Read this article before buying your next car and discover John Hrimnakâ€™s system for owning a car for free and still make money from it.
How To Own A Car For Free And Still Make Money From It: Strategy From The Book Breaking The Wealth Code
I just read John Hrimnakâ€™s book, Breaking The Wealth Code, with the sub-title: How You Can Earn Your First Million And Create A Lifetime Of Wealth, and it was great.
If you knew Johnâ€™s background, you wouldnâ€™t expect less. John was born into a poor home in an equally poor area of El Paso, Texas, growing up without a father to guide him through life.
But he never allowed that to stop him from achieving success in life. From his child to adulthood, he learnt and applied the principles of success that allowed him to gradually built up cash flow from his first business with his wife Shannon, and with smart investment strategies he turned his investments into millions of dollars in just three years.
In this book, he shares his strategies and uncommon skill in building cash flow, avoid falling into debt, and creating wealth, with anyone who is desirous of living a life of financial abundance.
Johnâ€™s teachings are practical and simple, and anyone can easily copy his success strategies.
I particularly want to share with you one of his strategies in the book, of how you could turn something that would have been a liability, into a super income stream.
Here is an excerpt from his book, Breaking The Wealth Code, of how John usually turn buying a personal car into lots of profit:
One of the biggest items that people believe is an asset is really a huge liability â€“ their cars. People brag, â€œI got a low interest rate and Iâ€™m getting a great deal and making an investment into my future by buying the car Iâ€™ve always wanted.â€
They buy the car for $45,000. They make payments for five years. At the end of the five years, the car that they bought for $45,000 plus the interest over that time is now worth $10,000 if theyâ€™re lucky. The car now has almost 100,000 miles and is approaching being out of warranty.
The next thing most people do is decide they want to invest in the future some more. They could easily sell the car for $10,000 but instead they trade the car in. The dealer gives them $2,500 and says itâ€™s a great deal and they start all over again. If you follow it all the way through, that is not an asset. Itâ€™s a liability.
I have a great system for buying cars and having them be assets most of the time. When they are not assets, they are an even tie with a liability. Sometimes itâ€™s right in the middle. They donâ€™t cost me any money, but they also didnâ€™t make me any money. Even if I donâ€™t make money on a car that I own, I think thatâ€™s still a great deal considering I got to drive it for free. Iâ€™ve been doing this since I was about twenty-one years old.
Back in those days, I didnâ€™t have a whole lot of money to work with and so what I would do is find a vehicle that I could afford somewhere between $2,000 and $3,000. I would buy the car for cash. I would clean it up and do any minor repairs that it needed and I would immediately place an ad in the classifieds for it.
I would drive the car typically a month to three months before it would sell. I wouldnâ€™t lower the price too much because, after all, it was a car I was driving and, in some cases, I wasnâ€™t really too motivated to sell it. Not being motivated to sell it caused me to get what I wanted for the cars most of the time.
I had a system that I stuck with that really worked and I still use it today. First of all, I would never buy a vehicle with over 80,000 miles. The reason for that is most cars are beginning to develop major problems or have problems that are occurring at that point which is why people are selling them in the first place.
In addition, most people are not looking for a car with these miles because their perception is that itâ€™s not going to run for very much longer. Iâ€™m not a mechanic and I canâ€™t verify which cars last longer than others. The issue was peopleâ€™s perceptions that led them to make decisions either to buy or not buy vehicles with a certain number of miles.
In addition, I would research, based on what the cars were actually selling for in publications like the Auto Trader and the local newspaper. It didnâ€™t matter and it still doesnâ€™t matter what Kelley Blue Book or other services similar to it say the car should be worth. All that really matters is what people are selling the car for.
Once I find the make and model that seems to be holding its value and for which there seems to be just a few of them available for sale, I target that type of car. I donâ€™t buy makes and models of which there are substantial amounts available for sale. I donâ€™t want to have a lot of competition drive the price of the vehicle down.
The second thing I would do is to verify if the miles are original. Back in those days they didnâ€™t have such convenient sources as they do today. I love CARFAX. So what I had to do and I still do today, in addition to CARFAX, is I would ask them a series of questions before I saw the car such as how long theyâ€™ve owned it and why they are selling it.
The biggest question that led me to what I was looking for was always my last question, tossed out as though I didnâ€™t care too much and it wasnâ€™t that big of a deal. But it was a major issue that I needed to know. The question was, â€œWho did you buy it from?â€ I would later verify this question by looking on the title or by looking at it in the bill of sale that they provided so they knew they couldnâ€™t lie and not be found out before the transaction was over.
This question, if it provoked anger, which it did most of the time, was due to the fact that the individual had purchased the car in an auction or was a dealer in disguise. For whatever reason. People like to sugarcoat or flat out lie about the fact that they own a car with a salvaged title or something less than normal on the title. If this was the case, I wouldnâ€™t touch it with a ten foot pole.
No matter what kind of a great deal you might think youâ€™re getting, most banks wonâ€™t finance such cars and most prospective buyers donâ€™t want anything to do with them either. Individuals locate these vehicles from insurance companies and body shops and buy them for pennies on the dollar. Who knows the workmanship that went into them to repair them? They get them back to their original condition so that they can turn around and sell them for high profits.
In such cases, I was not interested. My system, then and now, means I only buy from private owners who have owned the vehicle for a minimum of a year. I donâ€™t do this because I have a phobia of dealers or auctions but because peopleâ€™s perception, much like with high mileage, is that they donâ€™t want an auction car or a vehicle that showed a series of dealers owning it. I quickly learned this and only purchased first – or second-owner vehicles.
When I resold them, I advertised it in big, bold letters. People, for whatever reason, feel like if itâ€™s a first or second or third owner vehicle, itâ€™s a good car. For the most part I have to agree.
The third thing I would do is take the car to a mechanic. As I mentioned, I wasnâ€™t very mechanically inclined so I needed to depend on someone whom I could trust to look over the vehicle and insure that there were no major problems with it, since I planned to sell it.
I also had a mechanic, to the best of his knowledge, try to verify if the miles seemed original by looking at the number of parts under the hood that were original or recently replaced.
My mechanic would always legitimately find something wrong with the vehicle, minor or major. I would then assess what it was going to cost me to get that item fixed with him and I would use that as a point of negotiation with the owner.
Typically the owner was present and could find out for himself what was wrong with the vehicle he was trying to sell me. If he knew it already, he seemed upset and defensive and if he didnâ€™t realize it beforehand, he would be apologetic and gladly negotiate the difference.
Depending on what was wrong with the vehicle and after I made the purchase, I would either fix it or, in some cases, just tell the prospective buyer about the problem in advance. As long as I was asking a fair price and was being honest about what I knew, they didnâ€™t have a problem with it.
Today my price range is a little bit different so I only buy vehicles that carry the original manufacturerâ€™s warranty and that have less than 20,000 miles. I donâ€™t take the cars to mechanics anymore. I simply get the VIN number and call the dealer to verify the warranty on the vehicle and the last services that were done on it.
A dealer typically has access to some service thatâ€™s overdue or coming up and I always use that as a negotiating tool and it works 80% of the time. If you can afford to buy vehicles in this price range that carry an original manufacturerâ€™s warranty, you eliminate all the risk of buying a car that has potential major problems.
However, do not forget to verify with the dealer the current status of the warranty. Iâ€™ve had the experience before of a vehicle owner telling me that the warranty on the car expires in a certain month and year, only to find out from the dealer that the warranty was not nearly as long as the owner thought.
The reason for this is that the manufacturerâ€™s warranty starts from the date of in-service or the month it was The reason for this is that the manufacturerâ€™s warranty starts from the date of in-service or the month it was created and shipped.
I highly recommend using CARFAX anytime before you buy a vehicle. Itâ€™s not 100% accurate, but it does offer some strong guarantees. They guarantee that the vehicle was never in an accident, that the mileage is original and that the title is clean.
Whether you finance the vehicle or you pay cash is really up to you. The bottom line is that youâ€™re are buying a vehicle for a certain price, then driving it for a few months and, in most cases, selling it for more than you paid for it.
Finally, be aware of your stateâ€™s Department of Motor Vehicles rules and regulations before buying too many cars within the same year.
John Hrimnakâ€™s book, Breaking The Wealth Code is a great read, loaded with practical, simple, but powerful strategies to help you crush financial lack, and create immense wealth.
I strongly recommend you read this book.
You can pick up your copy by clicking here: Breaking The Wealth Code.