Leonard Lawson dives into common mistakes people make when buying cars, sharing a cautionary tale about a buyer who spent $240,000 on a Ferrari without inspecting it or securing the title first. He emphasizes the importance of due diligence, such as inspecting vehicles and understanding the implications of buying cars from different countries. The episode also touches on the dangers of co-signing for loans and the need for parents to let their adult children learn from financial mistakes. Lawson's engaging storytelling and practical advice make this episode a valuable listen for anyone in the market for a vehicle.
"And this time this particular purchase was for a 2016 Ferrari 488. Absolutely gorgeous automobile."
The Ferrari 488 is a high-performance sports car made by Ferrari. It's famous for its speed and beautiful design, making it a favorite among car enthusiasts.
The Ferrari 488 is a mid-engine sports car produced by Ferrari, known for its powerful turbocharged V8 engine and striking design. It represents a significant evolution in Ferrari's lineup, combining performance with luxury.
"What else do they need? They need a title to that car, right? Before you hand them your money."
The title is like a certificate that shows you own the car. It's important to have it when buying or selling a vehicle.
A title is a legal document that proves ownership of a vehicle. It includes important information about the car, such as the Vehicle Identification Number (VIN) and the owner's name.
"...you go inspect the car or you pay a highly reputable third party to go in there and inspect the car and then give you a full report."
A pre-purchase inspection is when a mechanic checks a car for problems before you buy it. It helps you know if the car is in good shape or if it needs repairs.
A pre-purchase inspection (PPI) is a thorough examination of a vehicle conducted by a qualified mechanic before buying it. This process helps identify any potential issues or repairs needed, ensuring the buyer makes an informed decision.
"I mean, it was a 2016 Ferrari 488, but it had a whole bunch of aftermarket parts that had been put on this car."
Aftermarket parts are parts made by other companies, not the car's original maker. They can change how a car looks or performs, but sometimes they can lower the car's value.
Aftermarket parts are components made by companies other than the original manufacturer. They can be used to modify or enhance a vehicle's performance, appearance, or functionality, but may also affect the car's value and warranty.
"especially an exotic car like that, to the negative."
Exotic cars are very expensive and rare cars that are known for being fast and luxurious. They are usually made by high-end manufacturers.
Exotic cars are high-performance vehicles that are often rare, expensive, and luxurious. They typically feature advanced engineering, unique designs, and superior performance capabilities compared to standard cars.
"...when I sell a car on bring a trailer auction, which is that online auction, the person pays me before they get the title..."
Bring a Trailer is a website where people can buy and sell cars through auctions. It's popular for classic and special cars, and you can see pictures and details about the cars before bidding.
Bring a Trailer is an online auction platform that specializes in classic and enthusiast vehicles. It allows sellers to list their cars for auction and buyers to bid on them, often featuring detailed descriptions and photographs of the vehicles.
"Now, he wired me the money, and I immediately, same day, sent him the title to the vehicle."
Wiring money means sending money electronically from one bank to another. It's a fast and safe way to pay for things like cars.
Wiring money refers to electronically transferring funds from one bank account to another. This method is commonly used in car sales for secure and quick payments.
"...when a vehicle comes from Canada, it has to be recertified. A two and a half percent duty has to be paid on it to bring it into the United States."
Recertification is when a car that was sold in another country is checked to make sure it meets U.S. safety rules before it can be used here.
Recertification refers to the process a vehicle must undergo to meet U.S. safety and emissions standards after being imported from another country. This ensures that the vehicle complies with regulations before it can be legally driven in the U.S.
"...A two and a half percent duty has to be paid on it to bring it into the United States. And, you know, it has to be inspected and all that stuff."
A duty is a tax you have to pay when you bring something into a country from another place. Here, it's a tax for bringing a car from Canada to the U.S.
A duty is a tax imposed on goods when they are imported into a country. In this case, a two and a half percent duty is required for vehicles coming from Canada into the United States.
"...Plus, the speedometer is in kilometers. It's not in miles per hour."
A speedometer is a tool in a car that shows how fast you're going. In Canada, it shows speed in kilometers, but in the U.S., it shows speed in miles.
A speedometer is a device in a vehicle that displays the current speed of the vehicle. In Canada, speedometers measure speed in kilometers per hour (km/h), while in the U.S., they measure in miles per hour (mph).
"When he got it, the exhaust system had been changed. It had had modifications to the electronics that the engine control module had been changed."
The exhaust system is the part of the car that takes the gases produced by the engine and sends them out of the car. It helps make the car cleaner and quieter.
The exhaust system is responsible for directing exhaust gases away from the engine and reducing harmful emissions. It typically includes components like the exhaust manifold, catalytic converter, and muffler.
"When he got it, the exhaust system had been changed. It had had modifications to the electronics that the engine control module had been changed."
The engine control module is like the car's brain for the engine. It helps the engine run smoothly by controlling how much fuel goes in and when to ignite it.
The engine control module (ECM) is a crucial component in modern vehicles that manages engine performance by controlling fuel injection, ignition timing, and other engine functions. It processes data from various sensors to optimize engine efficiency and emissions.
"...if it's a Canadian vehicle, you better know it and know what the problems are with that type of history. And then you've got to have a copy of the title..."
A Canadian vehicle is a car that was first sold in Canada. It might have different rules or problems compared to cars sold in the U.S., so it's important to know about them before buying.
A Canadian vehicle refers to a car that was originally sold in Canada. These vehicles may have different specifications or issues related to their history, such as emissions standards or safety regulations that differ from U.S. vehicles.
"...and I know you're wanting to buy that new Nissan Altima. But that's probably not going to work."
The Nissan Altima is a popular car that is known for being comfortable and good on gas. It's a great option for people who need a reliable vehicle for everyday use.
The Nissan Altima is a mid-size sedan known for its comfortable ride and fuel efficiency. It often features a range of engine options and advanced technology, making it a popular choice among families and commuters.
"...going to have to go with the 13 year old Nissan Pathfinder, the two-wheel drive that we have back here with 172,000 miles."
The Nissan Pathfinder is a larger SUV that can fit more people and has a lot of space for cargo. It's a good option for families or anyone who needs to carry a lot of stuff.
The Nissan Pathfinder is a mid-size SUV that offers spacious seating and good off-road capability. It's designed for families and those who need extra cargo space, making it a versatile choice.
"...what that's called is a spot delivery. And for a lot of people, you know, just so excited..."
Spot delivery is when you can drive your new car home right away, even if the dealership hasn't finished all the paperwork. It sounds great, but it can sometimes cause problems later if the financing isn't approved.
Spot delivery refers to a car dealership practice where a buyer is allowed to take possession of a vehicle before the financing is fully approved. This can lead to complications if the financing falls through after the buyer has taken the car home.
Select text to request an explanation
Hi, my name is Leonard Lawson at your service and no, I'm not trying to learn how to speak
Spanish.
I failed at that a long time ago, but I did learn that when I was in the eighth grade at
Hayes Junior High School in St. Albans, West Virginia, I had a great Spanish teacher.
She made it fun and her name was Ms. Godwin and she made us pretty much speak Spanish
the whole time in the second year Spanish.
And so we did and I've forgotten 99% of it.
Oh, I did remember one other thing.
That's how you say the vowels, which means my donkey knows more than you.
Now that is definitely something that an eighth grader would remember.
Now for those of you who are not regulars on this Kar-Guru radio program slash podcast,
you may be saying to yourself, who is this nut job?
But my regulars, they understand, they've been with me a long time.
I've had some of them say, you know, I probably know you better than your own wife knows you.
And that may be true.
And today I think, well, you're either going to be glad you know me or you're going to
be sorry that you ever heard of me because I'm going to talk about the ignorant things
that people do, especially with their cars.
Are you ready for this?
You need to hold on.
If I do offend you, it's not intentional.
However, I do want you to learn from it.
This first one is, well, I came in yesterday to work for a couple hours.
My mistake was deciding to do that work in what we call the fish bowl.
It's a glass enclosed office.
So you're visible from four different sides.
And so that's where I decided to get my computer out and get all my papers out and start trying to work.
But it didn't work because immediately this young man was kind of standing out there looking at me.
And I said, okay, he wants something.
So I got up, opened the door.
I said, can I help you with something, sir?
And he said, yeah, can I talk to you for a few minutes?
And I said, sure, come on in.
So he came in, sat down and started to tell me his story.
He was sent here by one of his friends and he wanted to tell me about a vehicle that he had purchased.
And it's just not turned out the way he thought it would.
So this is a pretty, this is a whopper.
This is what I call a whopper when it comes to mistakes.
He likes exotic cars.
He's had a bunch of them.
And this time this particular purchase was for a 2016 Ferrari 488.
Absolutely gorgeous automobile.
And he was so exuberant over it and he had done business with this dealer that is in Michigan.
He had bought several vehicles from them.
So he had developed a level of trust.
Folks, when you develop a level of trust, you still dot your eyes and cross your T's.
My dad used to call it, good fences make good neighbors.
It means that you do not shortcut the things that you should do just to protect yourself, just in case.
You know, good fence between neighbors, it lets them know exactly where the property line is.
There's no doubt, you know, somebody decides to build a shed and they build it on your property.
Then, you know, that can lead to the Hatfields and McCoys if you're not careful.
So if you have a fence, then that delineates what's yours and what's mine.
And when it comes to a car deal, there's certain things that you have to have.
Number one, you've got money, they've got a car.
What else do they need?
They need a title to that car, right?
Before you hand them your money.
In this particular case, this young fella handed them $240,000.
He got the car, but he didn't go pick it up the dealership.
He had him ship it to him.
That was his first mistake, not inspecting the car.
I mean, just think about that, folks.
You're going to spend $240,000 on something from pictures?
No.
Well, he did, but that's not what you do.
You go inspect the car or you pay a highly reputable third party to go in there and inspect the car
and then give you a full report.
But still, you don't send them the money until they produce a title.
So I guess he felt protected, so they shipped the vehicle down here.
He took possession of it, and it was nothing like what he thought it was going to be.
I mean, it was a 2016 Ferrari 488, but it had a whole bunch of aftermarket parts that had been put on this car.
It had been modified in a lot of ways that can dramatically impact the value of a vehicle,
especially an exotic car like that, to the negative.
And so he was very disappointed.
I said, what paperwork do you have?
He said, well, I got this bill of sale they sent to me.
I looked at it and I said, well, they signed it, but you didn't sign it.
He said, I didn't sign anything.
I said, well, that's in your favor.
But you have the car, he has your money.
You're in Tennessee, he's in Michigan.
You know, that's one of the other complicating factors here, folks,
is the laws are different in Tennessee than they are in Michigan.
And you have to judge, or a judge would have to judge, where did this transaction take place?
I mean, nothing's been signed.
They have his money, but they haven't produced a title.
See, that's just absolutely insane to me, is to buy anything without knowing what the status of the title is.
Now, when I sell a car on bring a trailer auction, which is that online auction,
the person pays me before they get the title, but I always send them a bill of sale,
and I send them a copy of the front and the back of the title.
It proves that I have possession of the title.
But I'm not sending them the title until I get paid, because I've sold cars all over the place.
I sold three porches in London, England.
I sold another Porsche in, we're in Southern California at the Google headquarters.
That's where the guy worked, and he was taking delivery of it there.
I had to ship it out there to him.
Now, he wired me the money, and I immediately, same day, sent him the title to the vehicle.
So I still have the car, but I'm shipping it, but he has the title, and I have his money.
And so far, so good.
Well, something else this guy finds out.
This vehicle was not sold in the United States originally.
It was sold in Canada.
Does that make a difference?
Yeah, it can definitely make a difference.
I mean, when a vehicle comes from Canada, it has to be recertified.
A two and a half percent duty has to be paid on it to bring it into the United States.
And, you know, it has to be inspected and all that stuff.
Plus, the speedometer is in kilometers.
It's not in miles per hour.
So there's some other things that were wrong with this car.
When he got it, the exhaust system had been changed.
It had had modifications to the electronics that the engine control module had been changed.
A lot of stuff that wasn't disclosed.
So, you know, he's kind of between a rock and a hard place at this point.
I think it's a really hard place because he has contacted that other dealer and they're saying,
well, the only way we'll take this car back is if you let us keep $10,000 of your money.
And he's saying, why would you keep $10,000 of my money?
You guys have deceived me.
You sold me a car.
You did not disclose all of this.
I have all of this stuff in writing.
And what I told him, I said, you can sue them in the state of Tennessee.
And you'll have to domicile the case in Michigan after you get a judgment.
And then you'll get a judgment there and then they can go after him.
But what if they're going out of business?
You know, it sounds like a place that's in trouble because he bought the thing three weeks ago and he still doesn't have a title.
So the bottom line of this, folks, is if you're buying a car from somebody, then, number one, get it inspected.
Number two, if it's a Canadian vehicle, you better know it and know what the problems are with that type of history.
And then you've got to have a copy of the title before you send any money to anybody.
You have to know that they have it.
You know, that car could have a payoff or the dealership could be in trouble from a cash flow standpoint.
And, you know, they have it floorplanned.
They have borrowed money against the car.
There could be a lot of reasons why it's that way.
And plus, it's just a huge amount of money.
And you just don't take chances like that.
But he took the chance, like I said, because he trusted the people and every other transaction has gone fine.
But this one has gone sideways and that's scary.
And I said, you know, your options are limited.
One thing I would think about doing, I'd put that thing in a trailer and I'd drive to Michigan and I'd stop at their front door.
You're trying to handle this all with texting and stuff like that.
I mean, I would put the car right back in on their front porch.
Don't drive it through their windshield or anything like that.
Okay, I'll be back in just a minute.
Okay, I am back.
You know, ignorant is not the same as stupid.
I've said this before.
One time I was just doing a radio show, didn't have a podcast many years ago and it was live and I used the word stupid.
And I got a hateful phone call from a school teacher in Johnson City, you're not supposed to say stupid.
You know, and I said, well, I'm sorry.
But what I was talking about was somebody that was stupid.
So ignorant is just not knowing what you don't know.
I'm ignorant.
I mean, of some things I couldn't, you know, I don't know how to build a space shuttle.
I'll admit it.
There's some things I'm not ignorant about and that's how to do a car deal, how to protect you from making an ignorant mistake.
Buying, selling, trading, servicing, whatever.
So this is one of those whatever.
You go in to buy a car with your wife and you get all excited and you're in the dealership and the guy pulls out a credit application and you look at your wife saying, uh-oh.
And he asked you all the information, name, address, social security number, date of birth, where have you had cars financed?
Where's your banking account?
How much do you make?
All of that stuff.
He fills it out.
Now you've already filled that same thing out at three other dealerships and you know what's coming.
When they actually pull your credit, that salesperson or a manager is going to come to you and they're going to say, are you kidding?
No, they're really going to come to you and say, folks, there's definitely some credit issues here and I know you're wanting to buy that new Nissan Altima.
But that's probably not going to work.
Probably going to have to go with the 13 year old Nissan Pathfinder, the two-wheel drive that we have back here with 172,000 miles.
I think we can get that financed for you.
And then you look over at your wife and she looks over at you and then both of you look at the salesperson and you say, that'll work.
And so you go through the process and then they come and you go talk to the finance manager and then they come in and they say this, well, we don't have you approved yet.
We're going to go ahead and get you to sign this contract though.
And we'll go ahead and take your trade in and you can leave it here.
And then you can drive the thing home tonight and then we'll see you on Monday and we will finalize the deal then.
So what that's called is a spot delivery.
And for a lot of people, you know, just so excited, they finally had somebody say, yes, you can drive home in something different, even though it is a 13 year old Nissan Pathfinder.
So they slap a dealer tag on the back of it.
You go to the house, you go out to eat on Sunday, you're so excited about your new car, you're showing it off to your neighbors and everything.
And then on Monday you go back in and sit down and say, well, there's a problem.
What's the problem?
Well, the banks that we thought we could get it approved at, they would not approve it.
They want another $1,500 down.
And the interest rate is going to go up a little.
Really? What from to what to?
And well, it was 13% and now it's going to be 28%.
What?
We can't do that.
We just have to give you the keys back.
Well, there's a problem with that.
We sold your trade in.
What?
Can you get it back now?
We can't get it back.
So if you don't do this deal, you pretty much have to do something.
I'm sorry.
So they somehow they get the credit card out and they, and they put $1,500 on it.
And they signed a paperwork payment went up $150 a month because they couldn't go the term that they wanted either.
And so they leave the place in shock.
Now there's a lot of ignorant things about that.
But the first thing they did when they couldn't get approved is they decided to take it home and hand them the keys to their trade in.
You do not do that any place.
If it's not an approved deal and they tell you to come back on Monday or the next day or whatever, the terms are going to change.
And if you've signed a contract, you know, one thing you'll notice is that you'll sign a contract, but they won't give you a copy of it.
It's because if they do, you've bought a car and you've financed that car and there's nothing they can do about it because you signed a contract.
They signed the contract.
That's legally binding on them.
So this is when, if this happens to you and they've given you a copy of the contract, that's when you call 423-552-2020 and I'll coach you on what to do next.
Now that wouldn't be ignorant.
That would be highly intelligent because you're taking advantage of, you know, this resource that's available to you.
So let me tell you something else that involves a little bit of ignorance.
And this is based on the many years of experience that I have and that is co-signing for somebody, which is not a bad thing except when they have bad credit.
They've got a bad track record before you ever co-sign for somebody.
What you do is, okay, so you've gone into the dealership because your grandson, who's 42 years old, has called you in and because he needs a co-signer.
And so you love your grandson.
So you go on in there and you're sitting down with the finance guy.
He said, well, Mr. Jones, we need to take a credit application on you and your bullets, as we say in a car business, you've got like 800 beacons score.
And you're getting ready to sign for a guy that's got a 500.
And really, I think that's an indication of somebody's behavior and their morals.
And I mean, not everybody that has bad credit has bad morals.
They just have bad behaviors or they have been through terrible circumstances like an illness in the family, lost a job.
There can be lots of reasons why good people have bad credit.
I'm not saying when I say good people, I mean people who are financially responsible.
I'm not judging whether they're good or bad.
Okay.
But if you have a 42 year old that needs a co-signer, that's a flashing red sign.
Maybe orange, but definitely not green.
And here's what I would do.
I would cause the grandson to leave and just talk to the finance manager.
I said, how bad is this credit?
Well, he just, he doesn't pay anybody.
You know, he's 30 days late, 60 days late, 90 days late.
He's had a repossession.
But you know, the dealership, they don't want to tell you that.
They just, just sign here.
I'm sure everything will be just fine.
And then six months later, you're getting a call from the bank saying, you know, you're 90 days past due on this loan.
We're going to repo this thing unless you pay it off or refinance it or something.
So never cosine for somebody unless you know what their history is like.
You know, I think in, in our society, we have just become too lenient on our children and especially when they become adult children.
I mean, at some point we've got to kick them out and let them take responsibility for their own lives.
But no, we don't want them to fall flat.
We don't want them to fail.
You know, some of the best lessons I ever learned was when I failed.
And then I was able to see that failure for what it was.
You know what it was?
It was a learning experience.
Yeah, it was costly.
Yeah, it hurt my feelings, embarrassed me.
But I learned from it and I decided to never repeat that mistake.
And I think that when somebody's there to always cushion the blow that they don't learn anything.
You know, if they're 28 years old and still living in your house, there's a problem.
And you know what the problem is?
It's you.
I'll be back in just one minute.
Okay, I am back on a very, very serious and personal note.
I speak from experience when it comes to entitlement and trying to cushion the blow.
When my son was 10 years old, he was playing tennis with his mom at Tuscan College.
And she went back to pick up a tennis ball and look back and he was on the ground having a seizure.
She didn't know he was having a seizure.
She thought he was dying.
And from that point on, we had to deal with epilepsy.
And it didn't destroy us.
But boy, it sure changed the way we looked at life because we had never had any issues.
I mean, we'd just been healthy and healthy kids, healthy births, you know, everything was just wonderful.
And then this happened.
And so we had to watch his medicine and all that.
And everything was fine until he got on his own.
When he went to college, oh, you know what broke loose?
And he stopped paying attention to his medicine.
He was drinking alcohol, which you cannot do when you're on seizure medications.
And he started having seizures and started wrecking cars.
And every single time I would try to cushion the blow.
You're supposed to lose your license for six months.
Well, he'd lose his for four months or three months.
And I knew that I was not doing a service to my fellow man.
As long as he stayed on his medicine, he was one of the lucky ones from that standpoint with epilepsy is he was able to be seizure free if he just took his medicine.
And he really had a hard time accepting it.
I mean, just from the standpoint of, you know, why do I have this dad?
It's not fair.
And I said, well, no, life isn't fair.
But why does somebody who has diabetes have to take a shot, you know, in order to live?
And it just, you know, it just kind of fell on deaf ears.
And he made it until he was 27.
And I truly believe that the accident that killed him was because he had a breakthrough seizure.
I don't know that for sure.
But, you know, that's just what I feel really doesn't matter.
But the thing is that we all as parents and grandparents and stuff, we have the responsibility to stand up to our kids when they don't follow the rules.
And one of those rules is, you know, you pay your bills, you pay your rent, you know, you don't bite off more than you can chew.
You don't go out and buy a new stereo system when you can't even pay for gas and you don't load up credit cards, you know, with that.
That you just won't be able to pay it off.
It's too easy.
And then, you know, what I've seen a lot of parents do is they'll go in and pay off their credit cards and say, I'm not doing this anymore.
And then they load up with credit cards again and things start falling apart and then they pay them off again.
They come to the rescue again.
And there's no lessons learned.
We have to be willing to let our kids fail because I believe that that's what it takes to become a productive member of society.
And I think a truly healthy human being.
So that's my opinion.
Okay, I'll be back tomorrow for the next edition of My Car Guru if you happen to need me for any reason.
423-552-2020 is my cell phone number.
Text me if you have a question about the value of a vehicle or you want to copy the My Car Guru guidebook.
It's free and I'll send it to you if you send me your email address.
But thanks for listening and I'll see you tomorrow.
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