How Rich People Save Money on Their New Cars
Andrew Koole
· 3 min read
We’ve all drooled as an expensive
new car
passes us by on the street. A shiny new Mercedes or Tesla Model S will catch your eye and spark jealous thoughts in almost anyone. You might think the wealthy drivers in these fresh-off-the-lot luxury vehicles can afford them because of their bursting bank accounts, but the smart ones actually have a few tricks up their sleeves to bring prices down.
From the size of their down payments to the size of their vehicles, rich people can use their knowledge of the auto industry and the tax system to squeeze the most out of every dollar. Peeling back the class curtain can give the average joe or jane access to savings as well.
Buying tactics at the dealership
Auto dealers have something in common with the average consumer—they need a line of credit to buy their vehicles. And as those cars sit on the lot, the interest on that loan grows. Nolan Sykes of
Donut Media
says rich people use this financial situation to their advantage.Instead of signing on for their own loans, the wealthy will show up to a dealership with cash. This puts the buyer in the driver’s seat of the transaction (pun intended!). Dealers will offer all kinds of incentives to get that cash in their hands to lower their interest payments.
Buying a car outright or with a hefty
down payment
might be easier for the rich than for you and me. But the more you save before heading to the car lot, the more control you have when negotiating the final price of your new vehicle.MORE: Senate Wants to Scrap EV Tax Credits for Those Earning More Than $100,000
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Tax tricks the rich use to lower the cost of their cars
The shockingly low tax bills of the rich are a common headline nowadays, but many of the benefits wealthy people use to lower the amount of taxes they pay are available to everyone. You just need to know how they work.
Most people are aware that buying assets like cars through a company can help protect your personal credit, but the practice is a little more clever than that. One trick Sykes calls the “hummer loophole” makes tax deductions grow with vehicle size.
Originally designed as a benefit for farmers, the tax law offers better tax cuts on heavy vehicles than light ones. But because it doesn’t specify what tasks those heavy vehicles are used for, it allows wealthy people to roll around in their Escalades while saving major dollars.
How you can save on car expenses
Not everyone can afford a full-size luxury SUV, even with the available tax breaks, but knowing the car buying hacks of the wealthy can help you identify new ways to save your own money. And one easy way everyone can cut car expenses is to shop for
car insurance
with Jerry
.Jerry is a personal insurance broker that lives in your pocket. But don’t worry about buying tiny office furniture, Jerry is an app—and a super one at that.
Once you download Jerry, just answer a handful of questions that will take you roughly 45 seconds to complete and you’ll immediately get car insurance quotes for coverage similar to your current plan. Jerry customers save an average of $887 a year.
