Jason and Ben discuss buying a car in retirement.

Ben Coulter is a Sales Manager at Hudson Auto Center of Poulsbo where you can get affordable, high quality pre owned cars and trucks with service for all makes and models.  Ben has 15 years of experience in the car industry as a new and used car salesman, Crew Chief, Sales Manager, and Finance Manager.

To learn more you can contact Ben at b.coulter74@gmail.com.

Below is the full transcript:


Announcer: Welcome back America, to Sound Retirement Radio where we bring you concepts, ideas and strategies designed to help you achieve clarity, confidence and freedom as you prepare for and transition through retirement and now here is your host, Jason Parker.

Jason: America, welcome back to another round of Sound Retirement Radio, so glad to have your listening ears tuning in this morning and I’m excited to be bringing you this episode, episode number 123, buying a car in retirement.

You know as you’re planning for retirement one of things I often sometimes say is that retirement is all about cash flow, not your net worth and so you want to be thinking about some of these expenses that are going to be coming up and buying a car is probably going to be one of them. I’ve got an expert, can’t wait to bring him onto the program to share some great advice with you.

Before we get started as you know I like to renew our mind in the morning and one way I think we can do that is with a verse. So this comes to us from Matthew 22:36-40

“Teacher, what is the greatest commandment in the law” and Jesus replied “Love the Lord your God with all your heart and with all your soul and with all your mind”. This is the first and greatest commandment. The second is like it “Love your neighbor as yourself”, all the law and the prophets hang on these two commandments.

All right and then I know that some of you are going to be visiting with your grandkids so I’ve got a joke for you to share with them, what animal needs to wear a wig? A bald eagle. Yes, keep them coming, keep them coming.

All right folks episode 123, buying a car in retirement and it’s my good fortune to have Ben Coulter on the program with me. He has 15 years of experience as a car salesman, crew chief, sales manager, finance manager for both new and used car sales. He is currently the sales manager at Hudson Auto Center right here in Poulsbo, Washington.

Ben, welcome to Sound Retirement Radio.

Ben: Thanks for having me Jason.

Jason: Absolutely, you know this is a real important one and I wanted to share some interesting numbers with you Ben and also with our listeners. My last car I bought a Ford F150 used, it was 2007, had 80,000 miles on it at the time that I purchased it and I paid cash for it. I’ve had to do quite a bit of repairs and so recently I just said I’m going go through and I’m going to add up all the money I’ve paid on this thing over the last 43 months and so what surprised me, and this is just for general maintenance like new windshields, putting tires on it, oil changes, tune-ups, those types of things. I’ve spent $6,759.00 in 43 months so I’ve averaged $157.00 a month is the cost of owning my Ford.

A couple of additional costs, these were things that I considered not critical to own in the vehicle like I put new floor mats in it, my radio died so I put a new stereo in it. I put a nice little ding in my bumper from trying to back up a boat trailer and so I decided to fix the bumper but the total cost when you throw those things in there, now this isn’t including insurance and gasoline, this is just maintenance and making sure the car looked decent $9,713.00 in 43 months. That has cost me an average of $225.00 a month, so kind of an interesting statistic again as you’re ready for retirement, make sure you’re calculating the true cost of owning that vehicle.

Ben, as we talk about car ownership one of the most important things that you brought to my attention was valuation, whether you’re buying a used car or a new car. Talk to us a little bit about some of the ways that people can understand valuations when they’re thinking about buying a vehicle.

Ben: Definitely. First and foremost at the end of the day what we want to do is, we want to make sure that we’ve made a good buy. Well how do we figure that out? Well there’s three but generally we use two, we got two valuation systems. We got NADA which is the National Auto Dealers Association, it’s the yellow book, not as common and we’ve got Kelley Blue Book which you know we’ve all seen the advertisements, if we’ve bought a car before we’re familiar with Kelley Blue Book.

Jason: Yeah.

Ben: Well why’s there two? Hmm. Aren’t they both the same? Huh. They are not. They have preferences. Just a couple of quick and easy ones. NADA doesn’t like Subaru’s for whatever reason, I couldn’t tell you why? Kelley Blue Book loves them. Kelley Blue Book is err, on a diesel truck, NADA loves them so the values are going to be remarkably different. I looked at the values on my father-in-law’s truck that he’d just purchased. It’s an older truck with really, really low miles on it, uncommonly low miles, NADA had a retail value of $14,500.00, Kelley Blue Book same truck, same options, same miles, same everything $18,659.00

Jason: Is that right, huh?

Ben: $4,100.00 difference on the same truck.

Jason: Wow, that’s interesting.

Ben: Which one’s right? Easy rule of thumb, go with the lower one.

Jason: Well, I’m sure the dealership is going to pull out the high one and the guy-

Ben: Exactly, it depends which side of the table we’re on. If Kelley’s higher well as a consumer that’s what I want to look at when were valuing my trade. When I’m purchasing I probably want to pay closer to NADA, I mean we’re talking about $4,100.00, that’s just on one vehicle.

Jason: Yeah, that’s interesting. You know Ben, Sound Retirement Radio is all about people getting ready for retirement and transitioning through retirement and buying a vehicle is something that people are going to have to face. A lot of people I know, they like to buy a car right before they retire and finding the right value I think is important. So you have these two valuations in the book, which one do you recommend? How do you go about making an offer? If the dealership is saying hey we’ve got NADA and it’s worth this and you’re looking at Kelley Blue Book it’s worth this, do you try to meet in the middle or how do you-

Ben: Real world, real money. They’re both guidelines. Neither of them are set in stone and neither of them sell cars. That’s a big deal. Well Kelley Blue Book says I should be paying this for it, well Kelley Blue Book isn’t selling that car and they don’t sell cars. It’s a guideline. A lot of times when we want it to be quick and easy okay the book says it’s worth that, that’s what I’m going to pay.

Well you do have to do a little homework, look at it. What condition’s the car in, what condition are the tires in, when was the last maintenance done on it? There’s a lot of other factors that you have to take into a fact when you’re looking at this valuation system, Kelley Blue Book, NADA their assuming maintenance has been done, windshields not broken, no check engine lights, no dinks, no dents, no scratches now that’s the assumption. Now wear and tear on a pre-owned vehicle is to be expected, we know that so act accordingly.

Jason: Imagine you’re talking to your mom and let’s pretend she lives on the other side of the country and she says “Ben, I’m going out to buy a new car” and you’re going to say mom here are the things you need to look out for or look for when buying a new car. What kind of advice would you give her in that situation?

Ben: First and foremost, figure out what you want before you go there. It doesn’t have to be a specific make, model or trim level but figure out, I want a contact vehicle, I want a crossover vehicle, I want a truck, I want a van, figure out what you want first.

Second, get an idea of what the market is, what do these things go for? What are they advertised for? Then, the most important thing in my opinion, third party independent inspection of that vehicle. If we’re looking at a pre-owned car, you need somebody that doesn’t have a horse in the race to look at this car and give you an honest valuation of the condition of this car, because that’s going to impact you down the line.

Jason: People pay for those independent inspections typically?

Ben: They do but they are generally pretty in-expensive. You can get a third party inspection done anywhere from about $75.00 to $125.00 and that can potentially save you thousands and thousands of dollars in repairs.

Jason: I was just going to ask you, I know one of the big concerns everybody has, me included especially when you’re buying a vehicle used, there’s a lot of people out there like me who say I’m just going to pay cash for a car, I’m not going to carry a payment on the thing but the concern is you don’t know where this thing’s been. You don’t know if it’s been down in Texas, in a flood or in a hailstorm somewhere.

I have a friend who was a carpet installer and he use to say Jason it doesn’t matter, his saying was “You can’t polish a turd”, but I’ve seen some people polish some vehicles up, make them look pretty good and they end up being pretty bad once they get them home. How do people, you mentioned this inspection, are there any other tools people can use to help avoid getting a real lemon?

Ben: Vehicle history reports. There’s two major ones. You’ve got CARFAX which is a fantastic business model by the way, your target customer doesn’t have to pay for your product, that’s ingenious and the other one, the one that we as dealers tend to use is called AutoCheck Express which is … Let me back track just a little bit. CARFAX is a profit serve, that’s what they do. They compile all this data and they give it to you at a cost. Not so much a service, it provides a great service but that’s not their intention, profit is their intention. Which is fine, profit is not a bad word.

The other one is AutoCheck Express which is owned by Experian the credit bureau and it’s something they do in addition. It’s less expensive for you as a consumer if you want to order your own vehicle history report, it’s considerably cheaper than CARFAX and it’s just as accurate. I’ve seen them both [inaudible 00:10:25] things, events but vehicle history report don’t … It use to be that we had to look all the way round a car and get somebody that really knew what they were looking at to determine if the car’s been in an accident before you know looking has there been paint work on this car, is that the original body panel and things of that nature.

It takes a very keen eye and a lot of experience to be able to effectively to do that, well we have the luxury of these vehicle history reports now that will report an auto accident, they’ll report if it’s been hail damaged, flood damaged anything of that nature. How was this vehicle initially purchased? Was it a Renault car, was it leased, was it purchased, how was it purchased and it’ll list all those things. This thing had a previous [sling holder 00:11:14]. Okay, somebody had a car loan on it, not a big deal. This was a Renault car. Frankly, Renault cars get a bad rap and I think unfairly. My wife drove a previous Renault car for 10 years and the only issues that she ever had with that car were self inflicted unfortunately.

Jason: We’ll have to get in here and learn more about that some time.

Ben: Yeah, I’m sure she’ll be real pleased to hear that.

Jason: This idea of buying a vehicle potentially not knowing what you’re getting and you and I before the show had a chance to talk about warranties a little bit. Let our listeners know what are some of the things about warranties that they should be aware of, are you a proponent, opposed to them, what do you think?

Ben: I’m a big proponent of warranties. We have car insurance. Why do we have car insurance aside from its required by law but we have car insurance just in case. We don’t want to use our car insurance but we it just in case. I look at a warranty as the same thing. With the warranties, you can spend potentially a couple of thousand dollars for good coverage. That couple of thousand dollars that you spend up front can literally save you five, ten or more thousand dollars, Average cost of a replacement motor it’s about $4,800.00. The transmission is $2,500.00 to $3,000.00 depending on what it is and this is real stuff that, okay you pay this money or you don’t drive the car. We don’t really have the option. So having that warranty-

Jason: Having a car sitting in your driveway with a payment on it, you can’t afford to do the repairs is not a good situation or a good place-

Ben: Exactly.

Jason: From a cost stand point how much additional money is it going to cost to put a warranty on a car? If you’re spending $20,000.00 or $30,000.00 dollars on a car, is there a percentage? How do people-

Ben: It’s very similar to car insurance oddly enough. It’s all based on risk. If you have a very expensive to repair vehicle which are going to be German imports wonderful cars, but holy cow the warranty I put on my wife’s car that she just purchased a couple of months ago, I think was about $1,800.00 and that’s 7 years worth of coverage and it covers literally everything that’s not made to wear out tires, brake pads, belts and hoses, things like that, consumables. $1,500.00, $1,600.00, $1,700.00 that kind of money. That same coverage on a BMW is $5,500.00 dollars. That a huge difference in the cost of the warranty but BMW’s are expensive to repair. There’s not a cheap part on that car. Now don’t get me wrong I’m not knocking those cars, they’re fantastic but when they break, they break big and they’re expensive. All the parts are generally imported and so you’ve got all these other costs that go along with it and it can be really pricey, really quickly.

Jason: Ben, you have a reputation I should say. You’ve been in this business 15 plus years and I know you went over to different dealerships over time and you actually have people that follow you around and come to you because you’ve got a reputation of just being a straight shooter and helping people get what they want. Now that being said people go into a car dealership expecting to make, it’s a kind of wheel and deal environment. So can you give our listeners and I’m kind of curious to know if you’ve ever had any outrageous, somebody comes in and offers 50% of the asking price of a car. Have you had any stories like that and at the same time what are some tips for … How do people really feel like they’re getting a fair price if they’re going through a dealership on a used car?

Ben: With the amount of time that I’ve been doing this, friends and family I’ve been asked countless times, how do I know if it’s a good deal? The honest answer is almost ridiculous. Are you comfortable with the payment and do you like the car? Or are you comfortable with the amount of money that you put down up front? Your expenditure, the money you pulled out of your pocket, are you comfortable with that? Do you like the car? If you said, yes to both of those things, you got a good deal.

Jason: Well, but if I go and buy a Volkswagen Bug and I pay $50,000.00 for it, I like the car and I like my payment but I didn’t get a good deal on it if I spent $50,000.00.

Ben: Of course, we still have to go into this with both of our eyes open. The key to that is just do a little bit of research. You don’t have to spend hours and hours and hours and days and days and days, researching what you should be paying for this vehicle. A quick internet search will get you within a few thousand dollars of what the right money is and keep in mind those are guidelines, those are averages. So there’s going to be ones that are frankly worth more and there’s going to be ones that are worth less.

Jason: So your mom’s going to buy a car, would you recommend that she buy that car private party or would you recommend she buy it from a dealership and is there a better option or better way to go there? Now I’m thinking just logically she’s going to get a better deal private party than she is through a dealership because more people have to get paid through the dealership but are there any additional advantages to going through a dealership other than-

Ben: Well full disclosure, I’m a little bias I think people should buy cars from dealers as opposed to private party but again I’m biased.

Jason: Why do you think that though?

Ben: After the sale, after the sale. How many times have any of your listeners gone to the dealership, bought the car and had to go back for something. Whether it was a big deal not a big deal major, minor.

Jason: So that’s the point that I thought was … So you’ve got an extra layer of safety there if something doesn’t work out you’ve got some accountability, whereas if you’re buying a car from somebody of craigslist-

Ben: The way I explained it to a lot of people because not as much now as it use to be but craigslist use to be a source of a lot of really good buys not as much anymore as the dealers have kind of taken over craigslist.

Jason: You know a kind of interesting story there just real quick. I had a car that was for sale, I put it on craigslist, it was actually a dealership that called. I just listed it as Kelley Blue Book, they gave me full price offer and they said bring it in and we’ll buy it from you right now. I thought that that was just kind of interesting that it was a dealership that bought my car off craigslist.

Ben: It’s surprisingly common Jason.

Jason: Is that right, they’re on there looking for well priced hot vehicles?

Ben: Definitely, because I’ve got a story on that car. I know the guy that I bought it from. I met him, I interacted with him and I was confident enough in what he was telling me to make that purchase. Whereas you go to an auction and it’s just whoever holds their hand up the longest.

Jason: Now one of the things I thought was interesting because I thought I was getting a fair price I sold it for Kelley Blue Book, I got what I wanted for it, everybody was right up front and they cut me a check. I actually felt really good about it because it was a reputable company buying my car. I did kind of watch it though and I noticed that they only marked it up about 15% and sold it for about 15% more than what I bought it for and so I’ve always kind of wondered how much wriggle room there really is in those things and so I don’t know if they just sold it for a good deal or at least that’s what they listed it for, I don’t know what it actually went for.

Ben: Sure, that money’s hard to track what the actual sale prices are. The best thing you’re going to be able to come up with is averages and that’s what Kelley Blue Book and NADA is, there averages. You had a clean, easy deal. There’s a ton of value to that. I don’t know how many of your listeners have sold a car on craigslist or even listed a car on craigslist and gone through the real pain to do that. You’re getting people that are flaking out on you and there’s lots of ridiculous phone calls.

Jason: I know calling you with these stories oh my poor this, that, the other thing. Please sell me your car I only have this much money. Then you get these weirdoes showing up at your house at 10 o’clock at night and its like-

Ben: Exactly.

Jason: It’s not a lot of fun.

Before we go any further I want to remind our listeners on Wednesday February, 15 we’ve got a webinar coming up at 1.15 and we’re going to be talking about HECM mortgages, Home Equity Conversion Mortgages, [inaudible 00:19:49] is going to be our guest for that so if you’re interested in signing up I want to encourage you to visit Sound Retirement Radio or soundretirement.com and we’ve got a button off to the right hand side where you can register for the webinar.

The other thing Ben before we keep going with this interview, for folks locally that may want to get in touch with you, may be their thinking about buying a car what’s the best way for them to reach you or contact you to talk about this?

Ben: Hudson Auto Center. Our main location is in Poulsbo, the number is 360-7790393 or you can reach me via email directly at bcoulter@hudsonautocenter.com

Jason: For our listeners out there, may be they’re in a different state and they just want to get some expert advice, may be a second opinion would you be willing to answer any emails from them, help give them some advice?

Ben: Most definitely.

Jason: Thank you.

So share with us a story where you saw something go really bad. Do you have any stories like that where somebody bought a car and it just was a real nightmare story?

Ben: I will leave names and locations and manufacturers and such out of it but I literally saw these nice people buy a brand new car literally off the showroom floor. As they drove it off the lot, the gas tank fell out of the car.

Jason: That doesn’t go over very well. Oh man. Was there any recourse? I mean did they take it back?

Ben: Most definitely. It was a brand new car, it was a manufacturing defect that nobody caught, it was fluke, it was literally a one in a million but that person was that one and your gas tank fell out as you drove the car off the lot.

Jason: Oh man that’s just classic. What are your thoughts buying new versus buying used? What is your opinion on that?

Ben: A couple of things. Specialty vehicles, I tend to buy new.

Jason: What do you mean specialty vehicles?

Ben: You know we’re dealing with a lot of retiree’s on your show and what not and sometimes we want a toy, that Ford Mustang GT500. Yeah, I’m never going to use that car to its full capacity but I’d like to go down to the coffee stand and grab a coffee in it. A specialty car like that, the best condition you’re going to find them in is new because a lot of these cars, the original owner depending on who they are, what they are and their demographic can be pretty tough on the car especially a performance car like that. I just used a specialty car as a for instance but generally I like year old cars.

Jason: A year old.

Ben: It’s got anywhere from 5,000 to 15,000 miles on it. It’s got every option that I’m after but I paid considerably less, often times 20% below the invoice price of a vehicle.

Jason: Wow, think about that? I mean I’m so proud of my Ford out here that I bought used and part of the reason has been that when you look at the price tag on these things brand new and you and I talked about this a little bit and I threw out the number $50,000.00 for a brand new one and you said Jason $50,000.00 doesn’t even get you very far in Ford trucks anymore?

Ben: No.

Jason: It’s ridiculous that to me is insane that’s half the price of my first house. I mean the first house I bought was $100,000.00 and now you’re going to spend $60,000.00 for a truck.

Ben: Exactly and-

Jason: I can’t even fit my TV in that thing.

Ben: Right, the cost of automobiles has really gone up [inaudible 00:23:30] just in the amount of time that I’ve been doing this. When I first started doing this I worked for a Ford dealer and if you walked in the door and wanted to pay full sticker, full price for a fully loaded diesel truck, you going to spend about $40,000.00.

Jason: Wow, Ben with that we’re just about out of time but I wanted to thank you for being a guest on our program today.

Ben: Thank you for having me Jason, this was a lot of fun.

Jason: Awesome.

Ben: I hope your listeners got a little bit of value out of this.

Jason: Folks, you’re listening to episode 123, archived online for your pleasure. Until next week, this is Jason signing out.

Announcer: Information and opinions expressed here are believed to be accurate and complete for general information only and should not be construed as specific tax, legal or financial advice for any individual and does not constitute a solicitation for any securities or insurance products. Please consult with your financial professional before taking action on anything discussed in this program. Parker Financial, it’s representatives or its affiliates have no liability for investment decisions or other actions taken or made by you based on the information provided in this program. All insurance related discussions are subject to the claims paying ability of the company. Investing involves risk, Jason Parker is the president of Parker Financial an independent fee based wealth management firm located at 9057 Washington Avenue North West, Silverdale, Washington. For additional information call 1800-514-5046 or visit us online at soundretirementplanning.com.