Can you invest in cars? The short answer is yes, but you should wait until the end of this guide before running out and investing your money!
You see, cars are one of the strangest investment options out there. When you buy a car, you own a physical asset. As such, it’s somewhat comparable to a house. Indeed, one of the ways you make money from car investments is similar to property flipping. However, there are some massive differences between cars and houses that mean certain investment ideas simply won’t work.
Apologies if that sounds ambiguous, but it will make more sense as you go through this guide. Below, you’ll see two ways to invest in cars, along with one way that definitely won’t work. It’ll soon be clear why they are such a confusing investment to approach!
Car flipping
Flipping a car for profit is the most likely way of making money from your investment. Here, the process is identical to property flipping, only you’re dealing with cars instead of houses. Invest in a vehicle that seems a bit rundown or could be improved. Make cost-effective changes, then sell the car for a profit. This is sometimes called wheeler-dealing, and the idea is that you snag bargains, boost the car’s value, then enjoy big profits. When done well, it is highly effective, though there’s a fine line between making a loss and making a profit.
Antique car investments
Secondly, you can invest in cars and hold onto them for many years. Well, this will only work with some cars. If you take a look at the Marc Spizzirri blog, you’ll see a post on investing in antique cars. Here, you’ll notice that certain cars will dramatically increase in value over time, largely because of their rarity. If you get your hands on a vehicle that’s highly desirable due to its antiqueness, you could make huge profits in the future. Of course, the difficulty is a) sourcing these cars, and b) trying to predict which cars now could be antiques in the future. Still, when you get your hands on the right antique cars, you can make a fortune.
Holding onto a car
The last example demonstrates when buying a car and holding onto it can be advantageous. However, this only ever happens in specific scenarios, usually revolving around antique cars. You will never make money from car investments if you treat them the same as houses in the sense that you buy one, use it for years, then sell it. Unless the car is unique, it will depreciate in value from the moment you use it. This is completely different from houses, which go up in value. So, if you think that buying a car is a good investment as you can simply sell it for profit in the future, you’re going to lose money.
Should you invest in cars? Well, there are two ways to approach car investments that can help you make a profitable return. The key is understanding that you can’t buy a regular car and expect it to be worth more money in the future. If you want to play the long-haul investment game, it only works with antique cars! Once you learn the right ways to deal with car investments, it can be a profitable venture to consider.