I Wonder Why Realtors Drive a Lexus...

Reblogger Missy Caulk
Real Estate Broker/Owner with Missy Caulk TEAM

In response to my friend's post on Why Realtors Drive a Lexus. 

I drive one and have for years, not for luxury but for the customer service I get every year. Now it is no where near the cost you described here. I drive the Rx350. The MRSP is 39,600, which is what I lease.

Matter of fact I drove the Honda 4 years ago to think about changing.  

My husband who was in the back seat and only drives Honda's went with me for both test drives. 

The Lexus was 15.00 more a month.

I looked at him and said "which one?"  He said "are you crazy, the Lexus."

Again, it is all about the customer service I receive at Lexus of Ann Arbor. I work with Gerald Creech and he is the best. 

Missy Caulk Realtor in Ann Arbor 

Original content by BILL CHERRY 0124242

In the Olden Days, people who bought Cadillacs were assumed to be financially well-off.  And most were.  Those who weren’t were quickly found out and thought to be nothing more than four flushers.

People who weren’t considered wealthy, if they bought a Cadillac, did it as a reward to themselves – they had just retired, and they thought it would be the last car they would ever own. 

"Good job!" they said to themselves as they patted themselves on the back.

That’s not the case today.  Many people, especially Realtors, feel the need to own new luxury cars if they want to succeed in their business. 

The MSRP of a 2013 Lexus LS 460 Sedan is shown by the manufacturer to be $72,000

 


A lot of those buy them before they have even the beginnings of success, and struggle to make the monthly payments, with $5,000 down, often being as much as $1,400 or more per month for five years at which time they have no choice but to buy or lease a new one of at least equal value.

But what about a loaded 2013 loaded Honda Accord?  The MSRP is shown by the manufacturer to be $33,500.  With $5,000 down and financed for the same five year period, the monthly payments are about $500.

So let’s assume the Realtor picks the Honda

        Honda Accord Sedan ===>>>


but saves the $900 a month difference between its payment and that of the Lexus.  And she puts each of those $900 monthly savings into a retirement account.

Our Realtor is 35 years old and she continues this strategy until she is 65, when she retires. 

If the money is invested in non-risk financial products, on her 65th birthday, even without one dime of earnings on this investment, she will have $324,000. 

Conventional wisdom says she should be able to draw out $13,000 for every year for the remainder of her life without significantly reducing the original accumulated principal amount.

Wonder why a significant portion of America’s Realtors insist on driving luxury cars? 

Especially when more than 85% of the retirees in America now live below the defined poverty line.

WILLIAM S. CHERRY AND NO COMPANY
America’s Wealth Coach
972 677-7028

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Rainmaker
899,200
Larry Brewer - Benchmark Realty llc
Benchmark Realty LLc - Nashville, TN

It's also offset by the fact that you can normally keep a Lexus for 10 or more years and expect no unscheduled maintenance. It does make a statement of success, and customers want to know that you are successful when you are asking to list the largest asset they own.

Jun 05, 2013 10:51 PM #2
Rainmaker
694,072
Clint Mckie
Desert Sun Home, commercial Inspections - Carlsbad, NM
Desert Sun Home, Comm. Inspection 1-575-706-5586

Hi Missy,

Long time no see in the rain. :-)

It do'es not matter what Realtors drive. Nor inspectors. But the idea of driving a expensive vehicle  is still out there. If your client see's an expensive ride they think you charge too much for your services or you are really successful in what you do.

Have a great day in Ann Arbor. Go Blue.

Best, Clint mcKie

Jun 06, 2013 12:23 AM #3
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Karen Fiddler, Broker/Owner
Karen Parsons-Fiddler, Broker 949-510-2395 - Mission Viejo, CA
Orange County & Lake Arrowhead, CA (949)510-2395

Hi Missy....I too love seeing your smiling face back here :). I drive what I like, a jeep! I think it's silly to view a car as a status symbol. 

Jun 06, 2013 04:18 AM #4
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Liz and Bill Spear
RE/MAX Elite 513.520.5305 www.LizTour.com - Mason, OH
RE/MAX Elite Warren County OH (Cincinnati/Dayton)

Missy, I think it's all personal choice and what fits someone's needs and budget.  Some customers will judge us by our cars, both to the good and the bad.  We've had clients say they didn't hire an agent they interviewed because they weren't paying for her BMW.  On the other hand, I suspect if we showed up at a McMansion in an AMC Pacer we probably wouldn't be getting hired for the exact opposite reason.  Maybe we need a fleet of cars to match with that day's work :)

Jun 06, 2013 04:48 AM #5
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Susan Emo
Sotheby's International Realty Canada - Brokerage - Kingston, ON
Kingston and the 1000 Islands Area

I believe there is a big difference in choosing a vehicle as a status symbol - as my Father used to say, "they're more to be pitied than laughed at". 

Getting value, service, safety is far more important than trying to impress strangers on the streets!

Jun 06, 2013 05:00 AM #6
Rainmaker
1,018,493
Steve Loynd
Alpine Lakes Real Estate Inc., - Lincoln, NH
800-926-5653, White Mountains NH

Missy...I live where it snows and snows a lot, so all-wheel drive wins the day, and I like German cars so mine is a 10 year old BMW X5 - no issues and a good ride.

Jun 06, 2013 05:13 AM #7
Rainmaker
557,862
Jo Soss
HOMEFRONT Realty - Kettle Falls, WA
Stevens County WA Real Estate - HOMEFRONT Realty

I am glad its America and we can buy whatever we want!  Service is Key, The Acura dealership in Seattle is the best - They still get my business on my 1997 coupe.  They treat me like it is new.  My Cadillac dealership is the same - I really like them.  I don't think anyone should apologize for what they drive.  Unless you are my CPA you have no idea if I can afford it or not. :)

Jun 06, 2013 05:47 AM #8
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Tammy Lankford,
Lane Realty Eatonton, GA Lake Sinclair, Milledgeville, 706-485-9668 - Eatonton, GA
Broker GA Lake Sinclair/Eatonton/Milledgeville

I am quite happy with my Toyota Highlander and my clients don't seem to care at all.

Jun 06, 2013 06:32 AM #9
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Loreena and Michael Yeo
3:16 team REALTY ~ Locally-owned Frisco TX Real Estate Co. - Frisco, TX
Real Estate Agents

So much in our world is a show-off. Show me a realtor that can pay the car in cash, then that person can afford to drive anything s/he wants.

Jun 06, 2013 07:13 AM #10
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Frank Rubi
Frank Rubi Real Estate, LLC - Metairie, LA
FrankRubiRealEstate.com

Missy, good to see you on Campus. I for reflect Loreena #10. I did pay cash for my caddie and will do so again in the Fall. Like Loreena point if you can afford it drive what ever you like after all my car is my office.

Jun 06, 2013 07:45 AM #11
Rainmaker
543,631
Eric Michael
Remerica Integrity, Realtors®, Northville, MI - Livonia, MI
Metro Detroit Real Estate Professional 734.564.1519

Missy, to each their own, right? We have the right to go into as much debt as they'll allow to buy a car, house, etc. I leased a H3 Alpha a few years ago. Best vehicle I've EVER driven, but when the lease was up, they wanted a FORTUNE to buy it outright. I got an Explorer and now have a Buick SUV.

Jun 06, 2013 09:30 AM #12
Rainer
5,103
Chris Francis
Semper Fi Homes - Murrieta, CA
Chris

Nowadays, you can lease a Cadillac, Lexus, etc for a pretty decent price. Much less than a purchase. It doesn't mean your well off.  My tax guy recommends leasing, being self employed, its a 100% write off. Not to mention, you and your clients can be comfortable.  Furthermore, you can get a new car every two years.

Jun 07, 2013 04:36 AM #13
Rainmaker
1,184,954
Wallace S. Gibson, CPM
Gibson Management Group, Ltd. - Charlottesville, VA
LandlordWhisperer

I'm driving my 5th Lexus and I am a lowly property manager - LUXURY is in the eye of the beholder...I want the SERVICE, RELIABILITY and I want the COMFORT of a LEXUS.......I also have a 2008 Mini that I use to carpool my dogs to vet, spa, etc....

Jun 07, 2013 06:42 AM #14
Rainmaker
43,206
Angela Fish Chan
Rockland County Real Estate LLC - Nanuet, NY
Licensed Real Estate Broker Owner

I think about this too.  For years I drove Cadi/BMW/Lexus, etc., but one day it occurred to me that I could find a lovely automobile without making a car dealer, (not me) richer.  

I think sometimes Realtors drive a high end car out of insecurity.  That's the long and the short of what I have to say.  I think sometimes a clients sees you "drive up" and more often than not thinks a negative thought.  Among other things, they may think about that big commission and how THEY are paying for YOUR car!  You could fill in the blanks of what those thoughts might be.  

I finally settled on a Hyunda Sonata, loaded ... with Leather.  I LOVE IT.  I'm on my 2nd one now and I call it my little pretend Mercedes.  It's comfortable.  It's beautiful, and it gets great gas mileage.  

I drive a HyundaiHyundai

I think the days of trying to impress with clothes, cars, etc., are thankfully behind us.  As for me, I'm saving for retirement and loving my life now.

Great article Missy.  All the best,
Angela

Jun 09, 2013 06:52 AM #15
Rainmaker
184,689
Steve Baklaich
RE/MAX Results St Cloud Mn real estate - Saint Cloud, MN
Treating Buyers & Sellers to Full Service Always.

Hi Missy:

I don't know what numbers Mr. Cherry is crunching, but most dealers I have seen are at 0-2.9% interest on a new car, and so his point is lost. I like your reasoning better. You and your husband crunched the numbers and realized for the price of a pizza per month, you could drive the car you want, and work with the proven team you like.

I did a similar analysis, but on a different brand (Hyundai) and acquired a better vehicle for less than I was spending.

0 Miles, 10 year warranty, many more/better features and less monthly expense.

Jun 13, 2013 04:17 AM #16
Rainmaker
1,122,221
Mary Yonkers
Alan Kells School of Real Estate/Howard Hanna Real Estate - Erie, PA
Erie/PA Real Estate Instructor
Love this re-blog, Missy. Can't disagree, but I have been driving a Caddy for years and loved each one. Yes, the service is outstanding at Roth Cadillac.

I extend my deepest sympathy on the unexpected death of your husband. I will keep you in my prayers.
Jun 13, 2013 05:53 AM #17
Rainmaker
531,923
Melinda (Mel) Peterson
Real Estate Cafe LLC - Medford, OR
Curator of Happy Endings

I too, drive a Lexus RX350... and love it Missy!  I've driven a Toyota Camry, Chrysler Town & Country Van, GMC Yukon... and by far, the Lexus is the best car I've ever owned... based on dependability, comfort, and spacious seating ;-)

Sending a gazillion {{{HUGS}}} to you and your family during this very difficult time. 

Jun 13, 2013 06:56 AM #18
Rainmaker
479,014
Lisa Friedman
Great American Dream Realty - Essex, VT
28 Years of Real Estate Experience!

Missy, I am on my second Lexus - LS400.  I just LOVE the way it looks and that is why I bought it.  I agree with you about the customer service - they are amazing.  I actually LIKED taking my car in for service.  I say 'liked' because there is not a single Lexus dealer in Vermont and I moved here four years ago.

I kept my older Lexus around for a 'beater' car :)  You know, for taking the dogs out, etc.  I finally gave it to someone at 300,000 miles.  I only had to change the brakes and the muffler.  Lexus' are incredibly reliable cars.  What a soft, smooth ride and excellent quality stereo.  I don't think I would ever drive anything else - mainly because I like the look of the body style so much.

Jun 13, 2013 07:11 AM #19
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Katerina Gasset
Get It Done For Me Virtual Services - Wellington, FL
Get It Done For Me Virtual Services
Hi Missy, great insight on the question why realtors drives a Lexus. Love the repost as well.
Jun 17, 2013 11:38 PM #20
Rainmaker
1,811,481
Andrew Mooers
MOOERS REALTY - Houlton, ME
Northern Maine Real Estate-Aroostook County Broker

Selling corn, veggies on the farm at 9 I made an observation. I liked the lady in the rusted Rambler better. She gave me a dollar tip, any of the 13 ears in the baker's dozen for corn were fine. And a pleasant experience to do business with. The lady in the Lincoln or Caddy was often snarky, sneering and wanted to hand rip one by one the corn of 1000 ears apart to chuck, toss and find THE best 13. We had no worms, the ears she did not take would be ruined, dry out and hard at 9 to say hey. Then  she complained about the too high price, no tip, spun off of the farm barn yard. Money was everything to fuel the ride for her.

Jan 12, 2015 08:09 PM #21
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