New or Used: Advising the Advisor for Financial Success
Marc writes:
As a long time reader and a new financial advisor, I am seeking advice from you and your readers concerning choices for a second-hand automobile. Here are the constraints:
1) $10,000 or less
2) Would prefer avoiding GM & Chrysler
3) 4-doors required (for clients and/or two under-five children)
4) Reasonable annual maintenance
5) Sporty OK but not flashy — message is ”prudently successful” not ”mid-life crisis on the client’s dime”
6) I’m a 47 year-old, married, 2 children, in southwestern Connecticut.
As a starting point, I see this as two basic options — Audi/BMW/Acura on the sporty side or Mercedes sedan on the prudent side. Which cars(year/make/model) do you or your readers suggest I consider? Thanks!
Steve Answers:
I suggest you take as much equity in the prior owner as you do the car. ‘Sporty’ cars like the ones you mentioned are very sensitive to wear and maintenance. German luxury cars that typically hit the 10k echelon are about 7 to 9 years old and have about 80k to 140k on them. Depending on the model.
I know there are a lot of fans of the 3-Series, A4 and C-Class. Well at least the first two. However the 5-Series, A6 and E-Class may be better options. But I won’t recommend them either because I find most European cars from the 2001 to 2003 era to be absolute buggy pieces of crap. Cheap to maintain they are not.
My choice of imaginary frugality and fun would be a 2005 Nissan Altima with the 3.5 Liter V6. You would likely have one with around 70k to 80k. I would opt straight for one from a prior owner (not the dealer) and have it examined at an independent shop. Other folks may recommend the Mazda 6 or even an earlier gen Ford Fusion. Both are fine cars. I don’t care. At least I’m not recommending a Grand Marquis with Flowmasters. In the end you should test all three along with a few others and see which one fits your version of ‘prudently successful’.
Sajeev Answers:
Damn son, now I gotta recommend a Grand Marquis with flowbastards? Maybe not, even if it’s more reasonable than believing a $10,000 budget gets you a “prudent” Mercedes Benz product.
So go for the unknown, forgotten luxury tools of the trade. The older Acura TL/RL bodystyles are a great fit, even with some vintages suffering from automatic transmission concerns from their high(er) horsepower V6 engines. The Jaguar S-type and Lincoln LS certainly fit the price point and performance/style quotient, but that’s a slippery slope when considering upkeep. Perhaps a Lincoln Zephyr (not MKZ, too spendy) or a Hyundai Azera/XG after a little de-badging? Probably not.
My pick? The Lexus ES, 2001 or older. This body style gets better with age, and doesn’t bring about the obligatory Camry references. Yet, under the financial advisor approved skin, this is still a cheap and cheerful Camry from the good old days of Toyota. Find one with service receipts for plenty of oil changes for a sludge-proof reputation and you will be set for years to come.
Need help with a car buying conundrum? Email your particulars to mehta@ttac.com, and let TTAC’s collective wisdom make the decision easier… or possibly much, much harder.
More by Sajeev Mehta and Steve Lang
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First of all, congratulations on being a financial advisor. Its a rewarding career, with a great opportunity to earn multiple streams of passive income through trails, bonuses, and even management overrides. The first 2-3 years are the hardest years. I'd recommend investing in the books from Nick Murray, the skillset and mindset he teaches will pay dividends. Just remember a few points: 1) It's a numbers game. 2) Don't take rejection personally. 3) Master referrals so you never run out of people to see. 4) Don't screw your customers (hint: if you wouldn't buy it yourself, don't recommend it). Most of our meetings are at clients' homes or coffee shops, so I wouldn't recommend showing up in a slammed Honda Civic or a jalopy Volvo. I love luxury cars so I drive an LS430, but the other branch managers in my office drive an S550, Intrigue, Compass, E320, RX350, and TL. Our agents drive whatever they want, from 4Runners and X5 to Versa and Accord. We're a motley bunch, one of them even punished himself for not making $200k/yr by leasing an Olds Alero for a year. But we practice what we preach, and max out our RRSP's and TFSA's (I'm in Canada) and avoid revolving debt like the plague. I don't like leasing, it's as questionably sound as eating more food to increase your metabolism to lose weight. And Canadian tax laws let my write off my business-related car expenses anyway without the infinite car payments. But I do agree that customers expect you to drive something that's fiscally prudent yet represents the station of an upper middle class professional. ES300, Azera, I35, TL, or Amanti is my vote.
Wow. You can't fake a nice car with 10k. People who drive nice cars know the difference. Also, buying an acura, lexus, infiniti etc, NEW is still faking a nice car. My advice? You can buy a 3.2 carrera or 964 rolling chassis for 10k and leave it parked in front of your office. Those old 911 don't sit up high when there is no engine in them, so it will look normal to your customers. Make sure you get custom plates for it like STKMAN or BULMKT and then just take the bus to work. a great example of how this 10k highline does not work, last year I sold my 2001 S4 that I had bought form audi when it went out of service as a dealer rep car. I owned it for almost 10 years. It was worth right around your 10k number when I sold it last year. I kept this car perfect and it had more than its original msrp in upgrades. Now we owned othehr nice cars, but i always kept and loved this s4. Friends, co workers etc gave me more trouble the last few years about why I was driving around that old dinosaur POS everyday. and that was a nice 1 owner car that was literally handworshed everyday by the porters at my work, and kept in fantastic condition. So imagine what people will think about your typical 10k 10 year old german car.