The single most important tool that we as rideshare drivers have is our car. How does a rideshare driver purchase a new car? It’s not as easy as you think! In this video, Jay Cradeur shares five steps that he took to purchase a car. At the end of the video he shares exactly which car he purchased.
First off: Lease or buy?
There’s a time to lease a car and there’s a time to purchase a car. And the time that you want to lease a car is when you are a full time driver putting in a lot of miles. Because when you lease or rent a car through Uber and Lyft, you’re going to get unlimited miles. You’re going to get free maintenance, minor services, and your insurance is included and you can just get in and get out whenever you want.
When I get to this point in my career where I’m not driving quite as much, I’ve decided I wanted to go and purchase a car. It’s not as easy as you think. I tried to get a $5,000 loan to get my Prius. That’s what the trade in value was I had to pay at the end of my lease, $5,000 to get the car. And I went to two different banks and they both turned me down, which is crazy. It was like $100 a month payment and I have a 750 Fico score, but I didn’t know what they were looking at and I’m going to cover some of that in this video.
Step 1: Know what you want
When I started out, I thought I’m just going to get another Prius. But then I rented a car through the fair car rental program and I had a Hyundai Elantra and I kinda liked having a bigger car, a quieter car, more peppy car. Then I started looking at a bigger cars. I looked at the Toyota Camry, and I realized I will also want to get really good gas mileage.
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What you see here is my list of things that I wanted. I wanted great gas mileage, like 50 plus miles per gallon if that’s possible. Quiet interior cause I like to listen to podcasts and music. I wanted a moon roof, because I like to feel the sun and the wind on my face. I want Apple Play, which is a great feature, and the color I wanted was black but I could do with a blue or gray.
Step 2: Find the model you want
The first place I looked was online at Car Gurus, and I really recommend Car Gurus to get familiar with cars and prices. They seem to have all the cars that could possibly be purchased. You can do a lot of different search features. You’re able to look at cars that are just within 50 miles of you. This was a great place to start looking.
The second place I looked was a website called Carvana. Now Carvana has a pretty cool setup and it’s a hasn’t been around too long. But they just didn’t have as many cars to look at, so the selection wasn’t where I needed it to be. Then I went to my next source, called Shift.
And Shift is really great. They had a lot of cars to choose from. They have these places you can go and you can test drive up to three cars and a then you can work out the financing with them and move forward.
Step 3: Shop for financing
Then I realized that I needed to get financing. Financing is a difficult for us as rideshare drivers because we can take some great tax write offs. But being that we’re self employed, many banks or lending institutions are going to want to look at our tax returns. And because we take all those deductions, it means our revenue is pretty low.
Here’s what they look, look, look for when they’re evaluating you for a loan. One’s called DTI, which is debt to income and PTI, payment to income. And the goals that you want to achieve is for the DTI to be at 45% and the PTI to be at 10%. And as you can see in this, this spreadsheet, the only way I get to the numbers that the, that the banks are looking for is if I show income of $60,000 or $80,000. That’s my sweet spot.
Step 4: Find a seller
I found a car that was very interested in, and I contacted the dealership where the car was located. I went in and I found somebody who wanted to make the sale. He didn’t ask for my tax returns. He just asked how much money I make, and I told him conservatively that I make $8,000 a month just just from driving for Uber and Lyft.
He then asked if I have some other kind of income that I bring in. I let him know that I write articles and make videos for a blog, and I’m starting a podcast. I’ve got a lot of things that I’m doing to generate revenue.
With that information he put together the package that was sent to finance, and within half an hour he said that I was going to get approved. My rate ended up being a little higher because they had to account for the fact that I’m self employed.
Lesson to be learned is to find someone who will be an advocate for you. Who wants to make the sale. Just go into a bank and you’ll see that they don’t care. They’re just looking at dollars and cents. But if you find someone who wants to make a sale because it helps him to make a sale or her to a sale, they’re going to figure out creative ways to get you through the system. And that’s exactly what happened here.
Step 5: Go get your car
I went and got my car: It’s a 2017 Honda Accord Hybrid. It’s a beautiful car. It’s got a little scratch, and it has 35,000 miles on it, but I got a good deal for it and I was able to purchase a car. The other benefit of purchasing a car is that you’re going to get this car loan onto your credit report, and that’s different than having a credit card.
This was a big win for me. I got to drive away in my new car, and I’ve been driving now for the last couple of weeks and I’ve been loving it. It’s quiet. It’s roomy, it’s black. I’ve been getting about 45 miles per gallon.
In summary, it’s not as easy as you’d think for us to get a new car. I hope all the little details I shared with you can help you if you’re in a position where you want to get a different car for your rideshare career. This is Jay Cradeur with The Rideshare Guy. Thanks for watching and reading!
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