It is commonly understood that no matter how much a car costs it is already losing money – or depreciating in value – as soon as you switch on the engine and drive out of the dealership. That is undoubtedly the case for most cars, but it is still possible to make money out of buying and selling cars and using them as an investment. You just have to know what to look out for.
Canadian roads = temporary car
Most people don’t even think of buying a car that will last them years now. With the increase in popularity of lease deals – whether it is personal or through a business – the ability to upgrade and replace your vehicle every few years gives many people the chance to drive something stylish and new most of the time. But that doesn’t help with increasing the value of a car – especially if it is forced to deal with the winter conditions in Ontario.
Knowing that you will be trading in your car in a few years also means that you will probably not take care of it quite as well as if you were thinking more long-term. There are plenty of ways to make money but if you are choosing a car with even just half a mind on the investment side of things then you need to forget about run of the mill cars completely and do your research.
Top of the range
Whereas most new cars will lose value there are some notable exceptions – and they are all at the higher end of the pricing scale. For a car to have a chance of being a sound investment it needs to have some kind of rare quality. That could simply be that there are not many of them made, or the vehicle has something notable about its manufacture that deems it noteworthy.
If money is no object then you could look at dream cars such as the Porsche 911 Carrera 2.7 or the Mercedes 300SL Gullwing. The limited number of these cars on the road already marks them down as something of interest to investors. But you may not have to extend your bank balance quite that far to find a car that could make you money in the long run.
Investment hints and tips
Rarity will always have an impact on the possible investment returns when it comes to buying and selling cars. But what other factors do you need to know about? Well, first of all you should realize that this is not a quick turnaround. If you are looking to get some money back on a car then you need to be thinking long-term. The best returns on cars need to grow over time so don’t look at this as a get rich quick scheme.
It is also vitally important that you do your research – or at the very least get someone to do that research for you. Just because a car is expensive does not necessarily mean that you will make money on the transaction when you sell. An experienced car broker is the best friend you could have, as they are able to point you in the right direction.
Spend money to make money
It’s an old saying but that only proves that it is true. You should be looking to buy at the very top of your budget. Car investment is not a game to try and shave dollars off an asking price. Decide on what you can afford to spend and stay to the amount. You can raise your money in a variety of ways but if you are in Ontario you could look at autoloans.ca to find a good deal on a loan that could help raise your upper limit – and increase the possibility of finding the kind of car that will retain value over time.
Take good care
Whether you actually end up driving the car is another question all together. Even the most careful of Canadian drivers will end up reducing the chance of making money by tearing down the open road. But cars do need to be driven to remain in a good condition. You just have to be careful unless you are completely decommissioning it to stand in your garage.
Investment in cars is not for everyone but if you do your homework, look for rarity and treat the vehicle as a thing of beauty you might just make a profit when you come to sell.