How to own luxury and exotic cars for as Low as $300 per month with $0 Down (part 6)
Ok I hope you've been taking notes.
I promise you that by the end of this page you will understand the entire car hacking process from start to finish.
Here's a quick recap so far...
• Identity 'hackable' cars that fits within our criteria/budget.
• Research the bottom cash value by taking the average of five dealers trade-in offers.
• Find a dealer that has been sitting on a car for close to 90 days.
The next step is to obviously run the numbers so that it works in our favor.
To make this as easy to understand, I want to use an actual car for sale and show you how a Nissan GT-R can only be owned for $66 per month.
From my experience and research, I know that the 2013 model year is tremendous value that it doesn't justify paying more for a newer car that is essentially the same.
The 2013 Nissan GT-R is also holding strong with only a 30% drop in depreciation from the original MSRP of $105,000.
Look even closer and we can actually see that it's been pretty stable over the last several years hovering around $70,000.
This is a great sign!
The next step is to figure out what a 2013 Nissan GT-R is really worth by figuring out its bottom cash value.
We need to know this number BEFORE we start the negotiation process so that we don't waste their time or ours.
After contacting five dealers, we determine the bottom cash value on a 2013 Nissan GT-R is about $54,000.
Time to go on the hunt!
Using the same free resources as mentioned before, I filter out the junk and come across this listing...
Hmm this looks promising!
• It's a 2013.
• The miles are very low.
• It's at an Audi dealer which is to our advantage.
But what about the 90 Day Rule?
How long has this car been for sale?
Remember how I said most dealer websites will have the CarFax report available for free?
This one is no different.
Let's take a closer look...
The first thing we notice is that it's accident-free (not pictured).
But there's a problem...
This report doesn't state when the car was first listed for sale with this dealer.
That's ok. It can happen from time to time.
But it doesn't take a rocket scientist to dissect the information provided.
On February 24, the lien was released from the previous owner.
The following day on February 25th, we can see that the Audi dealer serviced the vehicle.
Based on this information, we can assume that this Audi dealer has held onto this 2013 Nissan GT-R since February 25th and at least 90 days!
Since I've been monitoring this car over the last months I actually know that the dealer has dropped the price several times too.
Bingo! We've found the perfect car hacking candidate.
No dealer wants to be on the hook for a car after 90 days so this is when we come in and make our move.
Right now this dealer is asking $67,487.
We know that the bottom cash value is around $54,000.
That's a difference of $13,487.
So based on what we know about the car and dealer, this is what I would say to the sales manager (not a regular sales person)...
"I'm interested in your 2013 Nissan GT-R you have listed for sale. I've been watching this car and noticed you've had it for several months and dropped the price several times. I'm ready to help you move this car if we can close a deal at $54,000 today."
Most likely the dealer will reject your offer, but don't give up just yet.
With car hacking you don't always have to buy at bottom cash value. It's a starting point for negotiation, but you can still win even if purchased a little higher.
There's a very good chance this dealer will accept $59,000 so let's hypothetically assume we close the deal.
So now what?
Here's the part that people don't realize...
• You don't need to have a million bucks in the bank to be able to afford this car.
• You don't even need to put down any cash to buy it.
• All you need is decent credit (600 and up).
Financially savvy people leverage lenders like banks and credit unions because interest rates are so low these days that it's basically like free money.
Before you say...
"PJ, everyone says if you can't pay cash then you can't afford it."
Do you really think everyone you see driving an exotic paid cash?
That's not true for several reasons:
1) Financially savvy people know better than to tie up all their cash and how to get a better return on their money elsewhere.
2) Car hacking doesn't mean holding onto a car forever, usually only 6 to 12 months, so you aren't paying all the interest.
3) We use accredited financial lending institutions, not random hard money lenders that charge high interest rates.
Rates are as low as 3%, so it's practically a no brainer to leverage financing with car hacking.
Since we only plan to keep cars 6 to 12 months, I recommend 84 months to help lower our monthly payments.
This is the same thing I teach all my students like Jimmy who bought his Ferrari California with $0 down.
By financing the Nissan GT-R at $59,000 at 3% for 84 months, we can expect a monthly payment of $780.
Didn't I tell you that you could own this Nissan GT-R for $66 per month?
One of the biggest problems consumers do is look at monthly payment only.
That's 100% the wrong way.
What you should be doing is looking at your total cost of ownership from your entry to your exit.
Here's what I mean...
Although we didn't buy this Nissan GT-R exactly at bottom cash value, we still were able to buy it below market value.
After 12 months, we can then sell this car for $60,000 because we've already factored in future depreciation with our purchase price of $59,000.
We sell the car for more than we paid so we satisfy our $59,000 loan and gain +$1,000.
But because we paid interest for 12 months, we incurred $1,794 in interest payments (see below May 20 - May 21).
This leaves us with $794 total out of pocket expense. ($1,000 gain - $1,794 interest).
So our true monthly cost of ownership is only $66 per month ($794 / 12 months)!
I've purposely excluded sales tax because some states charge 0% while others charge 10%.
But for the sake of this example, let's assume you live in a state with 5% sales tax.
That would be an additional $2,950 in expenses paid up front.
If we combine that with our $794 and we have a true total cost of ownership of $3,744.
Divide that over the 12 months of ownership and it would still only cost you $312 per month to own this Nissan GT-R that had a MSRP of $105,000!
My students like Stavros are living proof car hacking works.
He even hacked his own Nissan GT-R for even cheaper at $100 per month!
How many cars over $100,000 can you own that only cost you $300 per month?
You can't even lease a 2020 Audi A4 for that much!
Even worse, this is a base model Audi A4 that doesn't even include their signature Quattro AWD technology.
Car hacking, when done right, is buying the right luxury or exotic car, at the right price, so that your actual ownership cost is very little or zero financial loss.
If you follow the strategy, it's literally a fool-proof way to enjoy the nicest cars ever made while keeping your hard earned money.
It's worked for me for the last 10 years and has allowed me to hack over 250 cars, some of which include...
• Lamborghini Gallardo bought and sold for $20,000 more (could have kept to this day and still be free).
• Maserati GranTurismo bought and sold for $9,500 more.
• BMW M5 bought and sold for $5,500 more (I'll send you the full case study at the end).
• Aston Martin DBS bought and sold for $11,000 more.
• Ferrari 550 Maranello bought and sold for $45,000 profit (flipped to collector).
• Porsche GT3 RS bought and sold for $65,000 profit.
• Ferrari Pista sold for $77,000 profit.
Of course it works for me.
When I pioneered this concept, it was especially important to me that this process could be replicated by anyone.
So that's why I'm most proud that this has worked for thousands of my students who used the same strategy to own the car of their dreams.
These are regular people who thought the only way they could own a luxury or exotic car was to wait until retirement and a million bucks in savings.
Now they're actually doing it, and loving life.
But wait... there's another road block.
There are three things that stop people from ever acquiring their dream car: taxes, insurance, repairs, and maintenance.
In the next and final lesson, I'm going to tell you the cold hard truth about ownership costs, including how you can insure exotics for under $100 per month.
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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.