Consider the following scenario: You are looking to sell your property and having phoned the three most well-known agents in the area, they each arrive to meet you for the real estate agent interview.
- The first arrives in a small, dirty car which is over 10 years old.
- The second arrives in a clean 3-year-old family car.
- The last arrives in the latest model luxury car. It costs almost as much as your house.
Which agent would YOU use?
Interesting debate: If a real estate agent drives a luxury car, will you (not) choose him based on that?
There is much debate about whether or not driving a luxury car is actually a good idea for a real estate agent.
Some swear that without the luxury car they could not do the business that they do; others insist that it makes no difference as there are ‘more important things‘ that determine whether someone would hire a certain agent.
Heck, some even suggest that having too flashy a luxury car could potentially alienate an agent from his potential clients.
Then again, following that thinking, the opposing camp insists that driving too old a car makes the agent look as if they are unsuccessful.
However, there is an interesting distinction that agents have recognised in practice: for the most part, the debate continues around the type of car the agent is driving.
Having said that, would it surprise you to hear that, when clients are choosing a real estate agent to use, the type of car actually makes LESS of an impact on the decision?
The condition of the car is a bigger factor!
Was it clean? Roadworthy, presentable?
As first impressions go, the first agent in the abovementioned example is already on the back foot before he even gets out of the car.
Not that big of a surprise there, right?
We all know that real estate agents regard their cars are their mobile offices, but (regardless of the type of car) agents should keep their cars clean.
After all, you never know when you’ll have a last minute appointment where you’ll have someone sitting next to you!
But the biggest factor in who clients will choose is determined by how the agent treats them once they get out of the car:
- Does he seem like he wanted to be of service to you?
- Does he give you a good first impression?
- Does he listen to what you have to say?
- Does he make you feel valuable?
These are bigger reasons to use (or not use) a particular real estate agent, rather than whether real estate agents drive luxury cars!
(1) So, if the flashy luxury car driver was somewhat of a jerk, he probably wouldn’t be your first choice.
(2) If the agent with the family car smiled warmly and took an interest in you and your needs, you might actually have signed the go-ahead after the meeting already.
(3) And if the agent in the dirty car was the nicest person you’ve met, you still won’t use him if he doesn’t seem to know what’s going on when it comes to marketing & selling houses.
Of course, if all the agents do have the same level of friendliness and professionalism, the dirty car agent will very likely be at the most disadvantaged. (If only his old car was clean and well maintained, he might have an equal shot at securing business with any of the others!)
Time for a Curve Ball: here’s what research says about real estate agents driving luxury cars
Studies seem to back up the fact that the most successful real estate agents are those who drive luxury cars.
Really? Did that study outcome throw you off?
I would contend this is because the most successful agents are generally the most professional ones, have the best people on their teams and probably have the necessary negotiating skills.
Using these skills successfully and working hard is actually what made it possible for these agents to buy luxury cars!
Then again, it could be that that, as a general rule, a real estate agent’s car will very likely reflect the type of clients he assists:
- Affordable cars will usually belong to agents who service middle-income neighbourhoods.
- Agents driving luxury cars will often be working in higher-income areas.
Again, this isn’t a hard and fast rule; just my personal observation!
Real estate agents only earn commission
Here’s something else to think about in this discussion:
Real estate agents are mostly self-employed, and while brokers (principals) might be getting a salary plus bonus from their offices, most agents aren’t getting any salary at all, as they’ll be doing commission-based work.
This means that agents can deduct any and all business expenses; that is, any expenses occurred while generating commission-only income are tax deductions. Any business use of a luxury car is seen as a business expense…
If an agent keeps a logbook, all expenses related to business travel are tax deductible. So, if an agent uses their luxury vehicle for business 50% of the time, half of the costs are tax deductible. These expenses include petrol, oil, services, car insurance and other expenses related to upkeep and use of the car. Also, 50% of the interest paid on the repayments of the luxury vehicle is tax deductible. With well-kept records, all these are legal tax deductions for which agents can claim.
Would this be enough of an incentive to upgrade the agent’s car?
It seems that real estate agents who drive luxury cars…
If a real estate agent can afford a luxury car, there doesn’t seem to be any valid reason for them not to.
Or is there?
Are there some real estate agents who have overextended themselves by driving luxury cars that they would be perhaps wiser to do without? For sure.
Whereas I’m sure it’s the case throughout the world, on a local level in South Africa, at one of the biggest property franchises, it was reported that two out of the three national top-earners were under debt review when the economic crisis of 2008 hit. And yes, all those individuals drove luxury cars!
I guess their standard of living was upwardly adjusted as their income rose during the property boom, but once the cash flow dried up, things hit the fan?
But it’s not just real estate agents who live a lifestyle beyond their means: there are SO many people across all income groups & careers who use credit to buy the nicer things in life (that they can’t afford & shouldn’t be getting in the first place).
Agents work hard with late appointments any day of the week and at times somewhat difficult clients; they log plenty of drive time for showings & meetings in order to negotiate the right price for an offer and more.
Guess what: a luxury car doesn’t get any of this done for them!
In the end, the most important factor in a real estate agent’s success will NOT be the car they drive, but the service they provide.
And yes, giving great service and working very hard might just get an agent into a luxury car one day.
What are your thoughts on this matter: should real estate agents drive luxury cars?
Related Resources on Real Estate Agents Driving Luxury Cars:
- What Type of Car Should a Real Estate Agent Drive? via Joe Samson
- Does It Matter What Kind of Car You Drive as a Real Estate Agent? via BiggerPockets
- Top 2018 Luxury Cars for Real Estate Agents via eCommission
- What Type of Car Should Realtors Drive? via Zurple
- Does The Car a Realtor Uses For Showings Have an Impact on Clients? via BuzzBuzzHome
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About the author: The above article “Should Real Estate Agents Drive Luxury Cars?” was written by Xavier De Buck, your top-producing Johannesburg real estate agent. Xavier has been nationally recognized and awarded for providing service excellence, exceptional property sales, whilst exhibiting the highest level of professionalism. With over 15 years combined experience as a real estate agent and real estate investor, if you’re thinking of buying or selling a home in Johannesburg, Xavier would love to share his property knowledge and expertise.
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