Author Topic: Accept used luxury car from client as payment in lieu of cash?  (Read 2924 times)

frontstepdesign

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Accept used luxury car from client as payment in lieu of cash?
« on: November 16, 2017, 02:41:52 PM »
I do some consulting for my husband's boss, whom I know well.  He has a 2012 Mercedes Benz GLK 350, 100K, loaded, sitting around.  He'd like to pay me next year with this car.  Help me decide whether to accept, or insist on cash.  He will discount the cost of the car to me by about 33%, making it a very good deal ($12K) on what it is. 

I've investigated the car somewhat - I'm a long way from being car-savvy, but I read what Consumer Reports had to say, and it was pretty encouraging, given I WON'T DRIVE IT VERY MUCH.

Explanation: In pursuit of a more MMM-lifestyle, we have moved to a small town where I can walk/bike nearly everywhere town-related, and I only need to drive to the next town occasionally (couple times a month) or long distance (300+ miles, <8 times/year).

My present car is a 2005 Toyota Scion xB, which I bought new.  I have driven it 220K since, and it has been a rock star.  However, my husband and my mother have been on my case for years to "upgrade your car, we worry about you."  I admit, it's not the quietest interior experience, and it sits like a dining chair, but it's taken care of me and my stuff.

I checked insurance rates, and discovered I've been overpaying, so that's going to get fixed anyway.

I know I will pay income tax on the value of the car.  But I won't have to fool with payments (which I'd have to do, given the Beginning Point of my MMM journey.)

Honestly, I'm most nervous about inflation of expectations/cost of maintenance owning a luxury car!  I've always owned/driven nonluxury cars, but CarMax tells me that I couldn't get a better late-model deal given a $12K budget.

What am I not thinking of?  I need to make a decision for 2018.

Capt j-rod

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Re: Accept used luxury car from client as payment in lieu of cash?
« Reply #1 on: November 16, 2017, 02:50:30 PM »
The concern I would have is the cost of repairs on a Mercedes. The parts and labor will be pretty steep compared to the scion or a Toyota   . I'm also not a very big bling guy. I drive a boring white Tacoma. Cash is always king. If you want a car then buy one with your cash. It's a nice gesture, but I would be passing. I had a customer try to trade me a 3/4 ton plow truck for HVAC. I would have made out like a bandit numbers wise, but I didn't want to feed a 3/4 ton and I really didn't need it. I trade labor all the time, but cars are another world. What is the KBB value if you sold it?

RidetheRain

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Re: Accept used luxury car from client as payment in lieu of cash?
« Reply #2 on: November 16, 2017, 02:58:56 PM »
Let's look at this a different way. If he gave you cash, would you go out and buy this car?

MustachioedPistachio

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Re: Accept used luxury car from client as payment in lieu of cash?
« Reply #3 on: November 16, 2017, 03:07:34 PM »
What would the cash value be? Is 12K a fair amount for the services you've provided? If the cash offered is less, take the car instead and sell it yourself. Or stand firm on the value you've provided that's obviously worth at least 12K.

That Mercedes is going to depreciate and cost you big bucks in maintenance. A cash payment can be immediately invested and/or used to pay down debt. In 10 years that invested cash will be worth much, much more than a 15-year-old car. A car that you don't need. A luxury car, at that. Given your biking/walking-friendly living situation, the xB should hold up just fine. If still in doubt, renting a car for those <8 trips per year is still more cost effective than the merc (and since you are a consultant, I'm sure you can find a way to make it business-related, no?). Don't succumb to social status pressures! :)

Let's look at this a different way. If he gave you cash, would you go out and buy this car?
+1

Tyson

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Re: Accept used luxury car from client as payment in lieu of cash?
« Reply #4 on: November 16, 2017, 03:18:48 PM »
I do some consulting for my husband's boss, whom I know well.  He has a 2012 Mercedes Benz GLK 350, 100K, loaded, sitting around.  He'd like to pay me next year with this car.  Help me decide whether to accept, or insist on cash.  He will discount the cost of the car to me by about 33%, making it a very good deal ($12K) on what it is. 

I've investigated the car somewhat - I'm a long way from being car-savvy, but I read what Consumer Reports had to say, and it was pretty encouraging, given I WON'T DRIVE IT VERY MUCH.

Explanation: In pursuit of a more MMM-lifestyle, we have moved to a small town where I can walk/bike nearly everywhere town-related, and I only need to drive to the next town occasionally (couple times a month) or long distance (300+ miles, <8 times/year).

My present car is a 2005 Toyota Scion xB, which I bought new.  I have driven it 220K since, and it has been a rock star.  However, my husband and my mother have been on my case for years to "upgrade your car, we worry about you."  I admit, it's not the quietest interior experience, and it sits like a dining chair, but it's taken care of me and my stuff.

I checked insurance rates, and discovered I've been overpaying, so that's going to get fixed anyway.

I know I will pay income tax on the value of the car.  But I won't have to fool with payments (which I'd have to do, given the Beginning Point of my MMM journey.)

Honestly, I'm most nervous about inflation of expectations/cost of maintenance owning a luxury car!  I've always owned/driven nonluxury cars, but CarMax tells me that I couldn't get a better late-model deal given a $12K budget.

What am I not thinking of?  I need to make a decision for 2018.

Are you joking?  Hell no.  Get the cash and save/invest it.

Lady SA

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Re: Accept used luxury car from client as payment in lieu of cash?
« Reply #5 on: November 16, 2017, 03:33:30 PM »
The car seems incredibly impractical and you admit you wouldn't even drive it much at all. Plus you would be getting a depreciating asset, instead of an appreciating one (cash).

Unless you are thinking of immediately turning around and reselling the car for a profit (which would be a hassle and your husband's boss might be upset), I'd say a hard NO on accepting the car. I would want cash for my services instead.

meghan88

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Re: Accept used luxury car from client as payment in lieu of cash?
« Reply #6 on: November 16, 2017, 03:53:28 PM »
I agree with the other posters.  Take the cash.

JAYSLOL

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Re: Accept used luxury car from client as payment in lieu of cash?
« Reply #7 on: November 16, 2017, 04:58:23 PM »
STAY AWAY FROM THE CAR IF YOU CAN

100k on a 2012 is very high milage, and Mercedes with a 100k on them tend to be extremely expensive to maintain and depreciate like theres no tomorrow.  I would stay far away, unless you feel this is your only chance at getting something for your work I would go for the cash instead.  Even if theres "nothing wrong" with the car, you are talking about a Mercedes with 100k on it that's probably due for every service imaginable.  Thinking $5k - $10k from a dealer easy if oil change, coolant change, transmission fluid change, spark plugs, timing belt etc needing to be done, then add in brakes are due etc and you've lost most of your money on a car with "nothing wrong with it".

JAYSLOL

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Re: Accept used luxury car from client as payment in lieu of cash?
« Reply #8 on: November 16, 2017, 05:00:16 PM »
Tell HIM to sell the car and get the cash if the car is actually worth that much

sokoloff

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Re: Accept used luxury car from client as payment in lieu of cash?
« Reply #9 on: November 16, 2017, 05:57:01 PM »
My dad is a big Mercedes fan, maintains several with my help, and I drove a used one for 6 years or so. They are expensive to service if your plan is "take it to the dealer, throw them the keys, tell them to 'fix everything', and eat the free ice creams in the waiting room while they do it."

If you DIY the basic service, I found the cars to be incredibly DIY-friendly; they seem to be designed to be serviced (very few plastic "Christmas tree" fasteners and other one-time use BS, things that need removed for servicing have proper threaded fasteners, reasonable access, and the model I had had an entirely top-side oil and filter change process, which was very nice) and the parts are readily available at reasonable prices for regular service items (brakes, rotors, lamps, filters, etc.).

No way was that car as cheap to maintain as our current Honda CR-V and Nissan LEAF, but it really wasn't bad overall because it never darkened the bay of a dealership in the 6 years I owned it.

WSUCoug1994

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Re: Accept used luxury car from client as payment in lieu of cash?
« Reply #10 on: November 16, 2017, 06:22:13 PM »
FWIW - I own a clown car - 2009 Mercedes C350 - 110,000 miles.  It has been trouble free and has never been to the stealership for any issue.  The downside is the maintenance - air-filters, oil filters, oil (8.5Q for a six cylinder), brakes and worst of all the tires.  Ohhhh the tires.  I have tried every available vendor for tires and they never last more than 25,000 miles.  Now I have a heavy foot but they are not cheap and they don't last.

I love this car.

undercover

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Re: Accept used luxury car from client as payment in lieu of cash?
« Reply #11 on: November 17, 2017, 05:53:29 AM »
Let's look at this a different way. If he gave you cash, would you go out and buy this car?

+1. You could buy a same year and mileage Honda Fit for about $6k. Of course, you can continue driving your xB until it actually dies as well. You know that whether or not you have any serious issues with the GLK that it's going to be more expensive to maintain in general.

OP, there is no reason to accept this. If anything it sounds like he's trying to take advantage of you by finding an easy way to get rid of something he doesn't use. Let him keep his problem and demand cash. The only way I'd accept the car is if I knew I could turn around and sell it easily for an acceptable (considering time and hassle) amount more than the cash amount agreed upon.

Dave1442397

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Re: Accept used luxury car from client as payment in lieu of cash?
« Reply #12 on: November 17, 2017, 06:19:31 AM »
Tell him to take the car to CarMax, sell it to them, and then pay you.


frontstepdesign

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Re: Accept used luxury car from client as payment in lieu of cash?
« Reply #13 on: November 17, 2017, 06:51:46 AM »
Thank you all SO MUCH for giving my gut instinct more ammo!  I had only read a couple of responses yesterday before I had to channel-switch, but I thought about some underlying aspects that ClownCarClient might understand when I say no.
Let's look at this a different way. If he gave you cash, would you go out and buy this car?

No, I wouldn't.  Furthermore, I would always feel uncomfortable about driving it.  A MB is not me.  Since CCC (and my susceptible-to-ambient-culture spouse) are very influenced by branding, I can say - that's not a FSD car.  Not sure what is yet beyond the xB, but I'll work on figuring that out.  Maybe y'all can help? Hatchback + road clearance for long gravel roads (this is the MS Delta) + high efficiency + reliability

STAY AWAY FROM THE CAR IF YOU CAN

100k on a 2012 is very high milage, and Mercedes with a 100k on them tend to be extremely expensive to maintain and depreciate like theres no tomorrow.  I would stay far away, unless you feel this is your only chance at getting something for your work I would go for the cash instead.  Even if theres "nothing wrong" with the car, you are talking about a Mercedes with 100k on it that's probably due for every service imaginable.  Thinking $5k - $10k from a dealer easy if oil change, coolant change, transmission fluid change, spark plugs, timing belt etc needing to be done, then add in brakes are due etc and you've lost most of your money on a car with "nothing wrong with it".

As a not-so-car-savvy person (I would have wanted to move to this bicycle-friendly town anyway, because I don't prefer to speak car, they are a necessary expense in my view), I really needed to hear this.  This will address some of my husband's arguments of "that's a lot of car for the money".

Though something else - I just Minted my financial picture (I'm the primary breadwinner), and have our financial projects planned out...which don't include coming up with the income tax due on the car.  If I insist on cash, obv I just withhold the usual percentage and I'm covered.

Thank you all again, and now I can go write a year-end summary. :D