“Most People Are Broke!” Lamborghini Salesman Reveals Who ACTUALLY Buys Their Cars! | Ed Bolian

21:34Decide then how much you want to own it and then either keep that one and sell the white one or sell it for what you paid for it.

21:42Graham Stephan:It just sounds like a hassle. I don't want another thing. Do you enjoy driving cars? Not really. So what do you enjoy cars for? I like to look at them. To me, it's like a piece of art. It's like a sculpture. You've got all these balls for posters around here. Yeah, but a car for me is like, it's a work of just art. I love like sitting in the car. I love looking at the engine of it. I like the startup. I get anxious. About what? There's now so much value in the cars that if something goes wrong on it or someone hits me, like I'm more than insured, but I don't want to deal with it. It's just, I breathe a sigh of relief.

22:21Graham Stephan:When I pull my car back into the garage, turn off the ignition, the garage goes down. I'm like, good. We survive. Car's safe. How would you save money on insurance if you want to really minimize your cost? Of all the things to save money on, I would strongly recommend not insurance. There are collector car policies that are massively cheaper. And so if you can qualify for those based on the areas that you live in and the way you use the cars and the types of cars that you're insuring, that is a huge difference. I think I pay about$15 ,000 to$20 ,000 a month, or sorry, a year on insurance, which is nothing relative to the value of all the cars, but that's because they know I can only crash one at a time.

23:07And it doesn't specifically exclude my family, my wife from driving it, but she's not going to go drive them. She's welcome to, but curbs come out of nowhere.

23:17Graham Stephan:So if someone wants to then look rich for cheap, what's the coolest car to buy? I mean, generally, the easy answer is the cars that depreciate like crazy. Your Maseratis, your Aston Martins, things like that. The reality is, and this is the same way that you avoid the wrong stigma of the car that you show up in, is have a good story about it. Don't just go out chasing the most interesting thing that you think gets the most clicks or views. Have something that really resonates with you about what the car is or what's rare about it or significant about it or unique about it. And that way, like, and those cars tend to depreciate a lot less because they're usually a little bit older.

24:00And that actually is the cheapest way to do it. The cheapest way to buy a car isn't to pay the least amount of money. The cheapest way to own a car is to have the equity position reflect something positive when you're done with it. So it doesn't really matter what you pay if it's going to go up in value. Everyone can afford to own a car that goes up in value. And so the best way to look like, you know, a baller on a budget is to buy something that's going the right way in value because of the factors that tend to make that happen. What car, if someone has it, just screams that they're broke? uh generally anything like i see people have brand new cars like if you drove up in a brand new escalade electric car like i know it's expensive but like the amount of money that that's costing is just unconscionable and i have a car that needs fifty thousand dollar tires and i was and i think those people are just so that's that's saying that they looked so rich to me i I mean, people that are broke, I don't know that...

25:02Chrysler 300. Well, that's fair. I mean, but I don't know that we need to necessarily stigmatize that. I would say that there are cars that scream irresponsible. We all talk about the way that we love cars. And the way I love cars is very different than the way that you love cars. And the fact that you love your current car in its state with its mileage. But it's so easy to be critical of that. And the audience will. When you say that you've owned the car for five years and put 300 miles on it, they're going to be like, you idiot. But you're not wrong. Whatever you mean when you say that you love cars, you're right.

25:40And just because my brand of loving cars is different than yours doesn't make me more right. It only makes me more right for me. And so it's so easy to see a car that is stanced out to the point that it can't move or a truck that is pointed to the sky so you can't see what you're about to run into or an Instagram tag on your quarter window and think that's dumb. And maybe it is for you, but like I just was emceeing an Australian car show. These guys that import Holdens into the U.S. I don't particularly like these cars. I don't relate to these cars. I don't understand the economics of these cars.

26:18But the community of these people is unbelievable. And when we think about the loneliness epidemic in America and the world at large, and the reality is that you could buy a marketplace$3 ,000, 300 C, put a stupid wrap on it, put your Instagram handle on it and go, you know, cruise around anywhere and make a bunch of friends that are in your same socioeconomic situation, have your same free time or complaining about the same kind of things and dealing with the same problems. You are going to make friends for less money than almost any hobby in the world. And the opportunity to just go out and make a questionable decision on a car and then meet people tomorrow, to me, is one of the coolest things about the car world.

27:09And you're not going to do that and come hang out with me or you or anybody different, but you can target those kind of people. The same way that you could if you buy a track car and go to track days or you go drive the same mountain roads or you go to cars and coffee or you join the Corvette club and, you know, get your jean shorts and your white polo shirt and your New Balances. Like whatever it is that is kind of the standard issue expression of that niche of automotive culture is one of the most powerful social tools that I've ever seen. The people within those groups are having an experience that is desirable and that needs to be fostered and available.

27:48And it is so easy to get trapped in your, you know, closed loop screen world, AI therapy, you know, just existence where you think there's no opportunity for me to go out there and have a different experience next weekend than I had this weekend. I'm trapped. And you're not because there is this way and a million other ways to go out there and experience the world in a much more interesting fashion. And I think it behooves people to hear like, huh, that is a way that this is happening that's different than just going out and meeting somebody in a chat room.

28:24Graham Stephan:What's the best car to get girls? Well, we're going for sushi tonight, I guess. G-Wagon. The girls do love a G-Wagon. They love a G-Wagon. I thought it would be a Range Rover. They love Range Rovers too. They do. My wife's had three of them. And I, so I, I literally started dating the girl that would become my wife the same week that I incorporated my rental car company out of my dorm room and bought a Gallardo. And so I have never used the cars in that form because that was the last first date that I went on. But I, uh, I would say that, you know, the, the brightly colored Lambos and things like that don't tend to work.

29:04But the bigger issue is like actually getting girls to even tolerate them, to be honest. And when I was selling cars at Lamborghini Atlanta, that was a huge thing. Like guys would come in like, how do I make my wife not hate the amount of money that I am spending on these cars? And, you know, the thing that I always said is let them drive them. go somewhere where they're going to be very safe, where it's on a highway, wide open, good visibility, easy access, no lights, no turning, no curbs, nothing. Because the reason they don't like them is that they think that if they engage with them, that they'll ruin them for you.

29:41If your wife took your Ford GT out and curbed the wheel, that would be an incident. Whereas if you took her up to a nice mountain road and said, look, here's how the thing works. I just want you to experience why I like it for five miles. And if you say, I want to pull over and get out after I'm going to be perfectly happy, but we're going to put you in a situation where it's very easy and I promise they'll love it. The cars are lovely. The first car my wife had driven was the $26 ,000 McLaren, uh, like in a long, long time, she's driven a lot of the cars, but like, she doesn't generally like it.

30:14And she loved it. She didn't know how the doors work. She got stuck in the car. Her friends had to call me, but it was, it was okay. And so, and she didn't run into anything. And I think that if you can create those kind of opportunities, that's what girls love is being brought into this thing that's fun in a way that they can sort of dip their toe in and experience. What car suggests that you're secretly wealthy?

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31:43Again, that is netsuite.com slash iced, or just click the link down below in the description. The guide is free to you at netsuite.com slash iced. Once again, that is netsuite.com slash iced. So guys, it has been over seven years since I first started working with Graham for free, by the way. And since then, I have invested, I kid you not, almost every single dollar that I've earned, which has let me buy my first house, including this warehouse that we're sitting in right now. But here's what nobody tells you. The more you build, the messier it gets to manage, which is exactly why we've partnered with Monarch.

32:13Graham Stephan:For those unaware, Monarch is the personal finance app that tracks everything. We're talking accounts, investments, savings goals, and spending. Like without exaggeration, I've spent years doing all of this myself, like tracking every account on Excel spreadsheets, on notes, one by one. It was extremely tedious, but Monarch pulls it all into one place. And honestly, it's what I wish I had when I was starting this out like 20 years ago. Most apps only tell you what you've already spent. Monarch helps you set goals, map out big purchases, and see if you're actually on track before it's too late to adjust.

32:45Graham Stephan:There is even an investment view where you can compare your portfolio's performance to the S &P 500. And, uh, looking at you, Jack. And it spots stuff you wouldn't even think to look for with AI insights, like has your spending actually gone up or is it just inflation? So write your own money story with Monarch. Use code IcedCoffee at Monarch.com to get your first year of Monarch Core half off at just$50. That's 50 % off your first year at Monarch.com with the code IcedCoffee or click the link down below in the description to get started. What car suggests that you're secretly wealthy? Well, generally older cars that are going up in value.

33:21Like if you see someone with a manual mercy or a, you know, an older Porsche that we know is rare and desirable, you know, you could see a sea of brand new cars and go, that dude knows what's up. because he's not experiencing the same kinds of risks of these newer cars. He's got something really, really special. Somebody pulls up in a Ferrari 550 Marchetta, you need to pay attention. They're going to give you some advice.

33:45Graham Stephan:So when you look for cars that you feel are undervalued, that will be going up in price most likely in the next few years, what set of criteria do you look for? So the biggest criteria is always the buying power of the people who thought it was the coolest thing in the world when they were late teenagers. So that means that 15 to 20 years later is the ideal window for the people that had them on posters to start putting them in their garage. So that is usually the inflection point. We're seeing that a little earlier now for a lot of factors. But generally speaking, that's what I would have said.

34:21You know, my goal in general car ownership was always to avoid depreciation. And I used to say the best way to do that is to look like you won the lottery 10 years ago. And if you look like MTV Cribs 10 years ago, your cars are not going to go down in value. They may break all the time, but they will not go down in value. And so that was the way that I started to build equity to be able to flip up, trade up and make some money. When I was growing up, I loved cars, like loved cars. And then I got a little older and I started to work a little bit more and I started playing more pickleball. My passions went elsewhere.

34:57But this last week, I had a dream that I was driving a McLaren and I woke up and I wanted one so badly. And I have never like, at least in the past, since I could afford a nice car, I haven't wanted one really that bad. Like I thought it would be cool to have a Gallardo or some sort of like cheaper supercar because like Graham says, owning a supercar in your 20s is cooler than your 30s. That's his opinion, not mine.

35:20Graham Stephan:Yeah, that's what I told him. If you're going to do it, your 20s, it's unlike anything else. When you're 30, less special. So I kind of sat on that and I'm like, okay, the only problem that I have is I do think that it is very douchey to be driving, especially if you're in your 20s, a McLaren or some sort of supercar. I just don't. Depends on the color. That's what I think. That is a factor. and there's also ways to do it right you know one of the myths that social media and content creation you know puts forward is that you need the biggest baddest latest greatest coolest thing to if you so if you want a mclaren it's got to be a 765 lt or whatever it is no it doesn't it can be anything and they they exist i bought one for 26 000 the other day a purple the other day?

36:16It's a McLaren? Yeah, it was a 2017 McLaren GT, a 570 GT, so the smaller GT. And I bought, I had to buy nine cars out of this collection, but when it all netted out, it was$26 ,000 for this purple car. And it was great. I drove it around. My 11-year-old drove it around the neighborhood. It was fun. Wait a second.

36:35Graham Stephan:$26 ,000 for a McLaren? It was in a flood. But it drove? I ran and drove. I sold it for$75 ,000 and the engine blew up 1 ,200 miles later. But he tuned it We're overly ready. Don't buy a tuned McLaren. Wait a second. So you're saying you could have sold Jack a McLaren for$70 ,000. Correct. Yeah. Well, if you happen to find another cheap McLaren, I've never been the type to think that I was going to actually buy one. But if the net cost after, let's say, three to five years, let's say I buy a 650S, which is what Graham thinks I should buy. Yep. Maybe after three, four years, it could only cost me like$30 ,000.

37:12Graham Stephan:I think less than that. That's a comfortable downside, given that the car is already 11 years old. Yeah. And so, like I said, look like you won a lottery 10 years ago. You probably will experience no depreciation cost. Now, like I said, when I said it earlier, it might break. And they do break. Yeah. And they can be very expensive. So the risk of having$30 ,000 in repair costs is much higher than the risk of having$30 ,000 in depreciation. But it's cheaper to own than just about anything new. Do you agree with the 650S? You think that's a good car? It's reliable enough? Absolutely. Yeah, they were so good.

37:50I sold them new at McLaren Atlanta. I worked there, and so I love them. 12Cs are a little spotty. Later ones, 13s, 14s, we're running one at Barrett-Jackson. I am going to be repping it and making a video about it tomorrow. It's a 2013 12C that sold last year at Jackson Las Vegas for$115 ,000, but it'll probably do a little less than that.

38:08Graham Stephan:So what cars today are on people's posters that you think 10 years from now will be collectible? So that was part of the reason why I stretched so hard to buy the Bugatti. Because, you know, people my age, I'm 40, grew up dreaming about Ferraris and Lamborghinis because they were much more rare. They didn't produce as many cars. And so that's why those are the cars that have continued to go up a lot. The people that are younger than me dreamt about hypercars. And so I believe that they aspire the way that I aspired to having a Mercedes ago to have Bugatti, Pagani, Koenigsegg, and then the hyper cars from, you know, McLaren P1, Porsche 918, La Ferrari and things like that.

38:44So I think that those cars are the ones that have nearly limitless upside in the way that Mercedes have 10x over the last decade. And so, you know, I think that's real.

38:56Graham Stephan:So why don't you think they've gone up in value more than I'm talking like Pagani, Koenigsegg, because it seems like it's really just those two that are kind of etching up a little bit. Well, they have gone up a little bit more predictably. The anomalies have been the less rare cars really in the last six months. We've seen this explosion of value in, you know, the special 911s that aren't actually that rare and the mid-engine V8 Ferraris, 360, 430, 458, 488, F8, as well as, you know, F12, 812. They've all just doubled in value. And so, you know, I think that when you look at the proper rare, proper significant stuff, they haven't moved quite so much, which I think is interesting, but they're just rare enough.

39:39They don't transact as often. So it's not like one sells yesterday on Bring a Trailer and then everybody on Autotrader just raises their prices so abruptly. It's a different situation where they sell at Monterey auctions. And those were all very, very successful. They sold$770 million worth of cars. So let's say I want to proceed with buying this McLaren. I don't have that kind of cash sitting around. I need to apply for a loan. What are the actual calculations behind what kind of car someone can afford? It's interesting because such a high percentage of these cars actually are financed. And there are different sort of seasons of how easy it is to do.

40:17And right now, it is quite easy to get loans. Now, the interest rates right now are a little bit higher. You're probably going to pay six and a half to eight and a half percent on a used car loan for something more than five years old. Also, they generally don't do branded title cars, so no salvage titles. So like my$26 ,000 McLaren was not a financeable asset, but that's one of the reasons why it was extra cheap. But the easiest way to look at what it takes is to look at an ideal application. So ideally, you're going to have a credit score over 740 that if it's anything beyond that doesn't actually help anymore.

40:48And you'll have comparable credit where you're not increasing beyond 50%. So if you want to get a$75 ,000 loan, you need to have had a$50 ,000 loan. And generally, you'll need to prove, have verifiable income that is beyond the loan amount. So it's different than the way debt to income is calculated on like a real estate purchase or something like that. And then, you know, terms can vary from anywhere from, you know, three years up to 12 and even 15 years on some much more expensive cars. And then they'll want the loan to value to be between 60 and 80 percent. So at least 20 percent down. Now, obviously, very few loan applications line up perfectly with all of those.

41:33And so you can sort of make up for one by doing better in the other. So if you have a higher credit score or better comparable credit or more money down, you can overcome having a shortcoming in the other criteria.

41:47Graham Stephan:I remember something crazy, by the way. When I was 24, I wanted to buy this Lotus Exige S240. And it was a gorgeous car. I saw it immediately. I had to have it. And I had never had a car loan before. And so I thought, oh, this would be easy. I'm just going to put like$20 ,000 down. Because I wanted to like both build my credit, but also it wasn't that expensive to finance back then. I think this was like 2013 or 14. And so I applied. I got denied, which is crazy because they said that I never had a car loan of this caliber before. And they had told me instead, if I had gotten a loan for like a Miata or a Honda S2000, I could work my way up.

42:30Graham Stephan:And then the dealer said, oh, we'll finance you. But I remember the interest rate being like 15 percent. It's like 15 to 17 percent is their financing. And I ended up just buying the car in cash. But I thought that was so stupid that you have to like build your way up these cars. I had no idea that was a thing. It's a thing. Well, and it hasn't always been a thing, but it very much was a thing in 2013. And it's, again, important to zoom out a little bit and understand what's going on in the world where we're rebuilding from the financial crisis of 2008 to 2011. Really, it was still kind of a big deal.

43:06And so at that point, yeah, banks were very, very few and far between that would take that kind of risk and just being an older car. and yeah, because a few years earlier in 2006, I got a loan for a Lamborghini at 20 years old by just telling the bank how much money I made and they didn't check anything just like they didn't check real estate mortgage applications or anything like that. It was just, they call them liar loans or stated income loans. And so it was too easy. And then maybe it got a little bit too hard. And, uh, and now I think we're kind of at a happy medium where the deal needs to line up somewhat, but you know, look, if you've got enough money down and you can't really prove your income or you've never done one, you can probably find a way.

43:44Graham Stephan:So what is your overall thought right now in the car market? I think that there's a lot of cars that are legitimately not desirable by the normal standards of rarity and significance and condition that have gone up in value a lot. And that's troublesome. There's people that are saying that there's market manipulation afoot and things like that. And I don't actually believe that's happening too terribly because nobody's going to go out there and try to manipulate the market on 488s. That's just not that they may, you know, there's 20 ,000 of them. Nobody cares. And so I think that it is genuine money, kind of dumb money.

44:20These aren't going into big collections. These aren't people buying their fifth Ferrari that are coming out on bring a trailer and doubling the market because they just know that they're only overpaying by one bid. These are real buyers. And that seems fragile because if you offered every owner of a 488$550 ,000 for their car, they're all going to say yes because they all paid$220 ,000 like two years ago. So that I don't have a lot of confidence in. The really rare and significant stuff I think is bulletproof. I think there are so many factors, like we talked about, these big family office, mega wealth people going in.

44:58The transfer of wealth is unbelievable right now. I asked Super Chat GPT how many Americans are going to inherit more than$2 million this year, and it was 55 ,000. So when you think about like the number of what you would say dumb money transactions on bringing trailers, maybe 200 cars have sold in ways that don't exactly make sense. That certainly could be explained just by that factor. So when you add that to more debt available as people are leveraging up their collections and getting more cars, as well as just this, I mean, obviously the IPOs of some of these giant companies are printing crazy.

45:34I mean, I think there were 600 people in Austin that made more than$100 million on the SpaceX IPO. So, I mean, that's all of the demand for interesting car allocations to that area in Texas.

45:47Graham Stephan:What's interesting is that it seems as though the car market is tracking the same, just put this together, with Pokemon prices. I kid you not, when you look at the graph of Pokemon and then it dipped, we saw a similar dip in 2022 when the market corrected. it's going back up and what do cars do they're going back up too i'm just saying i believe the two could be correlated in some way or another and we have to dig deeper to see what's driving this is it euphoria is it the stock market is doing well and people are overconfident is it people investing in this because they think it's going to be the next big asset class and so therefore they could spend more on it justifying this is like okay i'm gonna it's going to be an investment.

46:29How old are Pokemon cards? 20, 25 years old? Yeah. Okay.

46:32Graham Stephan:It just had their late 20 something anniversary. So it's fair to argue that the people that grew up enjoying these things are now in a much better place and can afford to engage recreationally. Sure. You know, that would also follow the 20 year old exotic cards are going up in value, which they very much are. And so it's probably sound. What else would trend that way? Certain video games potentially. I mean, You could say that Grand Theft Auto getting popular again, you know, could correlate to the same people that were playing the early versions of the game and are excited again. But yeah, that's a thing.

47:09Part of me thinks that it's just AI is going to disrupt the market so much that it's even hard to know which stocks are going to end up being the winners and which one's the losers because companies can now be built up this quickly. Companies can be killed this quickly if they don't adopt AI. And so maybe all of these people that have all of this money on the back, like, I mean, the rich are getting richer. They don't know what to do with their money. They don't necessarily want to buy stocks at this point. They want to buy something that can't necessarily be affected, duplicated, replicated by AI.

47:38So maybe that's... A tangible asset. Yeah. If the wealthy continue to get wealthier, then something that cannot be bought with like, you know, like traded on an exchange or something. Something like a collection. It's a physical thing. You know what I was thinking? I wondered how much would it cost to purchase a poster or some sort of like collection of every single autograph of every single president and apparently the autographs themselves are not that expensive if you collect it put them all together in a nice display it could actually be like a profitable endeavor I think that that could actually be a decent investment similar to Pokemon cards because there's like somewhat of an art to it there's there's you have to work kind of hard for it.

48:21Graham Stephan:So what's so funny is that I looked into autographs, certain autographs. It's really hard to authenticate each one. So if you were able to do the work and authenticate each autograph, then I think you would have something there. But that, like, that would be really, really, so really. In your research, how much would it cost to get all, you know? The cost would be anywhere between, like, $30 ,000 and$80 ,000. Really not that expensive. A lot of presidents' autographs are just going to be, like, a couple hundred bucks. And then some of the older ones, like an actual George Washington autograph, can be anywhere from$5 ,000 to$10 ,000.

48:55Okay. And have you found any examples of someone selling their collection? No. Interesting. But that would be, like, you could probably put it all together. Let's just say, worst case scenario,$100 ,000. Some guy who's got a billion dollars or, like, hundreds of millions, tens of millions, that's, like, a history fanatic or, like, an America fanatic, they would probably pay a few hundred thousand dollars. I feel like to have every single U.S. president, how cool is that? Well, in the car world, there's always this like rich guy in Dubai idea that like somebody's going to swoop in and buy my car for way more than it's worth.

49:26Graham Stephan:Some guy in Dubai is going to buy it. Is going to buy it. And so, you know, the person who is going to pay two or three hundred thousand for something that can be assembled for eighty thousand, maybe that is the convenience fee. Right. That he could. The authentication is kind of the main obstacle. Right. But if you paid somebody one hundred thousand dollars as a broker to go out and buy it, they could they could do what you did. Right. So sometimes things are worth what they're worth on their own merit, and then sometimes they're worth relative to what it takes to produce them. And so if there is theoretically a supply of these things, then you're going to make money from the convenience and the artistry of it and how it's displayed.

50:03But I think it's a fascinating idea. More of an arbitrage than a profit, but I like it.

50:08Graham Stephan:So what do you think of the new car market right now and the new cars going up? Very unreliable. And so you're dealing with a lot of cars that don't have as much longevity, cars that are built with different priorities in mind, and they are not selling well. So new car sales across almost all marks are down. What make is doing it right? Porsche is certainly doing it right from a curation of the demand of their customer base to the extent that they're getting pretty exasperated with having to buy a Macan to get a GT3 RS or all the things that they have to do. But when it comes to really maximizing profit, Porsche and Ferrari are doing a really, really good job.

50:45Um, Ferrari has sort of built, especially over the last 25 to 30 years, a customer base that knows that they're not allowed to say no to anything if they want to maintain their status. And they have done probably about as good a job as anybody short of maybe Hermes or whatever with these purses to make sure they extract as many dollars as possible out of all of their customers. So like the unit profit is unbelievable that those two are definitely doing it right. Although you would say that most of their latest offerings were less desirable than the one. There's less enthusiasm for them, but they're still selling them all.

51:22How do you think AI is going to affect the new productions of cars in the next five or so years? You know, it's so easy to say that AI is going to flip over the whole sandbox and that nothing in life is going to look the same five, 10, 20 years from now. And there's an easy argument to be made that that's possible. Life doesn't feel the same as it did two years ago as AI has proliferated and improved. But I don't necessarily think that a lot of the stuff that we just enjoy doing is going to change. Are we going to have more of an opportunity to do things we enjoy? Probably. You know, if I was going to start a business today, it would be in recreation.

52:03We would go under the assumption that as unemployment skyrockets and as we have, you know, potentially an age of abundance or potentially, you know, we're all just waiting to die. I think that, you know, sports leagues for old people seems like pickleball does seem like the space, right, for entrepreneurism and opportunity. But I think in the car world, we're going to see a lot of efficiencies in production. We're going to see a lot of deficiencies in creativity and in really relating to your customer base. So you're going to have something that makes sense on paper, but really isn't what anybody wants.

52:41And, you know, I run into this issue anytime I get a car that's too good. So I bought a 2014 Bentley Flying Spur about three months ago, and it was a$220 ,000 car, and I bought it for$15 ,000 with 100 ,000 miles on it. And it was a rat piece of junk, but after about$10 ,000 invested in it, it's amazing. And I love it. And it's so comfortable and easy. And I had two big trips last week. I drove it 2 ,500 miles. And I should have driven my much more interesting cars that I don't mind putting miles on, but I don't because I go out there and there's an option of sitting in this massaging seat, comfortable Bentley with working air conditioning and good visibility, and I just drive it.

53:21And I'll sell it because I don't want cars that good because I love terrible cars. I enjoy the masochism of driving uncomfortable, interesting cars that allow me to feel driving. when do you think we'll get to a point where different car makes will intentionally decrease the quality or increase the rawness of the cars that they produce because we were speaking to someone recently i think it was steve hamilton that like all of these luxury car makers or you know super car makers hyper cars they're all kind of becoming the same thing where you're just like throwing as much horsepower in there every car make can now produce a car that goes zero to 60 under three seconds.

54:01So like at what point are you going to see car makes try something totally unique or intentionally kind of inhibit some aspect of their car so it's not too perfect for the real car enthusiasts?

54:10Graham Stephan:You know what this reminds me of? I know we've seen this when you look at old McDonald's and old Taco Bells and like Burger Kings, they used to be such unique buildings and now they're all the box. Everyone has just done the box because when they move out, they could just move a new one in and they realized it's too expensive to build out these custom McDonald's with things. That's how it's kind of coming with cars, it seems. And really quick, you got to be honest with me here. Somewhere in your phone is a notes app with at least three business ideas in it. And those ideas could turn into real businesses, but you're just held up on the first step.

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55:12In fact, before I was working with Grim, I set up multiple different Shopify dropshipping stores. I tried every side hustle imaginable. Shopify dropshipping was the best, and I just kept going back because there was literally no competition. It is the best way to create an online brand and start seeing real sales coming in.

55:28Graham Stephan:Shopify powers millions of businesses worldwide, from household names like Mattel and Jim Shark to everyday people launching their first store. So if you're ready to hear the of your very first sale today, head to Shopify.com slash ICH to start your free trial at Shopify.com slash ICH. One more time, that is Shopify.com slash ICH to start your free trial today, or just click the link down below in the description. And they realized it's too expensive to build out these custom McDonald's with things. That's how it's kind of becoming with cars, it seems. And that may be true. So it's interesting because we've seen some efforts in that way.

56:03We've seen Porsche go all manual on certain cars and those cars sell out instantaneously. They are certainly demanded by the audience. We saw McLaren just released a very limited run, very expensive, nearly$2 million manual car that still uses their twin turbo V8. And then we saw Ferrari want to make a manual, and they sort of couldn't because the cars have gotten so advanced technologically that it wouldn't have worked well with the E-Diff and with the lightweight internals that they're building these cars with. So they made one that they call the Manuale, and it's the 12-cylindry. It's a stick, but it's fake.

56:40The gear shift is essentially buttons where you move it, and it tells it to go into first and then into second. And there is a clutch pedal and it is actually programmed to stall, but it's very patronizing to those of us that love manual cars because like we love them because of the purity and the efficiency and the simplicity mechanically. And, you know, look, I think younger kids care a lot less about manual cars, but we care about them a lot. And I think it's interesting to see those different effects that we may be in some cases like Ferraris just too far past their ability to give people what they actually want.

57:16And you may just run into sort of the wagon dilemma where they just stop existing. So enthusiasts always scream, we want wagons, we want wagons. And they don't buy them new. They buy used cars. So, you know, I love manual V12 cars, but I don't buy new cars. So no, they don't care about me. My opinion does not matter to these companies. And so if all we're willing to do is buy them once they're depreciated 80%, then we really don't count. Right. Your opinion doesn't matter in that case.

57:48Graham Stephan:You know what I think is going to happen? And people are going to be so pissed off at this. But I think we're going in the subscription revenue model where do you want your car to drive more than 80 miles an hour? That'll be$10 a month. Do you want heated seats? That'll be$15 a month. Do you want to unlock your car? Do the remote start? They're already doing that. That's going to be$15 a month. Do you want Sentry on your car so you could see it? That'll be$20 a month. And then pretty soon you could pick and choose every little feature and add a price to it. Everything. Windshield protection is now a thing I got to pop up on my Tesla app.

58:25Graham Stephan:Do you want windshield protection? $23 a month. What? Yeah. That's expensive. Well, they've always had insurance plans for windshields. And so it's not like they are actually keeping the rocks away. At that point, that's an insurance policy. Yeah, yeah, yeah. But that sounds expensive for windshield protection. No, because replacing the windshield is$2 ,500 on a Tesla. It's a lot of money. But my point being is I think we're going in the subscription revenue model where you want remote start, five bucks a month. And pretty soon it's like - It killed cable television. Pretty soon it's going to be like you're going to spend more money on the subscription than you would on the car payment itself.

59:07Graham Stephan:That's where I think it's heading. There's a good chance of that. Yes, potentially. And we're also going to get eventually into the era where it's pure coach building, where there's just a chassis and then all you're paying for is the body, the interior and the infotainment. Because beyond that, every car is the same through electrification and things like that. If someone has a minimal budget, but they want a great car, what do you think they should buy? And I'm talking minimal budget, like let's say a few thousand bucks. At a few thousand dollars, you're not really paying for the car. You're paying for the last 18 months of maintenance.

59:42So you're going to try to find a car that has recently had brakes, tires, plugs, coils, fluids done because that's, you know, when you start trying to now buy a two or$3 ,000 car, that's what matters. And so documenting that as a seller, that's how you sell them is you take the fear out of buying a cheap car like that. When you start thinking about trying to, we've done this with, you know, various car treks and things like that where we'll buy, you know,$1 ,500 cars and they're all junk. Like, especially if you try to get an interesting$1 ,500 car that's not a Honda or a Nissan or whatever. So, yeah, they're junk, but they're a whole lot of fun.

1:00:20We bought an SLK, an Audi TT, and an old, old Supra and drove them from Hoovy's house in Kansas all the way down to Galveston. And then I drove my TT into the Galveston Bay. And it drove right out and I drove it home 14 hours. So you can make them last sometimes, but not all. If someone wants the cheapest possible car over the course of the entire ownership, what would it be? In terms of maintenance, reliability, like this car could last them 40 years. Like what is a bulletproof cheap car? Well, the cheapest car to own is always the one you already have. And so the way to minimize your ownership cost in cars is to love the cars that you have enough to keep them.

1:01:01And so to be willing to endure driving it that long. When you start thinking about trying to put two, three, four, 500 ,000 miles on a car, that's getting harder and harder because there's just a lot of issues with cylinder linings and lubrication that are a lot worse now than they were across all manufacturers a decade or so ago. So I don't actually know that I would start with a brand new car with that aim. It would probably be a Porsche, to be honest with you. I think Porsches are the best built automobiles right now. They're not the most interesting. But if you actually wanted to put 250 ,000 miles on anything interesting, yeah.

1:01:41Otherwise, your normal Hondas, Toyotas. You'd say Honda and Toyota are the most reliable cars. Probably. This is not my expertise. I don't think about these problems often. But yes, historically speaking, if you look at consumer reports and all these things, that tends to be the case.

1:01:55Graham Stephan:And so what cars today are guaranteed to be financial disasters? Virtually any new car that you can walk in and buy is going to depreciate. And usually in a fairly predictable measure, 1 % a month is always the plus or minus for depreciation. If you look at lease residuals or anything like that, like a good lease is less than 1%, including taxes and everything a month. That's pretty rare. We are seeing unbelievable depreciation in electric cars right now where Teslas and, you know, all the electric European cars are just, in some cases, sub 50 % residual value in 12 to 24. Why is that? Well, lease incentives is the reason for that because it's so cheap to buy new ones.

1:02:43You know, under Obama, after Cash for Clunkers and all these things, where he was really trying to get some traction for electric cars, where we had lease deals on Nissan Leafs for$100,$150 a month. Everybody bought them. They sold a million of these things. And they had like 80 miles of electric range. Well, the problem is if a brand new car that was$35 ,000 is a hundred bucks a month, how much is a used one worth? Well, a hundred dollars a month is the payment on like five grand. And so they're worth like$5 ,000. And so in those cases, you literally had like 80 % depreciation on these cars inside of 24 months because there was zero demand.

1:03:28The only people that wanted to use one just didn't have enough credit to get the$100 lease or the$150 lease if you wanted heated seats, you know, that kind of thing. And so, you know, those are the cars. Yes, modern electric cars are guaranteed to depreciate to nothing. Who is even buying new cars in 2026? Like I, in my entire life, the only new cars that I have ever known about being purchased is I stupidly bought my Tesla new. And Graham, you bought a new Tesla. Yes, but because it made so much financial sense. Right, right. But I'm just saying you like new cars. Like, oh, I guess Jeremy. Jeremy bought a Ferrari, right?

1:04:07Was that new?

1:04:08Graham Stephan:No, that was used. He bought them both used. Who is buying new cars today? In some cases, they're buying new cars because the slightly used ones that still have the features and the reliability that they think they want are too close. because there's not as much initial depreciation because of used car leasing, because of extended warranty costs, because of a lot of factors that manufacturers can do to short-term bolster the value of depreciating cars. And so there are situations where it just makes more sense to buy something new because the amount that you're saving, let's say it's a lot less than 10%.

1:04:42So certain things like Escalades and GMC Yukons for a long time and Tahoes didn't depreciate all that much. So really, you didn't pay that much extra to get a new one. And most of the V8 engines that they put in the cars in the last decade are going to fail. And so it was really, really important to have a warranty. And so those are calculations where people can very rationally end up buying a new car. There's also situations where you plan to rely on goodwill from manufacturers and lemon law risks and things like that that can make sense to buy new cars, even when you naturally wouldn't. But in reality, there is enough demand and leasing is one of the biggest things about it, where people are leasing these cars because they want to have something new.

1:05:23The same way they want to have a new phone in two years is that they like to just trade in and out and they insist on having the latest, greatest thing. And they consider that to be a reasonable expense amongst their entire financial portfolio.

1:05:36Graham Stephan:What's crazy, I was looking at upgrading my Tesla and getting a new one. And when I'm looking at the used values of Teslas right now, I'm talking about the new redesigns, like 2024 and newer, they're selling for almost the same price as a new one would cost. In Model Y or? Model Y, Model 3 performance specifically, and the Model X and S have now shot up in value about 20%. Because they were discontinued, yes. And look, Tesla is an interesting company and we have no idea what the future holds, but I, uh, I think it's going to be a fun one to watch. Uh, you know, whenever you're talking about trading from, you know, your current car to a newer version of the same thing, you have to value those marginal gains so much.

1:06:19So people come up to me all the time and they're like, you know, are you sad that the cars that you love aren't made anymore? No, I'm not sad. I like having goals where the goalpost doesn't move. I like having a dream car that is its own thing. And I don't have to think, oh man, I hope they don't add car play next year because then I'll have to buy the new model year. No, none of my car radios work, but I don't care. I like to have a finite target that I can aim for and strive for. So what is your dream car? My dream car really is a Marcello go. And when I bought my first one, I had like a proper identity crisis of like, well, why do I have to keep going to work?

1:07:03I mean, I still owed 12 years of payments on this car, let's be honest. But I was like, that was the dream was like to have this car. And I've got one. And I've had nine since then because I love them that much. You know, when that was that was the dream car. When we really started to gain some traction with VinWiki and I knew that I needed to like bear down and really, you know, grind at this stuff. I said, you know what? I need the only way I'm going to do a good job of this is if I have a stupid car goal. So I was like, I'm going to buy a Bugatti. And I, uh, I, I was like, well, that sounds like a stupid idea.

1:07:34How in the world am I going to buy a million dollar car? Uh, but having that as kind of this background dripping faucet of a motivating goal, uh, you know, made me work harder. And when I bought it, I was like, well, darn it. You know, what am I going to do now? Cause I don't want a Valkyrie or some of these other great cars that people are well justified in wanting. I'd like a McLaren F1, but I don't really want to have enough money to have a 30, 40 million dollar car because that has other issues in your life that I'd prefer to avoid. So I don't know. I'm beyond content is the answer. And I love the stuff that I currently have.

1:08:11So what should people look for when they're buying a used car? Generally, just getting a good inspection is enough. And it's really a lot simpler than people think we use a company called Lemon Squad where they can get out and inspect a car usually within like 24 hours, no matter where it is, it's kind of a gig economy solution. Um, but you know, if you have time, take it to somebody who really knows these cars and have it looked at, it's not that expensive and it saves you, it more than pays for itself in the negotiating leverage to be able to say, well, I now know that this professional has evaluated that it needs this, that, and this, and now I should owe you less for this car.

1:08:47And they can't argue with you because you've proven it. How much should an inspection cost? I mean, Lemon Squad can be, you know,$200 or less. They can do it live from your phone if you need it done right then for like 60 bucks. And so you can just FaceTime a professional mechanic who will let you walk around the car and say, all right, open the hood, look at this, show me this, you know, and. I have problems with my cars that I don't, I'm not trying to sell them, but I would love to figure out. I took it to the actual shop and they couldn't figure it out. Call them 60 bucks. Holy mackerel. How accurate is that?

1:09:19Because I feel like the mechanics actually go in there and they like -

1:09:22Graham Stephan:It's the combobulator. Yeah. That's what's broken on the car. But they open up the combobulator and they're able to see all the things, the widgets in the combobulator to know, oh, that thing is broken. Well, my Uber today on the way to the Atlanta airport had a roaring differential. I mean, it is going to grenade momentarily. And I'm not going to tell this guy that the way he earns a living is like that he desperately needs. Why wouldn't you tell him? I would tell him. Oh, because nobody likes to hear that kind of thing. I don't know. Maybe I should have told him. I would have told him. You could message him.

1:09:56Graham Stephan:Because what if he's in the middle of a ride and his whole thing goes in the middle of the freeway? He wasn't unaware. The noise was profound. But maybe bad hearing or something. Anyway. Okay. I'll send him a message. Scrooge tires, you know. Yeah. Sound system. I am not a mechanic. I pay mechanics. But it's not that hard to diagnose cars. And they could at least narrow it down to the three possible things that add some AI and you're going to have a good day. So, yeah, by all means, somebody can remote diagnose your car. Where do you find the best deals? I find the best deals in situations where I am not competing with people.

1:10:35where I will find that a car is available in a circumstance that would alienate most buyers. So my$26 ,000 McLaren, once again, it came with nine cars that I had to buy out of an estate. And so I bought three Corvettes and a Mustang and an R8 and an I8. Were they all flooded? This guy was real high up at LabCorp and he was their CIO. And he had retired and started watching VinWiki videos. and it became a huge fan. It was like, Ed buys these terrible cars. I should do that too. And he bought them all. I mean, he bought a warehouse full of these things. And so then not because of that, I got connected after he'd passed, unfortunately, because of cancer.

1:11:22And so his wife contacted a local Kia dealer asking how to sell all these salvage title exotic cars. And that person only knew to ask Ed Bolian. So he sent me a message and said, Ed, what do you do? And I told him, I said, well, generally you tell me what they are. You ask for a lot of money. I offer a little bit of money and we meet right smack dab in the middle at my original offer and I come get them. And he goes, oh, okay, we could do that. And so he asked for a bunch of money. I told him what I thought they were all worth blind. I don't need any information. I'll tell you what I know they can't be worth less than.

1:11:55And I, uh, and he said, all right, if you'll wire the money and come get them, you can have them tomorrow. So I get a bunch of trucks. Holy crap. We got all nine cars. I actually bought three, and then they were so pleased with that, I bought the other six.

1:12:07Graham Stephan:Wait a second. So are you going to keep any of the cars for yourself? I sold them all. They're already sold? Yeah. I gave one to my editor. He took a new job, and as a parting gift, I let him pick, and he chose a Corvette. I had already sold a couple of the R8 and the I8 to friends. You didn't call me. Well, they're all going to come up for sale in November, so they're going to come back around. Now the deal's done. There you go. Now the deal's done, man. Well, and I actually, I thought a lot about that because I get endless requests for people like, hey, help me buy a car. And AI has not perfectly solved how I scale myself in that way yet.

1:12:44And so I was like, all right, let's use these cars as an experiment to see how this would work. Because I would love to just have, I don't know what the best platform to use, a Patreon where you pay$100 a month. And I love all my cars. I'm not really looking to buy anything, but I get opportunities to buy something every day. I'm just going to put them all in a chat and you guys can just go buy them. I don't care. I don't need to make money on them or anything. You're paying for the access. I'm not making any representation of the cars other than this came across my desk. Here you go. And so I kind of did that.

1:13:19I sent a list of these cars out to some friends. And like the first one was like, well, what recourse do we have? And I'm like, none. it's a branded title car in you know north carolina like no it's we bought you know i was like you cannot buy it because i'm gonna buy it anyway but like that's not really how this is supposed to work and then another one was like well you know what is your mechanic going to do to it before i buy it for the price that i've already agreed to i'm like nothing it's it's very much as is and so it was and they were not they just don't think about buying cars the way that i do.

1:13:54And they shouldn't because it's stupid. And I understand that like, you know, it's not for everyone. And I'm trying to sort of figure out, I don't actually think my idea there would work because I think everybody would end up taking risks they probably shouldn't and winding up with cars that are worse. And sometimes they're better, sometimes they're worse. But you know, like when I bought my cheap Bentley, I drove it back and the guy had badly welded a wheel and it broke, but I carry a big box of everything that you could do just to get somewhere. And so I've got a JB weld this wheel in a parking lot of a loves and then air it back up.

1:14:29And nobody's going to do that. They're going to end up with a very expensive tow bill from somewhere in West Georgia that they don't even know where to take it. And then when it shows up, they don't have any paperwork yet to process. And I enjoy that mess because I've kind of built out the way it works, but it's not like a silver bullet to great deals. Got it. Okay. That makes sense.

1:14:49Graham Stephan:But please pass. I'll be happy. Please keep us in mind. You got it. You get a cool Audi R8. Yeah. I like the R8. He likes the I8. I'm iffy on the I8. So the R8 was like mid fifties, but it had 106 ,000 miles. And again, totally unknown, been sitting for a year, you know, by the time they got around to executing probate and selling stuff. Uh, you know, there was an I eight, but you know, we, fortunately it was actually a really nice car, but we had to buy it thinking it's going to need a battery and all the things which could be in, you know, in, how much was the I eight twenties? Oh, I think. Yeah.

1:15:26Graham Stephan:I feel like I take the risk. Anything in the twenties, I'll risk. So if you bought a car and it was 25 ,000 bucks and maybe a great one's 60, but you got to spend 20 or 25 ,000 dollars and you still wind up on it. And, and then, so you got 50 grand in a branded title car and the car's down for six months. And you're like, why did I do this? And you got to pay cash and you got to pay before you see it. You know, it's not, it's not just an assembly line at the used car factory of all these great deals that just happened to go underwater at some point, 10 years ago that happens sometimes, but a lot of times you're like, Oh wow, this thing doesn't work at all.

1:16:04Okay. What's the most you've lost on a car? I've never lost money on the car. Not that, I mean, cars that we like destroyed for production that were very inexpensive, I guess I lost some money on it. I lost one when Freddie sold it on my behalf without my permission, but I let him know that that was unacceptable. My wife's daily driver cars have lost money, I guess, but not on like a car that I buy for fun or for content.

1:16:29Graham Stephan:So how could other people then not ever lose money on a car? generally know everything that can go wrong about a car and create a margin between what you'll pay and what that could manifest as. So I have enough, you know, the worst thing that could happen on a $26 ,000 McLaren is that the engine blows up, which only happens like 40 % of the time. And so I was like, well, you know, I could buy an engine for probably 30 to 40 ,000 bucks. At that point, I'm going to retail out of this car. I may not make that much, but it'll be okay. So it's the ability to make the right offer and then put that offer to the right seller who, for whatever reason, isn't willing to or able to engage in a more competitive sales process.

1:17:14Why doesn't Whovi's Garage follow your advice? Because it's not that entertaining to watch things go really, really well. We watch Tyler because he goes out and buys the cheapest example of whatever when the next cheapest would have been a good car, but he buys the worst one. so we can learn all of the bad things that would happen. And that is a really entertaining product. And then he spends money fixing it, and then that becomes a problem. And then he's the dumbest automotive channel in all of YouTube that we've come to know and love, and it goes really well.

1:17:42Graham Stephan:What do you think of online auction sites, like Bring a Trailer and Cars in Bids? They're wonderful. They operate on a little bit of a new fallacy that most cars are not actually 7 - or 10-day liquid. They have been for the last 7 or 8 years, because of unique things that, again, are macroeconomic trends where there's a lot more liquidity, there's a lot more enthusiasm and things like that. But they sort of represent a very, very hard to quantify reality. There are very good ways to liquidate cars. It is important to engage with them in the right way, to represent your car the right way, take the right pictures, get the right inspections done, do all the stuff beforehand to make sure that your car brings the most money.

1:18:27But the fact that they have solved the critical mass attention issue, that there are enough bidders and things like that on there, you know, to me is awesome. We've had a lot of sponsors on VinWiki of these different upstart car company or auction companies. And it is, it's really, really hard. Like it's probably the most expensive cost of user acquisition that I've ever seen in the automotive world. Um, you know, short of finding a brand new Rolls Royce buyer, I don't know that you could have to spend much more money. I think right now, based on what I've seen, it's probably between$15 ,000 and$20 ,000 of marketing expense to acquire a true retail value winning bidder that has seven days of discovery on a car remotely.

1:19:10When we started doing it with another one, it was probably$5 ,000. And I can see that based on what they spend with me and the number of really successful things they have. Now that's discounting the customer lifetime value, which is significant because most people end up buying five, six, seven cars there. It becomes a habit. So I think they can break even or beyond that if they're only making a five to seven percent, you know, fee on top of that. But yeah, it's a very competitive space and no one's really been able to do it without a preexisting social audience.

1:19:41Graham Stephan:And when you buy a car, how do you effectively negotiate? Like what are the strategies that you use, not just coming up with the price and this is what it is, minus 40%. How do you schmooze? So that's the problem is most people think, oh, I'm just going to lowball them. I'm going to give them an unqualified, low, casual offer and just see what they say. Like, oh, you're asking$100 ,000. Well, you'd take$60 ,000, right? No. But if I come in and I'm like, look, I totally understand that$100 ,000 is reasonable. And if you can find someone who wants that exact spec right now and can manage to either get it finessed or pay cash, likely have to pay cash because of all these circumstances that makes it more desirable to me and doesn't require any reconditioning, then sure, that makes sense.

1:20:26But look, let's be honest. I know that it needs these three things because all of them need these three things. And I'm not going to make us go through all the hoops and get it trucked across town to get it inspected to prove it. I am willing to fully commit at a number that accommodates for the risk that I'd be taking. And I'm not going to need anything beyond this. If you say, yes, I'm wiring the money right now. I am fully committed to this offer. And it is less than I know you want, but it'll be the easiest transaction you've ever had. And I'm never going to call you unless you want to know what happened to it.

1:20:57And if it blows up on the way past your mailbox, it's my problem. They're going to go, wow, that sounds like a really nice way to sell a car. And this guy really seems to know what he's doing. And the only way he's going to talk me into paying more is like, well, I can prove that it doesn't need this, or I can prove that it won't need that. And then we start to have a little bit of a different discussion. But that's how you negotiate. You negotiate from a point of 100 % commitment.

1:21:23Graham Stephan:Do you do this over the phone or in person? And what's the difference between the two? Usually over the phone. If you negotiate in person, you're too committed. Like they know that you've driven, you've traveled. Like you're not going to go home without this car. So you need to know when, so I like to buy them cheap enough that it's reasonable to do it blind. So let's just say I'm browsing Facebook Marketplace because this is what I've been doing. And it's not worked. I've been looking at really good deals for like 2022 to 2024 Tesla Model S and X. And I know exactly where they sell. I know the market really well based on the mileage.

1:22:00Graham Stephan:And usually what I'll do is I'll lowball 10 to 15 % below. But I'll send them a message saying, hey, I'll pay you this. And if you agree to it, I'll come and pick it up right now. cash buyer, but everyone said no. So am I doing it wrong? Should I be getting a phone number first? Like, hey, I got a few questions. Would love to chat over the phone and then pitch it over the phone. Do you think that makes that big of a difference? Well, I think you need to think about why someone is taking a fairly new Tesla to Facebook marketplace. Facebook marketplace is where you go buy some real junk. And I like that.

1:22:35I spend a lot of time there, but I don't go there thinking like, I'm going to buy a great car today. I'm going to buy a 200 ,000 mile Maserati that runs on half the motor. That's what I'm going to do. And then I'm probably going to, I know I'm going to have to push it somewhere, sometime. If they're advertising a 2022 Tesla on Marketplace, they owe too much money and they have to get that amount of money in order to pay their loan off. That's the only circumstance where they're going to have it. Otherwise, it would have taken...

1:23:03Graham Stephan:I see somewhere it says like upgraded to a Cybertruck, selling this Because they didn't want to take the trade allowance. Yeah. So if they they're not willing to take what it's actually worth. So they're out there looking for that rich guy in Dubai or that rich YouTuber from Vegas to come in and to come in and overpay for it because they have this hope that they're going to get that last dollar out of it. So if I want to buy a private party specifically, because there's no sales tax in Vegas for private party, used car transactions, where do I go? That's a fun wrinkle because that might motivate people that they think that they're not getting.

1:23:37Because you do get trade credits on dealer transactions, correct? So they've given, they decided that even 7, 8 % more than what I was being allowed on the trade was not enough. so private parties i mean you can sort by private party uh listings on all there's so few of them which is weird it is strange which means that dealers know they have to pay more and so we had that in georgia 20 years ago um it was only sales tax on new and used through dealers and so it was a huge disadvantage and the dealers lobby hard to have sales taxes instituted on private party transactions to avoid this dilemma.

1:24:18But it does create this spread of like you're buying cars for less at dealers than you would pay for a private party because it still makes sense.

1:24:26Graham Stephan:Yeah. So when you worked at a Lamborghini dealer, what do the best customers do different from everyone else? The best customers focus on the value delta of the way that they're experiencing it to make a hobby that they really like most sustainable, in my opinion. Now, the customers that do things differently, that just come in and trade every six months for whatever it costs because that's the adventure they want to go on. Or they come in and they spec$250 ,000 worth of options on a car because that's the way that they feel that they've expressed their love of the automobile most are also right.

1:25:01But when I put the people that I admired and I wanted to emulate in my own ownership, it was the people that were really conscious of the economics of it. And that's the reason they asked me to come work at the store Because, you know, in working in the rental car industry, I knew exactly how much it cost to put every single mile on each of these cars, all factors in, because that is the only way I could know if I was ever going to make any money. And so they wanted that applied to the broader scope of like multi-year ownership so I could help people counsel through the inevitable depreciation that was because I started there in 2009.

1:25:36So these were unsellable automobiles.

1:25:39Graham Stephan:How much wiggle room is there actually in price on a Ferrari or a Lamborghini? That totally depends. Generally, the spread between invoice and MSRP on most new cars is going to be between 8 % and 15%. There will be periodic incentives, rebates, things like that that could go beyond that. That's on new cars. Most used car dealers start from about an 8 % to 10 % margin and will end up making 1 % to 3 % net after everything's paid out. Now, that doesn't mean that you can negotiate all of it away because they actually have to generate some gross profit to keep the lights on. And so generally speaking, wiggle room is probably going to be on the order of 5 % to 20 % depending on the car.

1:26:21What percent of the people that bought Lamborghinis at the Lamborghini dealership would you say was a financially irresponsible move for them to purchase that car? So that would mean that they were buying beyond what they could likely sustainably afford because you could say that someone that I knew was going to lose$100 ,000 on a car. Well, if they're worth$100 million, that doesn't really matter. But people who were stretching a lot to where if the car broke in a meaningful way or if the car depreciated beyond what might be anticipated, that could become really problematic. That was probably 20 to 25%.

1:26:56That's not that bad, actually. 20 to 25%. If someone is going to purchase a car, what percentage of their income do you think it should max at? I would say that the bank's rule that the loan amount, the cumulative amount of all your car loans should probably be less than you make in a year. And that's excessive by most financial advisor standards. But if you're in that zone, you're probably not, again, at risk of a terrible maintenance event or additional depreciation really crippling you. Wait, explain that again? If your total loan amount, you have a$100 ,000 loan, you should make$100 ,000 a year.

1:27:32Okay. Yeah.

1:27:33Graham Stephan:What type of customer is most frequently buying a Lamborghini? Is it someone worth$3 ,030 ,000,$300 ,000? It's lower than you would think. And it's gotten a little bit stronger because the new car sales have gone up a lot since I was there. But generally, I would say that the people were probably$1 ,000 to$2 million net worth that were buying$1 ,000 to$200 ,000 cars. So in order to just buy a Lamborghini, you'd probably say this person needs to make at least$200 ,000 a year. Well, given that most, you know, new Lamborghinis are now three, four, five,$600 ,000, I would say that you probably need to make at least half a million dollars a year to go buy a brand new one.

1:28:13You want to buy a used Gallardo for a hundred grand, you could make$75 ,000 a year and not have any real risk. I mean, that needs to be your only vice. Yeah. Right. And that's one of the things like if you have a real job, you can have one vice. It could be eating really nice food, traveling a lot, doing, you know, Pokemon cards, whatever. Or it could be a heavily depreciated, interesting car. What would you say is your vice?

1:28:38Graham Stephan:I just like working. I don't know. I like working and saving. I don't have a vice. Like a financial vice, there's nothing that you're willing... What's the most money you spent on a single thing or event in the last 12 or 18 months? Well, it was that Heritage Auctions. It was a three-piece storyboard set, the key scene from Nightmare Before Christmas. Okay. Where Jack and Sally hold hands on top of the hill. That was it. How much was it? Under$20 ,000. Okay. If you think about the last five years, are most of the similar magnitude purchases art or significant collectibles? I only spend money if I feel like it's going to be an investment.

1:29:21Graham Stephan:it yeah like if i if i bought this thing i bought it because i liked it but i also bought it because i felt like it's under appreciated undervalued and i can't see why i wouldn't sell for triple so that's how i look at it i don't like buying things where i know the money's just gone i really like the last thing that you bought with no concern of its future value or an experience that you spent money on first class uh plane ticket i would say the aquarium you know no but that's not it's 20 30 bucks here and that's a cleaner shrimp i mean it's not well i meant the the actual purchase of the aquarium itself uh yeah but that was six years ago i would say a first class plane ticket that was the last time i had spent money where i did not think of an even then i thought of an roi i was like if i could get work done i could make that back at least and then it's a free flight got it but everything is an roi how much do you have in the aquarium.

1:30:15Graham Stephan:50 grand, give or take. Okay. And that's probably worth now 12. Right. So that is a vice. That's a hobby. Um, and I think it's a wonderful hobby. I've got an expensive boa constrictor. And so I agree that that can be a really, really lovely thing that can add value to your life and peace as you stare at it. Um, and so that would be a good example. And like, that's a huge expense, right? Lighting 50,$40 ,000 on fire is a lot. Um, you need to derive value. And so for that, you could have owned a couple of very interesting cars in that same time in Delta. But you could do that on, that's a lot, but I mean, you could do that on a$50 ,000 to$100 ,000 salary over time if you saved and if you were disciplined.

1:31:04But if you did that, you would need to not travel in first class and things like that. And so I think the same is true for interesting cars that you can own one for a lot less than you would think. You just do have to discipline yourself in the rest of life's asset allocation.

1:31:18Graham Stephan:So if someone gave you a million dollars to build a perfect five car collection, then what would it be? Hey, by the way, really quick, if you want extra content just like this, as well as early access and a bonus post show posted every single week, feel free to join as a channel member to get immediate access to all of that, as well as early access to everything else that we post, along with priority responses to all of your comments. So if that sounds cool, feel free to join. Would love to have you on board. Thanks so much. We'll get back to the podcast now. So if someone gave you a million dollars to build a perfect five-car collection, what would it be?

1:31:52I would buy an edgy e-gear Lamborghini Marcello for, let's say, 300 grand. I would buy a Mercedes McLaren SLR for about 300 grand. I would buy a manual transmission Ferrari 360. so I'd have a manual open top car for$150. And I'd have$250 left to spend. And I'd want some kind of a, probably an S-Class of some sort to drive around or a Bentley that's depreciated and something for the family. If it was going to be something else interesting, I'd probably buy a 911 variant that I could just beat on. But yeah, that'd kind of be it.

1:32:35Graham Stephan:The one I really like when you said Bentley, the Bentley Bentaygas. Yeah. Like a 2017. I'm seeing him now in the 60s. Oh, yeah. You can buy him in the 30s if you're crazy enough. Is that a bad car to buy? Yes. Why? Because they will mechanically total themselves, meaning that when things go badly, you can't justify fixing them for the eventual value that they still have. I still love them. I own the same thing as a sedan. And it's not responsible. But, you know, they're lovely cars. And same Range Rovers, any of these things, same thing. In terms of resale, how much does a unique spec matter? That's a really, really hard thing because you can look at certain cars where special specs can double the value.

1:33:23Having a paint to sample 918 or Carrera GT doubles the value at the moment, which is really hard to say that there is a seven-figure desirability delta between colors. but the market right now is saying that it is. I don't view that as long-term sustainable as cars get really valuable. We see more of a compression across specs that people just, if one is available, they do that. Um, you know, so it's, it's generally not that big of a deal. Uh, used car buyers have a preference towards spec, but like if you were really faced with an apples to apples, uh, a Delta to go from a 7 ,000 mile white GT to pay another$400 ,000,$500 ,000 for a heritage car, I don't think you're going to do it.

1:34:10Maybe a hundred grand, 200 grand, which still feels crazy because it's paint and you could wrap it for five grand to look the same way, but people do. And it is, in those cases, a reasonable store of value and they're probably going to get it back. And so that's the kind of thing that you would justify and I would struggle hard because you see that and you're right that if that is the primary focus for the ownership, that this is just kind of a, you know, it's a wash. I'm going to pay the delta that the market has. I expect that delta to prevail over time. I'm right to do it. I would say I can't possibly get the marginal enjoyment out of that color.

1:34:44And so I'm just going to buy. That's why I have a red over red Bugatti with red wheels.

1:34:48Graham Stephan:But are certain colors getting a premium right now? It seems like for Ferrari, it's yellow. Yellow is bigger than red. Green is bigger than everything. Orange doesn't work for Ferraris because they always look like just a picture is unsaturated because everybody thinks it's red. But on a Lamborghini, green is a 20 to 30 percent premium. Orange is up there. And so, yes, there are certainly situations where that happens. And what about people trying to deduct cars on taxes? Because we recently posted with Stradman, got in trouble deducting cars as props, but then paying tax on it when he realized the gain, but he would be just rolling it into future cars.

1:35:26So again, I'm not an accountant and realizing automotive gains is a really difficult thing to do for any accountant because there are obviously expenses that could offset them, but you're not really supposed to do that as a normal tax return. And so I would say everybody defer there. I am comfortable with basis shifting in trades, particularly given the fact that it's totally legal for paperwork to reflect different values as long as the actual cash outlay delta is well documented. Um, you know, I, there's, it's also perfectly reasonable for people to treat themselves more as dealers where they can treat the, the gains more as revenue or income as opposed to, and then the basis being the expense of the car.

1:36:15So there's a lot of ways that you can do it and get away with it. I think entirely legally, but you know, if you're going to go out there and realize a bunch of gains, you do need to plan to, to pay for it. Steve Hamilton alleged that Ferrari and Pagani understate their car counts, their manufacturer counts. Do you think that there's any validity to that claim or do you think that that's false? Absolutely true. It's very well documented. I built an app for it. And so like, for instance, Ferrari said they made 399 Ferrari Enzos plus one for the Pope. And there's well over 500 of them in our app.

1:36:52So they are undercounted by more than 25%. That's happened a lot. And that's why they now don't have a number out of, you know, a lot Ferrari just said limited to 499. And they'll do that forever. that now they say one of$799 or whatever they're making.

1:37:10Graham Stephan:So when did they stop doing that and actually sticking with the number? Was it the Barchetta? 550 Barchetta's Super Americas were numbered and 599 SA Apparatus were numbered. And there are duplicates of certain numbers out of 80. Yeah, there's like multiples. And then of course there's like 0 and 00 and 000 as prototypes. No. Oh yeah, with like F50s, They had post-production prototypes because they just wanted to build some more. Is that legal? No, it is fraud. But what are you going to sue them? For an extra car? You're going to sue Ferrari for defrauding you on your car that was immediately worth a million dollars over MSRP, that it should have been worth more than a million dollars over MSRP.

1:37:59And you're going to have a jury of your peers hear that case and say that, yeah, you're right. You deserved more profit. guy that's rich, I think they're pretty safe. And it's the same way as like, you know, you're not allowed to sell your car. You're allowed to sell your car whenever you want. No, you know, limitation of your ability to sell your car is remotely enforceable legally. But people sign these contracts that again are unenforceable because that's the requirement of the manufacturer. If they sell them, they just don't get any more cars from that manufacturer. So it's internally enforced.

1:38:35That's so interesting. You were telling us before the podcast that you have data on the general car loan market and how much equity certain people have in cars and this whole fascinating financial system behind the car market. Can you expand a little bit on that? So I've always been fascinated by the data and the economics of how car ownership fundamentally works. And so I have been working with Experian and AutoCheck, which is unique because they have an auto data set in AutoCheck, which is much like Carfax, but they're Experian. They're a credit bureau, so they know everything. And so we've been trying to understand what can be revealed and what cannot.

1:39:15And so I'm going to work on some content with them because I just think it's the most fascinating thing in the world to understand what percentage of buyers of each type of car are financing them, leasing them, paying cash, things like that. So, well, I'll pull some of it out and we'll make a VinWiki video here after that. I would love to hear about it. Yeah. Can you reveal one of the most shocking statistics that you found? It looks like I'm the only person to used car lease a Bugatti in the last five years.

1:39:44Graham Stephan:Really? So explain the mechanics behind this. Yeah. So I was able to get some data about like new car leasing versus, and it was like 0.5 % of used Bugattis are structured as a lease. And maybe it was just me and Whovie because he did through Premier Financial as well. And so, you know, to me, that's really interesting because there's not that many transactions. So that's got to be you. So you are. Yeah. So sometimes you see a data set, you're like, well, I know who that one was. And so it was me. Is there anything that you see that worries you about the car market crashing? We see so much right now about like upside down loans and negative equity in these cars and people can't afford to get rid of them.

1:40:21That will impact the new car market. It doesn't really impact the the world that I play in. But yes, there is the perfect storm for catastrophic depreciation in some new cars, which, you know, fortunately, all that means is that some people will not be able to trade as fast or as often as they might like to.

1:40:39Graham Stephan:Is there a chance that they just stop making the payments? Of course. Yeah. But again, the magnitude of that exposure isn't that great, even, you know, for the banks to absorb a 10, 20 percent negative equity. It's not like the housing market in 2008 where you could have billions or trillions of dollars worth of exposure, it's not that bad. Is there any car that's in a bubble right now that you disagree with? Like I said, a lot of the cars that have really exploded in the last little while are situations where the market or the owners of those cars at large would not turn down the recent highest price if they were offered it.

1:41:19And so that means that theoretically they're going to start trying to sell a lot of cars. And so if F-12s are actually worth$500 ,000 when they were worth$200 ,000 last year, that has to equalize, right? Because people aren't going to rebuy their car at that number tomorrow if they have the option. And so those are bubbles, right? That something's got to give. Either there has to be a continuous flood of new interest in the cars, or they've got to get to a point where, you know, the market comes back down and the bubble pops. But I don't think it's going to pop that dramatically. I think it's just going to be like, oh, yeah, they're only worth what they were worth yesterday, plus a little bit.

1:42:01Graham Stephan:So if we hit a recession, what do you think happens first? I don't think cars are the, you know, canary in the coal mine for a recession. I think, you know, home inventory is always a good thing. But the canary in the coal mine for the next recession is going to be unemployment. if AI causes unemployment, which we know it does, we don't know the extent to which it is. But if we start to get to a point where there is 9%, 10%, 12 % unemployment, especially as we even contemplate what 20%, 25 % unemployment would look like, which is what some of these guys are forecasting, that's where you start to really, really worry.

1:42:40I think there are other interesting indicators of, you know, if we start to see lower aspiration, right? If people just become a lot more content to not work hard or accumulate any wealth, they become very apathetic. And lazy is not the right word, but it just becomes trendier to not care about anything aspirational. That's horrifying, right? Because then you don't have a labor market. You don't have people that are willing to work hard, all that. It's already starting.

1:43:14I was going to ask you if you thought that was already starting. Oh, because you're so lazy. Is that what you're pointing at? That's not a joke. This guy's not thoughtful in his way. I see it. Yeah. I mean, way more words tonight. But, you know, I think, yes, there is a lot of that starting. And what I hope is that Gen Alpha recognizes this and they start to enter a workforce where, you know, there's just a vacuum of motivation. and they can just supersede their bosses and their bosses' bosses so fast just by working hard and trying. And I think that's the biggest opportunity for young people today.

1:43:49Graham Stephan:Yeah, what do you think is the future for our economy in the next five years? I am probably not the right person to ask. You are the right person to ask. I think there are so many trends that are wildly troubling. Things like you should not buy a house, you should rent. Maybe economically this can be justified, but there is no greater creation of wealth in the history of the world than the equity component, principal payment, component of your mortgage payment. Yes, you could be disciplined and save that exact amount in a good investment product over time and come out ahead, but the likelihood that you will do that without fail is zero.

1:44:31The likelihood that you will make your mortgage payment is really, really high. And so, yes, there might be a net loss or a parasitic effect, but people should buy homes. There's a reason that most millionaires are homeowners. And it's not because they're wealthy enough to buy homes. It's because long-term equity payments matter. So things like that, this idea that you should not go to college. Well, sure, it's really hard to justify$250 ,000 in student loans over time. But at the same time, having adulthood with training wheels for a few years after you're 18 years old versus going out in the workforce has a lot of value.

1:45:15And so I think that's something where we need to start re-evaluating some of these popular meme-worthy social trends that work well in infographics and say, you know what, maybe that's not actually good for society for us to move in certain directions when we extrapolate over decades and generations.

1:45:34Graham Stephan:So what's your advice to your own children in terms of what they should be doing in the future? Well, none of the jobs that I've pretty much had even existed when I was their age. And so I get invited to a lot more career days as a YouTuber than a used car salesman. And that's one of the things we talk about is like, you know, most of the things that you're going to end up making money doing are jobs that don't exist yet. So adaptability is the most valuable commodity. The ability to say, all right, this is the landscape that I am facing and these are the things that I may want to accomplish. And how do I overlay that with the talents and the gifts that I have and the things that I've learned to create opportunity?

1:46:11Because it's not gonna look like it did for, you know, my parents' generation, certainly most of the people my age, where you just kind of enter the work, go to a job fair, pass out some resumes, get a real job, you know, picket fence and all. And how do you teach them that quality? You put them in uncomfortable situations where they have to adapt. You celebrate the times where they didn't know exactly how to succeed, but they prevailed. They overcame. You give them adversity so that they can have a little bit of a shallower pool sometimes when they jump in. And again, I think you just hope and pray.

1:46:45Graham Stephan:What's your long-term plan with VinWiki? You know, it's interesting because, you know, we've been making content nearly daily for about the same amount of time and seeing what's happened in the space over that period is so wild. I think that, you know, the opportunity when we first started was like you could almost make a living and then it became, well, you could make a pretty decent living and then it became, well, you might be able to even support a co-star or a staff or a facility or something like that. Or maybe you could buy a Bugatti with a giant irresponsible loan like that didn't exist when we started.

1:47:17And so now that does exist. And then now we're kind of going, I think the pendulum is swinging in the opposite direction where the appeal of calling yourself a content creator or YouTuber is so high that people are coming in and like, as long as I can like pay my bills, I'm happy to do it. And so they're making content that's really, really good and relatively inexpensive. And so it's noisy, but for good reason, the platforms are working, they're getting the opportunity. They are out there making, you know, five to$10 ,000 a month making content. That's amazing. But, you know, that doesn't support all of the infrastructure.

1:47:51And so, you know, when I think about the future of VinWiki, I think about it kind of in the same way in the context of content creation to say that, you know, it's going to change. We are the old people in the room and we see in most cases some decline in viewership, 10, 20, 30 % relative to what it was, maybe at its high five, four, three years ago. And I think that that's okay. I think we all have kind of a life cycle and that may result in reinvention. It may result in some experimentation. It may result in, you know, just saying it's been amazing and I see no reason not to keep making the next podcast or inviting the next guest to tell a car story.

1:48:28And that we just sort of ride it into whatever that becomes. I think as the noise goes up, the dedication also goes up. The people that, you know, want to walk up to you in an event or the guy that sees you at the airport says, man, I just love your content. I love what you're doing. I appreciate you putting it out there and the things that you stand for. And so, you know, to me, that's really the future is we continue doing it because it's working so far.

1:48:51Graham Stephan:And I think the future for you, by the way, is in your back catalog videos because a lot of them don't have you in it. And my gosh, I mean, the amount of value that someone would be able to get by owning your back catalog. Well, there have been different places that pop up to do that, to pay you money for that sort of thing. I've loved that because they all call because VinWiki is enough not me that as they think about the value in the automotive vertical, they find me and we talk about it. And so seeing all the different ways that people are offering, you know, debt products, equity products, repurposing products, platform deployment and all that, I think is really, really interesting because it is, like you say, that is the way that we make the most of the opportunity.

1:49:30and I kind of view it on two fronts. Like, yes, I need to extract the most value as one can because it is my career, but I also need to be the right steward of the audience's attention to know that like to do well by the storytellers and to do well by what we're doing. That's why we try to, you know, raise the stakes with Car Trek and other, you know, car buying and other things like that, the adventures, but also just to make sure that there's value. So who do you think of all of the car YouTubers is the worst with money? Well, there's one that comes to mind, Um, but you know, I'd, I'd like to think there's a bigger picture with that.

1:50:02He's really going to put it together. Um, and that will, uh, yeah, certainly run to second place, which is also pretty easy to define. Uh, but you know, I think that it's, it's interesting because all of our content has different demands, right? Of what people are there to see. You know, sometimes they want to see you be really, really smart and sometimes they don't. And sometimes they want to see you buy really, really good cars. and sometimes they don't. And sometimes they think you're really going to put your life together and make all the right decisions and sometimes you don't. So who is it?

1:50:31I don't know. I can't really put a pace on it. Okay, cool. That's fair. Who is the best with money? Daddy Doug. It's always, Doug DeMuro has certainly kind of beaten the game in this form and I think it's great to see that. I think, you know, you look at the success of Hoonigan is also great. The guys that started Donut did really well. In most of those cases, post-acquisition, it's not as good. And I think that is sort of the biggest thing that the industry would solve is to try to figure out like, you know, well, what do we offer in terms of a transitional plan or an opportunity to scale that really makes the most sense?

1:51:09Cool. Perfect. Thank you. You want to come say hi? Oh, hello. Look who we have on here. Wow. How did Mr. Bullion do? It was great. Rubbish. Fantastic. Great. Terrible. There's very few people who are as good as a speaker. Yeah. Really. No, I'm no example of what to do versus what not to do when I show up, basically, right? Every story needs a bookend.

1:51:33Graham Stephan:Are you guys wearing matching watches? Oh, goodness. Look at this. I got a GMT. You got a sub. Okay. Yeah, pretty close. You should have worn your sub, Jack. I know. I didn't know. Oh, my God. I didn't send the memo out. So explain what brings you to Vegas. I got this guy hired at Barrett Jackson. You got him a job. Had to work with me. Some of the old guard there, they're busy. They have other things going on. So I got Ed for Las Vegas for the auction first time. So he'll be up on the block of me doing commentary on TV. So it's television, Ed. It's live. We're not accustomed to such things. Are you nervous going live like this?

1:52:09Graham Stephan:No. How many cars do you think Tyler's going to buy? Two. Too many is how many he's going to buy. but they have never lost money hiring Tyler. I can tell you that much. Is it true that he's going to spend the money back on the cars? Oh, and more. Always. Yes. Do they give you a line of credit, Tyler? No. It's available. I'm sure they got a table for it. Oh, my gosh. Cool. Well, thank you so much. I really appreciate this. Thank you for doing this and coming out to Vegas, filming with us. It worked great. And we'll link to all of your information down below in the description. and for the video that we do together, I'll link to it as well.

1:52:48Graham Stephan:Thank you so much. I appreciate you having me. Oh, and by the way, for all the channel members out there, huge thank you. If you want to see our next episode that's already live early for channel members, here's the trailer for it. Elon Musk, the world's richest person, has also become the world's first trillionaire. And every civilization that has rose has fallen because of a growing wealth gap. At what point, though, does the wealth gap get so big that all of a sudden something has to break. It is profitable to keep you financially stupid. It is profitable to keep you poor. Most Americans today would rather look rich than be rich.

1:53:24Over 40 % of us are unfamiliar with Roth IRAs, money market accounts, and high yield savings. It is so rigged, it is unfair.

1:53:32Graham Stephan:It is rigged towards investors. So what do you think is the biggest risk for the economy that no one is going to see coming? Right now, we have about$40 trillion of national debt. We are spending about$2 trillion a year that we don't have right now. Do you think it's a negative that right now stocks are near their all-time highs? The best investors, because don't sell. And what can the average person do to protect themselves? You're one paycheck away from your family being broke. Because if you want to be rich...

1:54:06Graham Stephan:It's incredible. We had so much fun filming it. So with that said, enjoy. And that's ready to watch right now. Cool. Thanks so much. Till next time. I think GTA is a magical moment for our culture. So what's your biggest trade coming up? Like, it's going to be phenomenal. What about? I'm not excited about it. I don't own any right now. But I still think the main trade is on take two. What are your thoughts? I love to see it falling here. I don't know when I'm gonna make my big move to heavily lever back into it But it's probably going to happen at some point in the next few months