The Millionaire Next Door: The Surprising Secrets of America's Wealthy by Thomas Stanley & William Danko

Author:Thomas Stanley & William Danko [Stanley, Thomas & Danko, William]
Language: eng
Format: epub
Tags: Rich People, Finance, Motivational, General, Millionaires, Personal Finance, Rich People - United States, Millionaires - United States, Social Classes, Business & Economics, Social Science
ISBN: 9781589795471
Google: qRMqB2BSJr4C
Amazon: 1589795474
Publisher: Government Institutes
Published: 2010-11-15T13:00:00+00:00

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USED VEHICLE-PRONE DEALER LOYALISTS (17.1 PERCENT)

Why do millionaires such as those in this group with annual incomes in excess of $300,000 and a net worth of nearly $4 million have to buy used vehicles? They don’t.

Overall, these millionaires get more satisfaction from acquiring used instead of new. In purchasing cars that are two or three years old, they feel that the original owner has paid while the vehicle was depreciating in value. They often plan to resell their used acquisition in two or three years and recoup much of their initial payout. Many also feel that aggressive bargain shopping for new vehicles is a waste of time and energy. They believe that new cars are overpriced at the manufacturer’s or wholesale level; in their minds, one can’t even hope to buy a new vehicle for much less than the dealer paid for it. For many, the real discounts on motor vehicles can be found in the used-vehicle market.

Used vehicle-prone dealer loyalists have the highest percentage of entrepreneurs among their ranks. Entrepreneurs are extremely price-sensitive when acquiring motor vehicles. Their preference to invest much of their income in assets that appreciate, however, must be balanced with the need of many successful entrepreneurs to drive quality motor vehicles. For this group, the acquisition of quality late-model used vehicles is the solution. Their favorite makes/models include used Jeep Cherokees, Cadillac De Villes, Ford F-150 pickups and Explorers, Lincoln Town Cars, Chevrolet Caprices and Suburbans, and Infiniti Q45s.

The members of this group spend less money on such acquisitions than do the members of either of the new vehicle-prone groups. The percentage of their incomes allocated for motor vehicle purchases is also the lowest of all the groups. On average, they spent only 7.6 percent of their income on their most recent acquisition, and only 9.9 percent for their most expensive purchase. As a percentage of their net worth, these purchases represent only 0.68 and 0.89 percent of their net worth respectively.

How do the members of this group make purchase and dealer patronage decisions? First, most determine the dealer cost on a new model of their preferred vehicle. Then they determine the vehicle’s projected depreciation. This information is used to bolster their decision to purchase a used version of their chosen model. Information about the current retail and wholesale value of used vehicles is available at many libraries and book stores. Often, enlightened CPAs provide this information to their clients.

Used vehicle-prone dealer loyalists then examine the offerings of several dealers. This is done to judge the willingness of local area dealers to “earn the business” of the members of this group. Some check the prices of vehicles offered by individuals as listed in the classifieds.

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