Can A Car Ever Be a Good Investment?

Most car purchases can be looked at as an expense rather than a true investment. While a new car will hold its value better than an older model, the reality is that as soon as you drive a new car off the lot, it begins to lose value.

This is because cars are subject to wear and tear, and they depreciate in value over time. In addition, cars also require ongoing maintenance and repairs, which can further add to the cost of ownership.

While it is possible to find a good deal on a used car, it is important to remember that even the best-maintained cars will eventually need to be replaced. For this reason, it is generally not advisable to purchase a car with the intention of selling it for a profit at some point.

Now, that doesn’t (and isn’t) always the case.

There are cars that you can purchase that will hold their value, or even appreciate in value over time.

What Types of Cars Tend to Hold Their Value (or Even Grow in Value) Over Time?

Certain types of cars have a better chance of holding their value or even appreciating in value over time. I first learned this from one of my early mentors who bought (and then sold) a BMW for more money than he originally purchased it.

When he told me this, I was blown away. My parents had always told me the age old adage that “cars are a terrible investment” and yet here was this guy who had made money by buying and selling cars.

I took the time to ask him how it was possible and he told me that it all comes down to supply and demand.

There are certain types of cars that are in high demand but low supply. When this happens, the prices for these cars tend to go up over time.

On the other hand, there are also cars that have high supply but low demand. These types of cars typically depreciate in value over time.

The BMW model he had was mostly made as an automatic car. That being said, BMW made very few in this model that were a manual transmission.

In short, this car was rare (low supply) and in high demand. This wasn’t any accident either. When he first purchased the car two years ago, he did so knowing that it would be a good investment.

In addition to making a smart long-term purchase, he kept the car in excellent condition. He took it to every checkup, oil change, and he even hired a team to detail the car and keep it in pristine condition.

When he eventually sold the car, he made enough profit to cover all of the expenses associated with owning the car for two years, plus he had some left over.

Essentially he not only drove the car for a net-zero cost, but he also made money in the process.

Related Read: How You Can Get the Ideal Price for Your New Dream Vehicle: Top Tips

You May Need to Spend More Money Upfront, But It’ll Be Worth It

Cheap cars tend to be just that, cheap. Not only do they have a lower resale value, but they also tend to require more maintenance and repairs.

If you want your car to be an investment then you’ll have to purchase a car that is something that people will want to buy a few years down the road.

Here’s the thing: cars that could be considered an investment tend to cost more than the average car. You’ll need to do your research and find a car that has the potential to appreciate in value.

So, yes, that means you’ll have to spend a decent amount of time researching and you’ll need to have a bit more money upfront.

But if you’re able to find the right car, then it will be worth the effort and expense.

Plus, remember that you don’t have to purchase a brand-new car in order for it to appreciate in value. In fact, many times it’s better to purchase a used car that is a few years old.

This is because the initial depreciation has already occurred, which means you’re more likely to see appreciation going forward.

Of course, there’s no guarantee that your car will appreciate in value. But if you do your homework and purchase a quality car, then you’ll give yourself a much better chance.

Remember, a car is only a good investment if you’re able to sell it for more money than you originally paid. If you can’t do that, then it’s not an investment, it’s a liability.

Beware of Auto Dealer & Seller Fraud

If you’re going to purchase a car as an investment, then it’s important that you do so with caution (especially if you are buying a very expensive car).

This is because there are a lot of scams out there and you don’t want to get taken advantage of. In situations where fraud does occur it is good to have an attorney who handle securities cases just in case there are any legal issues.

Looking for a reliable Utah car dealership? We got you covered!

Have Fun and Pick a Car You Love

While it’s important to be smart and cautious when making a car purchase, you should also have fun with it.

Not everything in life has to have a monetary investment attached to it. Sometimes you can simply enjoy the process of finding and buying a car that you love.

If you happen to find a car that is both fun to drive and has the potential to appreciate in value, then that’s even better. But don’t get so caught up in finding an investment-worthy car that you forget to have any fun.

At the end of the day, a car is a car. It’s a means of transportation that can also provide you with a lot of enjoyment.

So, if you’re thinking about purchasing a car as an investment, just be sure to do your homework and be cautious throughout the process.