The Fundamentals Of car hacking: how it works and what cars qualify (part 3)
Ok now let's get into the juicy details.
We already talked about how the three conventional methods of car buying is wrecking havoc on your finances.
Let's talk about how"car hacking" works.
At first glance you might be thinking...
"PJ, all you need to do is buy low and sell high. Duh!"
Quite the contrary my friend.
It all starts with knowing what cars to buy, and what cars to avoid.
Did you notice that in our previous example I specifically chose a Mercedes-Benz C63 AMG, and not just a regular C-Class?
That's because not all cars are created equal.
Car hacking is based on the idea of no longer buying cars that are considered liabilities (lose money), but rather buying very specific type of cars that can be leveraged as assets (hold value or appreciate).
Read that again.
The type of cars that work best are modern luxury and exotic cars that have depreciated based on time/age, but are still in very high demand.
So your Toyota Corolla won't qualify, nor will just any regular BMW 3-Series.
Speaking of BMW 3-Series, let me use one as an example to showcase why regular cars don't work.
Below is a 2009 BMW 3-Series.
If you bought this car brand new, you would've paid roughly about $35,000.
However... let's take a look at the value of the BMW over a 10 year timeframe (source: CarGurus.com).
Can you see what is happening?
Over the course of a decade, this BMW 3-Series has depreciated over 75% of its original value and continues to decline.
It's actually worth less than $10,000 now and at some point will be worth pennies on the dollar.
That's simply because cars like the BMW 3-Series are mass produced by the hundreds of thousands and attract a broader audience.
That's not what we're after.
We're after cars made in limited production (yet still attainable), and have a loyal following.
Cars such as the infamous Lamborghini Gallardo LP560.
The Lamborghini Gallardo LP560 is actually one of the best cars you can hack today.
Back in 2013 (the final year of this generation), a Lamborghini Gallardo LP560 would have sold for about $215,000 brand new.
Take a look at the depreciation graph below (source: CarGurus.com)...
Do you notice anything?
At the lowest point in the last 7 years, this Lamborghini Gallardo LP560 dropped no more than 40% of its original value.
Whereas the BMW had lost 75% of its value, the Lamborghini never dipped below 40%!
But there's one more thing you need to pay attention to...
Do you see it?
Let me zoom in for you...
Since January 2020, the Lamborghini Gallardo LP560 bottomed out and is actually trending UP in value!
Don't forget this is happening in the middle of a global pandemic too.
In other words, if you bought this car from 2017 onwards you could have gotten paid as much as $30,000 to simply to own and drive a Lamborghini.
Isn't that crazy?
The key to hacking cars is to know the right cars that work with our system, and then finding the 'sweet spot' along their depreciation schedule where it either:
A) Bottoms out and remains steady.
B) Starts to trend back up.
While exotic cars definitely work the best, you can also leverage this same strategy on more 'affordable' luxury cars too like the BMW M3 and M5, Audi RS5 and RS7, Mercedes-Benz C63 and E63, and so on.
Take a look at the depreciation chart of this 2014 Audi RS5 (source: CarGurus.com)
A car that was once $75,000 brand new is now hovering just under $50k.
If you look at the tail-end of the depreciation chart you'll see where it has started to flatten out over 2020 (the sweet spot for car hacking) and now has gone up nearly 20%.
Luckily you have car options as low as $25,000 all the way up to $250,000 that work really well with our strategies.
Here are some of my personal favorites right now (and ones that are recession proof):
• Ferrari 458 Italia
• Aston Martin Vanquish
• Mercedes-Benz G63 AMG
• Maserati GranTurismo MC
• Porsche GT3 RS
• Audi R8 6 Speed Manual
• Mercedes-Benz SL55 AMG
At the end of this I'm going to send you my cheatsheet of the 50 best cars to hack starting at $300 per month and all the way up to $2,500 per month.
Before we get there, it's time to hunt for some deals.
Most people use the same exact websites I use to search for cars.
However, there is one slight difference in my approach.
On the next page I'll share the trick I use to easily find cars below market value that dealers are begging to get rid of.
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DISCLAIMER: The results stated above are my personal results. Please understand my results are not typical, I’m not implying you’ll duplicate them (or do anything for that matter). I have the benefit of practicing car buying for over 10 years, and have an established following as a result. The average person who buys any "how to" information gets little to no results. I’m using these references for example purposes only. Your results will vary and depend on many factors …including but not limited to your background, experience, and work ethic. All business entails risk as well as massive and consistent effort and action. If you're not willing to accept that, please do not continue.