Home News Alternative Investments Is a Luxury Car a Worthy Investment?

Is a Luxury Car a Worthy Investment?

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If you have the opportunity to buy a luxury car because business is booming, or if you want to buy a luxury car because you feel as though it’d be good for your business image, then you need to give the whole thing some serious thought first. Luxury cars aren’t always the greatest investment, but if you make some sound decisions, you will soon find that it is easy to come out on top.

Learn about Depreciation

The first thing you need to do is learn about depreciation. Depreciation is when the cost of something declines over its lifespan. When it comes to luxury cars, the car is an asset that loses value. The depreciation curve is never a slow and steady line either. It drops the steepest within the first two years, and then slowly declines from there. Some high-end models drop 25% of their market value in the first year and then gradually taper out. So, a new vehicle could well recoup 80% of its value within the first year, but by the third year, you might only be looking at 55%. If you are using your car as an investment, make sure that you choose a brand that can maintain its value as much as possible. Jaguar F-type models are great for this.

German Car Manufacturers

Another thing you need to be mindful of is that German car manufacturers often make their cars very well. They have an average lifespan of around 7 years and this is before they change the model. Buying a vehicle in its 6th year or even its 7th year is one of the easiest for you to ride the curve of depreciation much better and it will also mean that your car is relevant when put up against new modes. Lastly, with a lot of manufacturers now giving a range of extended warranties on the cars that they sell, this means that your car can last up to six years plus extra with it being insured. Banks are offering loans at the same rate of interest as new cars, and this is great, to say the least. It means you don’t have to worry about any surprises on the injury front of things and it also means that you can feel more assured about your purchase. At the end of the day, it’s not easy for you to buy a new car that isn’t going to depreciate as soon as you drive it off the lot, but you can curb the amount of investment you lose while getting a car you can truly be proud of. If you can keep this in mind when you shop for a new car then it’ll make it much easier for you to make the right decision. 

You may also find that in some instances, if you do some upgrades to your car, you can get even more money for your car, and this can put you in a good position when the time comes for you to sell it.

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