down to around $500 that’s gonna leave you with an available income of around $2,000 to qualify for a car know granted it doesn’t mean that you’re gonna go out there and get a payment of $2000 and buy a brand new lamborghini coz that’s probably not realistic but the reason why i explain it like that is because i want you to see it in the eyes the

Same way that the creditors view it now to add a little bit more color to that black and white scenario if you do have a worst credit score than 650 you’re probably gonna be capped out for example a person with the exact same income that has a 700 credit score may get approved for $40,000 worth of a car loan and a person that has a 600 credit score may only get

Approved for a $25,000 carling and the reason for that is the total liability or risk that the creditor is willing to take out and the last thing i want you to think about is how much can you still set aside to save every single mont considering that you’re gonna have normal expenses like living phone gas internet everything else like that i still want you to be

Able to purchase a car that you love and still set aside money in the bank every single month and also set aside money into your ira i don’t want you to go live above your means or do anything crazy like that so look at your overall budget and make sure that you’re comfortable with throwing away a set monthly payment for this new car so now that we got the basic

Information out of the way this video is gonna be made for the masses so i’m not counting on the viewer or you to be able to fix up the car in your own and do all those repairs although we will touch up on the realistic approach of buying a mercedes bmw versus a higher-end honda and if you made it in this video this far go ahead and give this video a thumbs up and

Subscribe to my channel for more cool videos like this so first things first is you got to figure out your budget like i mentioned earlier you’re gonna have to figure out the monthly amount that you’re comfortable throwing away because cars are depreciating assets and i don’t want you to bank on buying a car paying it off over time and being able to resell it for a

Higher value and the easiest way to figure this out it’s the google car calculator i personally like using the one from cars comm because you can plug in your taxes your apr and all the little nitty-gritty details that gets you a more accurate payment estimate once you have an amount that you feel like you can comfortably afford look at the total loan cost and figure

Out and play with a down payment to see what’s the least amount of money that i can come out of pocket with to keep the payment at a reasonable rate and what i mean by this is i want you to see the difference between putting a thousand dollars down in your monthly payment versus $3,000 down if it means you’re only gonna save around $40 is really coming out of pocket

An extra two thousand dollars worth it or can you invest that two thousand dollars into something else to make you more money and help pay off that car sooner and you need to get the financing upfront i don’t want you to go to any dealership without applying for a pre-qual letter first because whenever you go to a dealer they’re gonna run a ton of inquiries and it’s

Gonna severely drop your credit score and if you’re shopping around for some time just going from dealership to dealership they’re not really gonna care about your credit they just want to get you through the door into a car so that they can meet their sale i mean after all that’s why they’re called salesmen right and some of the best places you can get pre-qualified

Is either your local bank they do have a really good relationship with or on the flip side of that my favorite are my personal where i like to go is go to a local credit union credit unions tend to take on a little bit more risk even if you have a lower credit score and start developing a relationship with them as well because it’s gonna come in handy whenever

You want to apply for future loans or lines of credit as well so for this time you should have a budget you should have your financial information squared away you should have a pre-qual letter and you’re ready to start shopping to get an expensive car for cheap so this is one of the first rules to get a really expensive car for cheap don’t buy new never mind you

As soon as you purchase a new car and give it just one mile more than it had when you bought it it’s gonna depreciate sometimes as much as half or 50% or more a great example of this is my personal car so i have a 2014 audi s5 that i picked up for a decent deal from a dealership at $25,000 now i bought that car last year and at the time that’s a five year old car

But i tend to buy the cars generation right before so if you take a look at the newer generation model audi s5 you’ll see that a lot of those cars are going for around 40 to 45 thousand and even 50-plus i’ve at that time when i purchase my car so not even paying attention to the year at all just by looking at the newer model audi s5 you’re gonna spend almost twice

As much money to purchase that car versus just getting the generation right before and i know a lot of you are gonna start saying well the miles are higher and it’s not as reliable because it’s gonna need some more maintenance and that’s not entirely true if you follow the next few tips so the second step that i want to give you is paying attention to the brand

Of car they’re gonna be purchasing there’s some strategy behind me purchasing an audi / a bmw and i’m a huge car geek so i love cars in general and especially german cars i think they’re just built fantastic but there’s a reason i didn’t buy a bmw and that’s because bmws depreciate like crazy and audi will hold its value a little bit longer than a bmw and because

Bmws have such a bad rap in maintenance and just general ownership i’ve owned so many different types of bmws including the newer ones and the older ones there’s just always something wrong with the car and now since i’ve been driving the audi for over a year now i haven’t had a single issue so understanding what brands to stay away from is gonna be essential for

You to get the best deal and if you’re not a car geek the easiest way to do research on this is to typing the brand or in model car that you want to purchase into youtube or look it up on some of the form they have car forms for almost every single car out there and they will give you maintenance estimates over the course of four years of that person owning that

Car so you can kind of predict the future and see what kind of maintenance you’re gonna have to go into another tip is kind of obvious but i want you to pull the carfax it’s well worth the investment especially for spending twenty plus thousand dollars on a car you want to make sure that you’re not buying a car that had tons of rear-end damage or stuff that really

Can’t be replaced and even more important the reason why you want to pull the carfax is to see the general maintenance ownership those people who don’t have a very expensive car don’t know that it comes with a very hefty maintenance bill and going to get an oil change is not gonna be just fifty dollars or thirty dollars like a honda civic so reading through the

Forms and making sure that you have the maintenance done on the carfax for example if you’re gonna buy a car about 50,000 miles make sure that certain items like the water pump like the shocks like the brakes have been changed before so that you don’t just buy that car and then have to go and get it changed yourself and believe me it can be confusing at first but

Literally all you have to do is type into youtube the model car that you have in someone i promise you somewhere has made a video of what to avoid and how to properly test drive that car so that you don’t get caught up buying the car with the same mechanical mistakes as the previous person which kind of leads into our next topic which is buying a car with a certain

Amount of model so depreciation is a huge factor that i focused on in this video because i’m looking at the financial aspect of every single dime that i put into this car i’m not going to give back so if i’m switching cars once or twice a year i want to know that if i resell this car i’m not going to take too big of a loss so if i’m buying a newer car say 2015-2016

The generation right before then i want to make sure that i’m getting the mileage under fifty thousand but i’m not getting the mileage under twenty thousand for some reason in this varies model to model and brand to brand but whenever you buy a certified pre-owned car it’s extra expensive and whenever you buy a car that’s twenty thousand miles or under it’s extra

Expensive and there’s nothing really fantastic about owning a car that has 19,000 miles versus owning a car that has 29,000 miles there’s really no difference as long as you do your due diligence and on top of that study your normal driving habits if you drive around 20,000 miles a year and you purchase a car at 50,000 miles that means whenever it comes time to

Sell after three years you’re gonna have over a hundred thousand miles on it and that’s going to severely depreciate the value so for me i generally put around ten to twelve thousand miles a year on my vehicle which is pretty standard among most people now because i’m a realtor i get to write off a lot of those miles for business purposes if i were you i would

Try to set up some type of side business so that you can also take advantage of the irs tax refund of mileage as well and then finally looking at the big picture overall whatever it does come time to sell because you’re not gonna hang on to this car forever you want to make sure that you’re gonna get the most money for it as possible so if you have the experience

I would recommend you to sell it privately or to a local friend so that you can get the most money for it and the goal is not to really make money on the car it’s to not lose money on the car if you can sell it for the same loan balance so that way all you came out of pocket to buy the car over the course of the time of you owning it was just the monthly payments

And that’s a win-win because that’s sort of like leasing a car without putting a deposit on it without having to worry about the mileage or any upfront fees or hassles that the dealership gives you anyway now if you can’t do that that’s completely understandable i wouldn’t recommend you to go trade this car into any just random dealership i would recommend you to

Get a car max estimate because one it’s free and most other dealerships are not going to be able to beat that car max estimate and if you bring that certificate with them within a certain amount of days that they will be able to match that price and work with you so that you can repeat the whole process over again and get your next luxury vehicle well that’s all

I have for you today if you liked this video or if i taught you anything new go ahead and give it a thumbs up and consider subscribing to my channel for more cool videos like this and check out my other videos on credit and real estate

Transcribed from video
How To Buy An Expensive Car For Cheap? | A Complete Financial Guide By Austin Harley