#1339 – The Expat Files: Car Buying Tips, Legal Warnings, and Plan B Strategies

Automatically transcribed from the original recording; names and wording may contain errors.

[00:00] South of the border down Mexico way That's where I fell in love when the stars above came out to play and now as I wonder Hello there all you ex-pad wannabes. I'm Johnny Mueller and you're listening to the expat files living in Latin America The show that tells you just what it's like to live work play and or retire down here in Latin America It's a mix of the good the bad the ugly and the great and it's all right here. So let's get started How about we start right off the bat with the boots on the ground story, man you better listen to this one because Everyone who comes down here to Latin America or almost everyone who stays here permanently ends up buying a car If you think you've had problems up in the states buying a used car, you ought to see what it's like down here

[00:49] Almost every long-term expat gringo I know has had his trials and tribulations when trying to buy a used car Though there are ways to avoid all those problems You know all about the reputation of used car dealers up in the states, right? They're public confidence rating ranks slightly below Catholic priests and politicians However, if you're smart and clever and know the tricks of a used car dealer, you can do well for yourself But do you know those tricks? So it would stand to reason it's best to buy from the original owner, you know private seller That's usually the best of all worlds because they don't know how to hide the defects. They don't know the dealers tricks They just want to sell the car so they can have room in the driveway for a newer car. That's usually the case

[01:36] Whereas used car dealers have a bag of tricks and you might have fallen for a fuel on the way yourself You know in my life I've had 14 or 15 cars a lot of them bought you so I've been victim to a trick or two Now stop me if I told this story before it, but it's a prelude to a brand new boots on the ground story So bear with me Way back when I lived in Chicago one of my good buddies was a used car deal So the really high-end stuff though Ferrari's jaguars, you know sold a lot of used ones too But all in great condition He took me on a couple of trips to look at some cars being offered up by desperate sellers You know a lot of high-end car owners who buy cars like Ferraris Lamborghinis and jaguars and stuff They buy cars like that to show the world how important and cool

[02:22] They are only to realize like my buddy told me if you own a Ferrari, it's gonna cost you at least 2,500 bucks a year just to do the routine maintenance add to that about 3,000 bucks in full coverage insurance you're looking at 5 G's a year just to keep it running That's if nothing big goes wrong So then a lot of snot knows young executives buy cars like that. No realize they bit off way more than they can chew so guess what after realizing what it costs to maintain a high-end car like that and Along with a little downturn in their luck my buddy Chuck the used high-end car dealer He's seen it all and he knows how to spot a desperate seller He'd show up with a blank check and a low-ball cash offer always wearing gloves and inside those gloves He had a hidden magnet He'd check out the car going up and down the metal panels

[03:09] feeling for areas that were patched up with bondo meaning body repair after an accident and of course bondo is a plastic material that magnets don't attract and he'd proceed to point out those previously repaired areas and Discounting his price offer as he went along for me. It was a sight to see how he worked that game. I mean Anyway, he knew most guys selling high-end cars that were only two or three years old They were desperate whether divorce a business downturn or just too many expensive high-maintenance toys So then how did I get to know this car dealer my buddy Chuck? Well, he was a lead player in a band with me a really good lead player, too We played the bar circuits and stuff till we got our real careers going I mean really think about it. Did you know there was a magnet in a glove trick that use car dealers use?

[03:59] Well, you know why that trick originated because people lie they say no, that's a pristine cards never been in an accident Yeah, right. How many times have you heard that line? The question is how can anyone prove that? Well, guess what? If it's never been in an accident, it's never been bond owed you get the point now, of course down here in Latin America No one needs to use a trick like that because Everyone who owns a car eventually gets an offender bender or two and get somebody worked on and therefore bondo Which brings us back to the original story? Anyway one day about two months ago a young Latino Engineering buddy of mine. He's a mechanical engineer works for a big plastics company that makes plastic tubing and containers and stuff. I Know I know we're finding out more and more bad things about plastic

[04:45] So obviously the guy doesn't have one of the most desirable engineering jobs in the world, but it pays the bills Hey, he's got a wife and a kid and all that anyway Did I tell you he's about 32 a very nice guy stable solid trustworthy works out Junk food and fast food addict like the rest of Latin America, but he's smart. So eventually he'll learn Maybe a couple months ago. He phones me up says Johnny. Guess what? I got promoted great news Turns out he told me he'd been working for that company about five years as an engineer on the floor sort of a Manufacturing engineer. Yep. That's the title They give you when you're an engineer on the floor of a plant keeping things going and developing new processes and such So anyway after about five years at that post, he just got a promotion to production engineer

[05:33] He'd now have to start making the rounds to many of their different plants throughout the country They told him now that you've got a promotion. You've got to have a nice Respectable car to drive around in there'll be lots of meetings and dinners with clients and executives So part of the job was making a good impression. He'd have to wear a suit every day, too now all along he had been driving kind of a junker a 2005 Hyundai Sonata Not all banged up or anything, but kind of a piece of shit, you know, nothing you or I'd want to try But hey down here in Latin America, if you've got a car at all That kicks you up in social class to the nth degree. Anyway, guess what he had been making as a manufacturing engineer about 800 bucks a month three times the minimum wage and

[06:20] With his new promotion. He had been kicked up to around 1300 a month that means he's making a grand total of around 15 or 16 G's a year and He's a graduate mechanical engineer working at a really big company That should give you an idea how really cheap the labor is down here even Professionals down here make what we might consider in the United States poverty wages Anyway, he phoned me up and said Johnny will you help me check out a couple of cars? I'm gonna get a new one cuz I got my promotion. I Said sure how about this weekend? He said fine. What'd you have in mind for a car? He says, oh, I already looked at two SUVs. I'm really interested in Now here's the thing. You heard me say that Oftentimes you're much better off buying from a private individual, you know

[07:05] Just a regular person selling a car because he can't hide any the defects. He just doesn't know how That way when you buy the thing, there's no surprises. Well, guess what Latin Americans don't much like to buy from individuals Why because it's a big pain in the ass to switch over the title get new paperwork done Get new plates sign up for car insurance and arrange for a bank loan It's a huge hassle to do all those things yourself By the way, if you have a decent car, you're gonna want to get at least the minimum insurance policy third-party liability It costs you a hundred to two hundred a year now I mentioned bank financing because most all Latinos do not have the cash I mean ninety nine point nine percent of them have to finance it though It's true. Most gringles the next pestle pay cash for a car, which is a very good and easy thing

[07:51] But Latinos almost never so when you buy from a private seller, there's lots of obstacles On top of that you'll have to get a lawyer involved to check the title to make sure it hasn't been altered or forged Or stolen because you know down here in Latin America about ninety to ninety five percent of used cars came from the states We're driven down or bought at auction up in the states as wrecks to be fixed down here and result You have to be aware of that. That's why most Latin Americans buy a car at a used car dealership That way they automatically know it's a clean title there'll be no need to involve a lawyer and the dealership will do all the paperwork necessary and Usually within two weeks deliver you a new set of plates all registered in your name They'll hook you up with insurance, too. That's why down here in Latin America buying from a dealer is so popular

[08:36] I mean look Who has the time to waste standing in six or seven government lines to get all that crap accomplished? The dealer does it all for you. Now. That's not to say I personally recommend going to a used car dealer You know, i've been down here a long time and i've done it both ways Bought cars from private owners and dealers and i'll tell you i've seen a few gringles and experts enter into their own personal nightmare When they bought from an individual especially when the seller speaks only spanish and the buyer the gringo or expat speaks only english The thing is if you buy from a private party Walk him into your lawyer's office before you make the deal and let your lawyer get all the signatures, etc That's where you do the cash transfer too in front of your lawyer Oh, and if you're buying from an individual you better pay cash because no bank is going to finance you

[09:22] However, if you buy from a dealership I've seen quite a few cases of gringles and expats getting bank financing without ever having to walk into a bank Dealerships will have their favorite banks and do all the paperwork for you right there at the dealership So anyway, my engineering buddy was dead set on getting a honda crv. It seems down here in latin america That's kind of the go-to car for junior executives and people climbing up the corporate ladder Now I know what you're thinking. Don't laugh a guy making 15 or 16 g's a year That's living under a bridge in a cardboard box kind of money, right? Just remember down here the average lawyer even the average Medical gp makes between 10 and 20 g's a year By the way medical specialists, you know like colon rectal surgeons or plastic surgeons

[10:07] They make on average about 30 to 40 g's a year Unless they get famous on tiktok for doing boob and butt jobs I kid you not once one of these plastic surgeons does a successful bbl on one of these idiot reggaeton or Gold tooth rap stars it goes viral They get a minute's worth of fame and notoriety out of it And suddenly they got a stream of latinas living up in new jersey and nueva york in chicago coming down To get cut rate plastic surgery too because obviously They all want to go to megan the stallion or cardi b's bubble butt doc Hmm wait a minute. Wait a minute. What a stupid name, huh? megan the stallion I don't know about you, but where I come from a stallion is a massive male horse

[10:54] Whose outstanding feature is his giant johnson? Hmm nice moniker megan. What's your pronoun for that one? But I digress man. Did I digress? Now my latino engineering buddy his name is edgar by the way the following saturday He took me to two car lots on the first lot. We checked out a 2021 blue Honda crv Now I know some of you are thinking there are lots of new car dealerships all throughout latin america What happens when someone buys a new car owns it a couple of years and sells it obviously it's not coming from the states So maybe it hasn't been wrecked and rebuilt So then how do you know that? Well, it's easy to tell right away Just look at the dashboard if the odometers in miles principally There'll be a smaller kilometer scale, but the mile scale will be predominant

[11:42] That means it most certainly came from the states was bought in an auction wrecked came down and was rebuilt However, if the odometer and speed gaze is principally in kilometers, you know The principal letters say kilometers then the car was most certainly bought new in latin america at a new dealership So if it's a used car for sale, it's highly doubtful. It was a rebuilt wreck However, the chances of you buying a light new car that was actually purchased new in latin america are about 20 to 1 In other words, there are about 20 times as many cars bought in the states wrecked at an auction Driven down and repaired then there are cars bought new in new car lots here in latin america So if you're looking for a certain kind of used car model make color, whatever That was bought new at a dealership in latin america. Don't hold your breath

[12:27] Now remember this particular honda crv we were looking at it's around four years old 40,000 miles on the odometer Sort of low mileage for a four-year-old car Then I looked under the car to see if there's any damage to the frame because you know Who wants a car that looks good on the outside and the undercarriage is all banged up There were a few minor scrapes but within normal range, but I did notice one of the protective panels You know the bolts of the frame beneath the oil pan and transmission was missing That means it bottomed out on something pretty hard at least once but not to worry It's just a piece of plastic the dealer said don't worry you buy the car. I'll have one put there immediately I know exactly what he would have done too. I saw him eyeing the other crv in his lot He would have just scavenged it from that car and put it on this one And the guy who eventually bought that other crv would be none the wiser

[13:16] Or not because it's really who checks for those things except maybe a guy like me And that's when I made with the big question. I said to the dealer. Where has this car been damaged? Show me now. I already knew because I looked at the paint job From various angles and if you have a good eye You can tell almost always when a portion of a car a trunk offender a hood whatever has been repainted They can match the color All right But they cannot match the final sheen of a car that had spent in the sun and rain and weather for a couple of years New paint applied no matter how well it's done will look ever so slightly different When you examine it closely from a distance looking at different angles Well, I already knew that car was whacked pretty good on the right front

[14:04] But looking under the hood and under the wheel well, it was a very good repair job Almost impossible to tell it had been whacked and repaired except for that slight almost Unnoticeable difference in the paint job now guess what and it was a surprise to me, too The dealer didn't lie. He said he got whacked on the front right I said anywhere else. He said no, that's it right front. And that's when I said the magic word Do you have a car fax on this car? And he stopped for a second and turned a little pale and said yeah, you want to see the car fax? Okay Now, you know what car fax is a complete report of the history of that car everything that happened to it It's complete history when it was up in the states. Anyway Car fax does not yet work with cars bought down here in latin america originally from the dealership

[14:52] But it'll give you a great history on any car that's bought and sold or driven up in the states Including many times the oil changes and the regular maintenance schedule Oh, and it's a fantastic way to find out if your dealer rolled back the mileage on the odometer Don't laugh some years back. I was sucked into a scam like that myself But car facts ain't free. It's something like 20 or 30 bucks B being a gringle was probably the guy's worst fear because he knew i'd pull up a car fax on that thing right in front of him Something latino buyers rarely do at least not yet, but surprise surprise. He was not lying It was exactly as he said there were photos on the car fax of the wrecked car Sometimes superficial dents could look a lot worse than they really are. That's why the guy didn't want to show it to us

[15:38] So anyway, my buddy edgar started dickering price back and forth with the guy and they came to some kind of agreement with the dealership arranging financing Meanwhile, we had another car and another dealership to check out Remember there were two honda crvs who was looking at anyway We went to the other dealership looked at another honda crv. This one was white. It was model year 2020 I once again asked my questions. I said where has it been hit? He said it was rear-ended And you know i'm always leery When a car's been fixed after it's been rear-ended because you're talking about a hatchback and those things have electric openers Hydraulic pistons for lift assist an electric wiper mechanism and water jet, you know It's pretty complicated back there and when it gets hit there's less that can go wrong. Anyway, everything worked. We checked it out

[16:26] Did a once-over inspection little test drive now being a year older than the other car This was slightly less expensive and that's when I said to the guy do you have a car fax on this thing? He said no, it came from one of the auctions in texas, but I don't have a car fax on it Then he took out his phone and said but I have this some photos from the auction Obviously dealers in latin america buy these cars sight on scene just through photos on the auction house websites Sure enough. It got rear-ended. All right But as mentioned the repair job was Pretty damn nice. Really. I said you mind if I do a car fax check on it right now Turns out when my buddy edgar called me up. I got him on the car fax website They were giving new subscribers a free first month So I went to the car fax website on edgar's phone. Not mine

[17:16] I don't put apps like that on my phone. I know better But you know down here in latin america people don't give a shit about privacy Even smart guys like edgar have their phones fully junk So we plugged in the car's vin number and up popped the full car fax report with photos And this car dealer just like with the other car dealer as I pulled up the car fax His face turned kind of pale It got even worse as I paged through that report and saw it had been in six Yeah, you heard right six Six different accidents up in the states since it had been purchased new in 2020 Obviously the owner or owners had been very bad drivers. Yep. It had three different owners Not a good sign at all Now you might be wondering why I didn't spot different paint repairs on that car right away

[18:03] You know the ever so slightly different shading as with the previous car Well, that's because the car was white and white paint seems to be painters will tell you this too It's the easiest to blend they can feather it and match it till it looks perfect Two novices like you and me who are not in the game. Anyway, so edgar bought a car that day. Guess which one he bought Oh and the epilogue to that story month and a half later just two weeks ago. He got in an accident Not his fault A motorcyclist crossing through three lanes of traffic clipped and broke his tail light Cost him 400 bucks out of his pocket because his insurance was 500 deductible and the motorcycle a-hole He picked up his bike and left the same. Oh, well So anyway, I hope you paid attention to that story and some of the lessons to be learned

[18:50] Here's one thing you absolutely should have taken from it. The average latin american Doesn't even know what a carfax report is and the ones who do and probably 80 or 90 percent of gringos as well If in lieu of a carfax report They're showing a picture from the auction house up in the states where the car was bought the prospective buyer even a gringle buyer would be Perfectly satisfied with that. Well, i'm here to warn you don't fall for it Even if it costs you 20 bucks to get a carfax subscription for a month yourself It would be well worth it when you're car shopping After all, you know what they say for most people buying a car is the second biggest purchase you'll make So spending 20 bucks to know the entire past history of a car man by all means take advantage of it That's a real gift that didn't even exist just a couple years ago Oh and don't let a latin american dealership tell you they're not hooked up with carfax

[19:40] They all are a dealer even saying as much would be a red flag for me Oh, and by the way, sorry, I forgot to mention this None of the salesmen at the dealerships i've been to speak english So by all means take a bilingual person along with you And of course, you know if you've been to one of my seminars or you're in guatemala Get ahold of rita go ahead and book some time with her. She'll go car shopping with you All right moving on A few shows back. I was talking about people who once had a plan b but threw in the towel and gave up on it There are lots of reasons for that. Of course Usually it's family or friends or other ties holding you back Some people have all the best intentions, but just can't pull the trigger can't make the break I got a lot of email responses after hitting on that topic

[20:26] I also got lots of email responses mostly from lawyers who listened to this show after I Read that letter from a highly placed lawyer. Who's a judge as well as an ivy league law school professor What he said stung some people a bit in his law school commencement speech He gave a stern warning to the newly minted lawyers in that group He warned that although they all may be idealistic now He said sooner rather than later once they get sucked into a big law firm, they'll all become corrupt Yes, he said drop by drop drip by drip and they'll justify it to themselves to the bitter end Anyway, I got a lot of emails from lawyers on that one like this email from patrick one of our seminar alumnus He says hello johnny I really enjoyed meeting you and getting to know you on the drives we took while attending your expat insider seminar

[21:17] I was in the class about 10 years ago That included a huge mixed martial arts fighter who had no money You probably remember him He held the entire bus trip up on stops Talking to the owners of restaurants and trying to give them autographs and memorabilia rather than paying for his meal There was also a very cool accountant named glenn and his wife at the seminar. I remember Then patrick says johnny I still listened to your show and heard a reprise of a subject that impelled me to write You mentioned in a recent podcast that trump has something like 60 indictments against him. I believe personally he'll do jail time In fact, he has over 90 felonies against him. I'll bet you a trip to a very nice cigar bar on this one Yes, I know he'll end up in a country club style jail

[22:04] But still jail and he will be the only american president ever convicted of multiple felonies Much deserved I say Wait a minute. Wait a minute patrick. I have to chime in here What about the two bushes and obama and clinton? They don't deserve jail time They're all sociopathic liars and crooks. Come on. Don't pick on just one They're all complete criminals guilty of multiple felonies It's just that trump runs his mouth off so much and made so many enemies behind the scenes that They've built up a better case against him on top of that. There's no justice in the justice system That's an oxymoron congress's button paid for as is the media and as for obama He was so damn popular with the public. It doesn't matter how many guilty and innocent people he killed in drone strikes

[22:50] After all he could do no wrong. He was saint obama, by the way, did you ever read the book the clinton body count? I doubt trump's ever killed anyone. I don't have to go on about it. You listeners know how corrupt the system is That's why most of you are listening to the show To get the hell out of dodge get a plan b going You know the country you grew up and no longer exists and it can't be fixed My simple solution is term limits two terms one term in office one term in jail Anyway rant over back to patrick's email. He says johnny. I loved exploring latin america with you and our seminar group In fact, i'm still facebook friends with one of the concierge ladies from the trip He says before I retired I had clients that were brilliant restaurateurs in monterey, california They sold their restaurant retired down to new mexico after studying arizona closely. I watched phoenix and tucson

[23:39] Absolutely run up in real estate prices. My goal was to pay cash for a home and never have another mortgage payment Hence, I followed my clients to new mexico He says i'm glad to report the cost of living here is at least 20 less than california yet I still enjoy some of the advantage of living in the united states. I love new mexico He says there are lots of latinas here and there's an ancient enduring latin culture, which I also love He says new mexico is about the fifth largest state in the country geographically with a little over 2 million people He says there are wide open spaces everywhere I can drive or ride two miles in any direction and still be out in the great chihuahuan desert Firearms can be carried openly here, too There are four seasons and yes, it does get hot during the summer I'd say the average is about 103 for two and a half months for me. That's easy

[24:31] So then what's the downside of living in new mexico? Well, the tap water takes like kaka and this is one of the most water sensitive states in the country So you have to filter and watch your consumption or pay a surcharge It can also get windy as hell But the cost of a house well, I paid well under 300 000 for a 10 year old three-bedroom two-bath home With a view of the spectacular jagged organ peak mountains He says I know I know I was lucky to have the cash to do this But I was under the impression there are at least several in our group at the seminar who could do the same I'm guessing this hasn't changed That said I'm betting there are listeners that have ruled out moving to another country like me But still retain a solid interest in the whole expat experience and idea like me

[25:16] I hope this is helpful for those people. I know moving down there can still beat the pants off a living here in the states In the end he says i'm very glad that we met john and who knows Maybe i'll see you in the future. I remain an avid listener and fan knowing you and your health habits I'm sure you're healthy and happy with plenty of feminine company And if I know you you still have a couple of big stunning dogs. Are they still dobies? He ends by saying drop me a line john a when you can and let me know what's happening with you all the best ex-seminar guy patrick All right. Well, thanks for that patrick. I know for sure when some people retire get up in age It can be harder and harder to get that plan B off the ground As much as people have the desire a lot of them just don't have the follow through Now I know you're not old and ancient but I can imagine a person who's maybe 70 or so

[26:06] Balking a little bit at getting the hell out of dodge even if they're absolutely convinced It's the right thing to do I've seen it myself a 70 year old or 70 plus year old person Is even though they might not admit it much less likely to get the hell out of dodge than a person Who's let's say 15 or 20 years younger people who are 40 45 55 are more likely to get the ball rolling in a hurry As compared to the 70 year old wannabe crowd provided they both had the means to get the hell out A lot does depend on age and health You know if you plan on kind of fading out into sunset versus coming down to latin america and starting up a business and getting back In the game again, we're talking about two completely different trajectories here By the way patrick just a little aside about our six foot four

[26:52] 325 pound mixed martial arts fighter. I haven't heard a peep from him since I believe he told me he was 43 years old, which means he was past his prime He also said the average mixed martial arts guy like him with a very big body and used lots of steroids, etc He said that majority of them are dead by the time they're 55 So he figured he had around 10 years left to live. He kept telling me that So his idea of a plan b timeline is much different than most everyone else's by the way patrick There was almost a universal consensus amongst the attendees at that seminar They all accepting maybe one or two said that big mixed martial arts guy was a real dick You've been listening to the expat files living in latin america

[27:38] If you need some help with your own plan b we can schedule a one-on-one phone or skype consult Just send me an email the expat files at gmail.com And if you want to get on the waiting list for my next week long expat insider seminar in central america Where you're guaranteed to get a two to five year head start on your plan b. Send me an email the expat files at gmail.com