With so many options on the market, from sedan to SUV to truck and everywhere in between, looking for a new car can be both exciting and intimidating. As a real estate agent, you might think that you need to drive something fancy in order to impress your clients and proclaim your success in the business. However, the best car for real estate agents is one that is simply practical, dependable, clean, and within your budget.
What We’ll Cover
- Monthly Payment vs Cash
- Owning vs Leasing
- New vs Used
- Luxury vs Average
- Car vs SUV/Truck
- Electric/hybrid vs Gas
- The Best Car for Real Estate Agents: My Top 10 Picks
Monthly Payment vs Cash
Debt is a four letter word in today's society, and is something that finance gurus like Dave Ramsey have taught us to avoid at all costs (literally).
To avoid taking out a loan and therefore acquiring more debt, some would argue that paying cash for large purchases is the best way to go when you are fortunate enough to do so.
However, there are times when even the wealthiest people prefer to take out a loan and pay monthly payments in lieu of paying cash.
One instance where you may want to consider taking out a loan is when the interest rates are so low that it actually makes more sense financially than paying it off in cash. If the interest rate on your loan is lower than the rate of return on the money you invest, financing your purchase becomes a much more advantageous option.
Interest rates aside, my opinion is this: if you are able to buy a more affordable car with cash and not have to make monthly payments, that is the way to go.
This is especially true for real estate agents who are just getting started, since much of their monthly income will be focused on marketing and prospecting. Having a looming monthly payment can really hinder your ability and motivation to invest in your business.
Once you start building up your career and your income is more consistent, you may consider selling or trading in your car for something a little nicer.
Owning vs Leasing
The topic of owning your car versus leasing it can be pretty polarizing, with most people having a strong opinion about one or the other.
Generally speaking, the more expensive the vehicle, the more advantageous a lease is. This is because a lease requires less money down and lower monthly payments, so you can get a much nicer car without costing as much in the short term.
Lease agreements are also favored by those who like to switch out their car periodically and upgrade to the latest model without the commitment and hassle of buying or selling.
But there’s more to consider when it comes to leasing a vehicle. Most lease agreements include a mileage limit, meaning that you are expected to stay under the mileage stated or you will be charged for every extra mile driven. If you travel a lot or otherwise tend to rack up miles on your vehicle quickly, this is a big mark in the "cons" column for leasing a car.
Buying and owning a vehicle can be a great option for your business when it comes to your taxes. The IRS Section 179 Depreciation allows businesses to take an immediate deduction for a vehicle weighing over 6,000 pounds, rather than depreciating it over several years.
That means if you are looking for an SUV or truck, there's extra incentive to buy versus lease.
For more information on the specifics of Section 179, consult your CPA.
New vs Used
Truth be told, you don't need to drive a new car to look professional.
At the end of the day, you need a car that is clean and in good condition. It doesn't need to be new, but it does need to get you from point A to point B without fear of leaving your transmission on the highway.
In my opinion, used cars are the way to go. Getting a used car, even if it's only a year old, means it has already taken most of its depreciation and you won't be paying the hefty price tag of a new car.
When it comes to reliability, I recommend a vehicle that is less than 5 years old and has under 60,000 miles.
Of course, this may not be feasible if you only have a $10,000 budget to work with. In this case, you’re probably going to have to get something with more miles on it. Just make sure to look up the vehicle's history and check it over thoroughly in person before agreeing to purchase it.
Luxury vs Average
As a real estate agent, you might feel like you have to project a certain image to your clients in order to impress them.
Having a luxury car doesn't necessarily boost your real estate business, especially if you are draining your savings to do so.
My advice would be to look around at the average vehicle in your area. What are most people driving? Fitting in with the average, or slightly above average, car on the road is enough. Many successful agents drive a well taken care of but otherwise average vehicle.
That being said, if you are a car lover like myself, and are at a place in your business that allows you to spend a bit more on your daily driver, then a luxury vehicle can be nice to have. Just keep in mind that luxury vehicles are not a good investment financially, since they depreciate more quickly than most cars.
Car vs SUV/Truck
One common misconception in real estate is that you need to have a big vehicle incase your clients want to ride along for showings.
While this may happen on occasion, most mid-size sedans have all the space you'd typically need to shuttle a few clients around town. Obviously, a sporty, two-door vehicle or super small sedan is probably too small.
Many people like sedans because they are easier to park and maneuver on unfamiliar roads, compared to a more cumbersome SUV or truck.
If you have a family and need something a little bigger, an SUV or truck is a great option. Just be sure to vacuum out the cheerios from in between the seats before you head out to your next showing.
Trucks are also popular amongst real estate agents specializing in farm and ranch properties.
Electric/Hybrid vs Gas
The main thing to consider when choosing between an electric, hybrid, or gas car is how far you drive on a daily basis.
Most electric cars claim to have a 200-300 mile range per charge, but that varies significantly based on how fast you drive and other factors such as the temperature that day. Since electric cars use fans to cool the battery when it gets too hot, your range will be lower the warmer it is outside.
Some electric cars, like Tesla, offer long range battery options that would be worth buying if you are on the road on a daily basis.
Electric cars also require much less maintenance than their gas-guzzling competitors.
A hybrid car could be a great compromise, since they toggle between electricity and gas, and can typically can go farther before needing to charge.
At the end of the day, there are more options for gas vehicles when it comes to affordability. You can find a great used gas vehicle for less than $10k, while used electric vehicles aren’t likely to be that cheap.
The Best Car for Real Estate Agents: My Top 10 Picks
Depending on the size you want, there are several great options when choosing the car for you. Here is a list of my top 10 picks with prices from CarGurus.com
1. Toyota Prius
If you are looking for a vehicle that is affordable but still classy, this hybrid car is a great bang for your buck.
Typically, they cost around $24k brand new, which is not super cheap but still competitive in the market.
You can find used Toyota Prius’ with significant savings.
2. Honda Accord
3. Ford Fusion
4. Toyota Camry
and are reasonably priced. At roughly $25k new, they are about $5k more expensive than the Ford Fusion.
Again, you can find a used Accord, Camry, or Fushion for under $10k.
5. Mazda CX-5
While the newer versions of these cars are nice and have advanced technological features, the older versions are still a great choice if you’re looking for something bigger than a sedan.
6. Hyundai Santa Fe
Hyundais are starting to get a better reputation, which is clear when you look at the Hyundai Santa Fe. This is a slightly bigger SUV that has received many great awards.
7. Ford Expedition
I wouldn't recommend anything this big unless your daily life outside of real estate warrants it, for example, if you have kids or you travel frequently. A new Ford Expedition will run you anywhere from about $50k to $70k.
Keep in mind that large SUVs are notorious for requiring more maintenance and upkeep overtime.
8. Tesla Model 3
The Tesla Model 3 costs around $40k new and offers so many features with very little maintenance required.
If you’re using this car for real estate, you'll want to get the Long Range version, which comes with an upgraded battery. The Long Range Model 3 can typically go about 270 - 320 miles on a single charge.
Charging the battery can be a little inconvenient, but 9 times out of 10 you won't need to charge until you get home.
9. Lexus ES
The Lexus ES is a mid-size sedan with many features.
You can save about $10k to $15k on the sticker price if you buy this car used. Last year’s model is currently available for about $33k.
10. Porsche Macan
The Macan is a great option for a smaller, high-end luxury SUV.
New, they cost about $61k.
However, be aware of the long term maintenance this vehicle will likely require.
Final Thoughts on The Best Car for Real Estate Agents
In the end, the best car for real estate agents isn’t something over the top. In fact, having a super flashy car can actually rub people the wrong way, depending on what your market is.
At the end of the day, an average range car is more than sufficient so long as it is reliable and clean.
Especially early on in your career, buying the right car can keep you from overextending yourself financially and help you focus on investing in your real estate business.