The Post-MBA Guide to Buying a Used CPO Car

So you’ve earned your MBA and now it’s time to start working. Especially if you’re an international MBA, you probably don’t have a car and want to get good value for your dollar. After all, you need to look good, but you have to pay off your student loans too.

That’s what I’m here for: I’ll show you how to buy a certified pre-owned car and get the most bang for your buck.

Why Certified Pre-Owned (CPO)?

Manufacturer CPO vehicles are fairly new (within last 3-4 years) and in very good condition. Manufacturers will add additional warranty on top of what a car may currently have, and because of this, they are incentivized to carefully inspect a car before they certify it in order to end up profiting from the extra fee the customer is charged for this peace of mind. For you the customer, you want peace of mind because you’re going to be working so many hours in your new job, you don’t have time to be worrying if your car is going die out on you as you are stuck in rush hour traffic. Thus, unless you consider yourself a car expert who feels he can rate the internals of a car himself, CPO is a great way to go.

Sound good? Let’s get started.

For more about CPO programs and understanding which manufacturers offer good ones, see this article from Edmunds.

  1. Start with CarGurus. CarGurus can tell you how good the price of a car is relative to the area and similar vehicles. It’s a very good starting point for understanding whether something is a good deal. The only thing where it may lead you astray is if the listing on CarGurus is different from the official dealer listing – for example, CarGurus thinks there are a couple of options that are not in fact, in the car. Just double check. Also double check that the car is in fact manufacturer CPO – dealer listing is the official listing. A used BMW car cannot be sold by a Mazda dealer as CPO. It may be CPO by the individual dealer, but you only want manufacturer-CPO. A BMW manufacturer CPO means that warranty is covered by BMW as a whole and you can go to any BMW dealer for repairs.
  2. Here’s an example search I made for a friend who was looking for Mazda and Subaru crossovers. Here’s a starting link for you to enter in your own information. Remember to select “Dealer” as Seller Type and “Certified” under Condition. All cars that are filtered should be manufacturer-CPO.
  3. Before you begin, filter out (check the box) all the options under Photos in the left column. You do not want to see listings with frame damage or simply don’t have a photo.
  4. You want to focus on the Good and Great Deals. I pay attention to anything $1,500 below Market Value. Depending on urgency and how picky you are in terms of options, you may have to be more amenable to lesser deals.
  5. If you like what the car offers, call the dealer and book a time (ASAP) to see the car. Research the car in advance just so you know what you’re getting in terms of reliability, CPO terms, etc. A test drive really isn’t about seeing if you like the car – it’s pretty hard to judge a car on a 5 mile drive that you will probably drive conservatively. If you see a car you love and it’s a Great Deal, don’t waste time and put it off until a convenient time (weekend, holiday). Odds are it will sell quickly. There’s less dealer foot traffic in the middle of a week, so there’s an advantage.
  6. For the most part, don’t expect to really negotiate unless you have leverage (exact same car within 50 miles, similar miles and options). Most dealers now are on automated pricing in which they have enough inventory in enough areas to understand what they can sell at. The system regulates the pricing.
  7. If the car is listed as a Great Deal, it may already be under dealer cost, so no discount possible – also look up a car under NADAguides to better understand the value of a car. Another thing to look into is the Costco Auto Program. The program guarantees you an easy no-negotiation price for a new or used car. Costco will have partnerships with dealers in your local area. You may not get the absolute best price from Costco, but you will always get a very good price with no work or hassle – Costco is very emphatic about protecting its members from typical dealer BS.
  8. Do check out any student offers (usually a cash rebate from the car manufacturer, not the dealer – it does not affect dealer profits) for new graduates. This may be around $500-$750. You can see a rundown of discounts per manufacturer on CarsDirect.
  9. You’ll need insurance, a copy of your job offer (or pay stubs), and a copy of your MBA degree to finalize the purchase assuming you want financing and the student discount. For F1 Visa MBAs, some car financing units may to offer financing to F1 Visas – check in advance. Toyota does, BMW does not.
  10. You’re more than likely better off not buying any additional insurance / wheels / maintenance coverage. Those are always priced to be profitable (of course). You could negotiate it (there may be tips online) if you want to see how low they can go. Expect the car purchase to take 5 hours if everything goes smoothly – most of that is due to financing.

If you’re wondering, I followed these guidelines myself and purchased a 2013 BMW (F30) 328i sedan for $21,500 in the Spring.

My 2013 BMW 328i F30

More details:

  • Original MSRP: $42,000
  • Purchased with 25,000 miles, and with CPO Warranty, the car had warranty for nearly 3 more years or 75,000 miles at time of purchase. Free maintenance was active for an additional 10 months. For reference, a new BMW has a 4 year / 50,000 mile warranty.
  • $1,500 recent student graduate manufacturer rebate from BMW for CPO vehicles.
  • Price was listed at $22.9K. Before the student rebate, the car was shown as over $3,000 below market value, according to CarGurus.
  • Received 2% financing for 5 years, another BMW promotion.
  • No Costco discount – the salesman said, this is already below our dealer cost.
  • NADAguides listed the CPO pricing for a similar (mileage, condition, etc.) vehicle at $27,075, with the “Clean Trade-In” value, or what a dealer would pay if a customer traded in the car to buy another at, at $22,375. This latter value doesn’t include the cost for the dealer to actually inspect the vehicle, recondition any problem issues (for ex, my floor mats were replaced with new ones), and add warranty onto it.

Secret Pro Tips for International MBA Students who Want to Work in the United States

As a former Northwestern Kellogg MMM (MBA + Masters in Design Innovation), I’ll tell you something that you want to know but that no one at Kellogg will ever tell you:

Secret Pro Tip:

If you’re an international student who REALLY wants to work (and  / stay) in the United States (USA) after graduation, invest in the MMM program.

Here’s why:

  • As an international MBA student in the US, you will be on a F-1 Student Visa for full-time students (if you are an exchange student, you will be on J-1). You are allowed to work up to 1 year in the USA on OPT period (Optional Practical Training), given that you find a job no later than 3 months after graduation.
  • In the unfortunate situation you have not found a job three months after graduation, you must leave the United States.
  • If you find a job with a company that is willing to sponsor your H1B Visa, you enter a one-time lottery for the H1B Visa. The probability of winning this year (2016) was just 40% for those holding a Master’s degree from the US. The odds were lower if you only held a Bachelor’s degree. Generally, this percentage becomes lower with each passing year due to increases in demand (from people like you who are reading this).
  • If you lose the lottery (odds are you will), you go back home.
  • Now, with MMM, the M.S. in Design Innovation is an engineering degree (that does NOT require an engineering background) from the McCormick School of Engineering at Northwestern. This engineering degree allows you to stay in the US an extra two years (3 total) and participate in the lottery a total of 3 times.

It can be said that the MS DI program is not really an engineering program, in the way that most people think about engineering (hardcore math & science). Nonetheless, it’s classified as an engineering program.

Beyond that are the more traditional reasons to be part of Kellogg: long-time elite business school brand, the amazing new all-glass lakefront building, rise in the rankings, leading percentages for diversity in gender and internationality, continued emphasis on tech, and my articles on the experience). Plus the MS in Design Innovation offers a great core of classes that will help you understand problems from bottom up (“what is the user/customer thinking?), rather than just top-down (“well, it’s clear from the financials, we have too many employees, let’s just fire them”).

All that sounds sound great, but let’s be real. The reason you go to business school is to fulfill your professional goals. If your goal is to be in the United States long term, apply for Kellogg MMM.

The simple math: at today’s acceptance rates, you have a 60% chance of getting rejected and having to leave the country after one year. With MMM, you can stay at least three years and the chances you will end up having to leave the US without a Visa is only 21.6%.

Is this worth an extra quarter of tuition? Of course it is.

Vietnamese (Olympics) Gold is Better Than Any Other Gold

“So proud! But the greatest happiness was that we won over China,” Nguyen Cao Ky Duyen, a Vietnamese music show host based in the U.S. but popular in her homeland, wrote on Facebook. 

From VNExpress

Admittedly, shooting is not the sexiest sport. Shooting from 10M (32 feet) sounds even worse. However, once I watched the video coverage, I was pretty excited and proud to see the first Vietnamese Olympic gold medal from Hoang Xuan Vinh.

But the thoughts above pretty much reflect any Vietnamese citizen right now, with bold emphasis mine.

Plus, check out the “Man, I got this!” grin Vinh breaks into as he prepares for his final shot (starting at 1:45 in the YouTube video below):

I do kind of wish he had been wearing a Vietnamese flag-themed jersey though. And done a little dance. Plus, isn’t it a bit weird we don’t see anything come out from the gun? I kind of feel like he’s playing Duck Hunt for Nintendo / NES.

The Case for Entering the NBA Draft and Economic Opportunity Costs

Occasionally I hear Jim Barnett and Bob Fitzgerald, the Warriors’ TV announcers, talk about how players who stay in college for additional years do not lose much from doing so – that not only do such players get better and become more mature from the experience, they also end up making the same amount of money (or perhaps more) from elongated careers.

As a Cal Bear, this makes me think of the upcoming decisions of super freshman Ivan Rabb and Jaylen Brown. Sorry Jim and Bob, I disagree with you because of former Warrior Chris Porter.

Porter is expected to be a late lottery pick in the June NBA draft. He could have been a lottery pick had he come out after an All-American junior season last year.

Andy Katz, ESPN.com (May 2000)

Chris Porter lost potential lifetime financial security by staying in school
Chris Porter lost potential lifetime financial security by staying in school

Over 15 years ago, Chris Porter was a hot NBA prospect, projected to be a lottery pick after his junior year. He was featured on the cover of Sports Illustrated. A year later, after giving scouts a full year to focus on his weaknesses, he was drafted by the Warriors at the 55th overall pick (I was very excited by this pick, as I remember).

He went on to have a nothing career.

This is the danger of giving up guaranteed money.

Let’s break this down for Rabb and Brown.  As of today, according to DraftExpress (a reputable source on pre-NBA talent), Jaylen Brown would be the 4th pick (or is the 4th best prospect, however you want to read it) in this summer’s draft. Ivan Rabb is 14th. Both would be considered “lottery picks”, draft picks for teams that do not make the NBA playoffs, just as Chris Porter could have been so long ago.

So why should both Rabb and Brown leave for the NBA?

In a worst case scenario, any 1st round draft pick gets two years of guaranteed money upon signing. As of this year, the amount for the lowest 1st round draft pick (30th) is approximately $1.9 million dollars. Even if a rookie has a terrible agent (see: Ricky Williams / Master P), he would still more than likely get at least $1.5 million. (I am going to leave any net present value arguments out of this entire discussion, as well as taxes, agent fees, etc.)

If their draft positions hold, Rabb and Brown would get closer to $3M and $7M, respectively.

Minimum $1.5M dollars and a (virtually) guaranteed spot at worst case on a NBA basketball team for two years is nothing to scoff at, especially if you did not grow up in a fairly affluent family. I went to Business School at Kellogg (Northwestern). If I were offered this deal today, I would absolutely take the $1.5M now, despite having a good amount of work experience and knowing I can do other things. Thus to paint 20 year olds (who are probably unable able to do other things at this state in their lives) as silly for taking the money is a bit ridiculous.

Yes, it sounds great to believe in your talent, that the money will always be there, but that’s actually the dumb move.

Taking money now is the smart thing, if it is guaranteed. For any player’s long term development, he has to be in a good team situation in which he can grow (compare San Antonio Spurs vs Brooklyn Nets) – this is something a player has much less control over and thus, has much more risk. The money is guaranteed while the opportunity to play, be liked by a coaching staff, is not.

What are the opportunity costs for staying?

Other than having your draft position go down, costing you literally millions of dollars, if you get booted to the second round as Chris Porter, you will not have a guaranteed contract, or a contract at all. Let’s ignore the chance for life-changing injury too, which could happen but is rare.

If you go to the NBA DLeague (the minors) on your own to try to make it to the NBA, you can make up to $25K a year. This could easily be 19K or 13K as well.

In other words, if your stock falls for whatever reason and you fall out of the 1st round, you will AT BEST be making just 3.3% of what you would have made, IN THE WORST CASE, as the lowest chosen first round draft pick.

This is a huge drop. Yes, someone could make good money (six figures to low seven figures) internationally, but if you are just starting your career and feel you are an NBA player, you will probably try the DLeague first.

A key thing to note here is not just the relative different of the 96.7% drop in salary, it’s the absolute drop. If you had this disparity with Kobe Bryant’s pay, you would still be making $750K per year, a ton of money for 99% of Americans. But this is $25K, and you won’t be flying first class, staying in nice hotels. This is bus life, a hard way to earn $25K (roughly equivalent to making $13/hr at a full time job for a year).

If a player stayed in school in order to complete his college degree and then dropped out of the first round, I would say he wasted the point of going to college. Jaylen Brown, Ivan Rabb, get in the draft now and go to summer school in the future.

If you want a more current example of how delaying can matter, look at Skal Labissiere from Kentucky. If he could have entered the draft a year ago, he might have gone #1 overall. After a poor freshman season, however, he might now be picked towards the end of the lottery, a $4.5 difference in guaranteed money.

Is there another way?

In my opinion, college basketball (the talent level) suffers from elite players leaving early. It is harder for non-traditional powerhouse teams to create momentum off of strong seasons (if Rabb and Brown leave, the Bears program is very weak for next year). Players are unable to mature in a more natural (college) setting and have to develop their games in the constant pressure of the professional ranks among men 5-15 years older. In addition, unless they play for a terrible team, elite players will likely see more reps and minutes playing for a college team.This lack of elite players over consecutive years is also part of the college game’s ratings decline.

Solution: Let players enter the draft but continue to play in college.

How this would work:

  1. College Players can enter the draft anytime in their college career.
  2. If drafted in the 1st round, a player could stay in school up to their 4th year after their high school graduation year (you cannot stay in school forever).
  3. Contracts are guaranteed (as they are today) for 1st rounders, while contracts for 2nd rounders can be offered guaranteed (optional by the team, as today). Contracts take effect once the player decides to leave school.
  4. 1st round picks do not have to sign their contracts, but their rights would stay with the drafting team until the end of their 4th year after high school graduation. Rights to 2nd round picks would only stay with the drafting team until the next year’s draft (a bit like the college baseball draft).
  5. Players who want to maintain college eligibility cannot leave school and take time off to prepare for the draft process. Instead, teams can visit with them during specific break (spring break, summer break) periods. This will limit the number of workouts (and injuries) possible, but interviews should be fine. Schools like Kentucky would likely hold on-campus “Pro Days” as in the NFL, which admittedly could favor powerhouse schools in college recruiting.
  6. Players give up their college eligibility completely by leaving school and going through the normal pre-draft preparations – this would be no different from today.
  7. Teams can cut players with no salary cap hit (the year the player enters the NBA) in case a player seriously regresses (or for whatever reason), but the player still gets fully paid.

For NBA Teams

  1. Teams no longer have to pay to develop players (ex. Jermaine O’Neal) and then see them leave once they are physically and mentally ready to contribute to a team. Thus, teams pay more for actual expected contribution than potential.
  2. Insurance can cover players who (perhaps this can be paid in half by the player, through his contract, and the team) have a career-ending injury during college after being drafted.
  3. Per Net Present Value, it is always better to have a financial obligation later than sooner.
  4. Non-ready players take fewer jobs away from NBA veterans.

For College Teams and the NCAA

  1. Teams can hold on to players longer, and coaches would no longer be in this weird “I want you to stay, but I swear it’s for your own good, not for mine” position.
  2. Having players for multiple years helps sustain programs.
  3. Consistency and multi-year player resonance creates better television ratings and attention, i.e. business revenue.

For Players

  1. Significantly less risk. If you have a good potential draft position, get drafted and get guaranteed money when you leave. If you’re hot, strike. If you’re not, keep working.
  2. Make progress on a degree (what college is for), become more mature, and improve your skills so you don’t flunk out (see: Anthony Bennett) once you do reach the NBA.

Some other notes about why this makes sense. First, we can look internationally. Teams like the Spurs have signed professional international players for years, knowing they are unlikely to come to the NBA right away. In that time, these players develop further and come to the NBA ready to contribute. These aren’t necessarily older players either – many European players (Tony Parker, Ricky Rubio, Kristaps Porzingis) turn professional as teenagers, before their college-age years.

In addition, with the NCAA’s supposed focus on amateurism, under this plan, players will not get paid anything until they leave for school. This is like getting a job offer when you are still in college, which is pretty common. MBA students often finalize their jobs up 10 months in advance of the actual start date.

I think these changes will not prevent players who can play in the NBA right away (ex. Karl-Anthony Towns) from jumping, nor should it. However, it can help the many players who have the talent, but not quite the skill set, with Brown and Rabb as examples. Jaylen Brown cannot shoot or handle the ball particularly well, and yet his physical talent makes him a great NBA prospect. An additional year or two would allow him to become a great player and make more progress on his academic ambitions without financial risk (aside from if his family needed money to survive right now).

This is a solution that helps everyone – both NBA and NCAA teams, younger players in college, older players in the NBA, and the NCAA as a business. Fans get to watch their NBA teams’ young talent in college and become more devoted and hopeful for their futures while enjoying their favorite college players for multiple years.

The Argument for The Punisher’s Right to…Punish

Daredevil vs Punisher
Daredevil vs Punisher. Image source: Collider

In episode 3, season 2 of Netflix’ Daredevil series, Matt Murdock (Daredevil) argues with Frank Castle (The Punisher) that no one has the right to judge someone to death.

Yet, I could not help thinking that of all people Frank Castle actually does have the right. Here’s why:

– The Punisher is a former Marine, having been thrown into war and ordered to kill people based on his judgment. He had both the responsibility and duty to do so.

– Frank’s superior officers technically guided his killing decisions, but why should they have had that power? Perhaps they represented the legal system, but Matt could not claim they represented God or a higher power. In a war, who can claim a “legal” justification to what is right?

– In a United Sates-based system, Frank had previously been given the authority to judge and execute. When it comes to New York City and Hell’s Kitchen, he should have the same authority because he is still enforcing a US-based mindset in US territory. He may not know what is right in Afghanistan, but the military values should be relevant in NYC.

Why does The Punisher have the right to be judge, jury, and executioner? Because he did have that right. Similarly, among Marvel superheroes, Captain America should have that right too.

Now, whether this has parallels to real life, I do not want to think about that too much, but at least in the Marvel Universe, Frank Castle has a case.