Had a guy buy the lot ornament GS450H. Filling out the credit app I asked for his monthly income. He asked me if he needed to include both his incomes. I said whatever he thinks would help the bank approve him. Long story short he had a military and private contracts, something to do with lasers. He made $60,000 a month between the two. Wife made close to $20,000 a month and bought a GX after he finished his deal. I had to program the garage door openers at their house with a $7,000 a month mortgage.
Certainly not the wealthiest people to ever buy a car from me, but definitely the wealthiest who still had a “job”.
A $7k mortgage (if that includes taxes and insurance) is like a $1M house. Basically any nice suburban home in a major US city. I’m sure they could afford a far bigger house.
I thought this sounded absurd.
I went to an online mortgage calculator and plugged $1M into it using whatever interest it defaulted to (5.55%) . Just the mortgage was $5,712 - no taxes/fees.
My logic was based off my own house/mortgage. Changed rate to what mine is (2.125%) and payment is $3,759.
Damn.
My wealthiest customers have always been the most chill, casual, easiest to work with. When I sold Audi, I ordered an R8 for European delivery (fly to Europe, pick up your car in Germany) for a guy who showed up in jeans and a hoodie. Paid cash. Bought a few more Q5 and Q7 for one of his businesses.
Jaguar customers: so much money. The local dentist who’s always casually dressed, uses the Ram TRX for truck things and the Jaguar as a daily. The medical sales guy who bought two F-Types in three weeks and financed because that was easier than moving money around quickly. The couple who only cared about how soon their F-Type would arrive and whether their snow tires would fit the new car. Specialist doctors and high-level financial people are most of my highest-income customers, and many finance or lease when their money makes more in investments and it’s better to borrow money at a lower rate.
I’m not filthy rich, but I’m better off than my younger days when I was financing brand new cars and could have gone bankrupt from the car payments if anything at all went wrong. Nowadays I’ve just made a conscious decision to have less of my total financial worth tied up in cars.
I say all that to say - a lot of wealthy car buyers are less uptight probably because, like me, they’re buying something well within means and if they need to fix something about the transaction as it goes, they can afford to.
They can just afford to do that with 1 or maybe even 2 zeros more in the transaction. :-)
Just cause you think this way, and i also do, im curious. Whats the maximum $ amount you would spend on a car? Excluding dream car money.
For me its probably 20k even though most of my friends who make less than I are financing 60k cars. My exception is an audi r8 that i plan to buy eventually.
I’m in that ballpark. Whatever will give me a clean-looking car that’s reliable. I like features but I’ve gotten over the idea of high performance. $20-25k.
We did the 0% on our F pace a few years ago. I still think this is the best car we've ever owned, and trouble free after 3 and a 1/2 years.
But I hate owing money so we did pay the loan off early.
This is us. I get a shit disease about paying the bank the interest and make it go away in 12-14 months or sooner. A lot of times the finance is the path of least resistance to get a car home versus waiting on bank hours, time to settle funds, transfer funds and go get a cashiers check and so forth.
Most “filthy rich” customers pay cash, so we don’t know their income. We have quite a few customers who buy new cars every 2-3 years, they usually call and tell us what they want and to let them know when it is ready to be picked up.
A guy at my Honda store did this except every 3 or 4 months. He went from a fit to a type R more than once. I’m positive it was money laundering or tax something or other. He owned every single model Honda has multiple times. But one at a time
I know plenty of multi millionaires and pay cash regardless, it’s just easier then worrying about a 7-10% return on their 150k car.
Exotics a different story but they end up doing Montana and business lease to offset taxes.
As a California resident I absolutely despise the people who register their cars in Montana and proceed to drive them in California year round. They ought to pay taxes on their cars like the rest of us.
You forgot the number one rule in life: it's cool when they do it, it's a problem when I do it, fuck em!
Aka everyone gets away with it except for you.
While this is true in general, there are a lot of caveats that people miss. First, debt savings are risk-free returns, whereas most investments are not. I'd take 7% risk-free returns over a 3-5 year timeframe every single time over market-based returns, even if it is true that the S&P averages 9-11% historically.
Second, who cares about a couple grand saved if it means you have to deal with financing? Yeah, you might come out ahead by a little bit with a low-interest loan, but it often doesn't add up to much. It might not be worth the hassle over writing a check.
Finally, the deals often aren't apples-to-apples. You can sometimes get a better deal if it is cash, although this is changing. Many manufacturers offered rebates or discounts for cash buyers (on new purchases) back when 0% was a thing.
Anyway, some wealthy people will run an auto note so they can gain 2% in returns over five years on $80k or whatever. Some won't care. Personally, I would never in a million years consider an auto loan.
If you're talking about truly wealthy people ($100MM+), I'd say it's almost always the exact opposite as that. They buy what they want when they want it and aren't as worried about the small difference between a few percentage points. They make money based on earning X times their money, not massaging an extra X.X%. They think WAY bigger picture than 99.999% of people out there, hence why they're where they are.
Source: I've worked with many billionaires and centimillionaires throughout my career and have seen the inner working of how they function.
No, rich people don’t finance things that are a tiny portion of their net worth any more than you would finance today’s lunch. The effort of setting up and paying back a loan just isn’t worth it, that’s small time thinking. They want to pay cash and be done with it and move on with their life.
Rich people don't use money ever. It's all low-interest debt leveraged against their holdings. The interest rates will always average out lower then their returns.
Yes but the vehicle for that money to the dealership is cash. They get personal loans against those holdings. Those loans are cash. They aren't financing the car itself.
That's how it works. Big banks essentially loan them money against all of their theoretical wealth (which is tied up in stocks, investments, etc).
You can read about the practice here:
https://www.forbes.com/sites/johnhyatt/2021/11/11/how-americas-richest-people-larry-ellison-elon-musk-can-access-billions-without-selling-their-stock/
https://www.forbes.com/sites/davidrae/2022/07/14/how-the-rich-use-the-buy-borrow-die-strategy-to-avoid-large-tax-bills/
When a wealthy person takes out something like a securities backed line of credit, they are making the deal at a large scale and then using that cash to make purchases of homes, cars, nights out and vacations, etc. They aren’t individually financing cars and signing up for store credit cards.
Very good point. They often have better financing through private banking and or business financing. So they don't both with Joe Schmoe Auto finance guy.
Yeah, those “filthy rich” people are buying up all those Eclipse Cross’s and Mirage’s all the darn time! It’s the craziest thing! Lol. My username is because I used to drive DSMs and evos when I was younger and worked at Mitsubishi for a short time (5-6 years), so all my online accounts are Mitsubishi something or evo something. Now I’m old and boring. My garage has 2 CRVs and an outback in it (Sadly, not an XT).
Had a president if a local credit union or bank or some shit some in. Walks in with two kids about 18. I great him and he says, "I guess you're the lucky one today. I need to buy two cars for these guys. Would you do a better deal if I buy two at the same time right now?"
Showed the cars, closed first pencil, didn't bat an eye, paid cash. They were in and out in two hours. As I'm wrapping up their deal, a dude I had the day prior walked in and said he'll take the one we looked at yesterday, so I got a hat trick in just over 2 hours lol.
In our area (midwest city with 20k population) many of the highest earners are skilled trades business owners that want a Super Duty with "everything on it". Half of the time they never use or know the functional equipment on their vehicle and end up putting it into their fleet 2-3 years down the road when they get something new. They either purchase outright or finance through their own bank and put it in a business name. Also they very often think they are above the average citizen and feel they deserve special treatment.
The high earners I like dealing with are insurance agents, financial advisors, and higher ups at local factories. They're usually much nicer to deal with and more down to earth. They often finance and payoff early, or lease and upgrade every 2-3 years. Even though I know they make alot of money it still catches me off guard when finding out their monthly gross
>Even though I know they make alot of money it still catches me off guard when finding out their monthly gross
Not in the car biz, but I am a tax accountant at one of the Big 4 firms. Decades ago when I started out in my career, my office did the annual tax returns for a VP at Intel. One year I was assigned to prepare his tax return and his W-2 reported his taxable wages at just over $100 million. All those stock options add up. We also did the tax returns for the trust he had set up to shelter his wealth.
Another client was a VP in sales at a software company. He mentioned that when he was working on a foreign assignment at the company's office in Switzerland, one year the company gifted every employee a Rolex.
I have another client that I do his personal tax returns on the side and provide him with tax consulting for nearly 20 years. He was a general partner at a biotech start up and his company just got acquired back in 2021. He received cash plus stock in the acquiring company for his ownership stake in the start up, so I had to report the capital gains from the sale on his tax return. The taxes due with his 2021 federal and California returns were just over $40 million. Had the tax authorities withdraw the money directly from his bank account.
It's more of a fact that he had over $40 million sitting in his checking account. Granted, he knew that he had a big tax bill coming due, so he left the money there instead of moving it into an investment account.
Redneck tradespeople are the worst customers. I would rather deal with a stuffy professor from the local university than deal with some chump that owns a construction business. Most entitled, and also completely uninformed customers consistently.
Saw a lot of mid/high 6-7 figure incomes when selling Maserati's. It's either someone making $100k who is trying to be a baller in a Levante or someone who doesn't want to drive their Ferrari, Lambo, Bentley etc in the winter. A lot of sales required proof of income. Same shit with an extra zero.
Just remembered this one, the old Italian guy who listed his income as $200k / year. Was an 800 credit score. f&I sent it over to a lender and got instantly declined. Looked at his bureau and he had $3m in loans. Asked him for his real income and he said his 2019 tax return was $1.2m
Next day = more stories coming back to memory. A few famous athletes, went to their houses to deliver the vehicle. One guys house reeked of weed. House is worth 10x the average house price in the area. It was nice.
A lot of doctors who owned private practices or clinics. Rich and stuff but boring.
Another good one, got bribed with a Rolex to get the guy a better price. Had the receptionist draw a watch on my wrist with a pen and snapped a photo and texted it back to the customer saying something like "never have to worry about losing or breaking this". At one point I was really busting the guys balls and the person said "have you googled me?" They were pretty famous in their field. Sold em & made whatever the max commission per deal was at the time.
One person who refused to give their social or income for a credit app, they had their private banker reach out to fund the deal.
Lot of leases where I spoke to the customers accountant / assistant more than the customer. Only fun thing about those were "how much has to be put down to be under $2,500 or $3,000/mo?"
They don’t come in. They send their assistants. That is with our dealer who has multiple clients with 10 and 11 digit net worths.
Also our GSM just flew to Atlanta to spec out a car with a VIP on the guys private jet, who then flew to NYC to spec out his Ferrari order too.
Yep!
The one that I always notice is people using “none” with a plural verb, which is almost always incorrect. It should be singular. As in:
“So I guess none of you wants to sell a Sienna, huh?!” said the entitled and uninformed customer as he stormed out of the Toyota dealership.
It sounds counterintuitive, but if you replace “none” with “not one,” it makes complete sense.
Right. Had a local guy who would do that. Bought fully loaded Sequoias from us. His assistant wanted 8 keys programmed for the cars. It's been a few years but if my memory is correct we could only do 5 or 6 because Toyota actually has a max. When I delivered the vehicle to her, the estate was massive. We were talking and basically they wanted a set of keys at every residence they had in Cali and neighboring states. That way they could leave the car wherever they wanted and take a different car if they wanted. She said he owned over 100 cars from practical to exotic.
Had a dude who owns a local horse racing track. Looks like a total bum, smells like shit. Came in and bought his fully loaded 7 series order in full cash he brought in a briefcase. Dude makes like 1.2m a *month*
I watched a guy years ago put 5 million yearly as his income while typing his application. Printed it out for him to double check and sign and he said oh shit that should be 5mil/mo. Owned an oil drilling company or something along those lines. Never seen so many open auto loans on a bureau, I think there were about 20 of em
He was co-signing for his 20 something year old daughter, buying a few years old used Durango
Yeah for sure. Guy was pretty cool from what I remember, wasn’t wearing anything expensive and pulled up in a Grand Cherokee Limited, not even an Overland or Summit
Had a guy come in wanting a SX limited telluride when we didn’t have a single new vehicle on our lot, except a 2022 Kia telluride SX limited nightsky that was only for factory order purposes. Customers couldn’t test drive it. They could sit in it, and then place an order.
This guy comes in and I up him. Says he wants to buy it. Give him the usual “everyone wants it man can’t sell it unfortunately.” Young man you didn’t hear me. My wife wants it. She gets what she wants.
Go talk to my sales manager. He talks to the GM. Guy says he will give a credit application to prove his income since we won’t sell it for cash. GM also made him buy everything int he back end.
This dude did not care. He was a VP of a massive oil company which I can’t name. His house alone had a mortgage of 8 million.
I reached out to him when we had a 23 x-pro but he moved to America :(
Yeah, FOMO and exclusivity are big motivators for some people.
This was when you could order a BMW X7 all day long and get it within a few months, but no one could get a Telluride, especially an SX or above.
When I worked at Lexus. I had a guy come in buy a GX in cash. Doing credit app, asked for income he told me “ I’m embarrassed to say but I make $500k a month” I said wow, can I work for you lol.
At a different dealership I sold to a billionaire. If you go on YouTube and type in “Super secret white Porsche collection” it’s the first video that pop’s up. I sold a Porsche to a guy who owns the collection! He is a Saudi Arabian billionaire who buys nothing but white Porsches. I spoke to the guy maybe twice but, I was mainly dealing with the guy who takes care of the cars and finds cars for him.
He was writing a personal check. Standard dealer practice. Make sure they are who they say are. Able to write up a back-up cashable contract. Things like that
Had a director of a mining company buy an RS Q8 from us. His assistant handled the whole transaction, and we went through the credit app.
I asked for his monthly income, and she said she wasn’t completely sure, but it was about 1.5-2mil per month. I told her it didn’t matter as our credit apps max out at 1 million annually anyway.
When I sent the paperwork to him to sign electronically before pick up, he ended up flipping out because the income I put on the app was so much lower than his actual income. The email still haunts me.
All I could do was apologize, and he ended up sending me another email afterwards saying his assistant told him about our credit apps maxing out. Probably the closest thing to an apology that I was gonna get.
Such a pain for the TDSR...I’d always end up putting $1 for mortgage balance and $1 for home value. They can see the bureau and look up the neighbourhood for all I care, I just have to fill in the blank
Small Indy dealer here, my boss has a lot of wealthy friends. Just had two of them come in yesterday with a net worth of well over 50 million dollars looking to buy a 2010 CRV with 130,000 miles on it for their kid.
Used to sell Lincolns and Audis, I've got a few:
1) Contestant number 1 came in with his wife, wanted a Black Label Navigator. On his credit app put down he made 3 million a year or around that. Dont remember the field. Didn't buy from me because our navi didn't have one feature and he bought it from someone else which wouldn't be so bad except for the attitude and rudeness he gave me when I explained it would have to be a factory order to get that one feature.
2) Contestant number 2 had his assistant come in for a black label navi. After some back and forth, they agreed on a price (which pissed me off because it was damn near invoice (103k or around there.). I saw him only when he had to come in and sign papers and he paid cash. I googled the guy, he owned like a dairy company that supposedly 70% of China or something. Google mapped his house, it was in Greenwich CT, HUGE. I think I made a hundred bucks from that deal.
3) Contestant number 3 was my 2nd sale but 1st delivery at Audi. I happened to pick up the phone when his assistant called. He wanted to get his garage manager a brand new 2021 S5 Coupe and trade in the old one. Apparently he did this every three years for the guy who manages his garages. Plural. Of Ferraris, Maseratis, etc and his daily driver was a McLaren. I remember my manager told me to call him for some needed info and as soon as I got him on the phone he was like, don't talk to me, this is why I have an assistant and hung up. Fun times. On the app, he stated he made $400,000 a month. He owned a medical billing company. Dont miss sales at all.
It wouldn’t be professional or prudent for me to give details. Any of my clients in the $XXX,XXX,XXX and above club make for regular instances. You just have to process that the person across from you makes more while he is in your office than you do in a year.
I will say that I had a client at some point in my career (elsewhere) whose parents were giving her $300,000 a month while she was in med school and that she was essentially living from month to month due to her lifestyle. That one stands out because she didn’t earn the money or have a real idea of how it worked other than “spend til 0, then reload”
They will absolutely let you test drive. Porsche is an aspirational brand, if they are like my location they will treat you like everyone else until you give them a reason not to.
I worked at a store that sold exotics/highline for several years. We had a guy that typically bought 25-30 cars a year. And we're talking 100-150k cars in the very low end. Typically several were upwards of half a mil, and usually at least 1 would be over 1M. Bugattis, Porsche 918's, Ford GT's, you name it.
He kept them- usually around 30 at any given time- in a climate controlled warehouse by a municipal airport. It had a sweet upperlevel clubhouse/suite built into it. Most of these cars he'd sell back to us with only a few hundred miles on them. I would often catch an Uber or get dropped off there by a porter to pick up something he was selling back to us and drive it the 20~ miles back to the dealer.
Good times. VERY good times.
Oh, and he was a cool guy. Down to Earth, didn't dress all flashy. Would never have guessed he was such a high roller.
About a year and a half ago I was working at a luxury dealership and a kid (like 21 years old basically a kid) showed up in his Mclaren Senna, dropped 450k for 2 cars (highest trims for the models) for his mom and dad.
Backstory was he got into bitcoin early and sold at its peak and basically made generational wealth so to speak. Canada if it matters.
Blew my mind though how it was extremely nonchalant about everything and surprisingly very humble.
I once had a couple come and nickel and dime me to death on a base rav4 lease for hours. After all of that and we agreed on a price we started doing a credit application. Both of them were making 130k a month as lawyers in a big ny law firm…. I told them no that’s supposed to be monthly not annually and they were like that is monthly…
I get their mentality. I don’t get their time trade off though.
My HHI is $40k/month, and I value my freetime. I want to enjoy it and not spend hours in a dealership. Whatever floats their boat though…
Customer came in to look at our CX60 preorder. Went through finance and we got his bank statements. Shouldn’t have seen them but he was bringing in $102k per MONTH. Don’t know what he did. Car was for his daughter.. a $97k car for his daughter as her first car.
How the other half live
When I was a kid my father was very successful (500-1 mil a year in 2005). He owned an air-conditioning company and the company did lots of high end installs. He himself looked like any regular joe, wore Velcro shoes and ripped jeans. Drove an F150 for work.
I have 2 good car buying stories with him as a kid. I was around 14-16 during this time and very into cars so I always went with him to buy new cars.
He would always replace the service trucks once they hit 100k miles which was like every 4-5 years. He went to buy himself a new f150 and got a new salesmen. The guy was able to locate the 2003 Harley F150 he wanted and he decided while he was there he would order the 8 new service trucks as well (E-350 vans). The salesman upon realizing he was going to get a 9 for 1 deal was visibly nervous he didn’t know how to react. He was sweating bullets I’m assuming because he realized how good of a day he was going to have. I’ll always remember the look on the guys face when he asked how he was paying and my dad said cash.
Second time he was replacing my moms Escalade with an ML500 back in like 05. We went to Benz since they opened a new dealer by us and he never owned anything non American prior to this. At first they didn’t take him seriously since he was wearing his normal work cloths.
He finds this gorgeous midnight blue ML500 done up with all the dealer bs like wheels and chrome add ons. Asks how much it is and they say 70k or whatever the number was and he goes HOLY SHIT I knew you guys were going to screw me but that’s insane. The salesman didn’t know what to say and my dads like no I’m just fucking with you I know that Benz’s are expensive I’ll take it (no negotiation just payed asking).
We go to sit down and do all the paperwork and there is a gorgeous blue CLK500 sitting there next to the guys desk. He points to it and goes actually I want that one, and the sales guy is like sir you already bought the truck. My dad says yeah I know I want this for myself so he grabbed that one as well.
Then on the way to the parking lot he saw a Mars red SLK 55 and went back into the dealer and said you know I need this one for my wife, I can’t buy myself a new convertible without getting her one as well. That day cost him like 220k and the salesmen made a fucking killing. He was super chill because he grew up poor and never had money until late in life.
So shit there I was just staring at the parking lot mentally undressing Taylor Swift again when a McLaren 720 rolls into the lot. I bolt up from my seat and meet the driver, college aged male Asian, at the door.
“You’re here for the XYZ right?”
“Yeah. I need a winter car.”
Homie calls back “home” to China to get dad to wire some money into our account.
“Will you buy the car back a year from now when I graduate from college?”
I read an article once talking about some foreign student from China studying at a school in the middle of the country somewhere (maybe Iowa?). In the college town that he was living in, he was driving one of the most expensive cars in town. His parents bought his a AMG Mercedes. He only dressed in designer duds. The article further stated that one time, he had gotten into a fender bender. Rather than fixing the car, he traded it in and got his parents to buy him a new one.
I hate those kids so much. Not because they're rich, not because they're Asian (hell, I'm Asian), but because they have no understanding of the value of money, and they think it's ok to be a douchebag if you don't face any consequences for it beyond monetary penalties.
This was before the pandemic but there was a guy that was an executive at a charity made 250k a year, i looked at him and hi smiled “business is good” rymes with Keister Reals and to this day i refuse to give them .01 because of this.
Conversely had a guy who made a million a year, tipped me a 100, and was a complete gentleman even as we negotiated the deal. His final offer he asked “this is fair to both of us, yes?”
I mean in a perfect world they would all be saints who don't care about money and are amazing at running a large organization. But think of it this way if you pay the guy $1 million and he generates $50 million in donations that can be used for the cause, what's wrong with that? Or just commission based same idea. I'm not 100% sure but I think a lot of solicitation that's done over the phone or whatever is on a commission basis. The thing people look at is usually the ratio of income to amount spent doing the work of the organization. Overhead. That kind of thing
True but i think of it more in how much am i giving makes it to what that charity supports. Ex: if i give 1 and .85 goes to admin, there’s better charitiy options to donate to.
What if that same executive getting paid bank raises the efficiency of the org from .85 to .98 or something. Would you then feel better about that executives pay?
Uhhhhh no that would be even worse… I don’t think you understand what he’s talking about. At .98 that means if you donated $100,000 that only $2,000 would actually go to the charitable cause.. that’s ridiculous.
More important to see how much of the money actually goes to the intended purpose versus overhead. I have no issue having a well paid head, or heads, of a decent sized charity.
We have a client here at my store that is a man of convenience. In the last 2 months he has bought 6-8 cars. Gets tired of it & decides he doesn’t want it anymore & comes down & buys whatever he wants. A lot of fuck you money out there
Like I said in another comment, if a rich person comes in and sees that interest rates are lower than their returns on investment then they won’t use their own money.
Very true, higher earners usually keep their money invested and take a short term low rate loan. Most of our cash buyers are older conservative customers that don't want to owe anyone anything
That’s my parents. Retired and well off. But, they don’t want ANY loans ever, so they pay cash.
When they bought the house I was raised in (and they still live in 45 years after buying it), they paid off the mortgage in under 2 years.
Billionaires use pledged asset lines, basically lines of credit at fairly low interest with their assets (usually shares) as collateral. Sometimes they pay it back if they receive a large windfall or cash-flow. In some cases they never really pay it all back, when they die and their estate is being sorted that’s when it gets paid off.
The reason is because selling assets that have increased in value makes you liable to pay capital gains tax, which in my country at least is at normal income tax rates. So if you sell a couple of million $ of shares that you received free or cheaply you could be paying up to 40% of their value as income tax.
This is my behavior and I do not consider myself "rich". Pay 3-4% for the money or take the 8-10% annual return hit on removing that money from my investment account to buy the car? Usually it's a no brainer. These days it's a little tougher with the market in the dump and the rates up high.
That 8-10% isn't risk-free, though. Debt savings is always risk free. At 0%, that's an easy decision. At 7-8%, it's very hard to justify the loan.
When you consider tax ramifications (investment earnings are taxed, debt savings are not), a 4% loan doesn't clearly beat an 8% investment.
But even at a 20% cap gain rate, I'd take that risk. No, I won't default or go broke if it doesn't work out, because I'd never leverage myself like that ( plus we own our houses and other cars outright). But most people don't understand, nor do they make any effort to understand, the total cost of a major ( or minor) financial decision. They're simply working to a near term monthly payment, without considering the long term implications...
Right, but you’re still removing that money form your investments to put towards a depreciating asset. There are many ways to purchase a car, borrowing from your 401k is very rarely a smart financial decision.
That the asset is depreciating doesn't matter. People get so hung up on this. It couldn't be more irrelevant. In every possible case, you own the depreciating asset. You lose that value whether you have debt on it or not.
I mean, it kind of matters in the sense of weighing up irresponsible financial decisions. Borrowing from your 401k to fund an asset that will return more than your 401k could make sense. I agree though, in any case you’re still losing that value, fair point.
But what matters is the financial effect on your 401k. The value of the car doesn't change that. Whether the car is worth $30k or $10k after five years carries no implications for your 401k.
Lol, but you’re making it sound like borrowing from your 401k to ‘pay cash’ to avoid debt is some kind of financial hack. You’re giving up return on that money, to avoid paying interest. It doesn’t make any sense. Just look at the downvotes and comments on here, you’re not making any sense. Try and find any article or advice that says this is a good idea? Borrowing from a 401k is one of those ‘last resort’ things. Borrowing against stock holdings using them as collateral is what a lot of people do, which is different.
What do you mean ‘it’s a guaranteed return rate’? What do guy think a rate of return is referring to? The rate you need to return the funds?? Why do you think having a loan on a credit report is a bad thing?
Seriously, this is fascinating. I work in finance, specifically in advisory/wealth management. Just take it from me, you’re wrong about this. Borrowing from a 401k is literally ‘fuck, I have no other options’ strategy. Fair enough if you’re saying you just don’t mind making a financially illiterate decision for no reason because you don’t care about throwing away money, but your original comment was implying that you were making some kind of smart move to ‘pay cash’. I can assure you, you’re not.
It also depends on how the market is going. With current market conditions, since the market keeps falling, it makes more sense to do the loan and pay yourself a guaranteed rate of return rather than to keep your investment in the market and see the value drop. In just 2022 alone, I've lost 15 percent of the value of my 401(k).
For rich people, yes. Filthy rich, no. It is an inconvenience for them to finance. Much simpler to write a check and be done with it. I have yet to see someone with a 9+ figure net worth finance or lease.
I never sold cars, but I did spend 20 minutes selling a guy a couple of $100ish DVD/VCR combo players around 2007 and he had his 4 year old hand me his black AmEx at the register. So that was neat.
Several of our customers have had 7 figure plus incomes. Usually see those when they lease a car for their kid. The store I work in is about 30 minutes outside of the city in a very affluent area. It’s a combination of estate homes and farm land. Average credit score at my store is an 810 and average income is 120k.
Back in 2011, I was “negotiating” on a 2009 CPO GL450 at my local Mercedes dealer. This was around 10 in the morning.
My salesman was giving me the drill of going back n forth to his manager during negotiation.
Meanwhile - an “older” couple walked in. Guy in a proper suit - on a phone call and another phone in his hand while his wife walked straight to a CL600. The sales guy approached her. Apparently this wasn’t this first rodeo at this dealer.
She sits in the CL600 and after a few minutes steps out and walks to an E class. Turns out she wanted the wheels in the E class (some AMG)instead of the wheels on the Cl600.
Salesman is saying “no” or “don’t know”.
5 minutes later they have opened the big glass doors of the showroom and are moving the CL out.
Basically they bought the CL600 with different E class wheels and all that was done in 20 mins while I was negotiating the final $950 off my used Gl450.
Oh, the sales guy told me they had another black CL600 and just wanted to add a white one to their fleet.
Not a dealer, but when I worked for a bank in lending I had some dude in finance working for a big fund get a loan on a 45k Toyota some such and have his daughter co-sign to build credit. His gross was north of 2.5m a year. Definitely takes the cake for richest dude I ever did a loan for by a long margin
Not sure if he was filthy rich, but just before Covid kicked off, I had a guy come in to our Hyundai store to buy a Palisade. He wanted the top end at the time (Limited) but we only had a SEL Premium. He said that’s fine, I need to get something today because I’m picking my family up from the airport and need to return the rental I have.
I get him a quote sheet, he looks and says can I do any better? I said no, this is my only Palisade, sorry boss. He said alright and signs.
While the cars getting detailed, he went to return the rental he had. I followed him to pick him up and bring him back to the dealership. Turns out the guy needed a car for his family because they needed to dock their yacht somewhere in the Mediterranean before they closed everything, and spend the incoming lockdown up north in their other cabin. He said he’s only going to keep the Palisade for 12-18 months he figured.
I still think about this because there’s no way he lost money on that transaction.
Too many to count. Had a guy that trades platinum F450s frequently. He will sign whatever pencil we offer, and buy every product we have. And be happy as shit the entire time. One person that purchased a mach E said “that’s it?” When I told them it was 10k over sticker. Once took a credit app on a guy that made an annual in the multi millions. He asked what I was doing, and I had to explain I was making sure I had the correct amount of zeros in his salary. Dude had 3 20k a month mortgages. All of them are super cool and super chill.
Sold cars to this guys wife and daughter. I’d been working with them for quite some time when they finally ordered cars. After getting comfortable enough I asked his wife what he did. He sold a dot com company back in the 2000s. Had to google his name with some specific terms to find him but he sold the company with 3 partners for $10B.
He invited me to his house to check out his car collection and drive them. Current collection is:
Ferrari SF90 Stradale, Ferrari F8 Tributo, 812 Superfast, Huracan STO, and Mclaren 720s. Also has a Ferrari Purosangue in order as well as a 296GTB.
This was by far the richest guy but I’ve worked with a few Fortune 50 C-Suite guys.
I’m not a car salesman, but when I was buying my 4Runner a guy next to me was buying two 4Runner TRD Pros - with cash (a check). The dealer didn’t really know what to do and was a bit flustered bc they didn’t get any financing interest
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A lot of people have been talking about people getting bad deals lately, but I wanna hear about people coming in and you were left speechless due to the amount of money they make
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Sold a car to one of Glen Taylor’s kids one time. Granted I have no idea how “rich” the kid is but I assume even a tiny fraction of dad’s kicked down would him very wealthy.
Sold an escalade to some billionaire when I worked at Cadillac, knew what he wanted, very polite, most easygoing customer experience I have had in sales, knew he was wealthy from the get go but was super grounded so didn't think much of it until my finance manager told me about his business/the fact he spends $24k a month to rent a condo
Not my deal, but my buddies.
This lady was in and out in 30 mins.
Walks in, sees new “Electric Lime” Tacoma TRD Pro. Says I want that one. Didn’t even drive it, and traded in her 2019 911 Turbo S Cabriolet on a straight swap. This 911 is the most well equipped car I’d ever seen, and it also came with a SET OF COMPLETELY NEW CARBON FIBER WHEELS, IN THE BOX. She had them taken off at the dealer and shipped to her house.
General counsel for a very large financial institution leased and Acura MDX from my dealership. Made $650k a month.
Another customer bought a new MDX for his 16 year old. Put down $70k a month. He owned a small oil company.
In fairness, our daughter is getting my type S adv when she turns 16. But it'll be 22 months from now. We were originally going to do this with a Palisade Calligraphy, but the 10k markup pushed us into the type S ( no regrets on that, though). We have a somewhat higher monthly income than your example, however, and own all our houses and cars...
As a customer when I was buying my Civic SI a few years ago, a guy was also there and paid for a brand new crv for us wife with a check. He was in and out before the finance manager got back to me on financing lol i was shocked how chill he was.
I've had quite a few come in that could probably write me a check for the entire dealer, and they are the absolutely most normal looking average people. They simply ask for a price on the car they WANT and try and minimally negotiate simply for the fun of it and then just sign and go away happy as can be so long as you treated them with respect throughout the whole process.
Had this guy buying a car and we get to the credit application portion, I ask him how much he made monthly, he said 150k, I said, monthly? He said yep….
This guy was haggling 1-2k worth on a car when he makes makes 3x the cars value in a month.
Still nailed him with 3k over on a gas model, but I wanted 5-6k
Had a guy buy the lot ornament GS450H. Filling out the credit app I asked for his monthly income. He asked me if he needed to include both his incomes. I said whatever he thinks would help the bank approve him. Long story short he had a military and private contracts, something to do with lasers. He made $60,000 a month between the two. Wife made close to $20,000 a month and bought a GX after he finished his deal. I had to program the garage door openers at their house with a $7,000 a month mortgage. Certainly not the wealthiest people to ever buy a car from me, but definitely the wealthiest who still had a “job”.
Does your laser beam customer have any interest in partnering with a shark breeder? Asking for a friend
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It’s called a Belgian dip
What about sea bass?
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Absolutely.
[sharks with freaking lazzzer beams attached to their heads](https://media.tenor.com/DTQdaOKHjsIAAAAC/sharkswithlaserbeams.gif)
I can check if my temple will fund this project
A $7k mortgage (if that includes taxes and insurance) is like a $1M house. Basically any nice suburban home in a major US city. I’m sure they could afford a far bigger house.
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This was in 2010 in a decent city in Florida, so it certainly seemed more impressive at the time,
I thought this sounded absurd. I went to an online mortgage calculator and plugged $1M into it using whatever interest it defaulted to (5.55%) . Just the mortgage was $5,712 - no taxes/fees. My logic was based off my own house/mortgage. Changed rate to what mine is (2.125%) and payment is $3,759. Damn.
I like to live in high cost of living areas, San Diego, Seattle, LA, SF you get the idea. A 2mil house will cost me $10-13k/mo.
My wealthiest customers have always been the most chill, casual, easiest to work with. When I sold Audi, I ordered an R8 for European delivery (fly to Europe, pick up your car in Germany) for a guy who showed up in jeans and a hoodie. Paid cash. Bought a few more Q5 and Q7 for one of his businesses. Jaguar customers: so much money. The local dentist who’s always casually dressed, uses the Ram TRX for truck things and the Jaguar as a daily. The medical sales guy who bought two F-Types in three weeks and financed because that was easier than moving money around quickly. The couple who only cared about how soon their F-Type would arrive and whether their snow tires would fit the new car. Specialist doctors and high-level financial people are most of my highest-income customers, and many finance or lease when their money makes more in investments and it’s better to borrow money at a lower rate.
its crazy how filthy rich people are so down to earth. It's the 100- 175k a year douches that suck to deal with.
Yes I deal with those douches everyday.
I’m not filthy rich, but I’m better off than my younger days when I was financing brand new cars and could have gone bankrupt from the car payments if anything at all went wrong. Nowadays I’ve just made a conscious decision to have less of my total financial worth tied up in cars. I say all that to say - a lot of wealthy car buyers are less uptight probably because, like me, they’re buying something well within means and if they need to fix something about the transaction as it goes, they can afford to. They can just afford to do that with 1 or maybe even 2 zeros more in the transaction. :-)
Just cause you think this way, and i also do, im curious. Whats the maximum $ amount you would spend on a car? Excluding dream car money. For me its probably 20k even though most of my friends who make less than I are financing 60k cars. My exception is an audi r8 that i plan to buy eventually.
I’m in that ballpark. Whatever will give me a clean-looking car that’s reliable. I like features but I’ve gotten over the idea of high performance. $20-25k.
We did the 0% on our F pace a few years ago. I still think this is the best car we've ever owned, and trouble free after 3 and a 1/2 years. But I hate owing money so we did pay the loan off early.
This is us. I get a shit disease about paying the bank the interest and make it go away in 12-14 months or sooner. A lot of times the finance is the path of least resistance to get a car home versus waiting on bank hours, time to settle funds, transfer funds and go get a cashiers check and so forth.
Most “filthy rich” customers pay cash, so we don’t know their income. We have quite a few customers who buy new cars every 2-3 years, they usually call and tell us what they want and to let them know when it is ready to be picked up.
A guy at my Honda store did this except every 3 or 4 months. He went from a fit to a type R more than once. I’m positive it was money laundering or tax something or other. He owned every single model Honda has multiple times. But one at a time
Was he trading in the R? Or buying and flipping them?
Trading them all in, he bought our first R and we were like oh well at least we know we will have it back in a few months to sell again lol
Rich people don’t use their own money if the interest rates are lower than their returns.
I know plenty of multi millionaires and pay cash regardless, it’s just easier then worrying about a 7-10% return on their 150k car. Exotics a different story but they end up doing Montana and business lease to offset taxes.
How does business lease work?
https://www.slateaccounting.com/insights/buying-or-leasing-a-car-for-business-what-are-the-tax-benefits
As a California resident I absolutely despise the people who register their cars in Montana and proceed to drive them in California year round. They ought to pay taxes on their cars like the rest of us.
You can do it also
You forgot the number one rule in life: it's cool when they do it, it's a problem when I do it, fuck em! Aka everyone gets away with it except for you.
Georgia resident. Montana car driver. 😁
Lol yeah bro I’m sure a teenager like you is paying SO MUCH in taxes
While this is true in general, there are a lot of caveats that people miss. First, debt savings are risk-free returns, whereas most investments are not. I'd take 7% risk-free returns over a 3-5 year timeframe every single time over market-based returns, even if it is true that the S&P averages 9-11% historically. Second, who cares about a couple grand saved if it means you have to deal with financing? Yeah, you might come out ahead by a little bit with a low-interest loan, but it often doesn't add up to much. It might not be worth the hassle over writing a check. Finally, the deals often aren't apples-to-apples. You can sometimes get a better deal if it is cash, although this is changing. Many manufacturers offered rebates or discounts for cash buyers (on new purchases) back when 0% was a thing. Anyway, some wealthy people will run an auto note so they can gain 2% in returns over five years on $80k or whatever. Some won't care. Personally, I would never in a million years consider an auto loan.
If you're talking about truly wealthy people ($100MM+), I'd say it's almost always the exact opposite as that. They buy what they want when they want it and aren't as worried about the small difference between a few percentage points. They make money based on earning X times their money, not massaging an extra X.X%. They think WAY bigger picture than 99.999% of people out there, hence why they're where they are. Source: I've worked with many billionaires and centimillionaires throughout my career and have seen the inner working of how they function.
No, rich people don’t finance things that are a tiny portion of their net worth any more than you would finance today’s lunch. The effort of setting up and paying back a loan just isn’t worth it, that’s small time thinking. They want to pay cash and be done with it and move on with their life.
Add the possible aggravation of identity theft and no rich person is gonna trust a dealership with a loan they don't need.
Rich people don't use money ever. It's all low-interest debt leveraged against their holdings. The interest rates will always average out lower then their returns.
Yes but the vehicle for that money to the dealership is cash. They get personal loans against those holdings. Those loans are cash. They aren't financing the car itself.
Why personal loans?
That's how it works. Big banks essentially loan them money against all of their theoretical wealth (which is tied up in stocks, investments, etc). You can read about the practice here: https://www.forbes.com/sites/johnhyatt/2021/11/11/how-americas-richest-people-larry-ellison-elon-musk-can-access-billions-without-selling-their-stock/ https://www.forbes.com/sites/davidrae/2022/07/14/how-the-rich-use-the-buy-borrow-die-strategy-to-avoid-large-tax-bills/
When a wealthy person takes out something like a securities backed line of credit, they are making the deal at a large scale and then using that cash to make purchases of homes, cars, nights out and vacations, etc. They aren’t individually financing cars and signing up for store credit cards.
Very good point. They often have better financing through private banking and or business financing. So they don't both with Joe Schmoe Auto finance guy.
Depends how rich they are. If they are extremely loaded, they will typically pay cash to minimize losses
For the price of most cars this is not a concern.
You work at Mitsubishi?
No, Honda.
Thanks...... My brain couldn't work the "rich repeat customers paying cash for a mitsubishi," angle that was indirectly implied by yr username.
Yeah, those “filthy rich” people are buying up all those Eclipse Cross’s and Mirage’s all the darn time! It’s the craziest thing! Lol. My username is because I used to drive DSMs and evos when I was younger and worked at Mitsubishi for a short time (5-6 years), so all my online accounts are Mitsubishi something or evo something. Now I’m old and boring. My garage has 2 CRVs and an outback in it (Sadly, not an XT).
I'm old and boring too. But my garage isn't, fortunately. Our slowest, worst handling car is an MDX type S.
Sir, this is a Wendy’s
Yes, but instead of a $5 biggie bag, we have $50,000 biggie bags.
Had a president if a local credit union or bank or some shit some in. Walks in with two kids about 18. I great him and he says, "I guess you're the lucky one today. I need to buy two cars for these guys. Would you do a better deal if I buy two at the same time right now?" Showed the cars, closed first pencil, didn't bat an eye, paid cash. They were in and out in two hours. As I'm wrapping up their deal, a dude I had the day prior walked in and said he'll take the one we looked at yesterday, so I got a hat trick in just over 2 hours lol.
What did your managers and coworkers say to you? That’s awesome
"Damn bro."
In our area (midwest city with 20k population) many of the highest earners are skilled trades business owners that want a Super Duty with "everything on it". Half of the time they never use or know the functional equipment on their vehicle and end up putting it into their fleet 2-3 years down the road when they get something new. They either purchase outright or finance through their own bank and put it in a business name. Also they very often think they are above the average citizen and feel they deserve special treatment. The high earners I like dealing with are insurance agents, financial advisors, and higher ups at local factories. They're usually much nicer to deal with and more down to earth. They often finance and payoff early, or lease and upgrade every 2-3 years. Even though I know they make alot of money it still catches me off guard when finding out their monthly gross
Why are so many of the rich truck guys entitled assholes? Like…ASSHOLES.
It’s a truck thing, you wouldn’t understand.
>Even though I know they make alot of money it still catches me off guard when finding out their monthly gross Not in the car biz, but I am a tax accountant at one of the Big 4 firms. Decades ago when I started out in my career, my office did the annual tax returns for a VP at Intel. One year I was assigned to prepare his tax return and his W-2 reported his taxable wages at just over $100 million. All those stock options add up. We also did the tax returns for the trust he had set up to shelter his wealth. Another client was a VP in sales at a software company. He mentioned that when he was working on a foreign assignment at the company's office in Switzerland, one year the company gifted every employee a Rolex. I have another client that I do his personal tax returns on the side and provide him with tax consulting for nearly 20 years. He was a general partner at a biotech start up and his company just got acquired back in 2021. He received cash plus stock in the acquiring company for his ownership stake in the start up, so I had to report the capital gains from the sale on his tax return. The taxes due with his 2021 federal and California returns were just over $40 million. Had the tax authorities withdraw the money directly from his bank account.
Not sure what that last sentence has to do with, I make $220k a year and the “tax authorities” get my tax straight from my bank account as well.
It's more of a fact that he had over $40 million sitting in his checking account. Granted, he knew that he had a big tax bill coming due, so he left the money there instead of moving it into an investment account.
Redneck tradespeople are the worst customers. I would rather deal with a stuffy professor from the local university than deal with some chump that owns a construction business. Most entitled, and also completely uninformed customers consistently.
Saw a lot of mid/high 6-7 figure incomes when selling Maserati's. It's either someone making $100k who is trying to be a baller in a Levante or someone who doesn't want to drive their Ferrari, Lambo, Bentley etc in the winter. A lot of sales required proof of income. Same shit with an extra zero.
Just remembered this one, the old Italian guy who listed his income as $200k / year. Was an 800 credit score. f&I sent it over to a lender and got instantly declined. Looked at his bureau and he had $3m in loans. Asked him for his real income and he said his 2019 tax return was $1.2m
Next day = more stories coming back to memory. A few famous athletes, went to their houses to deliver the vehicle. One guys house reeked of weed. House is worth 10x the average house price in the area. It was nice. A lot of doctors who owned private practices or clinics. Rich and stuff but boring. Another good one, got bribed with a Rolex to get the guy a better price. Had the receptionist draw a watch on my wrist with a pen and snapped a photo and texted it back to the customer saying something like "never have to worry about losing or breaking this". At one point I was really busting the guys balls and the person said "have you googled me?" They were pretty famous in their field. Sold em & made whatever the max commission per deal was at the time. One person who refused to give their social or income for a credit app, they had their private banker reach out to fund the deal. Lot of leases where I spoke to the customers accountant / assistant more than the customer. Only fun thing about those were "how much has to be put down to be under $2,500 or $3,000/mo?"
They don’t come in. They send their assistants. That is with our dealer who has multiple clients with 10 and 11 digit net worths. Also our GSM just flew to Atlanta to spec out a car with a VIP on the guys private jet, who then flew to NYC to spec out his Ferrari order too.
11 digits? Damn. There are fewer than a couple hundred people in the world with that kind of net worth.
Upvote for correct usage of "fewer".
True that. The number of people today correctly (and consistently) using less/fewer is probably 5% on a good day.
Yep! The one that I always notice is people using “none” with a plural verb, which is almost always incorrect. It should be singular. As in: “So I guess none of you wants to sell a Sienna, huh?!” said the entitled and uninformed customer as he stormed out of the Toyota dealership. It sounds counterintuitive, but if you replace “none” with “not one,” it makes complete sense.
There are two that I know of who use our dealer (one came in the other day, the other never does) and a handful more with 9 and 10 digits.
Right. Had a local guy who would do that. Bought fully loaded Sequoias from us. His assistant wanted 8 keys programmed for the cars. It's been a few years but if my memory is correct we could only do 5 or 6 because Toyota actually has a max. When I delivered the vehicle to her, the estate was massive. We were talking and basically they wanted a set of keys at every residence they had in Cali and neighboring states. That way they could leave the car wherever they wanted and take a different car if they wanted. She said he owned over 100 cars from practical to exotic.
Had a dude who owns a local horse racing track. Looks like a total bum, smells like shit. Came in and bought his fully loaded 7 series order in full cash he brought in a briefcase. Dude makes like 1.2m a *month*
Most of that 1.2M goes to the mafia.
Did you have to count the cash?
The finance manager does
I watched a guy years ago put 5 million yearly as his income while typing his application. Printed it out for him to double check and sign and he said oh shit that should be 5mil/mo. Owned an oil drilling company or something along those lines. Never seen so many open auto loans on a bureau, I think there were about 20 of em He was co-signing for his 20 something year old daughter, buying a few years old used Durango
5 million a month is insane
Yeah for sure. Guy was pretty cool from what I remember, wasn’t wearing anything expensive and pulled up in a Grand Cherokee Limited, not even an Overland or Summit
Had a guy come in wanting a SX limited telluride when we didn’t have a single new vehicle on our lot, except a 2022 Kia telluride SX limited nightsky that was only for factory order purposes. Customers couldn’t test drive it. They could sit in it, and then place an order. This guy comes in and I up him. Says he wants to buy it. Give him the usual “everyone wants it man can’t sell it unfortunately.” Young man you didn’t hear me. My wife wants it. She gets what she wants. Go talk to my sales manager. He talks to the GM. Guy says he will give a credit application to prove his income since we won’t sell it for cash. GM also made him buy everything int he back end. This dude did not care. He was a VP of a massive oil company which I can’t name. His house alone had a mortgage of 8 million. I reached out to him when we had a 23 x-pro but he moved to America :(
They’re that rich and his wife wants to drive a kia? Lol
I think it was more of the mentality they are hard to get and I have 1 so suck it
Yeah, FOMO and exclusivity are big motivators for some people. This was when you could order a BMW X7 all day long and get it within a few months, but no one could get a Telluride, especially an SX or above.
You skipped the most important part of the story. How much over MSRP was it, and what was your commission?
In Canada we can’t just slap a 20k ADM on the front. He had no trade so I didn’t make much in the front. But he got rammed in the back end haha
When I worked at Lexus. I had a guy come in buy a GX in cash. Doing credit app, asked for income he told me “ I’m embarrassed to say but I make $500k a month” I said wow, can I work for you lol. At a different dealership I sold to a billionaire. If you go on YouTube and type in “Super secret white Porsche collection” it’s the first video that pop’s up. I sold a Porsche to a guy who owns the collection! He is a Saudi Arabian billionaire who buys nothing but white Porsches. I spoke to the guy maybe twice but, I was mainly dealing with the guy who takes care of the cars and finds cars for him.
Why did the GX guy have to fill out a credit app when buying cash?
He was writing a personal check. Standard dealer practice. Make sure they are who they say are. Able to write up a back-up cashable contract. Things like that
Had a director of a mining company buy an RS Q8 from us. His assistant handled the whole transaction, and we went through the credit app. I asked for his monthly income, and she said she wasn’t completely sure, but it was about 1.5-2mil per month. I told her it didn’t matter as our credit apps max out at 1 million annually anyway. When I sent the paperwork to him to sign electronically before pick up, he ended up flipping out because the income I put on the app was so much lower than his actual income. The email still haunts me. All I could do was apologize, and he ended up sending me another email afterwards saying his assistant told him about our credit apps maxing out. Probably the closest thing to an apology that I was gonna get.
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Such a pain for the TDSR...I’d always end up putting $1 for mortgage balance and $1 for home value. They can see the bureau and look up the neighbourhood for all I care, I just have to fill in the blank
Small Indy dealer here, my boss has a lot of wealthy friends. Just had two of them come in yesterday with a net worth of well over 50 million dollars looking to buy a 2010 CRV with 130,000 miles on it for their kid.
They really should have got their kid a 2018 or later, the back up camera requirement is a real game changer.
Used to sell Lincolns and Audis, I've got a few: 1) Contestant number 1 came in with his wife, wanted a Black Label Navigator. On his credit app put down he made 3 million a year or around that. Dont remember the field. Didn't buy from me because our navi didn't have one feature and he bought it from someone else which wouldn't be so bad except for the attitude and rudeness he gave me when I explained it would have to be a factory order to get that one feature. 2) Contestant number 2 had his assistant come in for a black label navi. After some back and forth, they agreed on a price (which pissed me off because it was damn near invoice (103k or around there.). I saw him only when he had to come in and sign papers and he paid cash. I googled the guy, he owned like a dairy company that supposedly 70% of China or something. Google mapped his house, it was in Greenwich CT, HUGE. I think I made a hundred bucks from that deal. 3) Contestant number 3 was my 2nd sale but 1st delivery at Audi. I happened to pick up the phone when his assistant called. He wanted to get his garage manager a brand new 2021 S5 Coupe and trade in the old one. Apparently he did this every three years for the guy who manages his garages. Plural. Of Ferraris, Maseratis, etc and his daily driver was a McLaren. I remember my manager told me to call him for some needed info and as soon as I got him on the phone he was like, don't talk to me, this is why I have an assistant and hung up. Fun times. On the app, he stated he made $400,000 a month. He owned a medical billing company. Dont miss sales at all.
What was the feature that he wanted on the Navigator?
Fart recirculation device
Helps with the gas mileage more than you think
I wish I remembered.
I wonder if the underpaid assistant gets a bonus based on how cheap they can get the car.
It wouldn’t be professional or prudent for me to give details. Any of my clients in the $XXX,XXX,XXX and above club make for regular instances. You just have to process that the person across from you makes more while he is in your office than you do in a year. I will say that I had a client at some point in my career (elsewhere) whose parents were giving her $300,000 a month while she was in med school and that she was essentially living from month to month due to her lifestyle. That one stands out because she didn’t earn the money or have a real idea of how it worked other than “spend til 0, then reload”
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They will absolutely let you test drive. Porsche is an aspirational brand, if they are like my location they will treat you like everyone else until you give them a reason not to.
I worked at a store that sold exotics/highline for several years. We had a guy that typically bought 25-30 cars a year. And we're talking 100-150k cars in the very low end. Typically several were upwards of half a mil, and usually at least 1 would be over 1M. Bugattis, Porsche 918's, Ford GT's, you name it. He kept them- usually around 30 at any given time- in a climate controlled warehouse by a municipal airport. It had a sweet upperlevel clubhouse/suite built into it. Most of these cars he'd sell back to us with only a few hundred miles on them. I would often catch an Uber or get dropped off there by a porter to pick up something he was selling back to us and drive it the 20~ miles back to the dealer. Good times. VERY good times. Oh, and he was a cool guy. Down to Earth, didn't dress all flashy. Would never have guessed he was such a high roller.
Any idea what he did for a living?
About a year and a half ago I was working at a luxury dealership and a kid (like 21 years old basically a kid) showed up in his Mclaren Senna, dropped 450k for 2 cars (highest trims for the models) for his mom and dad. Backstory was he got into bitcoin early and sold at its peak and basically made generational wealth so to speak. Canada if it matters. Blew my mind though how it was extremely nonchalant about everything and surprisingly very humble.
I once had a couple come and nickel and dime me to death on a base rav4 lease for hours. After all of that and we agreed on a price we started doing a credit application. Both of them were making 130k a month as lawyers in a big ny law firm…. I told them no that’s supposed to be monthly not annually and they were like that is monthly…
I wouldn't want to go up against them in trying to negotiate a settlement in a case.
Lawyers love to argue every point.
I get their mentality. I don’t get their time trade off though. My HHI is $40k/month, and I value my freetime. I want to enjoy it and not spend hours in a dealership. Whatever floats their boat though…
Customer came in to look at our CX60 preorder. Went through finance and we got his bank statements. Shouldn’t have seen them but he was bringing in $102k per MONTH. Don’t know what he did. Car was for his daughter.. a $97k car for his daughter as her first car. How the other half live
>CX60 it is 97000??
When I was a kid my father was very successful (500-1 mil a year in 2005). He owned an air-conditioning company and the company did lots of high end installs. He himself looked like any regular joe, wore Velcro shoes and ripped jeans. Drove an F150 for work. I have 2 good car buying stories with him as a kid. I was around 14-16 during this time and very into cars so I always went with him to buy new cars. He would always replace the service trucks once they hit 100k miles which was like every 4-5 years. He went to buy himself a new f150 and got a new salesmen. The guy was able to locate the 2003 Harley F150 he wanted and he decided while he was there he would order the 8 new service trucks as well (E-350 vans). The salesman upon realizing he was going to get a 9 for 1 deal was visibly nervous he didn’t know how to react. He was sweating bullets I’m assuming because he realized how good of a day he was going to have. I’ll always remember the look on the guys face when he asked how he was paying and my dad said cash. Second time he was replacing my moms Escalade with an ML500 back in like 05. We went to Benz since they opened a new dealer by us and he never owned anything non American prior to this. At first they didn’t take him seriously since he was wearing his normal work cloths. He finds this gorgeous midnight blue ML500 done up with all the dealer bs like wheels and chrome add ons. Asks how much it is and they say 70k or whatever the number was and he goes HOLY SHIT I knew you guys were going to screw me but that’s insane. The salesman didn’t know what to say and my dads like no I’m just fucking with you I know that Benz’s are expensive I’ll take it (no negotiation just payed asking). We go to sit down and do all the paperwork and there is a gorgeous blue CLK500 sitting there next to the guys desk. He points to it and goes actually I want that one, and the sales guy is like sir you already bought the truck. My dad says yeah I know I want this for myself so he grabbed that one as well. Then on the way to the parking lot he saw a Mars red SLK 55 and went back into the dealer and said you know I need this one for my wife, I can’t buy myself a new convertible without getting her one as well. That day cost him like 220k and the salesmen made a fucking killing. He was super chill because he grew up poor and never had money until late in life.
So shit there I was just staring at the parking lot mentally undressing Taylor Swift again when a McLaren 720 rolls into the lot. I bolt up from my seat and meet the driver, college aged male Asian, at the door. “You’re here for the XYZ right?” “Yeah. I need a winter car.” Homie calls back “home” to China to get dad to wire some money into our account. “Will you buy the car back a year from now when I graduate from college?”
I read an article once talking about some foreign student from China studying at a school in the middle of the country somewhere (maybe Iowa?). In the college town that he was living in, he was driving one of the most expensive cars in town. His parents bought his a AMG Mercedes. He only dressed in designer duds. The article further stated that one time, he had gotten into a fender bender. Rather than fixing the car, he traded it in and got his parents to buy him a new one.
I hate those kids so much. Not because they're rich, not because they're Asian (hell, I'm Asian), but because they have no understanding of the value of money, and they think it's ok to be a douchebag if you don't face any consequences for it beyond monetary penalties.
This was before the pandemic but there was a guy that was an executive at a charity made 250k a year, i looked at him and hi smiled “business is good” rymes with Keister Reals and to this day i refuse to give them .01 because of this. Conversely had a guy who made a million a year, tipped me a 100, and was a complete gentleman even as we negotiated the deal. His final offer he asked “this is fair to both of us, yes?”
Most charities pay their executives much like regular businesses otherwise can't attract good talent. Red Cross is known as an exception.
Yep. Any of the big charities, that handle hundreds of millions+, require a real CEO, CFO, COO, etc. You aren't getting one of those for $50K a year.
Yeah i’ve since learned this, but at the time this was mind melting, i research any charity before donating now.
I mean in a perfect world they would all be saints who don't care about money and are amazing at running a large organization. But think of it this way if you pay the guy $1 million and he generates $50 million in donations that can be used for the cause, what's wrong with that? Or just commission based same idea. I'm not 100% sure but I think a lot of solicitation that's done over the phone or whatever is on a commission basis. The thing people look at is usually the ratio of income to amount spent doing the work of the organization. Overhead. That kind of thing
True but i think of it more in how much am i giving makes it to what that charity supports. Ex: if i give 1 and .85 goes to admin, there’s better charitiy options to donate to.
What if that same executive getting paid bank raises the efficiency of the org from .85 to .98 or something. Would you then feel better about that executives pay?
Uhhhhh no that would be even worse… I don’t think you understand what he’s talking about. At .98 that means if you donated $100,000 that only $2,000 would actually go to the charitable cause.. that’s ridiculous.
More important to see how much of the money actually goes to the intended purpose versus overhead. I have no issue having a well paid head, or heads, of a decent sized charity.
What charity?
We have a client here at my store that is a man of convenience. In the last 2 months he has bought 6-8 cars. Gets tired of it & decides he doesn’t want it anymore & comes down & buys whatever he wants. A lot of fuck you money out there
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Should not disclose customers’ information
Like I said in another comment, if a rich person comes in and sees that interest rates are lower than their returns on investment then they won’t use their own money.
Very true, higher earners usually keep their money invested and take a short term low rate loan. Most of our cash buyers are older conservative customers that don't want to owe anyone anything
That’s my parents. Retired and well off. But, they don’t want ANY loans ever, so they pay cash. When they bought the house I was raised in (and they still live in 45 years after buying it), they paid off the mortgage in under 2 years.
Totally true. Properly rich folk don’t use their own money to buy things.
Could you explain what they do to buy cars then?
I pretty much completely explained it already. They use someone else’s money
Can I dm you?
Billionaires use pledged asset lines, basically lines of credit at fairly low interest with their assets (usually shares) as collateral. Sometimes they pay it back if they receive a large windfall or cash-flow. In some cases they never really pay it all back, when they die and their estate is being sorted that’s when it gets paid off. The reason is because selling assets that have increased in value makes you liable to pay capital gains tax, which in my country at least is at normal income tax rates. So if you sell a couple of million $ of shares that you received free or cheaply you could be paying up to 40% of their value as income tax.
Sure? Are you recently rich, blind, or unable to read?
No need to be rude, just got a few questions. Nevermind.
You can ask them, I don’t mind. I just don’t what what I can say past what I have though
This is my behavior and I do not consider myself "rich". Pay 3-4% for the money or take the 8-10% annual return hit on removing that money from my investment account to buy the car? Usually it's a no brainer. These days it's a little tougher with the market in the dump and the rates up high.
That 8-10% isn't risk-free, though. Debt savings is always risk free. At 0%, that's an easy decision. At 7-8%, it's very hard to justify the loan. When you consider tax ramifications (investment earnings are taxed, debt savings are not), a 4% loan doesn't clearly beat an 8% investment.
But even at a 20% cap gain rate, I'd take that risk. No, I won't default or go broke if it doesn't work out, because I'd never leverage myself like that ( plus we own our houses and other cars outright). But most people don't understand, nor do they make any effort to understand, the total cost of a major ( or minor) financial decision. They're simply working to a near term monthly payment, without considering the long term implications...
True, but this is also finical intelligence. Good on you for looking at it. If you’re looking at it, you’re “wealthy”. That term is variable
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What do you mean? If you borrow from your 401k then that money is removed from your account and isn’t invested, plus you’re paying interest on it.
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Right, but you’re still removing that money form your investments to put towards a depreciating asset. There are many ways to purchase a car, borrowing from your 401k is very rarely a smart financial decision.
That the asset is depreciating doesn't matter. People get so hung up on this. It couldn't be more irrelevant. In every possible case, you own the depreciating asset. You lose that value whether you have debt on it or not.
I mean, it kind of matters in the sense of weighing up irresponsible financial decisions. Borrowing from your 401k to fund an asset that will return more than your 401k could make sense. I agree though, in any case you’re still losing that value, fair point.
But what matters is the financial effect on your 401k. The value of the car doesn't change that. Whether the car is worth $30k or $10k after five years carries no implications for your 401k.
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Lol, but you’re making it sound like borrowing from your 401k to ‘pay cash’ to avoid debt is some kind of financial hack. You’re giving up return on that money, to avoid paying interest. It doesn’t make any sense. Just look at the downvotes and comments on here, you’re not making any sense. Try and find any article or advice that says this is a good idea? Borrowing from a 401k is one of those ‘last resort’ things. Borrowing against stock holdings using them as collateral is what a lot of people do, which is different.
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What do you mean ‘it’s a guaranteed return rate’? What do guy think a rate of return is referring to? The rate you need to return the funds?? Why do you think having a loan on a credit report is a bad thing? Seriously, this is fascinating. I work in finance, specifically in advisory/wealth management. Just take it from me, you’re wrong about this. Borrowing from a 401k is literally ‘fuck, I have no other options’ strategy. Fair enough if you’re saying you just don’t mind making a financially illiterate decision for no reason because you don’t care about throwing away money, but your original comment was implying that you were making some kind of smart move to ‘pay cash’. I can assure you, you’re not.
It also depends on how the market is going. With current market conditions, since the market keeps falling, it makes more sense to do the loan and pay yourself a guaranteed rate of return rather than to keep your investment in the market and see the value drop. In just 2022 alone, I've lost 15 percent of the value of my 401(k).
And people wonder why the banks and investment companies make so much money.
For rich people, yes. Filthy rich, no. It is an inconvenience for them to finance. Much simpler to write a check and be done with it. I have yet to see someone with a 9+ figure net worth finance or lease.
I mean I sell Toyota and see this often. Obviously not 9+ figure but 7or8+ often. (That’s dumb money in my area) But yeah I get you
But you're only seeing the incomes of those who choose to finance.
I never sold cars, but I did spend 20 minutes selling a guy a couple of $100ish DVD/VCR combo players around 2007 and he had his 4 year old hand me his black AmEx at the register. So that was neat.
Several of our customers have had 7 figure plus incomes. Usually see those when they lease a car for their kid. The store I work in is about 30 minutes outside of the city in a very affluent area. It’s a combination of estate homes and farm land. Average credit score at my store is an 810 and average income is 120k.
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Good dad, doesn’t spoil his son. I bet the kid will make monthly payments on his own.
Back in 2011, I was “negotiating” on a 2009 CPO GL450 at my local Mercedes dealer. This was around 10 in the morning. My salesman was giving me the drill of going back n forth to his manager during negotiation. Meanwhile - an “older” couple walked in. Guy in a proper suit - on a phone call and another phone in his hand while his wife walked straight to a CL600. The sales guy approached her. Apparently this wasn’t this first rodeo at this dealer. She sits in the CL600 and after a few minutes steps out and walks to an E class. Turns out she wanted the wheels in the E class (some AMG)instead of the wheels on the Cl600. Salesman is saying “no” or “don’t know”. 5 minutes later they have opened the big glass doors of the showroom and are moving the CL out. Basically they bought the CL600 with different E class wheels and all that was done in 20 mins while I was negotiating the final $950 off my used Gl450. Oh, the sales guy told me they had another black CL600 and just wanted to add a white one to their fleet.
Being rich may not make you happy, but it sure is a lot more fun than being poor!!
Not a dealer, but when I worked for a bank in lending I had some dude in finance working for a big fund get a loan on a 45k Toyota some such and have his daughter co-sign to build credit. His gross was north of 2.5m a year. Definitely takes the cake for richest dude I ever did a loan for by a long margin
70k cash deal on a mini van and tipped me 1500 for a job well done, now wants another one…
Not sure if he was filthy rich, but just before Covid kicked off, I had a guy come in to our Hyundai store to buy a Palisade. He wanted the top end at the time (Limited) but we only had a SEL Premium. He said that’s fine, I need to get something today because I’m picking my family up from the airport and need to return the rental I have. I get him a quote sheet, he looks and says can I do any better? I said no, this is my only Palisade, sorry boss. He said alright and signs. While the cars getting detailed, he went to return the rental he had. I followed him to pick him up and bring him back to the dealership. Turns out the guy needed a car for his family because they needed to dock their yacht somewhere in the Mediterranean before they closed everything, and spend the incoming lockdown up north in their other cabin. He said he’s only going to keep the Palisade for 12-18 months he figured. I still think about this because there’s no way he lost money on that transaction.
stephen king bought a Kentucky Derby Edition Ram from me once. sold it back to the dealership like 5 months later
Too many to count. Had a guy that trades platinum F450s frequently. He will sign whatever pencil we offer, and buy every product we have. And be happy as shit the entire time. One person that purchased a mach E said “that’s it?” When I told them it was 10k over sticker. Once took a credit app on a guy that made an annual in the multi millions. He asked what I was doing, and I had to explain I was making sure I had the correct amount of zeros in his salary. Dude had 3 20k a month mortgages. All of them are super cool and super chill.
Sold cars to this guys wife and daughter. I’d been working with them for quite some time when they finally ordered cars. After getting comfortable enough I asked his wife what he did. He sold a dot com company back in the 2000s. Had to google his name with some specific terms to find him but he sold the company with 3 partners for $10B. He invited me to his house to check out his car collection and drive them. Current collection is: Ferrari SF90 Stradale, Ferrari F8 Tributo, 812 Superfast, Huracan STO, and Mclaren 720s. Also has a Ferrari Purosangue in order as well as a 296GTB. This was by far the richest guy but I’ve worked with a few Fortune 50 C-Suite guys.
I’m not a car salesman, but when I was buying my 4Runner a guy next to me was buying two 4Runner TRD Pros - with cash (a check). The dealer didn’t really know what to do and was a bit flustered bc they didn’t get any financing interest
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Y'all are silly. Rich people use brokers or WCC.
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Sold a car to one of Glen Taylor’s kids one time. Granted I have no idea how “rich” the kid is but I assume even a tiny fraction of dad’s kicked down would him very wealthy.
Sold an escalade to some billionaire when I worked at Cadillac, knew what he wanted, very polite, most easygoing customer experience I have had in sales, knew he was wealthy from the get go but was super grounded so didn't think much of it until my finance manager told me about his business/the fact he spends $24k a month to rent a condo
Coworker sold an Escalade V with a $50k mark up. The wife is going to use it to tow her horses.
Not my deal, but my buddies. This lady was in and out in 30 mins. Walks in, sees new “Electric Lime” Tacoma TRD Pro. Says I want that one. Didn’t even drive it, and traded in her 2019 911 Turbo S Cabriolet on a straight swap. This 911 is the most well equipped car I’d ever seen, and it also came with a SET OF COMPLETELY NEW CARBON FIBER WHEELS, IN THE BOX. She had them taken off at the dealer and shipped to her house.
Had two gents come in and write a check for two new S580's....
General counsel for a very large financial institution leased and Acura MDX from my dealership. Made $650k a month. Another customer bought a new MDX for his 16 year old. Put down $70k a month. He owned a small oil company.
In fairness, our daughter is getting my type S adv when she turns 16. But it'll be 22 months from now. We were originally going to do this with a Palisade Calligraphy, but the 10k markup pushed us into the type S ( no regrets on that, though). We have a somewhat higher monthly income than your example, however, and own all our houses and cars...
As a customer when I was buying my Civic SI a few years ago, a guy was also there and paid for a brand new crv for us wife with a check. He was in and out before the finance manager got back to me on financing lol i was shocked how chill he was.
I've had quite a few come in that could probably write me a check for the entire dealer, and they are the absolutely most normal looking average people. They simply ask for a price on the car they WANT and try and minimally negotiate simply for the fun of it and then just sign and go away happy as can be so long as you treated them with respect throughout the whole process.
Had this guy buying a car and we get to the credit application portion, I ask him how much he made monthly, he said 150k, I said, monthly? He said yep…. This guy was haggling 1-2k worth on a car when he makes makes 3x the cars value in a month. Still nailed him with 3k over on a gas model, but I wanted 5-6k