Car Buying Tips from a Wealthy Physician

Consult with young physicians about what prompted them to decide upon a career in medicine and one will hear reasons that run the gamut from the philanthropic (the desire to ease pain and suffering and help others to the practical (making money and gain respect). Whatever the reasons driving their decision, most young physicians agree that having the means to drive a nice car is one of the perks of becoming a doctor. As a result, high-end luxury automobiles such as Mercedes-Benz, Lexus, Porsche, and BMW have long been favorites among doctors who want to portray the classic image of success. Other doctors who are more focused on economy or practicality may be steered toward hybrids offered by market leaders Toyota and Honda, or sporty minivans (for those physicians with growing families or a lot of hockey gear). Those who want the best of both worlds are opting for high-end hybrids or electric models from manufacturers such as Cadillac, BMW, Lexus, Audi, and Tesla. Regardless of the choice, ask a wealthy physician to share his or her car-buying tips and here’s what one is likely to learn: whether buying new or used, it all comes down to research, timing, and patience.

The Case for Buying Used

Savvy physicians have for years learned that buying a used car, especially a used luxury vehicle, can yield huge savings. Consider that the true market value of a brand-new vehicle depreciates the moment the tires leave the dealer’s lot, up to about 19 percent by the end of the first year, according to the auto experts at Edmunds. Although the depreciation rate will vary among cars, there’s no denying that the depreciation amount will continue sharply in the first few years of a new car’s life, to the point where it is not unusual to find that a vehicle’s true market value has decreased by 31 percent by the end of the second year. The luxury cars favored by many physicians fare even worse, typically losing a greater percentage of their value in the first five to six years despite their higher price compared to economy vehicles’ depreciation in the same period of time, according to auto experts. By carefully selecting a high-end luxury car that is one to three years old, the physician can acquire a luxury car that has the bulk of its warranty in force, low mileage, options such as plush leather interior, wood trim, heated and/or cooled seats, premium sound system, integrated phone/Bluetooth and navigation connection, premium brakes, tires, and wheels, and features such as intelligent parking and onboard emergency assistance, all wrapped in a years-old body style that may not be distinguishable from a brand-new model. Going to an established, reputable used car dealer in the region may be preferable to a private sale, providing more options for recourse if a problem surfaces after purchase. Use the Internet to preview the price range for the make and model under consideration, and consult the local Auto Club or membership warehouse, which may have special pricing available to members. Obtain a Carfax on any car under consideration for a detailed mechanical and accident history.

Don’t Discount Buying New

The current economic downturn means that auto dealers are offering unprecedented deals to attract new car purchasers. When factoring in the new car price, special low- or no-interest financing, rebates, and other dealer incentives, some new cars can actually cost less than the same model that is for sale on a year-old-used or certified pre-owned basis. Plan to purchase in September (the traditional end of the model year) through January and at the end of the month for the best bargains. Models that are slated for redesign or elimination in the next model year will be heavily discounted, and are great deals for those who don’t mind having the “old” design, albeit in a new car. Whether buying new or used, other important considerations in the buying process are the true costs of ownership—looking beyond the purchase price of the vehicle (including tax and license fees) to include costs to insure the vehicle, maintenance, repairs, and fuel costs. With gasoline topping four dollars per gallon in most cities throughout the U.S. for supreme fuel which most luxury cars require, fuel economy alone is an increasingly important factor in the true cost of ownership. The real-world mileage drivers realize in their vehicles is often less than the EPA mileage estimate that is advertised for a vehicle, which is derived from a combination of highway and city driving that tends to boost the mileage estimate. However, keeping all of the above in mind when it’s time to purchase a car can enable physicians, whether just starting out or with years of experience, to drive the car of their dreams at a surprisingly affordable price.