Cars – and other automobiles – are the victims of a great investment debate. Seasoned investors from around the world will passionately argue whether or not cars are a good investment. Some say they are, others say they’re one of the worst things you can buy.
The initial thought process is that buying a car is similar to buying a house – albeit a very small, moving, house. Unfortunately, cars don’t appreciate in value like houses. You can leave a house untouched, and it will likely increase in value over ten years. Do this to a car, and it will drop in price.
This seems to be the key argument against them as an investment. Does this mean you should never invest in a car?
No.
Cars can be great investments, and they can be terrible ones. In reality, it depends on how or why you’re investing in the vehicle. The best way to explain this is to look at instances where a car can be a handy investment:
Investing in cars for your business
Getting a car for business purposes can be a terrific investment. You can buy a whole fleet of vehicles, find a paint booth to cover them in your brand colours, then use them to deliver products/services. As a result, you save money on shipping costs while spreading the word about your brand. This makes the car an amazing investment as your business can save money – and potentially make more due to new customers contacting you after seeing your branded vehicles.
The value of the car hasn’t increased in any way. However, it has provided your business with something very valuable. The mere presence of your new vehicles can boost productivity and influence your profits. Therefore, it was a smart thing to buy.
Investing in old cars and improving them
This is the car version of property flipping. Find a desirable vehicle that’s seen better days. This can be an old car that’s quite rare or a specific vehicle that’s sought after by car enthusiasts. You want to buy it for as low a price as possible, then spend money fixing it up. Now, you can sell it for a profit.
Here, the car is a fantastic investment because you’ve made it more valuable. Be cautious, this tactic only works on certain cars. Mainly, it’s for older vehicles as they have more room for improvement. If you want to invest in a car like this, then it’s a good idea to learn which cars are the best to flip for a profit.
You see, cars are worth investing in when you take the right approach. Don’t buy a car with the intention to use it every day, then sell it in the future. That will always lead to a loss. Instead, consider either of these two approaches. Car flipping is a very popular choice, but it can be tricky to find the right vehicles. Investing in cars for business purposes will work very well, and it shows that cars can generate a great return on investment through means other than the actual financial value of the car.
So, are cars a good investment? Yes, but only when you know what you’re doing.
