As an accountant, I talk to a lot of people about their finances and the difficulty of covering their expenses, and I am often asked about what is the best way to obtain a car: new, used, or leased?
Cars are, without
question, the most expensive consumer item – not counting houses and tuition,
that is. Clearly, the smoothest way to buy a car is to buy one brand new. There
is no worry about who owned it before or if it has problems that were covered
up. It will certainly drive nicely (and have that new car smell). The only
downside is that it is the most expensive option. Therefore, if one is trying
to save money, he or she will buy a used car. You see, many people keep cars
for three to ten years and then sell them, often back to the dealer in the form
of a trade-in. The dealer then resells that car – hence, the enormous business
of selling used cars. Here is how it works: The original owner trades in a car
to a new car dealer. That means the car owner is selling the car to the dealer for,
say, $5,000. The dealer then resells the car to a used car buyer for $10,000.
In this example, $5,000 is the wholesale price, and $10,000 is the retail
price.
The Current Situation
Buying brand new
and leasing are always the most expensive options. I therefore advise people
that the best value is a used car (although I have occasionally seen great
deals on new cars and advised clients to go that route). Furthermore, the best
source for a used car is a neighbor or friend. You can offer them the same
price that the dealer is offering: $5,000, or the wholesale price.
Now it gets better:
When you buy a used car for $10,000, you really do not know much about the car.
Yes, it can be checked out – but only to a degree. When you buy your friend’s
car, you know the original owner, and assuming that he is honest, you will find
out if there are problems and, hopefully, get a record of repairs. There might
even be warranties on replaced parts! The car you buy from your neighbor is therefore
more valuable than the used car from a dealer – yet will cost you so much less.
The problem is
that, when a person needs a used car, finding the “friend or neighbor” who is
selling their good-condition used car is not easy. Similarly, when a car owner
wants to sell a car, it is not easy to find a buyer in the community. Where are
you supposed to be looking to find these buyers and sellers?
My Solution: a Car Gemach
Imagine the
following: There is a gemach for cars. No, this gemach does not give out free cars. Sorry
folks, wouldn’t that be nice? (And wouldn’t it be nice if chocolate were not
fattening?)
Here is my idea: There
is a manager of the gemach, whom you
email (or call) with your request to purchase or your offer to sell a car. This
would be similar to the Agudah
share-a-ride gemach. The gemach manager maintains a list of
people wanting cars (with relevant details) and a list of people who are
selling cars now or perhaps in the near future. The gemach manager then
makes a shidduch between seller and buyer.
Important points:
Sellers should not list the car on the day it has to go. Rather, they should list
it early on and indicate when it will be available – in, say, a month or even
several months. That way, the buyer will hang in there, knowing that they have
something coming down the pipe.
Buyers will most
likely want to take the car to their mechanic to get it checked out, which
should not be a bother to the seller.
Folks, if this
idea works, it will save the community more money than all the current gemachs
combined (more than the bris pillows,
pack-n-plays, folding chairs, and tents). This could save the community over a
million dollars a year!
Some Questions
Q: Is the seller
giving a warranty?
A: No, of course
not. Sorry.
Q: How is the
price determined?
A: It could be more
or less the same amount that the dealer is offering. Granted, it can be
difficult to figure out what the dealer is offering because there is a lot of
confusion in the sale of a car. What is the real price of the new car vs. what
is the real offer for the used car? This will be a challenge. There are several
options online for determining the value of a car: sites like Carmax and Kelly
Blue Book. They often show the dealer’s trade-in price as well as a private
seller price. I imagine that the seller and buyer might also negotiate further.
Perhaps the buyer can offer a small amount to compensate the seller for the
slight tircha (bother) involved in
selling his car this way.
Q: Why would the
seller want the hassle of doing this when they can walk into the dealer and get
a check immediately?
A: So the seller
can get to olam haba. Seriously, this mitzva is so valuable to the buyer
and is really costing the seller no money – maybe a small amount of time and a
bit of hassle, but isn’t it worth it? Isn’t it a hassle to buy an esrog and
build your sukkah? (You know… shver tzu zein a Yid.) I’m exaggerating as this
entails no real effort but gives you a very big mitzva. Furthermore, ignoring
the needs of others is at the minimum bad middos (character) and probably
an aveira (sin).
Summing Up
If Baltimore gets
this off the ground, other cities will copy it. And those who played a role in getting
it up and running will be rewarded with all the future mitzvos that this reaps
for the entire country. That means that, in the next world, you will be a
greater baal tzedaka than some billionaires were. Amazing opportunity.
Jump on board folks. By the way, this project does
not involve fundraising and has no bank account. I hope to pull this project off
without spending a penny. I already have a volunteer to manage it!
Please email your
car offers and requests to Baltimorechesedcars@gmail.com. Tizku
lamitzvos.
Eli Pollock is a self-employed CPA in Baltimore who
writes on finance. Eli can be reached at Elipollock2@yahoo.com.
