I just got this question about applying my KTL Leasing System tactics to buying a used car:
I bought your leasing system and I think it’s great. But my wife and I are considering buying 3 year old vehicles as an alternative.
Are any of these approaches for leases transferable to buying used vehicles? Even discount stacking etc?
Wondering if I can apply any of the same principles.
I created my system so I would never have to buy a used car again.
The idea of driving a car driven by someone else is repugnant to me. Because I have no idea how rough the driver was on the car.
And driving a car that is out of warranty is a surefire path to major anxiety – even with an extended warranty (see below).
Here are the many reasons I would shy away from buying a used car:
One of the many advantages of leasing is we are always driving the newest car. Today’s cars continue to be safer than even last year’s cars. Many first responders tell me victims walk away from the worst crashes these days – from new cars.
Cars typically increase their reliability year by year. This is a big deal for me. I have no interest in stressing whether my car will start or not. Driving new cars virtually eliminates this anxiety.
We have no idea how a used car was treated before us. Used cars usually have worn consumables such as hoses, tires, shocks, filters, fans and clutch that break when we least expect it.
Although used-car dealers (typically) provide a warranty, it is only limited to a couple of months. (Of course, leasing a new car includes a full warranty.) And we all know Murphy’s Law… “Anything that can go wrong will go wrong”… and this usually happens just after the warranty expires.
The most expensive maintenance
Repair and maintenance tend to skyrocket in year #4. This usually adds thousands to the cost of owning a car. Most used cars have underlying problems that only show up once we buy the car. The worst part is the extended warranty… we think we are covered, but the tiny print in the contract prevents us from collecting on claims.
Higher costs to finance
For some odd reason, it is difficult to negotiate fair financing terms on a used car. This hidden extra cost makes a used car more expensive.
Higher cost of auto insurance
When we get a new car, the insurance company tends to reward us with lower-priced insurance. Why? Because newer cars are safer. And safety is (by far) the most important factor in determining insurance premiums.
Stuck with a lemon
Auto manufacturers purposefully make parts good enough to last the warranty period. This “planned obsolescence” is built into the way cars are manufactured. It is GREAT for business. Because it forces us to buy parts, service – even get into new cars.
Even worse, some cars are made so poorly, they are known as “lemons.” And laws protect us from driving a lemon – as long as it is a new lemon. Unfortunately, used-car lemons are not protected. And if our used car lemon craps out, there is nothing we can do about it.
If you insist…
If none of these used-car disadvantages scare you off, my answer to your question is maybe…
Maybe some of my KTL Leasing System tactics can be employed to buy a used car…
Here is how I would do it (if I was knocked unconscious and lost my memory):
As I recommend in my system, I would never step foot on a used-car lot. NEVER.
Instead, I would track down the car I was looking for and find it at dozens of other used-car sellers. I would choose a used car with similar options, upgrades and mileage. And like we do with my system, I would email these car sellers a lowest-price offer (and see which one comes closest to accept). No price will be the same. And like with my system, the lowest price might be half the price of the highest-quoted price.
Frankly, I think this is dumb
Here is why:
No matter how we get into a new car, the cost per mile is almost exactly the same.
For example, whether we lease, finance or pay cash for a new Toyota RAV4 Limited, the cost per mile is roughly 34 cents if we average 12,000 miles of driving per year.
This is true if we buy a 3-year old RAV4 or a 9-year old RAV4… it will cost us approximately 34 cents a mile (when we factor in everything – the cost of the car, financing, repairs and maintenance).
If the cost is roughly the same no matter how we pay for the car, I say why not always drive the newest car?