So you want to know how to buy a car like the rich eh? Lucky for us the internet exists, and secrets don’t stay secret forever. There are tricks that the very wealthy use, that you might not have known about.
These tricks allow them to keep on winning at their favorite game which is making money and finding ways to pay less for the stuff they want. So let’s break down how to buy a car like the 1%.
Have Deep Pockets
Here’s the first trick to buying a car like the wealthy. Have a lot of money. If you have enough cash to buy a car outright without any financing, chances are you will qualify for some additional discounts.
These discounts are offered at the dealer level and aren’t advertised. To understand how this works we need to know a little bit about how a dealership works.
Dealerships like other businesses often use outside capital or loans to purchase inventory. These loans have to be paid back (with interest) and the longer inventory sits around the less profit a company makes.
So if you can purchase a car in cash you can help alleviate how long the inventory sits on a dealership’s lot. A Dealership may use this as an incentive to discount a car if they know they can sell it right away and receive a large sum of cash.
Of course, the caveat is that this strategy works better in high supply, demand situations. Pretty much the opposite of what is going on right now in the automotive market.
If you’re a loyal consumer who buys cars fairly often at the same dealership network, this discount can add up over time. Makes sense for business owners.
Start A Business
The most popular strategy the wealthy employ when buying cars is by using a business. The U.S. Tax Code is designed to help business owners and the wealthy use every trick to take advantage.
Enter the section 179 deduction for trucks and vehicles, better known as the “Hummer loophole”.
Depending on your vehicle you can claim up to a 100% deduction on your taxes based on the price of the vehicle.
Vehicles classified as heavy-duty vehicles (6000 lbs – 14000 lbs) qualify for especially significant discounts. Originally intended to help agricultural workers, it morphed into a luxury SUV escape for the wealthy hence the name “Hummer loophole”.
Large luxury SUVs very often exceed the 6000 lb requirement for these deductions making them the vehicle of choice of the wealthy with businesses that can exploit this loophole.
Escalade, Range Rover, G-Wagon, Tesla Model X. Yes, those all qualify as heavy-duty vehicles. Oh, and pretty much any full-size pickup truck out there too just in case you actually do use your vehicle for work.
To learn more about the section 179 deduction for businesses check out the official website of section 179. Always make sure to discuss with your tax professional what tax deductions and discounts you are eligible for.
The last trick the wealthy use is simply genius. They just register their cars in states that have no sales tax. This is a legal grey area and insuring and registering your car in a state you don’t live in is not recommended.
However, it is no secret that this practice exists most notably in states like Montana. Montana allows out-of-state registration in addition to their no registration tax.
Hypercars are big in Montana, and it makes sense if you’re buying a very expensive vehicle. Registering a car worth hundreds of thousands or even millions can add up huge savings.
Can you imagine what the registration is on a car like a Bugatti?
So there it is my fellow plebes. The secret sauce to the recipe. How to buy a car like the 1%.
Use this information wisely, and always seek the advice of professionals. Everything here is just entertainment not financial advice.