One of my broker buddies from my wirehouse days started at EDJ before moving to the wirehouse drove (and still drives) a beater of a car compared to the Lexus’, Benzes, and BMW’s that line the lot.  He has been at the top of the list year in and year out for bringing in new assets.  He even picks up his clients in this car and takes them to lunch and that kind of thing.  No one has ever hesitated doing business with him because of his car.  It actually shows more financial common sense as opposed to buying or leasing a new car.  Who do you think your clients would rather work with?  Someone that drives a “respectable” car, or someone who has good financial sense?  The person behind the desk is far more important than what car you drive.  People don’t care about that kind of stuff, and if they do, they probably aren’t clients you want to have. 

  This topic has been talked about many times over, you can do a search.  It is widely agreed that it would not be best for your clients to see you in a fancy sports car.  BondGuy should have something noteworthy to discuss about this.

Clients either don’t care or you can’t make ALL of them happy.  I’m a car person.  I’ve had everything from the top of the line Caddy/Lexis/Audi (back in the day), to a Porsche 944 to an Eddiw Bauer model Bronco to a vintage Corvette to a Ford Windstar to a modern Corvette to the current VW bug turbo. 

  People either will hit it off with you or they won't.  Drive what you want because it's either what is appropriate for you at the time or what you want to drive.  Don't hide who you are are and don't try to be anything you aren't.  My next car will be a '59 Caddy El Dorado convertible.    Sweat the big stuff not the little stuff like transportation.

I’ve had one client make a comment about people driving foreign cars.  At 80 years old he still believes that you should be buying American made cars.  Never mind that the parts are made in Mexico.  He said he wouldn’t do business with the other Jones broker that he knew because he drove a BMW.  BTW, this was just a couple of years ago, and the BMW was an 85. 

  You could pick up a used Acura, BMW, or Benz for $15K and some people would frown on you for driving a fancy car.  You could also drive a $45,000 Ford F150 Quad Cab King Ranch and they'd never look at you twice.  People are strange. 

First a story, then some comments:

  A few years ago a large company with a large local presence was going thru a merger. The biggest block of employees at stake for the 401k rollover bonanza worked at a plant in a small working class neighborhood. All the advisors competing for this biz found themselves driving to the plant and picking these guys up to go to lunch. This was after holding seminar workshops at the area's only hotel.    My wife had an appointment with an electrical engineer from the plant. On the way back to the office she called me to tell me that she didn't think we were going to get him because he didn't like her car. The car, a 2003 Honda Accord EX, looked good and was, as always clean. The prospect told her that the Merrill guy had a better car, a BMW. She replied 'Oh, you must be talking about _________, he always has expensive cars. And she was right, it was that advisor. For my part I told her that the client had misspoke, that the other broker didn't have a better car, only one that cost more. Still, my wife was disappointed she'd missed one because of a car.   By the time she got back to the office I'd typed out a reply for if the car thing ever came up again. If reads: Mr_______, my husband and I prefer to put our money into the markets where it works for us, rather than spend it on expensive cars. If you'd like, I can run an excel spread sheet that shows you the real cost of throwing your money away on cars.  She shortened it by deleting the last line. And, it has never come up again.   Comments: Nothing wrong with looking successful. A expensive car probably won't hurt you, but it's not necessary. My wife and I drive a Jeep Grand Cherokee and a Toyota Camry. Most of the advisors in my office drive everyday cars/SUVs, Honda's, Fords ETC. There are two Lexus drivers and one BMW driver.   The best value on the U.S. market is the Mercury Grand Marquis. New, you can buy a 26k GS for 19k. But here's where it gets even better for those who need really cheap transportation. This car is little changed since 1992 and is an excelent car. Good safety, good reliability, decent gas mileage.  Late ninties versions in top condition can be had for 5 or 6K. Buy one and no one will know how old it is. And yes, it's a grandma car. So what, it starts, drives and looks good! And it's exactly the kind of car your target market is driving. Half of them can't tell it from a Town car. Damn, I think I 'll buy one just for good measure.   Don't show off! In my office four of us own Mini Coopers. These, for each of us, are toy cars. Another advisor owns a Lotus Elise, and there is one with an Aston Martin DB7(i think). Don't ask how we all ended up with sports cars of British heritage or origin. Our other common thread is not to let the clients see our toys. The toys in our office include everything from entertainment systems, watches, and boats, to high end bicycles. Of course this includes the cars. A toy car sends the wrong message. You want to look smart. Toys are not smart. There is nothing wrong with buying these things if you want them. Man, or should say men, don't live by bread alone. Just don't show off.   Buy American: this is less of an issue than it was at one time. Still, with country in recession, it could become a bigger issue. There is nothing wrong, in my view, with owning a Honda or Toyota, however in a small town with growing unemployment this could be a problem. There are good american cars to be had from the big three. Pick one you like and buy it. This is especially true for the indys and EJ guys whose offices in small towns might be highly visable. Ok, your work car is an Impala, so what? The go to Capitol City car is a 997. The clients will never know.    Hupty car: AKA: beater. Some college professor friends of mine hold a winter one downsmanship contest with each other, each trying to outdo the others by buying the rattyist car. it's fun to watch. My vote went to the prof who drove the topless convertible all winter, rain, snow, or shine.   The beater car works against us to some extent in this biz. To at least some extent, perception is reality. If the clients are never going to see the car a beateris  OK.  Imho there is a limit to how much of beater you can get away with. As I said, something like a 98 Grand Marquis in excellent condition, with good paint, OK. An 82 Dodge Aries K car with mismatched doors, rusting quarters, and belching smoke, not OK. The line is someplace in between. Of course there is nothing to stop you from parking your beater front and center in front of your competitor's office. Buy 5 $100 cars and park a different one there every weekday. Make life fun!   Aging luxury metal: Old BMWs/Benzes/Audis are very expensive to maintain. Don't ask me how I know. Most likely you won't spend the small mountain of dough needed. If not maintained they go down hill very quickly. Nothing says stupid more effectively than an unmaintained high end car.  Says:Good taste, no money, no brains. Yeah, that's the message you want to send.          

The moral of the story seems to be that the client shouldn’t notice your car.  It should be nice enough to not make you look bad and not so nice that it makes you look bad. 

  Get an average car that makes financial sense to drive around town and take clients in.

Yup,  other than maybe a super duper beater this choice will account for less than 1% of you AUM. 

  Buy the car for you not for other people.

LOL…NOTHING will make that 13mpg beast look efficient, but it does fit in better at the little cafe up the road from my house in the country…

  and FWIW, I never expected to lease anything, but with my tax structure as an owner and using the 300 for business, I can have a $33,000 car for as I said earlier, just over $300/month after the tax effect.  Better yet, my insurance, gas charges, and repair/maintenance are all tax deductible also.  If I were working for someone else, I probably wouldn't lease.