Take It or Lease It — Car Buying

Some new wheels would be nice! However, what should customers think about financially before taking a test drive? Interactive Brokers’ Senior Manager of SEO and Content, Cassidy Clement is joined by IBKR’s UX Infrastructure Director, Dave Fortier. Dave is an automotive enthusiast and hobbyist. They compare buying and leasing vehicles in the sense of financial situations, car market timing, and retaining value.

Summary – Cents of Security Ep. 8

The following is a summary of a live audio recording and may contain errors in spelling or grammar. Although IBKR has edited for clarity no material changes have been made.

Cassidy Clement

Welcome back to IBKR’s Personal Finance podcast. I’m Cassidy Clement, Senior Manager of SEO and Content at Interactive Brokers. Today I am your host for our podcast. Our guest is Dave Fortier, the UX Infrastructure Director at IBKR. He has purchased everything from two wheels to four. One can say he’s an automotive enthusiast and hobbyist as he’s purchased more than 30 motor vehicles over the past 2 1/2 decades, so welcome Dave. We are going to examine buying and leasing a car in different contexts today, such as what fits the different financial situations with the cost structure differences, indicators of good/bad times to shop in the car market, and then some ways to retain value on your asset, meaning that current vehicle. So welcome to the program everybody and welcome, Dave. I know this is your first episode, so I guess what we’re going to do is we’ll kick it right off.  And you know some people would think, OK, some new wheels would be great but there are some things that you should think about before just walking into the dealership and asking for a test drive. So, when the time comes to look for a car, what are some general indicators you would say to look for when a person is looking at the broader perspective of the car market? I know from the financial area we talked about sales numbers, consumer confidence surveys, some unemployment numbers and interest rates. But from the buyer perspective, just in a general sense, are there things you look?

David Fortier

So the key thing to keep in mind here is we are in the post pandemic world, so things are a lot different than they used to be. Inventory of both used and new vehicles are certainly in short supply than they have been in the past, but you could always find good inventory on certain vehicles like end of the model year vehicles where you may know that a newer version or facelifted version of that vehicle will be coming out in the future. Another good time to buy it, certainly during holiday sales, so popular times are like 4th of July, Memorial Day Weekend, Labor Day weekend. And then of course, your end of the year, car dealerships certainly have certain sales figures that they have to reach in goals by the end of the year, so a great time to buy us also at the very end of the year. Certain cars also have a longer time on dealer lots, so a great way to also get a good deal is to research how long a certain vehicle has been on the lot. If you’re over 30 days or even over 60 days, you’re more than likely to get a much better deal on that vehicle, cause the dealership would be willing to move that vehicle off the lot because the longer the vehicle stays on their lot, the more it’s costing the dealership monies.

Cassidy Clement

Got it. And I know like for the COVID mention that you said, there was always a lot of talk about supply and that was a big indicator and I guess people who once they got their license, if you were somebody got your license during COVID, it was a tough time. Supply was tight, the microchip shortage and those supply constraints cause different types of discount changes, so a lot of those things that you mentioned weren’t totally going on because cars were in at one point super high demand and at another point, nobody was driving at all. It changed the market pretty quickly, but I know that from as you were saying, do your research, see how long it’s on the lot, things like that to help you identify the market for what you’re willing to spend. So I guess the next piece would be if I’m out on that lot or on the website, which most people do nowadays, there is more than just what color, trim or type of vehicle you want in the sense of SUV or sedan. Now we’re talking about gasoline or EV, so there are some brands that have these or like a hybrid but I know the main part that most people are familiar with is you’re looking at 5 different pieces. So, it’d be like your mileage range depending on how much you commute, gas versus battery costs and maintenance issues or potential maintenance issues, environmental impact and then the tax benefits. I know usually you might see a higher sticker price on some of those electric vehicles initially. It’d be good to get an updated charger, an upgraded charger to help you with that charging, but the traditional car, obviously you’re paying some taxes when you get to the gasoline pump and of course on the sale but the electric car sometimes you may owe an extra registration fee, or you can get some different tax breaks. Is there anything from your experience with gasoline versus EV or the hybrid that you have found with different price points, things like that?

David Fortier

So, obviously there’s many different types of vehicles out there. So, when you’re looking at something like mileage range and fuel efficiency, Toyota Prius is certainly going to outperform a RAM TRX pickup truck. Two totally different vehicles targeted towards 2 totally different audiences, so you know cost is kind of relative depending on what you’re looking at. Certainly things to consider between EV’s and traditional gasoline powered cars, and also hybrid cars is maintenance costs over the life of the vehicle. Certainly, EV cost you have less items to maintain on that vehicle. Common things between EVs and gasoline and hybrids is always, you’re going to have tires and brake pads and rotors because regardless of how the car is powered, you’re going to go through those wear and tear items. But certainly, you know environmental impact for sure, gas is still what I would consider to be fairly expensive compared to what it used to be when you’re comparing it to electricity.

Cassidy Clement

I agree.

David Fortier

So you know, an electric car will definitely save you money in the long run since you’re essentially fueling it up at home on those wonderful wattages and voltages. So, it definitely depends on what you want in your life and certainly there’s an environmental impact as well. Many individuals who gravitate towards EV’s do so because of the environmental benefits, not necessarily factoring in the manufacturing processes that go into making both types of vehicles. One could argue that EV’s may not be the better solution going forward, but you know that’s a whole other conversation for another time. But yeah, certainly there are tax benefits to pursuing the EV route. A lot of other manufacturers and also states will offer incentives to get someone into an electric vehicle so it’s definitely some worth pursuing but the thing to keep in mind there is the long term maintenance costs which we’ll talk about later on.

Cassidy Clement

And of course, as you said, dependent on what you’re looking to do. If you’re going to be hauling stuff, maybe you look at the truck, but if you’re going to be driving on a highway most of the time, yeah, you might want to look into that EV option or that hybrid option. So then getting down to that main piece that we’re talking about today, the financial side for buying or leasing and what makes sense. I mean leasing, it does have high upfront costs too because people sometimes don’t realize the down payment aspect, potential security deposits. What it really comes down to from the research part before — Once you have the car chosen, let’s say, or an idea in your mind — is alright what can you afford? Check out some quotes, do your research, and then think about some general ideas of do you want to improve your credit with a longer-term item? Those monthly payments, whether it’s a loan or lease what’s your wiggle room? And how much do you want to pay? I mean, leases tend to have a constriction not only because you’re paying for a portion of the vehicle in a way, but like your mileage is capped. So, 12,000 usually is the norm. Sometimes I’ve gotten a lease before for 10,000 miles when I was commuting in college.  Leasing also will sometimes offer the newer model to some consumers who care about the newest and the best technology and they like to trade that overtime. Other aspects about leasing versus buying that you want to bring up or that you think would be helpful to the to the listeners?

David Fortier

So the key thing with leasing versus purchasing is again the audience, right? So, I usually would recommend leasing to individuals who not only do you want the latest and greatest and always have a new car, but you’re also someone who’s not going to be traveling very far. Going back to your point about the mileage restriction, 12,000 miles is the typical mileage for a three-year lease. You can go down to 10,000 or you can go up to like 15. Certainly, the number one thing you want to consider with the lease is what that cost is if you happen to go over your mileage. They charge anywhere between $0.10 to $0.25 a mile and if you’re using that vehicle to commute to work as well as maybe go on long road trips and you exceed your leases mileage limits, it could certainly come back and sneak up on you at the end when you either go to trade that vehicle back in for a new lease or even if you decide to purchase that vehicle once your lease is over.

The other thing to keep in mind with leases is sometimes you have the maintenance included in that lease, which makes it a little bit more beneficial, since the dealership certainly wants to have that vehicle functioning and looking as best as it can by the time they receive it back from you after the three to four year, five year period, however long you own the vehicle. So definitely things to keep in mind. You want to make sure you’re the type of person who may be retired or has a very short commute and doesn’t do a lot of driving. However, the benefit for financing, of course is you can drive it as much as you want. The only thing you’re going to kind of pay for in the long run there is the depreciation value of the vehicle, the more mileage you put on it, certainly wear and tear on the vehicle the more miles you put on it, which is going to vary from make to model. I mean certainly cars; some cars are more reliable than others and things of that nature. But you know, if you have a longer commute or you like to drive up and down the coast for example, like a lot of snowbirds do, purchasing a vehicle is definitely the better route to go so that you avoid any of those hidden fees or excessive fees once you go over the mileage like in a leasing scenario.

Cassidy Clement

I think some other pieces that you kind of touched on too is how much you drive of course also impacts too if you’re using your vehicle for business. So, if you know that you’re going to be, let’s say, traveling salesman or driving back and forth to different places that are offices. While you could in some places, write off those lease payments within a tax deduction, also, if you know that you’re going to go over it, it might be a wash, it might cancel each other out anyway. And the other piece that I think a lot of people forget about, especially new drivers who you get your new wheels, you’re ready to roll, looking super cool in the high school parking lot and you want to make that car stand out. When you bring that car back, it’s got to be in the condition you got. So, if you’re somebody who’s not that organized in the car, maybe make sure that you don’t spill the smoothie all over the seat or if you want to put flames on the side of your car, it might not work with the lease. You might want to look at buying a used car. You want to use it in different capacities that isn’t just the general commuting.

David Fortier

The usual modifications that individuals make to their cars, are things like wheels, suspension, modifications, audio system upgrades or changes. All those things when you’re leasing a vehicle are things you want to avoid. I mean, if you’re going to lease the vehicle and you want to change out the wheels and tires, that’s all well and good just know that you’re keeping those wheels and tires by the time you bring that car back and you want to put that car back on its original wheels and tires. You said it, you want that vehicle going back to the dealership at the end of your lease, exactly the way you got it.

Cassidy Clement

The last kind of item, I guess that a lot of people were going to think about just like in this part of the purchase would be the taxation impacts. So, there’s obviously sales tax on these cars, there’s also fees. When you’re working with the dealership, there’s going to be usually like a finance department that you can speak with but something that you and I have talked about too, which not a lot of people realize, is the luxury tax on different types of cars or a different price point in cars. Because when you’re purchasing it, you could do a trade and you save on taxes because it’s the difference between the vehicles. Of course, the purchase in general, you’re going to have fees depending on the registration location of the state and of course the piece that I think a lot of people are going to want to learn from this podcast is the luxury tax and traveling out of state to buy a used vehicle. A lot of people think, oh, I’m going to save super big on that tax, that’s not always the case. So, if you want to touch on those points, I’m sure people are going to be like I’ve heard it all and I want to get a great deal, but I want to know the truth.

David Fortier

So, this is something that happened to me personally. You know, obviously as my income level rises, I wanted to attain nicer quality vehicles and ended up trying to purchase a very nice pickup truck that had all the bells and whistles and when I was sitting there doing the paperwork, it wasn’t adding up and I was like, why is this? And they explained to me, oh, it’s a luxury tax and I was like oh, interesting. So, certain states, depending on the value of the vehicle, will put you into a higher sales tax bracket, and usually that higher sales tax bracket known as the luxury tax can be anywhere from .5% or I think the highest I’ve seen is 1.5%. Definitely don’t get caught off guard by that one, research your state’s tax laws when it comes to purchasing a vehicle because the price cap is different depending on which state and definitely educate yourself on how much sales tax you’ll pay at the time that you go and purchase that vehicle from the dealership.

Going back to your comment about purchasing a vehicle out of state, so you’re never going to escape the tax man. If you go to another state and you purchase a vehicle, generally speaking, what will happen is you won’t pay the sales taxes there. And when you bring the car back to your home state and you register it, that is when you will be paying the sales tax on that vehicle. If you did happen to pay the sales tax in another state when you purchased the vehicle, again, when you come back to register that vehicle in your home state, they’re going to want to see proof that you paid the sales tax.

Cassidy Clement

Right.

David Fortier

And if you didn’t, obviously they will charge you and if there’s a difference, they may charge you. Again, definitely familiarize yourself with your own state’s tax code and how they go about charging taxes on motor vehicles. The other key thing to touch on with taxes is property taxes. So, some people, especially new car buyers don’t realize this, is that certain states have property taxes on those motor vehicles, Connecticut being one notorious for this. So, if it has a motor for the most part, you’re going to pay a property tax on that vehicle every year, whether it’s a motorcycle, a snowmobile, or an automobile, you will be paying property taxes on that vehicle. And depending on the mill rate of your town or city, will determine how much property tax you pay every year for the length of time that you own that vehicle.

Cassidy Clement

Depending on where you live, how you’re planning on helping to subsidize that value, whether it’s outright saving your money from your graduation party, a trade in, etcetera. All these pieces come together to give you that final bottom line, but with the different items, the maintenance. Now we talked a little bit about maintenance from the car type, but the leasing and buying, when you own it, you cover everything on your own. There’s no mileage restrictions, but you’re paying for everything else. And with the lease, it could be under warranty. There’s some maintenance coverage but I know you talked a little bit about the wear and tear and some of the higher insurance costs and premiums with buying or leasing. Can you touch on that a little bit?

David Fortier

Certainly, so when you purchase a vehicle, regardless of if it’s a lease or attritional finance, certain maintenance plans can be optional or could be as an added benefit to you. Certain dealerships will offer certain maintenance plans for free or at a reduced charge at the time of purchase of a vehicle versus coming back later to purchase one of those service contracts. There are certainly dealerships out there that I’ve seen in the past who will offer free oil changes and free tire rotations for the life of the vehicle, whether you lease or finance. Certainly there are rules to that contract for example, usually with those you have to service your vehicle at that dealership every time service is required and you can’t miss one in order to ensure that you continue to get your free oil changes and tire rotations etc. So, things to keep in mind there. Sometimes what they will do with leasing is they will bake the maintenance contract into the lease so that again, it just helps when you go to trade the car back in for either a new lease or if you want to buy that car outright. Again, when you lease a vehicle, you’re essentially renting it from the automaker or the dealership, so they want to make sure that their asset retains its value. So, a lot of times they’re going to want to require that when you lease a vehicle, which is great because there’s no headaches at that point. You know when your service is due, you come in, you have your service done and it’s a pretty worry-free experience. And then when it comes to the traditional financing aspect of purchasing a vehicle, what they’ll do a lot of times is they’ll offer you a discount on a maintenance or service contract that will be less expensive than if you came back and decided to purchase it later. Now, the thing I’d like to touch on there is you do not always have to go with the service contract that specific dealership may offer. Just like you shop around for your automobile, you should also shop around for your maintenance contracts. Certain dealerships will offer that same exact maintenance contract for significantly less money if you’re willing to reach out to them and there are also third-party maintenance contracts out there that are independent of dealerships or make or model of your vehicle that will offer similar coverage. But again, do your due diligence, read over the contract thoroughly to ensure that you’re making the best decision for your purchase.

Cassidy Clement

With that, next with talking about keeping it all together and making sure that you’re not running into the ground, the other piece is, yeah, you’re right, you’re renting that that leased vehicle in a way and in some cases your intention could be rent to own, but you still, when it comes to the insurance piece of this, that expense — you can have a higher insurance premium because it’s still the leasing companies -, you’re just renting it and they want to make sure that it’s covered and all those pieces are going to come back in some way shape or form in the way that they want them to go back on the lot versus well, while you’re financing a car, the financing company might have some insurance requirements, but generally once you own it, it doesn’t have to be as high. Is there some differences with the basics of insurance, you know, the new car versus the new lease insurance otherwise?

David Fortier

Yeah. So of course, you’re going to be required to have insurance legally in all 50 states in order to own and operate a motor vehicle. So, you definitely want to shop around for your insurance as well, just like you’re shopping around for the vehicle and your maintenance contract. Insurance can vary greatly, some states like the one that I’m in, the great state of Florida, has some of the highest insurance rates in the country. So, it could definitely change your perspective on what your affordability will or can be. Also, the make and model of the vehicle. Certainly, a sports car is going to be more expensive to ensure than say, a Toyota Prius hybrid. Your age also definitely comes into effect with your insurance as well. You’re under 25 years old, your insurance is going to be significantly higher than those who are over 25 years old. And not only that, but again coming back to that commute, right, if you’re somebody who has a longer commute or lives in a more city or urban environment, you’re going to end up paying more for insurance just because the probability of you getting into an accident is going to be a lot higher just because you’re on the road more. So, definitely take that into consideration, make, model, distance, location. Is that vehicle stored in a garage or covered parking area versus being outside in the elements? Will also make a significant difference in your insurance premiums. And also insurance companies offer things now where it’s like drive and save where they offer something that will plug into your OBD port that will track your location and monitor your driving to ensure that you’re obeying the laws and if you do and you’re a good citizen when it comes to being behind the wheel, you’ll get a discount. You know some of them I’ve seen up to 30%, which can certainly help. So, if you’re the type of person who doesn’t mind that, definitely pursue that route to save some money on your insurance.

But going back to the lease and finance with the lease, you are certainly going to want full coverage, they’re going to require it. In case someone steals the vehicle, say catches on fire, you know gets caught up in a hurricane or tornado, etcetera, they’re going to want that full coverage and even with the traditional finance, they’re going to require full coverage on that vehicle until that vehicle is paid back in full.

Cassidy Clement

Right.

David Fortier

It’s only after you’ve paid back that vehicle in full that you can lessen the insurance and go with comprehensive only or something like that.

Cassidy Clement

Got it. So, if somebody was thinking, alright, I think I’m going to buy it, should I just buy it out, right or finance it? And what does that financing piece even look like? I mean, to most people, the concept of a car loan sounds pretty straightforward. You make your monthly loan payment with interest. You have to apply and get approved by a lender. And you know, for financing a new car, it’s probably a good idea if you want to drive a new car, you can find a low interest rate, you can make those monthly payments and free up some funds and for other things without causing any trouble like a larger sized lease with the down payment. And that you definitely can make those payments on time to improve your credit history, which is a big reason why people finance cars, to improve their credit history. But from the other side of paying for a car with cash, not dealing much with those loans it’s not on your credit report. You don’t have to deal with the potential of an upside-down loan or defaulting and reduces your chance of the overspending. But for either side, I mean there’s pros and cons, but from the financing side, most people in our other conversations that I’ve had with you about cars, you had mentioned something about coming in already with that knowledge and getting some type of pre-approval or maybe shopping around and having your information with you before you get into the dealership so you’re not caught off guard. I think those points are really helpful. For people just starting to look at their first large car purchase.

David Fortier

Absolutely. This definitely applies to somebody who’s new to purchasing a vehicle. Sometimes you learn the hard way and the things I’d like to point out here is definitely do your research with your finance company. Local credit unions, local banks in your town or city will offer some really good financing on motor vehicles and it also takes some weight off of you as a buyer when you walk into that dealership. A lot of people tend to get overly excited when purchasing their first vehicle and the dealership will walk them into maybe financing that’s not the best for them. One of the things I like to point out here in this instance is when you are looking at your own financing options, you are in control of your credit report, right? So, when you go and apply for a loan on a motor vehicle and you go with one bank, you’re only taking one soft or hard hit, depending on your credit report, whereas if you walk into a dealership and you fill out the generic form that basically requires your name and address and your Social Security and your employment history and things like this. That dealership can actually pull your credit multiple times because what they’re trying to do is they’re trying to get you the best deal by shopping around, so you could end up walking out of that dealership with a new car and a new loan but you come to find out when you look at your credit report that your credit was pulled 5,6,7,8,9,10 times. And that’s something you certainly want to avoid, because the more inquiries on your credit report, the more it will lower your score. It’s not the same as if you were shopping around for a mortgage when it comes to applying for a car loan. So definitely keep that in mind, and this way you know exactly what you qualify for, so the best course of action is research your lenders try and find the best percentage. If you could limit the amount of times you apply for a loan the better. Get the best rate possible of course and certainly when it comes to your loan payments going back to that being underwater statement, the traditional average car loan was generally 60 months. They offer them up to 72 and now 84 months, I would never recommend that because you would find yourself underwater and you’re never really paying down, and getting any equity into that car, of course.

So, you know, if you could shorten that loan payment and still be comfortable in making the payment down to a loan term of 36 months or 48 months and it doesn’t cause you any financial hardship, definitely take that route because, you are paying a percentage on that loan and the shorter time it takes you to pay off that loan, the better off you will be financially. And the other benefit to a financing versus cash is if you get a great financing rate, certain dealerships, — I don’t know if they still do this because the Fed Rate Increases — but if you can get a loan for 0% or 0.9% or 1.9% and you actually do have the cash to pay for that car in bulk and not take a loan, you may want to weigh the options of financing that car anyway. Just because then you could use that excess cash to invest in the market and certainly help yourself out financially as well.

Cassidy Clement

Right, exactly. Those lower monthly payments might be able to free up funds like you said for investing or maybe doing something else like home improvement or other things in your life that you might want to allocate that to. So, a lot of people may say, OK, I already have a car … so what potential do I have to retain that or use that value towards something else? And most of the time you’re looking at a trade in or you’re going to resell it yourself and for the trade it’s less hassle. You’re going to reduce your taxable sales price because it’s the difference of the trade into the new or the other vehicle, but the cons tend to be usually like potentially have a lower offer coming your way because the dealer is trying to look to make a profit on that as well in the end, and there’s also the caveats of positive to negative equity with the potential loan, if you do have it on your car. So, if your car is worth more than you owe, great, you have positive equity but if you have a loan on the car that’s worth more than the car is worth currently, that’s the negative equity and a lot of people have that and you have the option to roll that negative equity into the new car loan. You could pay the difference between the trade in value and your remaining balance. Or maybe you could just delay that trade in, try to pay off that car at least like lower it a little bit. But I know you’ve done both, but when it comes to selling your car on your own like what are some pros and cons there? And can you talk a little bit about how you’re going to be paying income tax on this if you do sell it for a profit yourself regardless.

David Fortier

So certainly going back to our previous points, you want to avoid being underwater on your loans as much as possible and a good rule of thumb is when you actually do purchase a car, you want to put up at least 10% to help you avoid ending up underwater on your loan as well, as those shorter loan terms that we talked about. But yeah, if you have positive equity in your vehicle, it’s great because it certainly helps you out not only with purchasing a new vehicle, but as you said that sales tax trading in is great. It does makes sense for a lot of people to trade a vehicle in for a new one at a dealership because they handle all that paperwork for you, and they will figure it out. But as you stated, you will get generally speaking, a lower price for your vehicle than if you sold it on your own.

Now, when you sell a vehicle on your own, there’s a couple of things you want to keep in mind. This all kind of comes back to the title of the vehicle, every state is different. Some states will let you hold on to the title when you have the vehicle, whether it’s financed or not. Other states, if you have a lien on that vehicle, they will actually, the finance company or the state itself will hold the title on that vehicle. So, what this means is when you go to sell your motor vehicle to another private buyer, you have to have the title for that vehicle. So, if you still have a lien or a loan out on that vehicle, say you have $10,000 remaining, you’re going to have to come up with that $10,000 and finish paying off that loan so that the finance company can then mail you the title so that you can sign that title over to the new buyer of your vehicle. So, when you go to sell your vehicle privately, always try to ensure that you have the title, because if you don’t have the loan paid off and you don’t have the title, that process can take between two weeks to a month to six months depending on if there is any hiccups and the chain of communication between you and the bank and the title department. Generally speaking, ensure that you always have the title of your vehicle before you put it up for sale. You always want to make sure you have that to make your life as easy as possible when it comes to selling that vehicle to a private party.

Cassidy Clement

So essentially, you know, you could have that higher sale value because you’re the one kind of working with the buyer to set your market price but the problem is or well, your price based on what the market is looking like for you and your area, but there’s more work and time you have all this documentation you got to keep track of and you also got to make sure that that if there is a financing aspect that is completely taken care of. And of course, you’re still going to pay income tax when you sell a car because the IRS says, hey, that’s an asset. So, when you sell that vehicle for a profit, that’s a capital gain. If you sell it for less than you bought it, OK, it’s a capital loss and you would have to work with your tax professional to see how you would report some of these things. But the point is, is that again, you’re not going to avoid anything there either it’s just what fits you better. No matter what the tax man’s going to get you.

And once you have that new vehicle or the vehicle that’s new to you, there are some things to keep in mind with depreciation and carrying the value forward because the cars lose value over time. So a new car tends to depreciate a little bit more typically than a used one, and you have to stay on top of that maintenance. But the factors that are going to affect that depreciation usually, as far as I know, make and model, the condition you have it in, how old it is, how much mileage is on it. And you can limit that with how much you drive, and you talked about keeping in a garage, not in the elements and making sure that that maintenance is up to date. But what are some tips that maybe you can give to reduce the depreciation on cars. I know in the past you’ve talked about buying if you’re into higher resale value models like I think you had said in just passing conversations like collector cars and things like that, but what are some things for the general buyer to help keep in mind with reducing their depreciation on their vehicle?

David Fortier

So, the key things to keep in mind is to limit the mileage, of course, to certainly maintain your car to the best of your ability. Keeping up with maintenance would certainly help keep the appreciation up on your vehicle because if you go several thousands or tens of thousands of miles without maintaining your vehicle, it just means that you’re putting off the cost of maintenance for someone else and it becomes their headache and it could be a very costly one so certainly, keep up with the maintenance of your vehicle. So, one of the things that you could look at especially if you purchase a brand-new vehicle is what they call PPF or paint protection film. Sometimes they also offer undercoatings, this is very popular for like pickup truck and SUV owners, especially if you take your vehicles off road or living in the Northeast Snow Belt area. This will help you know prevent things like premature rust on your vehicle from happening, rock chips on the highway and stuff like that. So, while they may be kind of significant investments at the beginning since you just purchased a vehicle, you know you’re looking at another $1000 to $2000 to get it to get the vehicle, PPF or undercoated or both, they may pay off in the long run because they’ll protect your vehicle from the elements and anything that you may pick up on the road as you own that vehicle for its lifetime. Certainly try to keep a clean vehicle, everyone loves taking their cars through the drive-thru in this great country. So you know, we are no strangers to McDonald’s and Starbucks and things of that nature but try to keep your vehicle clean on the inside. If you do have pets, make sure you clean the vehicle out frequently because no one wants to inherit your pet’s fur when you trade in a vehicle.

Cassidy Clement

Right.

David Fortier

And those are all things that can definitely help limit the depreciation for sure.

Cassidy Clement

Right. So really, we’re talking about maintenance, watch your mileage and keep in mind, how long do you see yourself using that car for potentially. It doesn’t obviously have to be hard and fast that you’re like, this is what I’m doing, I’m just driving this car for 10 years, that’s the end of it. You don’t know what the markets going to do and if you’re looking to maximize the value of that asset, you might want to keep an eye out. So, thank you for joining us, Dave and all of your car knowledge.  And as always, listeners can learn more about an array of financial topics for free at IBKRcampus.com. Thanks for listening everybody.