5 Tips for Making a Great Car Investment
Thursday, September 24, 2020, 6:00 PM | Leave Comment
For the majority of people, buying a car is an important life decision but for others, it can be a great investment, as well.
The thing is that when looking to buy, you need to make up your mind at what is a priority.
Your personal preference is a huge factor but some cars are better known for reliability or for successfully fending off depreciation.
So, do you give priority to the driving experience, personal satisfaction or the financial viability of the purchase?
Here are five tips for all those who opt for the latter.
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Depreciation is not simple math
Depreciation is an economic principle that mandates that the optimal value of an asset is at its purchase/production. Subsequently, the asset loses the value until this given value reaches zero.
With cars, the depreciation is quite severe, seeing as how a vehicle that is only a couple of months old loses a significant fraction of its value. Nonetheless, even when it comes to cars, depreciation is not simple math. There are some cars that get depreciated the least. This is the list worth studying before committing to buy a vehicle.
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Fuel-efficiency
When observing a car as a means of transportation, the fuel efficiency will determine the ROI of your investment. The cost of getting to work, when compared to the full fuel-efficiency is definitely something worth taking into consideration. This is true regardless if you’re carpooling or driving to work on your own.
Also, you need to take into account the cost of other means of transportation, like having someone else drive you to work (how much would you pay them on a monthly basis), public transportation, etc. The cost of maintenance also needs to be taken into account and it would be best to check this with a reliable car repair service. An expert’s opinion can make a world of difference here.
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Budgeting the gadgets
While this may sound like something a bit bizarre, it’s quite important that you keep in mind the importance of spending money on car gadgets. The majority of them are incredibly convenient and they contribute significantly to the driving experience but from the perspective of the value boost of the vehicle, they really don’t have much to show. This is why you need to learn how to prioritize and put some of these things into perspective more efficiently.
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Taking care of your car
The value of your car is determined by its overall cleanliness but this is not just something that you should do immediately before taking the photos or just before the visitor arrives. Bear in mind that some dirt particles take time to destroy the surface of your car or penetrate its insides.
This is why regular cleaning but also waxing the vehicle may make a world of difference. Most importantly, one of the best investments that you could possibly make in terms of taking care of the car is to buy a quality car cover. This is something that is mandatory for those without a proper garage but also smart for those who do have one.
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Collectible cars
One last thing worth mentioning is the option of investing in collectible cars. These are the vehicles with historical importance, which is why depreciation doesn’t affect them in the same way as the rest of their counterparts. These cars have a special allure to the collectors, which is why their value sometimes tends to be quite outlandish. Just remember that this is a sizable investment.
Ideally, you would find a collectible car in a suboptimal shape and then restore it in order to help it peak in value. This is, however, quite risky, seeing as how it greatly depends on the success rate of the restoration process.
In conclusion
At the end of the day, whether an investment is worth it mostly depends on the broader context. How much money does your car stand to save? How much value will it lose over time? Will restoration drastically affect its value? Are there steps and preventive measures that you can take to preserve its value? All of these questions are something that you need to ask in order to save money and make your investment worthwhile.
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