Cars As Investments: Buy Low With A High Resale

cars investments Cars As Investments: Buy Low With A High ResaleWhen considering an investment of any kind, the first question one usually asks is whether or not it is realistic to expect the investment to provide a solid return, usually upon resale of the purchased item. Whether the purchased item is a home, business, or other piece of real property, the bottom line in investing is to be at least reasonably certain that the finances you place into the purchase are going to be retrievable down the road, ideally with an increase on your investment. In some markets, the risk is higher due to fluctuating values such as stocks, bonds, annuities, and the like. But real estate and real property investments tend to be less risky, with a more predictable return rate.

There is a catch, however. When purchasing a home or business, one expects the value of the property to increase over time in response to inflation, improvements made to the property itself, and the future interest of potential buyers. It is reasonable to expect that barring unforeseen negative economic conditions that are beyond consumer control, such properties will indeed increase in value over time if they are well cared for, and will thus provide a profitable return on the initial investment. The problem is that when it comes to automobiles, this just does not usually prove to be the case.

You see, automobiles, though technically termed “real property”, do not ordinarily increase in value, rather they depreciate over time with use and eventually become less and less valuable. No matter how well-maintained a 1998 Chevy Blazer might be, for example, as it is driven its components endure increasing wear and tear that will eventually require service and/or replacement. An owner might be able to maintain a value close to it’s original purchase cost if they meticulously maintain the vehicle and replace parts as needed, but then upon resale of the vehicle these interim costs greatly reduce the overall profit of the resale.

Many of these common sense points do not apply when one considers investing in a Classic car. Vehicles over fifty years old, especially those of limited production or particular consumer interest, often do maintain a high resale value and actually increase in value over time. However, to maintain that value and guarantee any future value of the vehicle, maintenance must be meticulous and actual use of the vehicle is usually limited. Values of Classic cars tend to be much higher the lower the actual mileage is on the vehicle. Those interested in seriously investing in a vehicle with the intent of re-selling it down the road at a considerable profit would do well to focus on the Classis car venue, as it is the main venue of automobile investing that has any proven track record of increasing financial value over time.

Otherwise, vehicles are purchased to be driven, not as an investment geared to providing a high financial return.

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