How Buying A Great Car Is Exactly Like Buying A Great Stock

By Steve Lang on July 29, 2018

If you’ve ever worked with growth stocks uk or shares then you will know that the way you make money in the stock market is almost a mirror image of how you avoid losing money in the car market.

When entering the stock market, you definitely don’t want to be losing money. So, that’s why you need to invest your money wisely, and reading something like these Stash reviews can help you to get started as best as you can. And it’s exactly the same as the car market; losing money is just unimaginable.

1. Have As Few Transactions As Possible

Imagine if every time you bought a stock you had to pay about 10% of your transaction price.

That’s what happens when you buy a car – new or used. Every… Single… Time…

Do you want a brand new Camry for $30,000? Great! Your state government, and sometimes even your local county and city governments, will be glad to receive anywhere from $2,000 to $3,000 every single time you sign that dotted line. Just as a stockbroker charges a fee every single time you buy a stock, governments raise their revenues whenever you buy a car.

Then there is the car dealership.

Many offer bogus fees that range from paperwork “DOC fees” to a mish-mash of acronyms that only serve to add an extra dealer expense to your transaction. I personally know of one former dealer in my home state of Georgia who charged what he called a “TOBY Fee.” What did you pay for with TOBY? Nothing much. That fee just happened to be named after the car dealer’s dog.

There’s absolutely nothing wrong with buying new or used. You can win with either one. Just make sure that what you buy is worth keeping if you want your long-term costs to remain low. One way of doing that is insuring your car with the best possible insurance coverage possible. Often times, camper van owners have been able to meet their vehicle’s repair cost through insurance. So, if you own a camper van, you might want to get camper van insurance that covers for maintenance as well.

2. Investments Need Auditors

Imagine if Facebook simply said they made $10 billion last quarter.

How would you know if this is true? Well, in the case of Facebook and every other publicly traded company there is an auditing firm that goes through their books in incredibly deep detail and verifies their financial performance. These auditors are a small army of trained professionals who look for inconsistencies and errors so that those who own that stock are protected from fraud and other deceptive acts.

When it comes to cars an experienced independent mechanic serves the exact same purpose. Many of these professionals will look at close to a thousand vehicles a year. They can put your next best car on a lift and examine the true story that’s behind the car that interests you. Just because the prior owner told you, “It’s all good!” doesn’t mean it’s true. Let an experienced professional take a deeper dive. If you’re looking at car leasing rather than buying, check out All Car Leasing performance division since you can rest assured these cars will be in perfect condition.

3. Past History Means A Lot

There are models we cover at Dashboard Light that would offer atrocious reliability if it weren’t for one unique ingredient.

The owner.

Sometimes owners make all the difference. Like Michael Brozyna who owns this bird friendly 1995 Dodge Grand Caravan with over 400,000 miles and counting.

How do you know whether that car has been given a good life? By examining maintenance records and that independent inspection we just mentioned. Just as a great CEO can turn around a bad company, a great owner who maintains the car to a T and uses quality parts can offer an outstanding vehicle.

Always ask for records, and ask your mechanic if the parts that were replaced are quality components. As a car ages, those ingredients become essentials one in the car buying recipe.

4. Never Believe The Preachers

There is a special place in hell for the producers of financial television shows like “Mad Money” that use a lipstick’s worth of truth combined with thirty minutes of emotional seduction to get you to buy a stock.

With that said, would you ever pay for a car just because a car reviewer drove it for a week and used dozens of compliments to make that car your next desire?

Thousands of consumers do exactly that. They read a review from a publication that is totally reliant on advertising revenue from car companies, and then pay a healthy five figure sum to experience the same emotional flight from their daily reality. Years later when that vehicle becomes an expensive money pit, they are the ones left holding a money loser that’s not worth keeping while that publication is pumping up their next paid sponsor.

5. A Good Name Doesn’t Always Mean A Good Return On Your Investment

There is a reason why most reviewers will never mention the long-term reliability of a car. It usually cost money to be honest in the car business, but emotions are always free and easy to monetize.

When high-dollar BMWs receive a hero’s salute from a popular enthusiast magazine, don’t be surprised if they eventually become money pits with piss-poor reliability. Even mainstream brands such as Subaru (ranked 30th out of 38th) and Volkswagen (ranked 34th) have received far more accolades than they deserve.

Some new cars are engineered to slowly suck money out of your savings account the moment you drive them off the lot. So don’t believe the hype. If you want to know the truth about a car always do the deeper dive, read reviews from actual owners (like here and here) and seek out the long-term reliability data that’s out there.