Updated: Oct 14
Buying a luxury car can be the ultimate dream. If you’re ready to hear that engine purr and turn heads in the street, check out some tips that can keep you from spending more than you need to on your dream car. From financing and timing to preventing a tax burden that can turn your dream purchase into a nightmare, do luxury the smart way.
Whenever you’re making a large purchase, if you’re financing it, you could end up paying a lot in interest and fees. Before financing your luxury care, make sure your finances are in order and do your research to find the best interest rates. Only borrow what you need, commit the largest downpayment you can, and keep the length of your loan as short as you can (under four years is best). You can save thousands of dollars in interest payments this way.
Even better, purchase in cash if possible. Not only will you avoid paying more for the vehicle because of interest over time, but sometimes this may give you leverage to negotiate a better sale price.
Timing is Key
One key to turning the luxury car market into a buyers market can often be timing. Strike with the seller is eager to offload. When new luxury vehicle models are coming out in the spring, many sellers are looking to make space by phasing out last year’s models. Plan to begin shopping around in early spring to find some deals. It’s also worth browsing in August and September when some of the next year’s models are beginning to arrive.
You can shop around any time of year with another tactic. While it can vary by dealership or seller, oftentimes dealers have monthly sales goals—meaning as the month goes on, you may have the benefit of a salesman itching to meet a target.
Ditch the Bells and Whistles
If you’re going to time it right to have the upper hand as the buyer, don’t blow it. Know what you want and stick to it, without getting sold on a bunch of features that you didn’t set out looking for in the first place.
Some of the add-on features for luxury vehicles can tack on thousands of dollars to the cost, so know beforehand what’s going to matter to you—aesthetics, comfort, convenience, etc. Be ready to stand up for what you want and don’t be sold on that extravagant scent system, motorized cup holders, or granite trim (unless that’s what floats your boat).
Consider Recently Used Cars
Although it may seem impossible that anyone could look at that Lambo or Porsche with anything but reverence, luxury cars do depreciate fast. By some calculations, new cars lose 20 percent of their value in the first year. Luxury vehicles can depreciate as much as 30 to 50 percent in the first few years—which is one way of saying that a brand new car may be overpriced.
Save Thousands by Paying $0 in Taxes
The tax burden that comes along with your dream luxury car purchase can feel like a nightmare. With sales and local taxes, you can easily add $10,000, $20,000—even $100,000 or more to the final purchase price of your ultimate luxury vehicle.
Fortunately, there’s a way to pay $0 on your new luxury vehicle. By setting up a Limited Liability Company (LLC) in Montana to act as the purchaser for your vehicle, you can legally take advantage of the same zero tax rate that residents receive. You don’t have to live in Montana to register an LLC in the state and since your Montana LLC is viewed as a resident, you don’t even have to purchase the vehicle in Montana. Always make sure to double check the laws pertaining to this type of purchase in your own state.
MT Vehicles can help you streamline the LLC formation process and act as your Registered Agent, providing a physical and mailing address for your LLC, and helping you with your paperwork.